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Turner, who is president of the Greater Washington Central Labor Council.
Mr. Chairman, I appear here today on behalf of the AFL-CIO as well as the metal trades department of the AFL-CIO, and the Industrial Union of Marine & Shipbuilding Workers of America, AFLCIO. Other AFL-CIO affiliates interested in the pending legislation have also requested the committee for time to present their views concerning the impact of the amendments upon workers in their specific industries, and they will be appearing before your committee at a later date.
The American Federation of Labor and the Congress of Industrial Organizations appreciates this opportunity to testify in support of the major provisions contained in H.R. 13314 and S. 2485. This legislation designed to improve the benefit structure and modernize other provisions of the Longshoremen's and Harbor Workers' Act is long overdue. It is now over 6 years since any changes were made in this act.
At that time, the act covered approximately 600,000 workers including: longshoremen, ship repairmen, ship servicemen, harbor workers and other offshore workers, workers at U.S. defense bases outside the United States, and private industry workers in the District of Columbia.
Today, this act provides workmen's compensation protection within the same groups to an estimated 1 million workers, but this protection has deteriorated noticeably since 1961. In many ways, the basic provisions of this act have fallen far behind the standards established by State workmen's compensation laws and the Federal Employees Compensation Act.
The President, at the time he signed the 1966 Amendments to the Federal Employees Compensation Act, urged other jurisdictions to examine their workmen's compensation laws in the light of the new Federal amendments. At the same time, he urged the other jurisdictions to take action that would assure injured workers proper compensation for the loss of their earnings.
We are sure that the President's suggestion will be heeded by this committee, and our testimony will be directed to the proposals contained in Ś. 2485 which we feel are consistent with his statement of July 4, 1966.
The current maximum weekly benefit payable for temporary total disability in the act is now only $70. This figure is exceeded by Alaska ($100), Arizona ($150), Connecticut ($74), Hawaii ($122.50), New Jersey $83), and the Federal Employees Compensation Act ($331.92).
Workers covered by this act are engaged in extremely hazardous occupations. Injuries are frequent and severe. Along with mining and logging, the injury frequency rate of longshoremen ranks among the highest. According to the Bureau Employment Compensation, 87,497 longshoremen and harbor workers, 4,272 defense base workers, and 29,492 private employees in the District of Columbia were injured in the year ending June 1967 in the course of their employment.
The combined total of injuries to workers covered under the act was 130,389. Of these 280 were fatal. Such terrible losses should be adequately compensated.
The importance medically of adequate compensation has been recognized by the American College of Surgeons and the American Medical Association. The American College of Surgeons has taken the following position. Provision must be made for "adequate compensation to secure family security during the entire period of disability and rehabilitation.” The position of the American Medical Association is as follows:
Workmen's compensation is not a relief program. It is the proper intent of the program that a disabled employee and his family should not suffer a serious reduction in normal living standards during the rehabilitation period. This requires that the benefit level be maintained at an adequate percentage of usual wage and include reasonable personal expenses incurred by the employee in the course of the rehabilitation process.
Underlying almost all workmen's compensation laws is the principle that the great majority shall receive indemnity benefits in amount equal to at least two-thirds of their actual wage loss during the period of total disability. We think a one-third cut in your actual earnings entails "a serious reduction in normal living standards during the rehabilitation period."
On the other hand, for reasons clearly justifiable, the Congress fixes the maximum benefit amount above which compensation to injured persons may not go, regardless of earnings. Our problem is this: We have delayed too long increasing the maximum and minimum benefit amounts.
The present maximum indemnity benefit for those earning $105 a week or more is $70. This provision has not been amended since 1961.
Since 1961, wages in general have increased substantially for workers covered under the act, and we list the rates payable in 1961 for longshoremen in the eastern and gulf coast areas and also those rates for 1967.
Senator YARBOROUGII. Yes. The reporter will include that full table in the record at that point.
(The table referred to follows:)
BASIC HOURLY RATES FOR LONGSHOREMEN IN THE EAST AND GULF COAST AREAS
Jr. MCGUIGAN. According to the New York Waterfront Commission the average annual earnings of longshoremen in 1966 was $7,823. This is equal to an average weekly wage of over $150 compared to $115 in 1961 when the act was last amended.
Workers in shipbuilding and repairing are now averaging $137 a week. The average weekly wage in the District of Columbia for manufacturing in 1960 was $98 compared to $121 in August of this Senator YARBOROUGH. Mr. McGuigan, would you pause just a moment. This is reverting back to earlier figures we were discussing, at the early part of your statement. There are about a million workers covered under this act. You say that there were, in 1967 alone, a total of 130,389 injuries.
Does that mean injuries enough that they reported them under the Compensation Act? You don't mean just a scratch. You mean a serious enough injury to have lost time and reported ?
Mr. O'BRIEN. Yes, sir; and in appendix II is a table reflecting operations under the Longshoremen's and Harbor Workers Act for the period June 1, 1962 through June 30, 1967.
Senator YARBOROUGH. These are injury cases reported ?
Senator YARBOROUGH. If you just tore the skin on your hand and put a bandage on there that wouldn't be reported, would it?
Mr. O'BRIEN. Yes, sir.
Senator YARBOROUGH. In some States, you know, you only report I believe under the ICC Act, and if a railway employee doesn't stay off 3 days it isn't reported, but under this act any minor injury like that would be reported too!
Mr. O'BRIEN. It might be reported as an injury, but it wouldn't necessarily
Senator YARPOROUGH. Mean compensation.
Senator YARBOROUGH. Of course an injury like that could result in a disabling infection in the hand. You can't tell whether it is minor or not when it happens.
Mr. O'BRIEN. Yes, sir.
Senator YARBOROUGII. Thirteen percent of all the workers injured in 1 year is a terribly high percentage it seems to me of industrial accidents. You have i3 percent. You have 130,000 injured in 1 year alone. Thirteen percent injuries in 1 year is a terrific rate of injury.
We need safety devices and safety education along with workmen's compensation to protect them.
Go ahead please with your statement.
Mr. McGUIGAN. If wage rates for the construction industry were included it would certainly raise this average.
We have previously referred to manufacturing. A copy of building and construction rates are attached.
In 1940 the average weekly wage in the District was $26.29. At the same time the maximum disability benefit amount was fixed by law at $25 a week or 93.7 percent of the average weekly wage. In 1967, to restore the ratio of 1940, the maximum benefit would have to be increased to approximately $115 a week.
It is clear if we are to provide injured workers in the District in 1967 with benefits comparable to 1940, the present maximum benefit of $70 a week must be substantially increased.
The AFL-CIO and its affiliates feel the proposal in S. 2485 that would increase the maximum benefit amount from $70 to $105 is a step in the right direction.
However, it fails to provide any assurance that a worker earning over $160 a week will receive a benefit equal to at least two-thirds of
his average weekly wage. If we are to provide the great majority of the workers injured on the job benefits in accordance with the principle enunciated in the law today, it will be necessary to increase the maximum benefit amount from $70 to at least $115 per week. In fact, we find a maximum weekly benefit of more than $115 is warranted.
The wages of Government workers and workers in private industry in the District of Columbia are closely related. For example, a Government employee working at the Government Printing Office as a journeyman printer is currently earning $1.49 an hour. In private industry the same worker engaged on a same trade in the District of Columbia and a member of the same union earns $4 an hour in commercial shops and $4.51 an hour in the newspaper industry.
However, the shocking fact is that a Government worker in the printing trades earning approximately $180 a week would receive benefits of $120 a week compared to only $105 a week for a worker in the same trade in private employment with comparable wages. Injured workmen simply cannot understand the reason for this discrepancy:
Other skilled workers in private employment in the District of Columbia have established or negotiated future wage rates that will soon make the proposed maximum of $105 a week inadequate in terms of their earning capacity.
This does not mean that every injured worker should or would receive the maximum benefit. However, many workers covered by this act can and do earn weekly wages in excess of $160.
The proposed minimum benefit presents a similar problem. S. 2485 would increase the minimum benefit almost 100 percent. This is a significant improvement in the benefit structure of the act, and it is long overdue.
However, we would like to see this minimum benefit amount raised to a higher level. We are concerned about the inability of a totally disabled worker to subsist on $35 a week, or $1,820 annually. The question of the adequacy of the long-established—1956—minimum benefit has been shamefully ignored far too long. For a family of four the official poverty figure is $3,000, nearly twice the annual income the proposed minimum benefit would provide. Thus the proposed increase in the minimum benefit to $35 a week would still leave injured workers and their families far below the poverty level.
A serious deficiency in the present law would be remedied by enactment of the proposed amendment to eliminate the present statutory maximum amount payable-$24,000—in cases of temporary total disability. Eleven State laws and the Federal Employees Compensation Act provide for the payment of benefits for the duration of the disability including:
Connecticut, Delaware, Maine, Michigan, North Dakota, Oregon, Rhode Island, Pennsylvania, Washington, Wisconsin, Wyoming, and the Federal Employees Compensation Act.
The majority of industrial accidents, approximately 90 percent, involve temporary total disability, and 75 percent of these cases recover within 3 weeks and 90 percent within a month. The remaining 10 percent are disabled for a longer period, and they should receive benefits for the duration of the disability regardless of the time period involved.
We feel the cost of eliminating the present limit would be negligible even at the proposed maximum benefit level. At the proposed maximum
benefit level for temporary total disability, a worker's disability would require a duration of four or four and a half years before reaching the
a $24,000 limit. The average duration of temporary total disability cases in manufacturing, according to 1963 data from the Bureau of Labor Statistics, is only 18 days. Only a very small proportion of workers would have a temporary total disability lasting more than four or four and a half years.
The proposed reduction in the period required before the worker can collect retroactive benefits from 28 days to 21 days is a welcome improvement and it is in harmony with present-day developments in the field of workmen's compensation.
However, this reduction in the retroactive period fails to meet the Department of Labor's recommended standard of a waiting period not exceeding 3 days with retroactive benefits after 2 weeks or less. The AFL-CIO has supported this standard, and we urge the committee to include it in this bill.
The proposal to add a new subsection (23) to section 8(c) providing compensation for the loss of wage-earning capacity upon the termination of a scheduled award in cases of permanent partial or total disability has the unqualified support of the AFL-ĊIO.
This proposed revision, similar to the 1966 amendment to the Federal Employees Compensation Act, fills a serious gap in relation to unmet wage losses. However, there are other scheduled award inequities that proposed legislation would not remedy.
The contrast under the scheduled losses between the Federal Employees Compensation Act and the District of Columbia or the Longshoremen's and Harbor Workers' Compensation Act is dramatic. An arm at the shoulder is worth, under FECA, $103,584 but for a worker in private employment in the District of Columbia the maximum is $21,840.
A hand, under FECA, is worth $81,008 but under the Longshoremen's and Harbor Workers' Compensation Act, the hand is worth only $17,080.
As a result of these existing differences the scheduled loss maximum amounts for FECA covered employees suffering a scheduled injury are four times greater than that of a worker in private employment. The proposed amendments would reduce this differential only slightly.
It is difficult to see as a matter of adequacy and equity why a person just because he is an employee of the Federal Government should receive more than four times the amount for the loss of an arm than a person in private employment.
Medical and indemnity benefits as a percent of payroll in the United States vary from a high in Oregon of 1.46 percent to a low in Indiana of 0.35 percent. Medical and indemnity benefits in the District of Columbia range between 0.5 percent and 0.6 percent of payroll. In only 12 States, are benefit payments less than 0.5 percent of payroll
. In 29 States, benefits as a percent of payroll are higher than in the District of Columbia ranging from 0.6 to 1 percent or more, according to the October 1966 issues of the "Social Security Bulletin."
When the Congress of the United States decided-and we think correctly—to substitute a system of compensation for injuries arising out of and in the course of employment in place of the adversary proceedings of employee's suits against employers in negligence, the Con