TABLE 9.-Disqualification, by issue, by State, October-December 1957-Continued

Mr. MACKALL. I am not talking about the number of weeks, but the rate, and I would say that that is expected to be rather that way for the simple reason that because of the nature of our economy, most of our separations are what you might call "individual" separations. We don't have a large industrial business here, as you well know, and you don't pick up the papers as you might in Detroit and see that General Motors has laid off 5,000 or 25,000 people.

Now, when a large plant lays off a big number like that, there certainly would be no reason for disqualification. Those people are all involuntarily put on the labor market; but, where you have individual separations, then you have more reason to believe that they may possibly be misconduct or possibly voluntarily quitting cases, and the percentage would normally be higher under such conditions.

Senator MORSE. Might it not be possible that the type of procedure you have described to the committee this morning, namely, the individual-interview procedure might enable you to catch the truly disqualified claimant more easily than possibly in some jurisdiction where they may not follow this procedure?

Mr. MACKALL. I would hate to say that this wasn't fairly uniform, Senator, because we pool our resources so much through the State and through the Bureau of Employment Security that one State may do one thing in a certain way, but I think you will find that that is pretty much standard policy.

Senator MORSE. The difference can be explained more in the nature of the difference in labor force, and the type of employment availabilities by way of industries and businesses?

Mr. MACKALL. That is right.

Senator MORSE. Well, what would you say what suggestions would you make to this committee for any changes in the language of the law that we might recommend to the Senate that would make greater certainty that the malingerer is disqualified?

Mr. MACKALL. I don't believe that any change would be necessary in the language of the law-it would not actually assist.

Some States have written in the law what they term "actively seeking work," but we say that under our availability, a man must be available for work.

We have a policy that he must do what the reasonable individual would do in like circumstances, in that he must be actively seeking work to do it.

Senator MORSE. Now, you recall, on April 21, the hearing taken then, there were some witnesses, one or more, and I think there were several witnesses to this matter of evasion of the purpose of the unemployment insurance benefit law by people who just didn't want to work. Would you say that those criticisms involve the exceptional case and that there are not enough of them to justify this committee concerning itself greatly over modification of the language in a bill that would seek to strengthen the procedures for eliminating the malingerer and loafer?

Mr. MACKALL. I think that any time you have a law of this sort, you are going to have some people who will try to get by the law. You cannot get around that.

By and large, I think it is up to the administration, through its vigilance, to weed these individuals out, and I don't believe that any additional language in the law would be of any assistance.

I think that Mr. Long, in his statement, was trying to show the importance of not changing the disqualification so that the Board would have more teeth on the man who is voluntarily unemployed and not involuntarily unemployed; but I don't think any additional language in the act would be of assistance to us.

Senator MORSE. I received a letter from Mr. Press since the hearings, in which he states, in part:

At the conclusion of the hearings you voiced a deep interest in and some concern about paying benefits to malingerers. Some information bearing on this subject is being sent by local employer groups. Additionally, I would like to make the following comments:

What must amount to a considerable sum of money is currently being paid out annually in the District of Columbia to people who have retired. To some degree, people in private employment reaching the specified age and retiring under an employee-retirement system do file for unemployment compensation and do draw benefits.

Repeated reports to this office indicate that in the Government service, at least in some departments, it seems to be standard practice for a person upon retirement to file for unemployment compensation and list himself as available for work. His Government wage record in most cases entitles such a claimant to draw maximum benefits for 6 months for a total of $780. This amount will, of course, increase upon the passage of any of the bills now before the committee. In my judgment this is an unwarranted raid on the taxpayers' money, since the United States Government reimburses the District of Columbia Unemployment Compensation Board for benefits paid to Federal workers.

I believe that the only fair way to correct this situation is to add to the District of Columbia law a provision stating that persons who have retired under retirement systems shall be construed to be separated from the labor market and cannot qualify for unemployment-compensation payments until they have, after retirement, met the qualifying provisions for eligibility. Such provision under existing law would save the taxpayers of the United States a considerable sum of money.

Under the provision of your bill, S. 3493, under which Federal workers could draw $60 a week for 39 weeks, this would effectively put a stop to a gift of $2,340 by the taxpayers to every retired Federal worker who applied.

In conclusion, I wish to emphasize and repeat Mr. Gunther's testimony supporting the variable duration principle in the District of Columbia. It is the only effective manner of dealing with malingerers. In this extremely stable community, there are few reasons for irregular employment of those who wish to work. Claimants having a record of reasonable earnings reflecting reasonably stable steady work are not handicapped by the annual wage requirements for full benefit duration.

We will be happy to furnish additional information if desired.

Very truly yours,

WILLIAM H. PRESS.

Senator MORSE. I think that the view as expressed by Mr. Press simply has to be faced up to by this committee, and I would like to get your opinion in regard to his views.

Mr. MACKALL. Well, what he says has a lot of merit in it, but there is this problem with the Federal benefits:

Some States have provisions that will allow retirees to be paid, such as we have; other States have not. It is the same on annual leave.

Under our law, if I leave today from a covered employer, I can start drawing benefits tomorrow, even though I had, through my back service, built up a rather sizable sum of terminal leave money that should come to me.

Now the Congress has faced the problem in title 15 of the Social Security Act by saying that no State shall pay the Federal benefits until the period of accrued annual leave has expired.

If anything is to be done about the retired Federal employee-and, frankly, I think it should be done I don't think it should be done by amending the District Act or the California Act or that of New York-because those are the three big States-but I think that this is something that really belongs in title 15 of the Social Security Act in order to make the Federal benefits uniform in that respect to all claimants.

As far as paying retired workers is concerned, the important thing-and I am not talking about Federal workers now-but the important thing is that "Is that man in the labor market? Does he want to work?"

With a slow but steady inflation, so many of them had their retirement eaten up. They retire but don't have enough money to live on, and they really want to work.

If they don't want work, of course they are not entitled to benefits, but if they do want work, there is a lot to be said that they belong in the system. However, for Federal employees, the Federal Government has established the retirement system and it is also paying these unemployment benefits, and I don't think it was contemplated that two concurrent payments should be paid to the same individual.

Senator MORSE. What about Mr. Press' suggestion where he says: I believe that the only fair way to correct this situation is to add to the District of Columbia law a provision stating that persons who have retired under retirement systems shall be construed to be separated from the labor market and cannot qualify for unemployment-compensation payments until they have, after retirement, met the qualifying provisions for eligibility.

Is there merit in his suggestion that if X is retired, he should not be allowed to go ahead and draw unemployment benefits until he has first qualified for them? And I assume that Mr. Press means until he first has obtained employment and then for some reason lost that employment.

Mr. MACKALL. The difficulty, Senator, is that usually these retired people are elderly people and it is not too easy for them to obtain a job.

There are two classes: You have one who is voluntarily retired, but you have other employers who will, at a given age, lay the man off.

Senator MORSE. It is automatic.

Mr. MACKALL. Automatic; whether he wishes to be laid off or not. In processing claims, for the man who is not automatically laid off but who voluntarily takes retirement, we look at him a lot more severely than we do the one who has been automatically laid off.

The chances are the fellow who voluntarily retires is going to receive a disqualification, and we are going to watch his efforts to get a job more closely than we would the other man.

Senator MORSE. In connection with this matter, the committee has received a memorandum from Mr. F. G. Preston of the District of Columbia Unemployment Compensation Board.

Mr. Wharton has made this memorandum available to us.

I will ask that the memorandum be inserted in the record at this point.