or go

to high-quarter formula or to knock out such inequitable disqualifications as the bar to benefits of a woman discharged for violating a no-marriage rule, or that of barring benefits to women who, after childbirth, want and need to work, and others-including a labor dispute provision.

We also need to eliminate the minimum benefit and duration. May I, Mr. Chairman, just take a moment of your time to explain more adequately these disqualification features.

At the present time the Minnesota law says that if a plant has a no-marriage rule, that is, they prohibit women working in their plant from being married, if after a certain period of employment a woman does get married and as a result of that is discharged from her job because of the no-marriage rule in the plant, this woman is not eligible for unemployment compensation benefits.

In addition to that, after a woman quits her job for the laudable purpose of giving birth to her baby she is disqualified from collecting unemployment compensation benefits if she cannot get work although she is fit, available, and eligible for employment.

Insofar as the labor dispute section is concerned, sir, I suggest I take a moment to explain that.

Let's assume that there is a 1,500-employee plant and 1,000 of those 1,500 employees are members of an organized group. This organization for economic reasons decides that they must strike. That means that 500 other workers who have no financial interest in the outcome of the strike, had nothing to say about whether or not there would be a strike, after a week or so if the employer decides that it is no longer necessary for them to be there because the production and maintenance workers are not on hand, these people are laid off, and irrespective of whether the strike lasts a month, 2 months or 3 months, these people are ineligible to qualify for any unemployment compensation benefits.

If you would tell me that any of these are matters which the State can handle best, I will tell you that from my experience I believe this just isn't so.

Whenever efforts are made in my State to update the unemployment compensation program by increasing benefits, extending duration, broadening coverage or the like, the loud cries of business interests, that we are imposing a terrible economic disadvantage on them, petrify timid legislators into total inaction. This despite the fact that the average Minnesota employer during the past 10 years has paid a tax of 0.9 as against the national average of about 1.3, yet when the Minnesota program was initiated, employers paid a tax of 2.7.

In each State the existence of a cheap, cutrate unemployment_compensation program almost everywhere else in the country is used as a club to beat back any improvements. When the inadequacy of the separate programs verges on a national scandal and calls for Federal participation and I submit that Congress has at last begrudgingly admitted the need for some standards by initiating and then extending TUC-many opponents quickly wrap the sacred flag of State rights around such programs to protect them from well-deserved assaults.

Unemployment transcends State lines. Many unemployed workers were employed by those engaged in interstate commerce. They not

only made the product, but actually wrapped and shipped it to many parts of our Nation. Many thousands of workers living in Wisconsin and the Dakotas work in and make their living in Minnesota-St. Paul, Minneapolis, Duluth, Moorhead, and other cities. This is true in most States.

I believe it to be shabby disservice when the worthwhile State rights principle is used, or rather abused, for the indecent purpose of exploiting the economic weakness and misery of the jobless.

I would rather end the perversion of the State rights principle in unemployment compensation, and, instead of using the principle for the negative purpose of disqualifying additional groups of unemployed, of reducing benefits and duration, I propose that we put a floor of decency under unemployment compensation and provide an opportunity for the States to show the nobler, more humane potential of which they are capable.

For that reason, I support the enactment of H.R. 3547, the KarstenMachrowicz bill.

I have further indicated my support by introducing an identical bill, H.R. 4626.

Much has been made by opponents to this legislation about the violence allegedly done to sacred State rights principles by the proposed inclusion of standards of benefits, duration, and coverage in the bill. But in fact, historically, whenever the Federal Government participates jointly in any variety of programs with other levels of government, one of the conditions of its financial participation often is that certain standards be established.

Specifically, title II of the Social Security Act, section 303 begins by stating:

The Secretary of Labor shall make no certification for payment to any State unless he finds that the law of such State, approved by him under the Federal Unemployment Tax Act, include provision for

and so on.

Or take the provisions of the Federal Unemployment Tax Act, sections 3303 and 3304 spell out in considerable detail conditions and procedures which the States must meet before becoming eligible for participation in the program.

In our immense, highly integrated economy, in my opinion, it makes absolutely no sense for a jobless Minnesota steelworker to draw benefits for anywhere from 18 to 26 weeks while a jobless Pennsylvania steelworker is entitled to benefits for a uniform period of 30 weeks. I sincerely hope and pray that this Congress and the administration in their collective wisdom shortly can come up with effective solutions to the economic dislocations which beset our country. As a realist, however, I know that such solutions will not be forthcoming in the short run. Millions of workers in the country, thousands of them in my native State, will suffer unemployment through no fault of their own.

Our economy is in a massive upheaval as the result of technological revolutions, expansions and shifts of population, and other factors. Industries are being created, growing and dying with drastic effects on the labor force.

In Minnesota, for example, the foreseeable exhaustion of prime iron ore deposits of the Mesabi range, the agricultural revolution and the

decline of the railroad industry have forced thousands to seek other occupations in new locations. Many of these people are finding jobs in our State.

We are proud of our home-grown industries. We have 55 manufacturing companies that employ an average of 500 or more people. This includes between 40 to 50 percent of all manufacturing employees in the State. Forty-one of these were developed and remained in Minnesota; three which originated in the State have consolidated with national concerns but have maintained manufacturing plants there. Some of the new industries include the "brain" industry with firms such as Sperry-Rand, IBM, Minneapolis-Honeywell, 3-M, and General Mills.

Even if many of Minnesota's jobless workers eventually do get jobs, weeks often pass before they are employed. Meanwhile these workers and their families need food and shelter. Bills come due and have to be paid. This economic and emotional crisis in the lives of affected men, women, and children should be mitigated as humanely as possible by allowing an adequate length of time and a level of benefits sufficient to maintain a family in decency and dignity.

I believe the provisions of H.R. 3547 will at long last correct the serious deficiencies of not only Minnesota's, but most other States' unemployment compensation systems. Enactment of H.R. 3547 will end once and for all the vicious whipsawing of the systems by employers groups which has resulted in the relative decrease in incomemaintaining effectiveness of unemployment compensation over the

years.

However, changes in industrial patterns which are ever incerasing in scope involve substantial dislocation and hardship for workers who lose their jobs. The personal catastrophe of the unemployed and their families, if left to multiply, can and does often develop into national catastrophe, as we relearned in the recession of 1957-58.

Many eminent economists have credited even the present inadequate Federal unemployment compensation payments with preventing the recession from becoming a full depression.

It is significant that last year the Congress and 36 States decided that the regular unemployment compensation program was not nearly meeting the needs of the jobless; 17 States adopted the Federal plan in full while the other States adopted portions of it.

Millions of workers who will face unemployment next week, next month, or next year have a right to expect better than the present inequitable hodgepodge of disqualifications, benefits, and benefit periods.

I respectfully urge the committee's favorable consideration of H.R. 3547.

Thank you.

At this point, if there are no objections from the committee, I should like to place in the record a resolution that I just received in the mail from the St. Paul Trades and Labor Assembly in my district in behalf of the 60,000 members of that organization.

The CHAIRMAN. Without objection, that material will be received for the record at this point.

(Information referred to follows:)

RESOLUTION

Whereas unemployment in our area is a serious situation at the present time and all indications are that it will remain at a critical level in the predictable future; and

Whereas the Minnesota State Senate has shown that it will not improve the wholly inadequate Unemployment Compensation Act that is presently in effect; and

Whereas there are many hundreds of families in our area who are suffering needless hardships because of the failure of the legislature to live up to the intent of the Minnesota Unemployment Compensation Act by amending it to keep up with present-day economic conditions: Now, therefore, be it

Resolved, That the St. Paul AFL-CIO Trades and Labor Assembly in behalf of its 60,000 members go on record for full support of HR. 3547 and S. 791, a bill to set permanent Federal standards guaranteeing benefits of at least 50 percent of a worker's average weekly wage, up to a maximum of two-thirds of the State's average weekly wage benefits payable for a 39-week period; and be it further

Resolved, That a copy of this resolution be sent to Congressman Joseph E. Karth and Senators Hubert H. Humphrey and Eugene J. McCarthy, urging them to use every effort to secure passage of this urgently needed legislation. Adopted by the St. Paul AFL-CIO Trades and Labor Assembly April 8, 1959. E. D. MCKINNON, Secretary.

Mr. KARTH. Thank you very much, Mr. Chairman.

The CHAIRMAN. We thank you, Mr. Karth, for coming to the committee and giving us a very fine discussion of your own views and the situation which prevails in your State of Minnesota.

I want to congratulate you on your grasp of this subject matter, as indicated by your statement, and for a very fine presentation. Mr. KARTH. Thank you, sir.

The CHAIRMAN. Are there any questions of Mr. Karth.

Mr. KING. I, too, wish to compliment you, Mr. Karth. It has been a very interesting statement.

The CHAIRMAN. We thank you, sir, for coming before the committee.

Our next witness is the Governor of the State of Iowa, Hon. Herschel C. Loveless.

Governor Loveless, will you come forward, sir? We are highly honored this morning to have you as a witness before our committee and you are recognized, sir.

STATEMENT OF HON. HERSCHEL C. LOVELESS, GOVERNOR OF THE STATE OF IOWA

Mr.LOVELESS. Thank you, Congressman Mills.

Mr. Chairman and members of the committee, I think the shortcomings of the present unemployment compensation program are pretty well recognized. Even in the relatively mild recession of 1957-58, the weaknesses in the system have become painfully obvious. The temporary measures to extend duration of benefits enacted by the Congress have been of some assistance in those States suffering the most severe and prolonged unemployment, but the basic inadequacies remain.

It is imperative, therefore, that action be taken to modernize the basic features of the unemployment compensation program in order

that it may provide at least a subsistence level of income security to American workers, and, at the same time, a valuable stabilizing force in our economy.

This committee and the Congress have available the recommendations of numerous experts. A former Chairman of the Council of Economic Advisers, the Federal Advisory Council on Economic Security, the "Rockefeller Fund Report," and the Secretary of Labor, have all recognized the need for improved benefits and the establishment of minimum standards. Because their specific recommendations are available, I shall not elaborate on them. Rather, in the time allotted to me, I shall discuss the problem from the vantage point of the chief executive of a State in which the unemployment compensation program has failed to meet the basic requirements of income security for workers planned when the program was established. By way of background, I should point out that Iowa is properly regarded as basically an agricultural State. But in recent years, agriculture has provided only from 16 to 25 percent of the personal income of our citizens; in the past few years manufacturing payrolls alone have exceeded total income from farming in most years. Roughly two-thirds of our labor force is employed in nonagricultural occupations, and an even larger fraction of our income is derived from sources other than farming. The adequacy of our unemployment compensation program is, therefore, a matter of vital concern to our citizens.

Still by way of background, it is noted that the economic arthritis with which much of the Nation has been afflicted since 1957 has not seriously affected Iowa's general economic health.

During the worst months of the recession in Iowa, unemployment did not rise above about 5 percent of the labor force in the State as a whole. The total personal income received by Iowans was an estimated 80 percent higher in 1958 than in 1957. But even with the relatively slight impact of the recession in Iowa, a distressingly large number of covered workers exhausted their benefits and even larger numbers of workers were denied benefits, or received benefits so inadequate in amount that these workers were forced to apply for general assistance.

Plainly, the Iowa unemployment compensation program failed to meet the basic needs of the vast majority of the involuntarily unemployed, even in a period of mild unemployment.

In Iowa, as in the Nation as a whole, the real level of income security provided by unemployment compensation has declined since the program was inaugurated.

In 1939, the maximum weekly benefit was equal to 65 percent of the average weekly wage in Iowa; by 1958 this ratio had dropped to only 39 percent. For a covered worker with weekly wages equivalent to the 1958 Iowa average weekly wage in covered employment, the proposed standard benefit schedule would provide a maximum weekly payment of $38.75, as compared with the present maximum of $30.

Under the proposed benefit schedule, approximately 69 percent of the claimants would receive larger benefits than they are allowed under present Iowa benefit formulas, and the established ceiling; the duration of benefits would be extended from 24 to 39 weeks.