wage of today compared with the percentage of the benefit of the wage when the program started.

Now you take the position that a benefit cannot be considered adequate until the benefit is related in proper percentage to the amount of wages that are lost at a given time by the person who becomes an applicant for unemployment compensation. I am very much interested in the testimony that may be given before the committee in the remaining days of this hearing in justification of one or the other of these positions. Very frankly, I think that the program of unemployment compensation was established initially to counteract to a certain extent at least the loss of the wage at the time an individual became unemployed, not in terms of what the cost of living is as of a given time. What are we doing through unemployment compensation during this temporary period to compensate for the loss of wage that results from the unemployment.

Now you perhaps have studied this matter in more detail than I have. What is the basis for that philosophy being the correct one? Can you help me on that point? If you cannot, I think tomorrow Mr. Meany will be before the committee and perhaps he can give us the basis for this thinking as to why this is the proper approach rather than the approach taken by the representatives of management who have appeared before the committee.

Mr. EZELLE. Mr. Congressman, it has always been my understanding that unemployment compensation at best was to do two things for the unemployed worker and his family. No. 1, it was to provide him with shelter, in other words keep the rent paid; and No. 2, provide for groceries. Those two things, food and shelter, were primarily sought for then, and to the best of my knowledge that is still the picture today. I think we have to take the dollars we were getting in benefits then and compare them to the dollars we were drawing in wages then and get the percentage of what they were making and what they were receiving at that time, and not what the percentage is today.

The CHAIRMAN. I disagree with you completely on that.

Mr. EZELLE. I will leave it to George Meany to paint a different picture. I want to ask you one other thing, sir.

The CHAIRMAN. I imagine Mr. Meany will take a different point of view. You are talking about the relationship of benefit to the cost of living. You are trying to compensate this individual for the cost of groceries and rent, so if the benefit takes into consideration the increase in cost of living during that period of time, it is satsfactory. That is what the representatives of business have argued before the committee. But your initial argument is, as I understand you, that the benefit is not satisfactory if it merely reflects the rise in cost of living. It should be related to the lost wage percentagewise as of the time of the unemployment, which is what I thought the program contemplated initially.

Wen you say that the two purposes of it are to take care of two things included in the cost of living, I think you lose me in my thinking as to the original purpose. It is not to compensate for these items that go into the cost of living. Of course, it serves that purpose, but actually what we want is in time of depression or periods of unemployment to compensate through this program out of these reserves

we build up in times of employment for a part of the loss of the wage incurred at the time of unemployment. Isn't that what we want to do? And a benefit is not satisfactory that does not do that percentagewise to the point up the ladder that we think is a satisfactory percentage.

Mr. EZELLE. I would like for us to get 69 percent of the wage today in benefits, as we were getting in 1939. I admit I may have been clumsy about getting my point over.

The CHAIRMAN. I misunderstood you, then.

Mr. EZELLE. Yes, sir.

The CHAIRMAN. The reason I point up this issue is because it is very clearly an issue for us to decide, when is a benefit satisfactory? When it reflects a certain percentage of the lost wage the percentage being satisfactory, or when it merely provides for recognition of the increase in cost of living between two dates. Business says the latter. You are saying, as I thought, the former.

Mr. EZELLE. Yes, sir; the percentage of wage.

The CHAIRMAN. That is the issue then in determining whether or not a benefit is satisfactory.

Mr. EZELLE. Yes, sir. Now Mr. Alger here was adding cost of living to one, and I did not understand his answer to the other.

The CHAIRMAN. My point is this. Is it sufficient in viewing whether or not a benefit is satisfactory merely to satisfy yourself that the benefit has risen in proportion to the rise in the cost of living? Mr. EZELLE. Percentage in average earnings, sir, is the way we prefer it.

The CHAIRMAN. If you relate it to the cost of living, I dare say that almost every State has allowed benefits to go up as cost of living has gone up. I think that is the fundamental philosophy behind the benefit structure within the States. Now is that philosophy the philosophy that was intended initially in this program? I want to know, because I am led to believe that the initial philosophy was that we were trying to replace a certain percentage of the lost wage as of the time the unemployment occurs.

Then we must decide either at the State level or the Federal level what is an adequate compensation.

Mr. EZELLE. Two-thirds would be a whole lot better than the 46 that we have. I call your attention, sir, to the fact that back in the thirties when this bill was passed there was not the rapid change in the cost of living that you have had in the last 10 or 12 years. Of course, we take the position that it should be a percentage of earnings.

The CHAIRMAN. The point is, why? Because that is the original philosophy that we had, that we were trying to compensate for the percentage of loss of earnings at the time of unemployment.

Mr. EZELLE. That is right.

Mr. MASON. That was the original thought.

The CHAIRMAN. That was was my understanding of what the original thought was. If that is the case, then we must view this collection of present benefits not in the light of having a relationship to the rise in the cost of living, but whether or not their relationship percentagewise is today proper to the wage that is lost.

Mr. EZELLE. I do not have a great deal of faith in the consumers price index figure because it leaves out taxation increases, and I never

want to stick closely to the cost of living. We get hurt when we do that. The only time we get more is when the money is worth less.

The CHAIRMAN. I think this is the issue that we need to have some more information on from some other witnesses as they come before the committee, which is the proper cost and why. Thank you, sir. You have been an outstanding witness and we appreciate your buying that plane ticket and coming to appear before us.

Mr. EZELLE. Thank you, sir.

The CHAIRMAN. Our next witness is Mr. Sam H. Field.

Mr. Field, please come forward and identify yourself for this record by giving your name, address, and capacity in which you appear.

STATEMENT OF SAM H. FIELD, ON BEHALF OF THE COMMITTEE ON SOCIAL SECURITY LAWS, OF THE MID-CONTINENT OIL & GAS ASSOCIATION, TULSA, OKLA.

Mr. FIELD. Mr. Chairman, members of the Committee on Ways and Means, my name is Sam H. Field. I reside in Dallas, Tex., and am an attorney by profession. In appearing before you today I represent the Committee on Social Security Laws of the Mid-Continent Oil & Gas Association, one of America's oldest and largest producer organizations.

The Mid-Continent Oil & Gas Association with general headquarters at Tulsa, Okla., is an oil trade association with approximately 8,500 members. It represents all branches of the petroleum industry and more particularly the majority of the oil and gas producers in the States of Alabama, Arkansas, Illinois, Kansas, Louisiana, Mississippi, Oklahoma, and Texas. Within the borders of these States three-fourths of the Nation's natural gas and over two-thirds of the Nation's crude petroleum is produced and around one-half of the Nation's petroleum products are refined.

May I suggest that for a few minutes we think together about people, pay, and places.

The people are workers who need the protection afforded by unemployment benefits.

The pay is unemployment compensation pay for people while they are temporarily out of a job, through no fault of their own.

Places refer to the States where these people live.

I believe the following questions may be of helpful guidance in our thinking together about these matters.

I. What is the position of our association on unemployment compensation generally? What is the problem? What is the plan? What do we propose?

II. What is the position of our association on unemployment compensation generally?

Certainly our association is not opposed to the concept of unemployment compensation. We recognize and accept it as an estabfished part of the American business and government scene. The cost of such a program has become an accepted part of the cost of doing business.

We cooperate with the various State unemployment agencies, furnishing required and requested information, making appearances at

unemployment compensation hearings, and assisting and encouraging the improvement of State unemployment compensation laws.

Our association members because of concern for their people have what I think is a well-earned reputation for stable employment. When you stop to consider the very definite fluctuating demands and calls on this industry, this record of stabilized employment becomes truly significant.

Our association members pay their people good wages and provide satisfying fringe benefits. We have gone a long way toward establishing, if you will, private unemployment security programs as one phase of a long list of benefit programs whereby our people can provide their own protection against economic disaster.

We still believe in the old philosophy of self-help as the best way to preserve a workingman's dignity and integrity; but we recognize that all people are not perhaps as well insulated as ours against these economic perils. Dignity and integrity can become mere empty words to a man out of work with a family to care for. therefore, willing to and do participate in the development of State unemployment compensation programs and freely subscribe to the proposition that benefits provided should be adequate for local needs.

We are,

At the same time, our association members are very opposed to any giveaway programs which do not satisfy definite social needs. We welcome the opportunity to pay our fair share of any cost, but we do not want to pay for the benefits that other groups in business receive and should pay for themselves. There is a gasoline pump and a quart of motor oil pretty close to the lives of every human being in this country. We are a nation on wheels and for business reasons, if for none other, we like to see those wheels keep turning.

An ideal condition for everyone is, of course, stabilized employment. To achieve this ideal condition is or should be the aim of all of us, whether in business, in labor unions, or in government. We think that vast strides have been taken through the joint efforts of management and labor toward this goal of obtaining reasonable continuity of employment for those of our working force who are actively seeking work. We do not think it would help us to get there faster to make it more attractive for an unemployed worker to wait rather than to go after another job.

III. What is the problem?

Legislative measures have been introduced and are now before this House Ways and Means Committee, which would have Congress find that the State unemployment compensation systems have failed to produce desired and necessary results, and that benefit payments received by the claimants are inadequate to provide even the basic necessities of life.

The problem then is to determine whether these allegations of the States' failure in this field are, in fact, true.

IV. What is the plan?

Some of these proposed measures would attempt to correct the alleged inadequacies by setting up minimum Federal standards with reference to amounts of unemployment compensation benefits and duration periods. The philosophy apparently is that if the States won't do it, Washington will.

V. What do we propose?

We suggest to you gentlement that the States should do the job, can do it, are doing it, and that further intervention by the Federal Government is not only unwarranted but is highly undesirable.

Facts available indicate that State unemployment compensation benefit payments through the years have increased by amount and also duration. For example, unemployment compensation benefits in 1958 could buy 38 percent more than the payments could buy in 1939. In this it represents an increase of more than $8 in purchasing power. For example, from 1939 to 1958, the consumer price index had a 108-percent increase. In actual dollars the average unemployment compensation benefits increased 186.6 percent, and measuring that in 1958 dollars the increase was 38 percent. The average unemployment compensation benefits have kept pace, or even exceeded increases in expendable wages since 1939 for three-fourths of all the beneficiaries. This would be even more if you would consider Federal, State, and local taxes.

Nearly 60 percent of the beneficiaries in a current week at the present time receive half or more of gross wages in unemployment compensation benefits. Nearly 70 percent receive half or more of their after-Federal tax pay. Nearly 80 percent of workers are located in States where 26 weeks or more of unemployment compensation benefits are available to unemployed workers with substantial work history.

These facts suggest that the States have been doing an adequate job in meeting the purpose of State unemployment compensation. Even assuming that some States may have lagged a little, is it a fact that States have refused to consider improving their unemployment compensation laws with reference to increasing benefits and duration period? I think the answer is definitely "No." The year 1959 is expected to bring unprecedented increases in unemployment compensation benefits. Among the 44 States whose legislatures meet in this odd-numbered year increases in weekly benefits, many substantial, are expected in at least 30 States, and increases in maximum duration of benefits in at least 25. This means that States will continue to meet and in many instances will exceed the Presidential recommendation of 1959.

As actual proof of this, already 11 States have increased maximums in duration, 2 States to 24 weeks, 4 to 26 weeks, 4 beyond 26 weeks, and 1 with the provision for an emergency extension of duration triggered by a measure of high unemployment. Ten States have already increased weekly benefit amounts with escalator provisions in three of these States.

Admittedly there are disparities among the States-that really says no more than that States are different.

These differences will continue to exist regardless of any attempt by Federal standardization to alleviate them. You and I know that living costs and conditions are very definitely different from State to State; certainly the cost of impact of being unemployed will vary in the same manner. Why should each State not be left with the authority and incentive to face its own needs and provide in its best judgment for such needs?

Gentlemen, by way of summary, may I suggest that in our business we are as close to employment and unemployment as that corner