State affairs, and I say State affairs because that is the present order of the Congress, that States shall determine, in four príncipal areas: One, uniform flat duration of 39 weeks as opposed to the present system generally in vogue of variable duration based upon attachment to the labor market. What are we insuring? What has the man lost? If he doesn't want to work how long do we carry him? That is probably one of the most radical departures in this bill. That will be discussed by Mr. Harding, of Utah.

The next item is that any individual's weekly benefit amount will be 50 percent of his average weekly wage up to certain maximums. There is no State at the present time which has a formula providing less than 50 percent up to the maximum prescribed in that State.

The next item is increase the maximum, the maximum to be increased to two-thirds of the average weekly wage in that State. I don't think there is any objection to increasing maximums. That is related to a man's earning power. I think that can best be determined in the State according to 'what that State can afford.

The fourth item relates to disqualification. It is all right to pay a man out of work through no fault of his own, but suppose he caused his own unemployment? How far should we go toward subsidizing this man? That will be discussed by Mr. Teets. Then there is an item relating to financing of the program in case the State goes broke.

Those summarize the areas of intervention proposed in this bill, but before it is decided that the Congress should intervene, should we not perhaps look at the record of the States. It has been said that the States have been somewhat laggard in meeting their responsibilities and therefore there should be some minimum standards to bring these laggard States up to a normal or average level, so to speak. That is not carried out in this bill. The minimum standards in this bill are twice as high approximately as the most liberal State, the State with the longest duration and highest benefit amount.

How does that fit in with the concept of bringing up a few laggard States? I would like to recite briefly, and I am not going to read all this statement, Mr. Chairman, in the interest of time, that at least half of the States have already this year, or in the closing months of last year taken action to increase or improve the situation in their State.

Alphabetically, Arkansas has already enacted legislation to increase their benefit amount to $30 and increase the duration by 8 weeks, California to increase by 10. That is virtually an agreed bill. Colorado has already gone to $42 for an increased number of weeks. Florida increased substantially. I won't read the whole roll of States, but I have a list here.

The CHAIRMAN. I think it would be well, Mr. Farmer, for the entire list to be in the record at this point.

Mr. FARMER. Yes, sir; I will be glad to file it.

The CHAIRMAN. Without objection, that will be done.

(The material referred to follows:)

Changes in unemployment compensation benefit amount and duration which were completed in 1958 and 1959 or are pending in 1959

1 Indicates that duration is lengthened whenever unemployment reaches a specified level.

* Indicates that benefit is adjusted automatically as wages increase. (Utah and Wyoming adopted this feature before 1958.)

ADDITIONAL NOTES

TUC program.-22 States, including 12 not among the 31 listed in the table, paid benefits for longer duration, financed either from advances of Federal funds under the Temporary Unemployment Compen sation Act of 1958 (17 States) or from their own reserves (5 States indicated by *):

Other legislative prospects.-12 States have not completed their legislative sessions, most of which will probably increase unemployment compensation benefits:

LEGISLATIVE ACTIVITY OF STATES, 1959 (WITH REFERENCE TO UNEMPLOYMENT

INSURANCE)

Alabama: Session begins in May. Expect to increase weekly benefit amount 1 by $3; to increase minimum disqualification period from 1 to 5 weeks; to deduct pension; to increase maximum tax rate to 4 percent. May increase duration by 6 weeks, to 26.

Arizona: No important change expected. Increased weekly benefit amount in 1958. Weekly benefit amount governed by formula.

1 Weekly benefit amount when referred to refers to maximum unless otherwise noted.

Arkansas: Adjourned. Increased weekly benefit amount by $4 to 30, and duration by 8 weeks, to 26. Increased qualifying wages from $210 to $300, and require wages in two quarters.

California: Likely to increase weekly benefit amount by $10 or more, and to provide 50 percent extension of duration "triggered” at 7 percent unemployment. Colorado: Increased weekly benefit amount by $7, to $42, with computation at 60 percent of worker's wage and maximum weekly benefit amount on escalator at 50 percent of average wage; increased duration by 61⁄2 weeks, to 321⁄2 and ratio of benefits to base year earnings from one-third to one-half; will deduct pension from benefits; increased period of disqualification.

Connecticut: Situation unsettled. May increase weekly benefit amount by $10 and may increase or extend duration.

Delaware: No change expected, except to increase tax rates. (Weekly benefit amount was increased to $40 in 1958.)

Florida: Session begins April 7. Likely to increase weekly benefit amount by $6, perhaps on an escalator; and to increase duration by 10 weeks, to 26. Hawaii: Likely to increase weekly benefit amount by $10 and duration by 6 weeks; to increase qualifying wage requirement; may count pensions as deductible income.

Idaho: Adjourned. Enacted emergency extension of duration, triggered at .6 percent unemployment if exhaustions are 10 percent over the 7-year average; require 30 weeks of work to requalify before second benefit year; will cover employees of the State government.

Illinois: Likely to increase weekly benefit amount for some family classes, to provide emergency extension of duration triggered at 4,375 percent unemployment; likely to increase maximum tax rate. Agreed.

Indiana: Adjourned. Increased weekly benefit amount by $3, to $36, and duration by 6 weeks, to 26; approved payment of SUB, exempt unemployment compensation benefits from State income tax.

Iowa: Likely to adopt "variable maximum" benefit formula, ranging from $30 for single person to $44 for head of family; to increase duration by 2 weeks, to 26; to count pensions as deductible income; to modify disqualifications.

Kansas: Enacted increase in weekly benefit amount of $6, freeing escalator; increased duration by 6 weeks, to 26; increased minimum disqualification period from 1 to 6 weeks.

Require qualifying wages of 30 times weekly benefit amount.

Maine: Likely to increase weekly benefit amount by $2; even chance to increase duration by 3 weeks.

Maryland: No benefit changes. Increased taxes were enacted, with the maximum up from 2.7 percent to 3.7 percent. The "peril point" was removed, whereby all employers would have paid 2.7 percent in 1959.

Massachusetts: Likely to increase weekly benefit amount and duration. Michigan: Likely to increase weekly benefit amount by $1 or $2 for various family classes.

Minnesota May increase weekly benefit amount by $2; may increase tax rates. Missouri: Likely to increase weekly benefit amount by $5, and provide emergency extension of duration triggered by 6-percent unemployment.

2

Montana : Adjourned. Benefit increases were vetoed.

Nebraska: "Agreed" bill will increase weekly benefit amount by $2, to $34, and duration by 6 weeks to 26.

Nevada: Adjourned, without significant change.

New Hampshire: "Agreed" bill has passed both houses. Increases all. weekly benefit amount by $1 and maximum weekly benefit amount by $6, to $38; increases qualifying wage from $400 to $500.

New Jersey: Likely to increase weekly benefit amount by $5 and duration by 4 weeks. Likely to strengthen disqualifications.

New Mexico:' Adjourned. Increased weekly benefit amount by $6, to $36, duration by 6 weeks, to 30.

New York: Adjourned (weekly benefit amount was increased by $9, to $45, in 1958). Reduced coverage to any employer who pays $300 of wages in a quarter (now limited to employers of two or more); 26 uniform, three-fourths over half pay.

North Carolina: Expect to provide 8-week emergency extension of duration "triggered" by 9-percent unemployment (sure to pass).

North Dakota: Adjourned. Increased weekly benefit amount by $6, to $32, deleting dependency benefits. Benefit formula reduced from one-twenty-fourth to one twenty-sixth of high-quarter wages.

Have enacted legislation and/or adjourned.

Duration increased by 4 weeks, to 24 weeks (uniform); will deduct all pensions from unemployment compensation benefits. Increased partial earnings allowance from $3 to one-half weekly benefit amount; increased tax rate from 2.7 percent to 3.7 percent.

Ohio: Enacted approval of SUB. Likely to increase weekly benefit amount by $5; may increase duration, or provide emergency extension.

Oklahoma: Likely to increase weekly benefit amount by $7; even chance to increase duration by 4 weeks, to 30.

Oregon: Likely to make no change, except to increase taxes.

Pennsylvania: Likely to increase weekly benefit amount by $5; may close some "loopholes" by strengthening disqualifications. Enacted authorization to borrow $112 million from Reed loan fund.

Rhode Island: No change expected (law amended in October 1958-$36 and dependency allowances).

South Dakota :' Adjourned. Increased weekly benefit amount by $5, to $33, and duration by 4 weeks, to 24, with "richer" duration formula. Increased maximum tax rate from 2.7 percent to 3.7 percent.

2

Tennessee: Adjourned. Increased weekly benefit amount by $2, to $32; increased minimum disqualification period from 1 week to 5 weeks. Increased maximum tax rate from 3 percent to 4 percent.

Texas: Likely to increase weekly benefit amount by $5 to $7, and restore the waiting period. May increase duration by 2 weeks, to 26.

Utah: Adjourned (weekly benefit amount is already on escalator). Increased duration by 10 weeks, to 36. (Range has been 15 to 26 weeks, and will now be 10 to 36 weeks, with ratio which increases with number of workweeks.) Vermont: Increased weekly benefit amount by $8, to $36, and put on escalator at 50 percent of average wages. Likely to provide emergency extension of duration, triggered at 7-percent unemployment. Likely to increase minimum disqualification period from 1 to 4 weeks.

Washington: Adjourned. Increased weekly benefit amount by $7, to $42, duration by 4 weeks, to 30. Partial earnings allowance increased from $8 to $12. West Virginia:' Adjourned without significant changes. Accepted extension of Federal temporary unemployment compensation.

Wisconsin: Agreed bill will permit weekly benefit amount to reduce by $1 to $41, for last half of 1959. (Last year's "emergency" increase from $38 to $42 was to expire July 1.) Thereafter the maximum weekly benefit amount will be on an escalator at 52 percent of average wages, adjusted twice a year. Weekly benefit amount should increase from $41 to $45 or $46 on January 1, 1960. Duration will be increased from 261⁄2 to 34 weeks, with ratio of benefit weeks to workweeks increased from 0.7 (which will apply only to the first 20 workweeks) to 0.8 for weeks above 20. Maximum duration will require 45 workweeks. Will increase the qualifying requirement from 14 to 18 weeks. Will exempt unemployment compensation benefits from State income taxes.

IMPROVEMENT IN STATE PROGRAMS SINCE 1958

Unemployment compensation benefits in 1958 could buy 38 percent more than in 1939, and represent an increase of more than $8 in purchasing power, as shown in this table.

Year 1938: $16 for 15 weeks, $240 (nearly all States).

Year 1959: Kansas (typical), $40 for 36 weeks-$1,040-4 times 1938; Utah, $40 for 36 weeks-$1,440-6 times 1938; most States, $35 for 26 weeks-$910= nearly 4 times 1938.

a Have enacted legislation and/or adjourned.

39678-5915

Sixty percent or more unemployed workers receive more than 50 percent of weekly wage.

Mr. FARMER. I repeat that about half the States have already taken action. Others are considering action with favorable prospects of

enactment.

In Texas, for example, the Texas Manufacturers Association is sponsoring a bill to increase benefits by 25 percent. Going back to a question that has been discussed or referred to before, What is the situation now and then? There has been a 38-percent increase in the purchasing power of benefits paid since 1938 when these laws first started.

The cost of living has about doubled. The average benefit amount in 1938 and 1939 was $10.66. In terms of 1958 dollars that would be $22.16. The average benefit amount today is $30.55 nationwide.

That represents an increase in purchasing power, not merely keeping up with the cost of living; on the average they can purchase more than they could in 1938, more than merely provide the basic necessities of life.

There is another aspect of this thing that hasn't been referred to. In 1938 the almost universal entitlement of an unemployed man was $15 for 16 weeks-$240 if he were unemployed for that length of time. It is not just what he gets per week. Now what is the situation today? We are not talking about just the weekly benefit amount. How much money does he get when he is permanently unemployed? Take Kansas as a typical example. Just recently they increased their maximum to $40 for 26 weeks. Multiply that out and you get $1,040. That is over four times as much as that unemployed individual could have secured in 1938; over four times as much, with some States less, and some States more.

Perhaps on the average it would run about $35 times 26 weeks, $910 total entitlement; nearly four times as much.

Utah, which is not the most liberal one in this program, pays $40 for 36 weeks, $1,440; six times as much as an unemployed man could get in 1938. Can it be said that these States have fallen down in keeping up with their responsibilities?

I would like to point out that 60 percent or more are meeting the standard of the President when he said that a majority of the workers ought to be entitled to 50 percent.

Mr. MACHROWICZ. How many States?

Mr. FARMER. Sixty percent or more have covered workers. I don't have that figure by States, Mr. Machrowicz.

I think it might be higher if we were in a utopian society and could afford it, if perhaps we went further than we do, but I think the record bears out the fact that he States have well met their responsibility, that there is no reason to say they have failed, and that there is consequently no reason to impose Federal standards.

Thank you, Mr. Chairman.

Mr. MORRISON. Mr. Chairman, our next speaker will be Mr. Curtis Harding, director of the agency in Utah.

The CHAIRMAN. Mr. Harding, you are recognized, sir.

Mr. HARDING. Mr. Chairman and members of the committee, I would like to take just a few moments, and I will make it brief, and talk relative to this problem of Federal minimum standard of uniform duration.