1 While listed as uniform has variable feature of extended duration.

2 Dependents allowance additional.

Source: State laws. Compiled by Washington Board of Trade, Research and Tax Department, April 1958.

Mr. GUNTHER. May I ask the chairman to please note the position of the District of Columbia as compared to the other uniform States were S. 3493 to be adopted. That is added below the last line there. Senator MORSE. I see it.

Mr. GUNTHER. The explanation for the failure of many States to establish the principle of uniform duration is that most State legislatures have shied away from its practical conditions principally because there has been no real rule and no satisfactory basis of judgment as to what period of prior attachment to the labor market would seem to justify 26 weeks, or in the case of this bill 39 weeks, and what would not. Most of the States having uniform duration, 7 of which go to 26 weeks, and 1 to 30 weeks, and none whether uniform or variable to 39 weeks, have reached the conclusion that fairly substantial annual wages should be required for such uniform duration. These States make their variance not in potential duration but in benefit amount, so it adds up in the long run to a direct relationship between total base period wages and total possible benefits.

The question then is at what point can a claimant be construed as being firmly attached to the labor market? Is the point 20 weeks employment? Then the question is, can a claimant with only 19 weeks employment be said to be per se less firmly attached to the labor market?

In our judgment, the variable duration period has answered that question very satisfactorily. That is why the District of Columbia and 35 of the States say that in this borderline area where there has been some appreciable covered work, perhaps less than what you would term regular employment, some benefits should be paid.

The District law is, we believe, a very satisfactory compromise, giving rough justice in cases where it cannot be said that a claimant is positively not attached to the labor market.

The variable duration provisions in the District of Columbia law recognize the principle that the number of benefit payments reflects the degree of attachment to the labor market. Only those with very insignificant earnings, less than $276 in the 4 quarters comprising the base period, are completely excluded.

In other words, the general theory is that for a little work there are small benefits, and as the firm attachment to the labor market increases and is established by the record there are greater benefits. We have always felt, and we believe others in the District of Columbia generally feel, that this is a very desirable provision in this jurisdiction, which has a large transient labor force.

S. 3493 would establish as the standard establishing attachment to the labor market a minimum of $130 earnings in one quarter and at least $65 earnings during the remaining 3 quarters of the year, for a total of $195. (The saving clause beginning on line 7, page 3, seems to reduce this required amount by $70, which could make the qualifying amount as low as $130.)

As a practical matter, what does this mean? Under the terms of this bill, the claimant would be entitled to $6 a week for 39 weeks, or a total of $234. This raises two important questions. First, is a person who made only $195 during an entire year really attached to the labor market? Second, even if, by stretching the imagination, an affirmative answer is given shown he then be paid total benefits amounting to 20 percent more than he earned during the previous year?

Let us take another hypothetical case of a person who worked every week at the average wage in the District of Columbia of $92 a week plus during his high quarter. His earnings for the quarter would be $1,196. To qualify under S. 3493 it would be necessary for him to work only 612 weeks at the same wages during the remaining 9 months of the base period.

These total wages of approximately $1,794 would entitle him to draw $52 a week for 39 weeks, or a total of $2,023. If the claimant in question were unmarried without dependents, his Federal and District withholding tax would have been $18.81 leaving $73.10 takehome wages each week, or $1,425.45 total take-home wages, as opposed to $2,028 in benefits.

The seriousness of that situation, when translated in terms of incentive to work instead of not to work, is further compounded if consideration is also given to social-security withholding and other work-connected expenses.

Let us look at this example. Assume that A earns $100 a week. He could work for 10 weeks in 1 calendar quarter, 8 weeks in another calendar quarter, and qualify for benefits of $44 a week for 39 weeks, for a total of $1,716.

Now, let us assume that his coworker B, also worked 18 weeks, exactly the same number. He, however, worked 13 weeks in 1 calendar quarter and only 5 weeks in the remaining 3 quarters of the year. Here you have the situation where, even though he had the same earnings at A, he had the misfortune of having too much of his employment during 1 calendar quarter, so he would not qualify as attached to the labor market and couldn't draw 1 penny in unemployment-compensation benefits.

On the other hand if this man B had not been quite so diligent during his high quarter and had taken a couple of weeks' vacation, then he would have met the standard of attachment to the labor market and could draw benefits under this S. 3493. We consider these circumstances to be bizarre and capricious, even ridiculous. We could go on with innumerable examples of the effect of this bill, but it would seem to me these illustrations demonstrate that the provisions of the bill do not establish better standards of attachment to the labor market and who is qualified for unemployment compensation benefits than the measuring device currently in force in the District of Columbia and most of the States.

If I may be permitted to interpolate here, in the 2 men whom we used as examples, under the present law they would receive the same benefits, or $30 a week for 19 weeks.

Senator MORSE. Do you mind if I interrupt you before we pass these hypotheticals?

Mr. GUNTHER. Not at all, sir.

Senator MORSE. Because these two hypotheticals involve individuals who are seeking work, are desirous of work, are ready and willing to work, and would work if jobs were made available to them. You assume that.

Mr. GUNTHER. We assume so; yes. It just happens that their employment does not fall into a particular time in a quarter or in the year so that one would be entitled and the other wouldn't.

It should be noted that it is quite possible for a fairly highwage person in 3 or 4 weeks' employment to qualify for benefits. It merely depends on how the lottery of the calender quarters coincide with his week's employment. This, in our mind, is a serious indictment of the provision. In 39 weeks or 9 months of benefits hang on such a capricious situation that you have a test under which no one can say with any certainty how many weeks the person worked, either inside or outside the quarter, it is a remarkable thing. It does not reflect duration and it does not reflect total earnings because it is not the total earnings of the individual but the distribution of those earningss over calender quarters that determines whether he is in or out, if he has not been a steady worker.

These provisions of S. 3493 and, also, the provision of existing District of Columbia law which limits benefits to one-third of earnings during the base period are included to take care of the casual worker. If everybody worked 50 weeks in the year except when they were unemployed, there would be no need for the one-third provision in the District law or the qualifying provision in this bill. But, unfortunately, while most people work regularly, there are a very substantial number who do not.

As a practical matter, it is, of course, the very irregular workers who are the most regular applicants for unemployment insurance and who seem to be the most content to remain unemployed so long as they are drawing unemployment compensation.

The average weekly wage in the District of Columbia today, including the Federal Government, is $92.40. Applying the 67-percent

formula proposed in this bill, the maximum weekly benefit payment could be $62.00.

I think we all accept the concept of a reasonable floor of protection for the unemployed. During periods of inflation, the reasonable floor for protection, expressed in dollars, increases and the board of trade has agreed to higher benefits in the District law from time to time during the last 20 years as salaries expressed in dollars have become higher. As a matter of fact, Mr. McMillan, chairman of the House District of Columbia Committee, at our request, has introduced a bill which, among other things, proposes to increase the maximum $30 benefit in the District of Columbia to $35.

The average wage for the District of Columbia is very considerably determined by the pattern of employment and the inclusion of Federal workers. If we exclude the Federal Government, the average in the District is $81.10, but, when, coupled with the Federal average of $105.77, the overall average becomes $92.40. This average has been arrived at by including vast numbers of highly paid professional people and department heads in the Federal Government, as well as some $50,000- and $60,000- and even $100,000-a-year executives in private industry.

We doubt whether the inclusion of salaries of this kind is really proper in reaching a determination respecting the maximum weekly benefit paid under unemployment compensation. We seriously doubt whether persons earning from $20,000 to $100,000 a year will ever apply for benefits and we also seriously doubt that the Congress would feel the need of enacting an unemployment compensation law for them. Now let us, if you please, sir, examine some charts.

Senator MORSE. Will we have those charts in a form so we can insert them in the record?

Mr. GUNTHER. Yes, sir. We will make facsimiles. The principal difficulty is in the coloring of them. We will have to do that but we will have them ready for the record. We could photograph them otherwise, but we will prepare them, color them this way and have them for you.

Senator MORSE. They will have to be in black and white. You will have to work them out so they will be in black and white, because we cannot put color charts in committee proceedings.

Let the record show that there will be included at this point a series of charts that Mr. Gunther is presenting for the consideration of the committee, and they will be identified in the record as they are identified by the witness as he presents each individual chart, thus making it unnecessary for the Chair to rule on each chart as it is offered.

Mr. GUNTHER. The first chart shows the maximum weekly benefits authorized by State laws. In preparing this chart we have excluded dependents' benefits which are paid in a small number of States, to insure better comparability as between the base maximums. It will be noted that the State of New York now pays the highest benefits of $45 a week. Twenty-eight States pay maximum benefits which are higher than that provided in the District of Columbia law of $30 a week. The District of Columbia is the black line.