their statutes to their own distinctive economic and industrial needs. This is as it should be. The State of Arkansas furnishes a prime example. Although our benefit maximums have generally been 47th or 48th, the benefit-cost rate has been the 22d highest in the Nation during the period 1948-56. The imposition of any "minimum Federal standards" would ignore and override the unique and local conditions which States are better able to cope with. As a member of a State legislature which devotes a considerable portion of its 60-day biennial sessions to considering amendments to the Arkansas Employment Security Act, I have had the opportunity of participating in the many different aspects of the legislative process as far as this particular subject is concerned. I have a close knowledge, and wholesome respect for, the wisdom and judgment of State legislators, who are perhaps a little closer to their people in some respects than their counterparts in Washington. For this reason, I believe it very important that Congress refuse to adopt any sort of standards which would deprive the States, in any measure, of the discretion which is very properly theirs. To illustrate: In the 1957 session of the Arkansas General Assembly, a bill was introduced to set up a cash sick and disability benefit program. It was a well-drafted bill; it was copied verbatim from a statute in another State. One of its more interesting features was that it provided coverage for commercial salmon fishermen. It happens that commercial salmon fishing is not one of the major industries in Arkansas; but, nevertheless, all Arkansas salmon fishermen would have been protected by the proposed law. The principle is the same when Federal standards are proposed. Why should the special needs and experience of highly localized areas such as Detroit, or New England, be used as a pretext for saddling the rest of the country with unrealistic and impractical “standards"? This is a complex and far-reaching issue, and it would be a major mistake if Congress were to intrude itself in an area where the States are better able to act. Respectfully, GAYLE WINDSOR, Jr. (Whereupon, at 4:38 p.m. on April 7, 1959, the committee recessed until 10 a.m. on April 8, 1959.) UNEMPLOYMENT COMPENSATION WEDNESDAY, APRIL 8, 1959 HOUSE OF REPRESENTATIVES, Washington, D.C. The committee met at 10 a.m., pursuant to recess, in hearing room, Committee on Ways and Means, New House Office Building, Hon. Wilbur D. Mills (chairman) presiding. The CHAIRMAN. The committee will please be in order. Our first witness this morning is the mayor of the city of Philadelphia, the Honorable Richardson Dilworth. Mr. Mayor, we are indeed pleased to have you before the committee this morning. You are recognized, sir. STATEMENT OF HON. RICHARDSON DILWORTH, MAYOR OF PHILADELPHIA, PA. Mr. DILWORTH. Thank you, Mr. Mills. I have a prepared statement which we have filed with the clerk, which I understand can be made a part of the record, so if I may I will just speak from the statement and very briefly. The CHAIRMAN. That is entirely satisfactory. Without objection your statement will be made a part of the record. Mr. DILWORTH. Thank you, sir. This bill is of particular importance I think to the large cities and in our own city, if I may just state the situation there, we now have about 21,000 workers who have exhausted their unemployment benefits, and in February of this year we had 86,000 on our relief rolls compared to 65,000 18 months ago. We had as of February, the last accurate figures that we have, about 100,000 unemployed in the city, which comes to almost 11 percent of our employables. There have, of course, been several factors in that-the loss of textile mills, of the hosiery mills, and also the fact that while we have fortunately in one sense no very large single industry, most of our industry does manufacture and fabricate durable goods, which are the goods that were the hardest hit in the recession, and of course we are quite a large rail center, which also hit us quite hard, but at the present time with 11 percent of our employables out of work it does create quite a serious situation. In that regard I think from our study it does indicate that economists today are generally agreed that unemployment compensation is one of the really helpful building stabilizers which can assist in reversing the cycle of recession. This has been recognized in the Rockefeller report and the President's Council of Economic Advisers who declared that the most useful step we can take in the near future is to liberalize our unemployment insurance system. As we see it the real need for this minimum standards bill is the fact that when you have States like Pennsylvania, New York, and Michigan with liberal minimum standards which can be extremely helpful in fighting any recession. Yet we are faced with the fact that many, many of the States don't have that kind of a thing, so that in effect it is self-defeating. In other words, the fact that some of the big industrial States do have liberal provisions is a real help in fighting this situation, but there is the fact that a very good number of the States don't have such provisions, and then also we are faced by the fact that you can't do anything about exhorting the other States to come along because many of the States use it as a weapon for bringing in industry. They say, "If you come into our State we have very low unemployment insurance provisions and you pay very little payroll percentage in our State as compared to Pennsylvania, New York and Michigan." Therefore, we feel it is good to have minimum standards in this just as in the social security program and in your old age pensions. All the States have exactly the same provisions, are compelled to under the Federal law, and it seems to me you have the same thing here and that in any great program of this kind the Federal Government has to lay down minimum standards that have to be observed, and that unless they do legislate this kind does become self-defeating. That is why we feel it is so essential to have this. The seven specific recommendations that we are supporting I think are familiar to all of you gentlemen. I know it has been said that one of the objections to this is that some of the States do have a considerably lower standard of wages than others, but I think the bill makes up for that by saying that, first, it shan't be less than 50 percent of the weekly wage, but at the same time the minimum shall not exceed two-thirds of the States average weekly wage. We also think it is important to have the potential duration 39 weeks and that a man who has had 20 weeks of employment should be eligible and that benefits should not be denied or reduced because of concurrent payments from various supplemental unemployment benefit plans that may have been arrived at between industry and the unions which they negotiate. We also think it should be extended to employers of one or more individuals except for domestic, agriculture, and casual workers; and finally that the States should have the option of providing uniform rate reductions to employers as well as individual experience rated reductions. We think that in many of the States the experience rate of reductions has been used really to set up almost capricious systems and that the incentive of permitting uniform rate reductions would improve considerably the efficiency in the operation of the plan. Finally, we do believe that reinsurance grants should be available to those States who are in financial difficulty because of the persistent high rates of employment. I think fundamentally our position, and I have spoken to the mayors of the other four cities of over a million population, is that we do believe that if this is to be really effective, this minimum has to be established for all of the States or in effect it really becomes almost self-defeating and the whole standard will be pulled down very rapidly due to the competition between the States for industry. (The statement is as follows:) STATEMENT OF MAYOR RICHARDSON DILWORTH, OF PHILADELPHIA, ON STANDARDIZATION OF UNEMPLOYMENT COMPENSATION BENEFIT I am greatly honored to be invited by your committee to submit my views concerning H.R. 6039, which will provide for employment stabilization and security against unemployment by establishing uniform minimum standards with respect to weekly unemployment compensation benefits and the period of time for which such benefits will be payable. I am particularly pleased to note that this legislation has been introduced by my esteemed friend from Pennsylvania, Congressman Dent, who in the past aided Philadelphia greatly as minority leader of the Pennsylvania State Senate. It might at first glance seem strange to have the mayor of one of our major metropolitan cities testifying concerning a matter which is of primary concern to the Federal Government and the several States. It is because Philadelphia is the core of a metropolitan area which extends across city and county boundaries, and, into four States, that we see clearly the necessity of standard minimum requirements for unemployment compensation if we are to maintain the economic health of the great metropolitan centers of our Nation. In Philadelphia at the present time we have approximately 21,000 workers who have exhausted their unemployment benefits. In February of this year we had 86,000 on our relief rolls, compared to 65,000 18 months ago. Although we are constantly told that our national economy has recovered from the past recession, Philadelphia in February had approximately 100,000 unemployed in our city, or 11 percent of our labor market. The economy of Philadelphia cannot be considered healthy as long as such a large proportion of our labor force remains idle. In fact our city government itself is one of the major victims of this unfortunate situation. Because of the large pool of unemployed we must provide many additional services while at the same time we suffer heavy losses in tax revenues in both business and personal income taxes. I would like to emphasize that the conditions which create this unemployment in Philadelphia are national in character and require steps at the national level to correct them. Later, I want to point out the steps we are taking at the local level to eliminate these conditions; but, even here our efforts are being thwarted by the failure of the Federal Government to establish minimum standards of unemployment compensation. Philadelphia has a diversified industrial economy. We are fortunate that we do not have to rely on a single or several major industries. On the other hand we are affected immediately by any setbacks which occur nationally in major industries such as steel, automobiles, railroads and mining. When carloadings are off because of national conditions over which we have no control, the Pennsylvania and Reading Railroads feel the effects immediately, and Philadelphia suffers. When the automobile industry slows down we feel the effects immediately at such plants as Budd Manufacturing. When steel drops below capacity our metal fabricating and machine tool industries feel the tremors immediately. The chain reaction then sets in, and our service and consumer goods industries feel the next blow. I don't think there is any economist in America today who does not recognize that unemployment compensation is one of the major built-in stabilizers which reverses the cycle of recession. This has been recognized by the President's Council of Economic Advisers who declared that "the most useful step we can take in the near future is to liberalize our unemployment insurance system." Because Philadelphia is the innocent victim of national forces which sweep the tide of recession into our area we are greatly concerned that the economic stabilizers which reverse the tides of recession be strengthened. If liberal unem ployment compensation systems in such States as Pennsylvania, New York, and Michigan are a major factor in putting us back on the road to prosperity, and if the conditions which bring on recession are national in character, then the economic stabilizers should be strengthened everywhere in the Nation, and if they are, every section of the Nation will benefit. |