Page images
PDF
EPUB

On behalf of the Illinois State Chamber of Commerce, I wish to express appreciation for the opportunity to appear before you and present our views on this important issue. We appreciate the fact that your responsibility to guide the thinking and decisions of Congress is great and we hope that the presentation of our views may be of some help to you in the discharge of your responsibility. Mr. REES. But I would like to summarize a few of the points, if I may.

My name is James W. Rees. I am assistant vice president of the Pure Oil Co., Chicago, Ill., and chairman of the social security committee of the Illinois State Chamber of Commerce.

My company is engaged in exploration, production, refining, and distribution of petroleum products. We employ 11,000 people and conduct company operations in 33 States. Thus we have a direct interest in unemployment compensation throughout the country.

I have had a direct and personal interest in the problems of unemployment compensation for many years, having been a member of the State chamber social security committee since 1946 and chairman of that committee since October 11, 1957.

The Illinois State Chamber for whom I am making this statement is a statewide civic association with a membership of approximately 17,000 businessmen representing companies located in over 400 communities in Illinois. The membership comprises individuals in all types of business ranging from small retail and service organizations to the self-employed individual and to the largest corporations.

The Illinois State Chamber's social security committee, comprised of 89 members, representative of the chamber's membership has given much study to one of the many problems with which your committee is now concerned. The matter of imposing Federal standards on State unemployment compensation programs concerns vital and basic issues which relates to Federal-State relations and the very fundamentals of sound and effective unemployment compensation programs. At this time I would like to very briefly summarize our opposition to imposition of Federal standards on State unemployment compensation laws, particularly as provided in H.R. 3547, the major provisions of which we have summarized in our prepared statement.

I would also like to emphasize certain conditions and situations that exist in Illinois which I hope will be of particular interest to you in your deliberations.

În summarizing our statement, we feel that further unemployment compensation standards, particularly those relating to the amount and duration of benefits, are unnecessary and undesirable because

(1) The Federal law has already served its original purpose in that it was set up to persuade the States to enact unemployment compensation laws and this has been accomplished.

(2) The States have not failed in their obligation to improve the unemployment compensation program. Benefits and coverage of workers have been steadily increased. As an example, I would like to point out briefly what has happened in Illinois. Mr. Bartley made brief reference to the beginning of the unemployment compensation program whereby the weekly benefit was $15 payable for 16 weeks and amounted to total benefits of $240. Also, that at the present time an individual with four or more children can receive a weekly maximum of $45 for a regular period of 26 weeks. This amounts to $1,170.

I wish to expand on this further. Illinois has accepted the responsibility of paying emergency benefits during periods of abnormal unemployment. So an individual is eligible to receive 50 percent more in benefits after he has exhausted his regular benefits. Thus, a person with four children can receive under certain conditions. $1,755 as compared to the total benefits of $240 in 1939.

For your information, the amendment to the unemployment compensation law just enacted in Illinois provides that these emergency benefits will be paid to individuals exhausting their benefits when during two consecutive calendar months the ratio of insured unemployed to covered employed is 1.375 percent or greater. We feel that Illinois has faced up to the responsibility of providing adequate benefits under its unemployment compensation program.

The legislature is still in session and further consideration will be given to increasing benefits and improving other phases of this law.

(3) The States are best qualified to determine benefit adequacy. Again I would like to point out the effective operation in Illinois. Unemployment compensation legislation in our State is developed through what we have called an agreed bill process. We have created a nine-man Governor's advisory board to deal with unemployment compensation matters. This board is charged with responsibility of insuring the solvency of the Illinois reserve funds. Thus it concerns itself with all types of legislation affecting unemployment compensation.

I would like to give you the makeup of this board. The chairman, a public member, is a professor of economics at the University of Illinois. There are two other public members, one a woman attorney from the city of Chicago, and the third a Lutheran minister. There are three labor members on this board. One is the executive vice president of the Illinois State AFL-CIO. Another is district president of United Mine Workers and the third is the secretary-treasurer of Chicago Joint Board, Amalgamated Clothing Workers of America. The three employer representatives on this board consist of an attorney who is counsel for a large public utility, the president of a small manufacturing company, and a social security tax manager of a large farm implement manufacturer.

This board deliberates for days on the many issues confronting the State of Illinois with respect to unemployment compensation and after weeks of meeting the members arrive at agreed legislation with respect to benefit amounts, duration and eligibility, and the very important matter of taxes. Legislation is then written and presented to the Governor and to the Illinois General Assembly which with few exceptions enacts it.

It is agreed in Illinois that this procedure during the past years has been very effective in promoting sound legislation and developing an effective unemployment compensation program and we are firmly of the opinion that such procedures should be continued without Federal intervention.

We do not believe that Congress dealing with many thousands of bills each year on every conceivable subject is as well qualified to handle Illinois unemployment compensation as is our Governor's advisory board or State legislature and the Governor.

(4) Federal Unemployment Compensation standards in H.R. 3547 would make the Illinois benefit system inoperative. In 1955

Illinois adopted a new system of benefit payments which we proudly call variable maximum benefits. At present a single individual in Illinois can receive a top maximum benefit of $30. The weekly benefit amount is increased in accordance with an individual's dependents, so that an individual with four or more children receives the top weekly benefits of $45.

I would like to point out that individuals eligible for a benefit of $27 a week receive a benefit equal to two-thirds of their weekly wage and individuals with a $45 weekly benefit amount receive approximately 50 percent of their weekly wage.

This is a result of a table of benefits set up in the Illinois law.

If the standards set out in H.R. 3547 were put into effect this variable maximum principle would become inoperative in Illinois and all individuals would receive the same weekly maximum benefit amount.

This would certainly be directly contrary to the desires of our State which spent weeks of research and deliberation in arriving at this system.

The Illinois State Senate has expressed opposition to Federal Unemployment Compensation standards by its resolution adopted March 25. Mr. Bartley has just covered this in detail so I will not repeat. However, I would like to reemphasize that this resolution expresses precisely what I have been attempting to say. In Illinois we wish to handle our own unemployment compensation program and feel we are capable of handling it without Federal coercion, intervention, or the imposition of Federal standards.

Thank you for the privilege of appearing.

The CHAIRMAN. Mr. Rees, we thank you, sir, for coming to the committee and giving us the benefit of the views of the Illinois State Chamber of Commerce.

Are there any questions?

Mr. Mason will inquire.

Mr. MASON. Mr. Rees, the thing that has brought this to a focus is the fact that the Federal Government is not getting enough money for administration purposes and keep the Reed fund built up. So, the Government, the administration is proposing that we do these things, extend the coverage and also change the base. If the States can take care of their own problems, solve their own problems, and the Federal Government is needing some more money for administrative purposes, why can't we change this three-tenths of 1 percent that the Federal Government is getting to four-tenths or five-tenths of 1 percent, and that would be a very, very simple thing to do and it wouldn't interfere with the States at all, would it?

Mr. REES. I agree completely.

Mr. MASON. That is what I would do myself.

Mr. REES. Let the States determine their rate of tax to compensate for that, it would be 90 percent.

Mr. MASON. They determine their own rates and let the Federal Government collect the four-tenths if it needs it, or five.

Mr. REES. That is right.

Mr. MASON. May I ask you a personal question?

Mr. REES. Certainly.

Mr. MASON. Are you Welsh, by any means?

Mr. REES. I am, strictly.

Mr. MASON. I thought you must have been because Welsh was talking to Welsh.

Mr. REES. Good. I might say that we from Illinois are proud of our representative, too, Mr. Mason.

The CHAIRMAN. All of us are, Mr. Rees.

Any further questions?

Mr. Mason is always present in these hearings, as most other members, but he is one of the very faithful members and will sit here to 6 o'clock, in fact, if you people have anything to say.

We thank you, sir, for coming to the committee.

Mr. REES. Thank you.

The CHAIRMAN. Our next witness is Mr. Rayburn Watkins, the executive vice president, Associated Industries of Kentucky.

Mr. Watkins, we are pleased to have you with us today and you are recognized, sir.

STATEMENT OF RAYBURN WATKINS, EXECUTIVE VICE PRESI-
DENT, ASSOCIATED INDUSTRIES OF KENTUCKY

Mr. WATKINS. Thank you, Mr. Mills.
Gentlemen, it is a pleasure to be here.

My name is Rayburn Watkins and I am executive vice president of Associated Industries of Kentucky. However, today I am appearing on behalf of not only Associated Industries but also a group of 40 Kentucky business organizations. You have them listed on the printed testimony so I shall not burden you, either the time or your ears to hear them read off.

The CHAIRMAN. Mr. Watkins, without objection, your entire statement will appear in the record and you may proceed as you desire. (The information follows:)

STATEMENT BY RAYBURN WATKINS, EXECUTIVE VICE PRESIDENT, ASSOCIATED INDUSTRIES OF KENTUCKY

My name is Rayburn Watkins and I am executive vice president of Associated Industries of Kentucky. I am appearing on behalf of Associated Industries and 40 Kentucky business organizations.

TWENTY-FOUR LOCAL CHAMBERS OF COMMERCE

Ashland Board of Trade

Bowling Green-Warren County Cham

ber of Commerce

Logan County-Russellville Chamber of
Commerce

Louisville Chamber of Commerce

Covington-Kenton County Chamber of Middlesboro Chamber of Commerce

Commerce

Cynthiana Chamber of Commerce
Danville Chamber of Commerce

Elizabethtown Chamber of Commerce
Frankfort Chamber of Commerce
Franklin County Chamber of Com-

merce

Glasgow Chamber of Commerce
Henderson Chamber of Commerce
Hopkinsville Chamber of Commerce
Lexington Chamber of Commerce

Murray Chamber of Commerce
Newport-Campbell County Chamber of
Commerce

Owensboro Chamber of Commerce
Paducah Chamber of Commerce
Paris Chamber of Commerce

Pike County Chamber of Commerce
Richmond Board of Trade

Shelby County Chamber of Commerce
Winchester Chamber of Commerce

SIXTEEN OTHER BUSINESS ORGANIZATIONS

Associated Industries of Kentucky
Associated Home Builders of Louisville
Employers Council of Kentucky
Kentucky Automobile Dealers Associa-
tion

Kentucky Home Owned Grocers Asso-
ciation

Kentucky Laundry and Cleaners Asso-
ciation

Kentucky Motor Transport Association
Kentucky Petroleum Council

Kentucky Petroleum Marketers Asso-
ciation

Kentucky Retail Food Dealers Association

Kentucky Retail Lumber Dealers Association

Kentucky Real Estate Association Kentucky Wholesale Grocers Association

Kentucky Wholesale Tobacco Distributors Association

Louisville Real Estate Board

Louisville Chapter, Associated General
Contractors

These organizations collectively represent the strongest united business front ever assembled on any issue. They strongly oppose the congressional passage of State laws on unemployment compensation under the guise of revised Federal standards and they are not going to be satisfied with a mere toning down of the ludicrous proposals before this committe.

Once the floodgate is opened there will be no end to the demands made upon the Congress for more and more pay for work not performed. This should be evident by the mass march on Washington planned for this week purposely to coincide with these hearings.

The groups I am representing today are united in their view that unemployment compensation is properly a matter for each State to determine in accordance with its own needs and the ability of its employers to fill those needs. Most of the States, unlike Michigan and a few others, wish to exercise a degree of fiscal responsibility and avoid the road to bankruptcy.

The Federal standards proposed by the administration, by the Karsten bill (H.R. 3547), and others would make this virtually impossible.

The technical nature of unemployment compensation and the special problems confronting Kentucky led to the creation of an advisory council on unemployment compensation, composed of an equal number of labor and management representatives, plus several technical staff people from the department of unemployment compensation.

Certainly this group, with detailed knowledge about the Kentucky economy and its problems, are better equipped to write legislation in the field of unemployment compensation as it affects Kentucky than any committee of Congress. This is true because legislation can be tailored to Kenucky's special situation. After many conferences and many weeks of hard work spread out over a period of 7 months, this advisory council was able to reach in 1958 an "agreed bill" that was passed through the Kentucky General Assembly without a single opposing vote in either the house or the senate.

While the present Kentucky legislation, nor any other on this highly controversial subject, is ever likely to satisfy management or labor completely-an "agreed bill" on a State level is bound to strike a more fair balance than an omnibus bill sent down from Washington.

Gentlemen, why not let Kentucky and the other States continue to resolve their State problems in this manner on the State level without further burdening the Congress with controversial issues it is less able to handle? Several members of this Kentucky Advisory Council are here today, greatly concerned lest the many months of effort they have put into reaching agreement in Kentucky be nullified by action in Washington who could not possibly know about the many complex and often mitigating circumstances that must be handled if fairness is to be achieved for all concerned.

No national legislation can give due consideration to the fact that Kentucky has a disproportionately high share of its labor force involved in casual, temporary, or intermittent work, many of whom are secondary, rather than primary wage earners.

Standards of eligibility that might be entirely proper for other States would be ill advised and unwarranted in Kentucky-and disastrous in their effects.

« PreviousContinue »