insurance system of holding down pay-roll taxes to a minimum; if any deficits occur these should be met out of general revenues and progressive taxation.

That we again condemn experience rating as unsound in that it prevents accumulation of adequate unemployment insurance reserves in good times, raises taxes in bad times, and provides a constant incentive for employers to fight workers' benefit claims administratively and by amendment of State laws.

That we urge strengthening of the Federal Bureau of Employment Security through redirected use of the present staff and through more adequate appropriations as it can take leadership in improving the program and achieving better cooperation from the States. We call upon Congress to make adequate appropriations for State employment security agencies, including a substantial contingency fund. But we oppose automatic return of administrative funds to States in any form whatsoever as inconsistent with proper Federal responsibility and programing. We urge Congress and the Department of Labor to prevent use of Federal funds for the lobbying activities of the Interstate Conference of Employment Security Agencies.

That the full benefits of this program and the legislation above recommended be applied to Puerto Rico as an integral part of the American economic unit.

RESOLUTION No. 9

SECURITY THROUGH COLLECTIVE BARGAINING

The United Steelworkers of America is now engaged in a strike in pursuance of the basic objective of securing pensions and a health and welfare program on a noncontributory basis from the steel industry. Many other CIO unions are similarly engaged in collective bargaining on these issues. Unions have continually fought for improved living standards, higher wages, better working conditions, and health and security benefits and shall continue to fight for these objectives in coming years.

Through the stalwart efforts of the United Steelworkers, the issue on pensions and health and welfare benefits has been brought to the forefront. The FactFinding Board in the steel dispute accepted the Steelworkers' position that workers are entitled to pensions and health and welfare benefits and that the cost of such benefits are to be considered as a cost of operation and to be paid solely by the corporation. The Fact-Finding Board accepted unequivocally the position of the Steelworkers' Union that reserves must be set aside by corporations for pensions and health and welfare benefits just as reserves are set aside by corporations for depreciation of plants, buildings, and equipment.

It is a fundamental obligation for corporations to provide for health and medical needs of the individual worker during the time of his employment and to further provide for the safeguarding of that worker's life and dignity when he becomes too old to work and too young to die: Now, therefore, be it

Resolved, We reiterate our stand that programs of security and protection for working people be recognized as a legitimate and proper cost of doing business and that programs under collective bargaining must be entirely financed by employer contributions.

Because Government social-security programs fail to meet standards of adequacy and are now completely lacking in benefits and services for health and disability, it should be a continuing necessity for unions to bargain collectively to supplement these Government security programs.

Noncontributary security programs won through collective bargaining shall be democratically administered with full regard to the interest of the workers. They shall establish the highest possible standards of benefits with available funds. Arrangements for programs under collective bargaining shall be those which maximize benefits to the workers.

The CIO must vigorously pursue through collective-bargaining programs to bring to its members a coordinated system of security benefits, increased real wages, shortening of the workweek with no cut in take-home pay, the guaranteed minimum annual wage, and improved working conditions.

RESOLUTION No. 26

INDUSTRIAL SAFETY AND HEALTH

Lack of safe and healthful working conditions continues to levy a fearful toll on the life, limb, and health of the worker in American industry. The latest reliable figures indicate that more than 16,000 workers are killed and an addi

tional number in excess of 2,000,000 are injured each year in these industrial casualties. These appalling totals are a vital concern of the Congress of Industrial Organizations.

The solution of this grave problem has been left for too long in the hands of one or another limited group. A large segment of American management continues to insist that safety is a sole prerogative of the employer. Some spokesmen for the technical experts, such as physicians and safety engineers, likewise endeavor to make safety and industrial health their exclusive jurisdiction. Enlightenment is needed to convince the autocrat in the field of safety and occupational health that elimination of health hazards in industry is the joint concern of all those involved in industry.

The failure to confront this national problem of industrial safety is chargeable in large measure to frequent legislative attempts to remove from the United States Department of Labor and the respective State departments of labor the functions of establishing safe and healthful working standards, and of enforcing these standards. A part of these destructive legislative assaults is an irrational opposition to the establishment of safety codes equipped with the authority of law and susceptible of constant improvement without involved legislative proceedings.

Some of the confusion having to do with enforcement of Federal and State safety laws results from misunderstandings arising between the respective labor departments and the respective public-health agencies throughout the country. The extremists on each side in these jurisdictional disputes must be made to realize that every public agency has its proper place in the field of peculiar competence in bringing about the elimination of accidents and occupational diseases arising within industry. Cooperation, not contention is necessary. It is encouraging to note that this problem appears to be on the way to solution. President Truman has made a tremendous contribution by calling National Conferences on Industrial Safety, which are bringing together leaders of management, of labor, of the medical profession, and of the engineering services to devise cooperative ways and means of meeting the problem. The first of these conferences called by President Truman was held in Washington, D. C., in March 1949, and a second President's Conference on Industrial Safety is scheduled for June 1950. At the same time the suggestion of the first President's conference that similar conferences be called by the governors of the respective States is meeting with success.

An almost criminal deficiency in the field of industrial safety and occupational diseases is the difficulty of obtaining accurate statistics and detailed reports on the subject matter. The gathering of this information is a proper function of the Bureau of Labor Statistics of the United States Department of Labor supported by the full cooperation of the respective State departments of labor, the United States Public Health Service, the State and local public health agencies, and of management and labor.

The problem of industrial safety and occupational diseases can properly be met only through the full cooperation of all of those concerned in the mounting toll of industrial casualties: Now, therefore, be it

Resolved, (1) We rededicate the CIO to the high objective of making the workplaces of America safe and healthful, with special consideration for the women and young persons who toil in them.

(2) We redouble our insistence that labor be brought into full joint participation at the plant level with management, the technical agencies, and the public authority. in instituting and carrying out safety and occupational health programs in industry.

(3) We urge Congress to provide the United States Department of Labor with the necessary authorizations and adequate appropriations required by the Bureau of Labor Standards to formulate national standards of industrial safety and occupational health for the guidance of the respective States in protecting workers from safety and health hazards in industry.

(4) We urge legislation authorizing, directing, and providing adequate funds for the promulgation and enforcement by the United States Department of Labor, in cooperation with State labor departments, of national uniform health and safety codes covering employment in hazardous industries in or affecting interstate commerce as proposed in the Burke-Humphrey bill (H. R. 4997; S. 1992).

(5) We urge our affiliated organizations with members in the various States to make every effort to strengthen the State departments of labor and to have delegated to those departments the enforcement of all State codes, statutes,

60805-50-pt. 3-11

and regulations designed to protect workers from unsafe or unhealthy working conditions.

(6) We support S. 1439 which would provide Federal assistance to State agencies administering labor laws to promote, establish, and maintain safe workplaces and practices in industry. This bill has been recommended for passage by the Senate Committee on Labor and Public Welfare.

(7) We urge our affiliated organizations to insist on the drafting in the several States of safety and occupational health codes by qualified experts from management, from labor and from the medical and engineering fields, working in conjunction with the State departments of labor, and to obtain for such codes the status of law.

(8) We commend the Surgeon General of the United States for establishing in the Industrial Hygiene Division of the United States Public Health Service a Public Advisory Committee composed of industrial physicians and nurses, management and labor representatives. Further, we endorse the recommendation of the Public Advisory Committee that the USPHS and the United States Department of Labor cooperate fully in their respective proper fields to protect workers in industry from occupational disease hazards.

(9) We endorse the reports of the President's Conference on Industrial Safety held in Washington, D. C., in March 1949, as an excellent beginning in the national campaign to make industry safe for the workers employed in it.

(10) We hail with satisfaction the assurance that another President's Conference on Industrial Safety will be held in Washington, D. C., in June 1950. Further, we note with satisfaction the excellent work done by the 75 CIO delegates sent by our affiliates to the 1949 conference, and we urge our affiliates to send similar qualified delegates to the 1950 President's conference.

(11) We urge our affiliates and their members to work for the calling of Governor's Conferences on Industrial Safety in the respective States.

(12) We urge Congress to make available to the Bureau of Labor Statistics of the United States Department of Labor the facilities and appropriations that will enable the BLS to compile complete, accurate, and detailed records on accidents and diseases occurring in American industry for the information and guidance of those persons of good will who are striving to reduce and eliminate the frightful toll of death and injury exacted by accidents and occupational diseases every year in American industry.

(13) We urge all of those concerned to cooperate to the fullest extent in bringing safe and healthy working conditions into the smaller plants where 70 percent of the Nation's industrial casualties occur each year.

A NOTE ON COSTS OF SOCIAL SECURITY

(Statement Prepared as Supplement to Testimony by Emil Rieve for the CIO)

A decent social-security program is a good investment in the preservation of the lifetime productivity of American workers. Only as we protect the physical and mental well-being of the Nation's work force will it be able to make its maximum contribution to the Nation's economic progress.

This position was well summed up in the recent economic report of the President's Council of Economic Advisers, which reminded the Nation that:

*** ** social-security programs should be measured primarily against what a strong economy can afford to do. Workers are more productive when they live in the assurance of protection against foreseeable hazards, rather than in dread of their incapacity to cope with them. Social-security programs also serve to cushion the effects of recessionary trends whenever these may appear, because old-age payments constitute a steady flow of income, and because unemployment insurance benefits and assistance payments rise as other forms of income decline."1

Much confusion and misunderstanding seems to attend consideration of the problem of cost in connection with proposals to liberalize existing social-security statutes. The very nature of the elements that must be weighed-future population trends including the general birth rates and death rates, forecasting the age at which workers will retire a decade or two hence, productivity and wage

1 Economic Report of the President. Together With the Report to the President, the Annual Economic Review by the Council of Economic Advisers, January 1950,

trends in the economy-these and other factors make it almost impossible to estimate the future costs of such programs with any degree of exactitude. As we enter the atomic age we urge the committee not to sacrifice existing needs and responsibilities on the altar of what are at best dubious cost projections.

Making sound cost estimates for a pension and survivors insurance program is a rather elusive task. Overconservatism somehow always seems to predominate such calculations. It is pretty well established, for example, that in setting up private pension systems, insurance companies have always tended to overload their premiums. Thus, they seem to overestimate life expectancy, the number of people who will actually retire at age 65, etc.

Similar miscalculations which tend to exaggerate costs were characteristic of the estimates of the Social Security Administration at the time the Federal program was originally laid down. Faulty population estimates, for example, failed to take into account the sharp increase in the birth rate which took place during the past decade. At the same time, experience has shown that although retirement benefits are available thousands and thousands of workers who reach 65 are able to and prefer to continue to work.

In his recent testimony before the House committee, Arthur Altmeyer, Commissioner of the Social Security Administration, admitted that the Government had originally estimated the cost of the present program at a level premium of 7.9 percent of pay rolls. On the basis of actual experience under the program and more current population statistics, this figure has now been revised downward to some 4.5 percent of pay rolls.

We think that this committee should be aware of the history of such estimates and take with a grain of salt any new estimates that are presented here. The fact remains that actuaries and economists seem to go awry in the face of changing birth rates, rising wage levels, and the like. Almost any estimate of eventual cost tends to be too high.

Cne of the most common errors made in estimating the costs of liberalizing the present program is that which ignores many of the costs currently being assumed to meet the same needs. It is by no means true that the increased payroll taxes which would be imposed under a liberalized Federal program are a net addition to the present burdens. For example, much of the public assistance or private charity which goes to supplement the presently inadequate old-age pensions could be dispensed with, if the existing Federal program was sufficiently liberalized.

The manner in which pay-roll tax costs under a social-security program are often a substitute rather than an additional cost can be clearly seen in the case of temporary disability insurance. Assuming, as is generally agreed, that the cost of this type of program could be met by a 1-percent tax on pay rolls, it should be obvious that this would be no new cost suddenly to be thrust on society. The fact remains that by some catch-as-can method which doubtless imposes severe and unexpected burdens upon millions of people, the families of temporarily disabled wage earners must scrape together resources to get by.

Such unbudgeted costs are in many ways the most severe of all and doubtless involve greater suffering than would a pay-roll tax. Furthermore, a wage earner lacking adequate resources during such periods of enforced disability returns to work before he is fully recovered. Frequently, he is laid up again, and the entire Nation, along with his family, suffers an economic loss.

To repeat, then, the pay-roll tax costs imposed to finance a liberalized socialsecurity program will represent, to a considerable extent, merely the regularization of charges already assumed to aid the aged and the needy.

Necessarily, the estimated costs of social security are a projection into the future. This is reasonable since any program, once set up, will presumably operate for years ahead. But projecting costs on the basis of future needs and operations of a program is only part of the task. Any realistic evaluation of costs must also take into consideration the factor of economic growth. As the Council of Economic Advisers expressed it in their recent report to the President:

"Social-security expansion now, insofar as it applies to persons who will not retire for many years, should make considerable allowance for an assumption of continuing secular economic growth. Almost all of our national policies in the long run depend on the validity of this assumption."

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*

*

Further, the Council pointed out that its "* main reason for offering this analysis is to promote the application of sound economic principles to socialsecurity matters. It seems clear to us that the application of sound analysis reveals that our Nation can afford a considerably expanded socialsecurity program without impairing our economic stability or weakening our growth potential." "

2

As an indication of perspective which is gained when one projects future economic growth of the Nation, as well as the cost of social security, in another recent report the Council pointed out that 25 years hence the total costs of all presenly recommended programs in the field of social insurance and public assistance, including medical care, might range up to $25,000,000,000 a year. The Council added, however, that although this is a very large figure it should be viewed against the "rate of growth which would result from fairly consistent maximum production and employment" which "would mean a total national output of 500 to 600 billion dollars 25 years from now, or in the range of $300,000,000,000 above the present levels." The Council went on to add that "the prospective increase of $20,000,000,000 in social-welfare costs would thus represent less than 7 percent of the total increase in national output. This would only be a moderate proportion of its increasing income for a prosperous democracy to devote to the aid of those less able to protect themselves against economic risks."

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To repeat, it is patently unfair to project costs into the future without making similarly reasonable projections of what our economy will look like some years hence.

As an example of the kind of scare propaganda which can be pumped out at a time when proposals to liberalize the OASI program are under consideration, let me call to your attention the much-quoted study recently issued by the Brookings Institution entitled "The Cost and Financing of Social Security." This study estimates that the original administration bill, H. R. 2893, by 1980 would have entailed annual charges of from $10,065,000,000 to $14,688,000,000, or a possible intermediate estimate of $12,377,000,000 annually. This certainly seems like an enormous figure and taken by itself might well be inclined to scare legislators into shying away from an effective liberalization of existing pensions.

We have already called attention, however, to the fact that even if these estimates proved to be true, and that's a doubtful assumption based upon past experience in this field, these costs would represent but a very small share of what national income is apt to be 25 or 30 years hence according to the Council of Economic Advisers.

If one prefers a more conservative source than the Council of Economic Advisers, Sumner H. Slichter has only recently made estimates of the probable level of national output in 1980. His estimates come to somewhat lower levels than do the Council's, but this stems in part from the fact that Professor Slichtér assumes that by 1980 the average workweek will be around 30 hours instead of the current 40-hour level. Even with this somewhat radical assumption, Slichter estimates that in 1980, total output will be around $416,000,000,000 per year compared to around the level of $250,000,000,000 in 1949.*

Viewed against even this more conservative level of national output the charge of $12,377,000,000 which Brookings blows up is obviously well within the limits of this country. The issue becomes one of letting the American people decide in 1950 whether by 1980 they can afford to apply around 11 or 12 billion dollars of a prospective increase of at least $150,000,000,000 in their national production, to provide decent care for the aged, the survivors of stricken wage earners, and the permanently disabled. (Moreover, as we indicated above, this wouldn't be an entirely new cost, since much of it would otherwise have to be borne in an inefficient and unplanned-for fashion.)

Regardless of what program is finally recommended by this committee, when costs are under consideration the probable and potential economic growth of the United States is certainly a relevant factor.

As we have already indicated, any cost estimates are in the nature of specu lative guesses. Recognizing that it is impossible to make full allowance for the

2 Business and Government, Fourth Annual Report to the President by the Council of Economic Advisers, December 1949, p. 23.

Economic Report of the President, together with the report to the President, the Annual Economic Review by the Council of Economic Advisers, January 1950, p. 122. The Atlantic, November 1949, p. 39.