acts, asserting that they are within the exclusive maritime jurisdiction. of the United States and that Congress could not delegate authority to the States to legislate in this area.

The Congress, therefore, is the sole arbiter of the measure of protection employers are required by law to give the employees subject to this act. In another workmen's compensation area, for which the Federal Government has exclusive responsibility, that of Federal employees, signal improvements were made by the Federal Employees' Compensation Amendments of 1966, which you referred to earlier, Mr. Chairman.

As you know, workmen's compensation benefits are in no sense a gratuity. They are a substitute for the valuable right of an employee to sue an employer for damages when injured in employment. In damage suits, there is no limit to the amount of recovery. Under a workmen's compensation system, however, the employer's ultimate liability is certain and limited.

It is implicit in this scheme under basic principles of due process and justice that the substitute be adequate. The Federal Government must set the scales on which the adequacy of compensation for Longshore Act employees are weighed. At the present time, there is an imperative need for a shifting of the balance toward greater employee protection.

A workmen's compensation scheme, to be effective, must provide fair and equitable financial security to workers who are injured as a result of their employment. Its basic objective is to restore to an employee or his dependents in fatal cases-a substantial portion of wages lost by reason of an employment injury. S. 2485 is designed to require wage protection in keeping with the spirit of the Longshore Act and present-day needs.

At best no compensation program can make the injured employee or his beneficiaries whole, financially or otherwise. But, by the same token, compensation should not be so limiting that it reduces the injured worker and his family to a state of deprivation or destitution.

Since workmen's compensation is a protection program for employees in substitute for the right of redress against employers, the worker and his family have the inherent right to look at the compensation act for adequate and equitable financial security in the event of injury.

It is important to remember that generally the benefits under the Longshore Act are not provided by the Federal Government but by private employers through private or self-insurance. The function of the Department of Labor is to handle the administration of cases, to set rules and to settle disputes when payments to beneficiaries under the act are contested. The administration is performed through a set of 15 compensation districts headed by deputy commissioners in various parts of the United States.

A word about the act's extension:

In May 1928, its benefits were extended to employees of employers carrying on any employment in the District of Columbia.

In August 1941, the benefits were made applicable to persons employed at military, air, and naval bases outside the United States. (Defense Base Act.)

Payments under the War Hazards Compensation Act of 1942, which provided compensation by the Federal Government for the injury, disability, death, or enemy detention of employees of contractors with the United States, are scaled to those provided by the Longshore Act. In June 1952 and in August 1953, the provisions of the Longshore Act also were made applicable to certain employees of nonappropriated fund instrumentalities of the U.S. Armed Forces (employees of post exchanges and service clubs, for example, concerned with the welfare and recreational activities of our Armed Forces) and to employees working on the Outer Continental Shelf (employees engaged in oil drilling operations) in the development of natural resources.

MAXIMUM COMPENSATION LIMIT

The most important provision of S. 2485 is that which increases the maximum compensation limit from $70 to $105 a week.

The Longshoremen's Act provides that an employee will receive 662% percent of his wages when totally disabled. (Under the bill, 75 percent if he has one or more dependents.) This percentage limitation, however, is subject to a maximum dollar ceiling of $70 a week, set in 1961. The longer a maximum limit remains static, the greater the number of employees who receive less than the promised percentage of wages.

A dollar compensation maximum is a practical device for making it possible financially to include all workers even the highest paidin a workmen's compensation system. The higher the wage, of course, the smaller portion of wage restoration possible under the maximum.

Dollar maximums, however, were never intended to alter materially the relationship between the maximum percentage of wages which a law provide generally two-thirds-and the wages the majority of the covered employees actually receive.

I want to emphasize that an increase in the maximum in no way affects the amount of compensation drawn by employees whose wages are less than two-thirds of the maximum, or, under this proposal, three-fourths if they have a dependent.

I emphasize that in a damage suit, available but for workmen's compensation, an employee may recover 100 percent of this wage loss, plus damages for pain and suffering.

At the present time, only employees making $105 a week or less receive two-thirds of their wage when disabled. The proposed $105 maximum would boost the wage rate level for two-thirds wage recovery to employees making $157.50 a week or less, or at the proposed three-fourths rate, those making $140 a week or less.

The operation of the workmen's compensation mechanism as an adequate substitute for damage rights against the employers is in many cases negated. Further, it must be borne in mind that the maximum which may be adopted at this time will apply into the future in which there will be a constantly changing relationship between wages and the stationary dollar compensation limit.

When a large number of employees under a workmen's compensation system draw benefits at the ceiling, the basic nature of the system is transformed from an individual to an almost flat-rate system, such as operates in foreign countries. In America, however, we think usually in terms of workers as individual human beings who have through their work established individual levels of earning which uld be taken into account in calculating wage loss.

To reestablish the relationship of individual earnings to compensation under the Longshore Act, it is essential that the maximum be increased.

During the third quarter of fiscal year 1967, approximately 75 percent of the injured workers under the Longshore Act and its extension received compensation at a maximum rate of $70 a week. (Table I follows:)

TABLE 1. PERCENTAGE OF CASES PAID AT MAXIMUM

(Percent of longshoreman/harbor workers and extension act cases (except DCCA) currently being closed at maximum $70 compensation rate, by district]

Note: The number of compensation cases reviewed (2,020) is over 10 percent of annual total. From 24 to 4 of the longshoreman/harbor workers and extension act cases (excluding DCCA cases) currently bing closed, are receiving benefits at the $70 maximum.

Source: Current count of portion of 3d quater of 1967 closed cases.

Mrs. PETERSON. With respect to longshoremen, the weekly average wage ranges from $200 in larger ports such as San Francisco to $75 in smaller ports, such as Norfolk. A January 1967 sample of the wages of longshoremen in San Francisco by the Pacific Maritime Association shows that of the 3,269 longshoremen, only 115, or 3.5 percent, received wages of less than $100 a week.

Under the present maximum limitation, about 96.5 percent of the longshoremen in the San Francisco area receive less than two-thirds of their wages when injured.

This is shown in table II.

(Table II follows:)

TABLE II-ACTUAL AVERAGE WAGE DATA, LONGSHOREMEN, SAN FRANCISCO
[Actual earnings of A and B longshoremen, San Francisco, week ending Jan. 30, 1967]

Mrs. PETERSON. According to information by the Bureau of Employees' Compensation, the average weekly wages for shipyard workers during fiscal year 1967 ranged from $160 in San Francisco to $104 in Jacksonville.

The national average for such workers was $133.82 a week in May 1967.

I am speaking here of averages only.

An October 1966 wage survey of selected occupations in the District of Columbia area shows that a substantial number of employees receive more than $105 a week.

Table III illustrates this.

(Table III follows:)

Number of workers receiving straight-time hourly earnings of

TABLE III.-DISTRICT OF COLUMBIA WAGE DATA

AVERAGE STRAIGHT-TIME HOURLY EARNINGS FOR MEN IN SELECTED OCCUPATIONS STUDIED ON AN AREA BASIS BY INDUSTRY DIVISION, WASHINGTON, D.C., MARYLAND, AND VIRGINIA

OCTOBER 1966

154 $3.21 $3. 05 $2. 86-$3. 53

Nonmanufacturing..

3.21 3.05 2.84-3.50

3.03 2.97 3.84-3.10

Services..

1 Excludes premium pay for overtime and for work on weekends, holidays, and late shifts.

2 For definition of terms, see footnote 2, table A-1.