unemployment compensation program and tax to them. This position was based on the fact that operation of the nation's hospitals has produced a minimal risk of unemployment for hospital workers, and it seemed inadvisable to us to add millions of dollars in unemployment taxes to the cost of operating hospitals for the purpose of providing benefits to a relatively few unemployed workers, especially when any individual having skills a hospital needs had many jobs available to him. The problem of widespread personnel shortages which hospitals have faced for years has not been solved. For example, reports about the serious shortage of nurses come to us continually from all parts of the country. In the New England States alone more than 6,000 hospital beds have been closed in recent months because of lack of nurses. Hospitals in all States are suffering from the shortage of qualified hospital workers and several have had to close entire wings because of personnel shortages. Staffing problems have also prevented a number of hospitals from putting into service intensive coronary care units and other types of facilities that were ready for use and urgently needed. The public and the government have been expressing great concern over the spiraling cost of hospital care. We feel we should point out that enactment of this legislation will without doubt be a pressure toward further increases in the cost of hospital care and consequently the cost of both the Medicare and Medicaid programs. With regard to administration of the program, we are concerned that some workers who voluntarily leave their jobs in hospitals might in some States be found eligible to receive benefits. We understand that a separation because of pregnancy or quitting to get married, to leave the State, to obtain a better job, or for other personal reasons can serve as a basis for payment of benefits in some States. Even under a program of self-insurance as authorized for nonprofit organizations in H.R. 12625, hospitals fear they might find the program unjustifiably expensive if they are called on to provide reimbursement for unemployment benefits paid to employees who leave their jobs for their own personal reason. We hope your committee will give special consideration to tightening administration of the program and to elimination of the risk of such abuses. We appreciate the opportunity of submitting these comments on H.R. 12625 and request this statement be made a part of the record of your committee's hearings on the bill. DEAR MR. MILLS: The American Nurses' Association is pleased to register its support for H.R. 12625. While we cannot support it unequivocally, the bill clearly represents a major step forward in improving our unemployment insurance system. The postponement of federal benefits standards for two more years seems unnecessary in view of the record. We recognize that some progress has been made, but this record supports considerable skepticism. Federal benefit standards are essential to the development of sound state programs and to the restoration of benefit payments to an adequate level. Of far greater importance is the fact that most nurses are not covered by any unemployment insurance program. Happily, H.R. 12625 would provide benefits to the employees of non-profit hospitals and, additionally, small employers without regard to the size of their workforce. This would include doctors' offices, usually staffed by one or two nurses. With most states providing voluntary coverage for employees of non-profit institutions, the overwhelming majority of hospital workers are not protected, and after 34 years of the voluntary coverage provisions! Avaliable federal government statistics indicate that only about 12 per cent of all nurses employed in non-government hospitals are now covered. Excluding proprietary hospitals, this figure would be even lower. Of the 1.8 million employees who would be added to those now protected, more than half are employed by non-profit hospitals, educational institutions, and community health agencies. This includes over 300,000 nurses. Recent history indicates that without mandatory coverage, most hospital workers will remain unprotected for years to come. Current social philosophy and modern business method no longer condones practices which give labor costs less priority than other costs of operation. As this Association has stated in previous testimony, unemployment among nurses, other than for a relatively short-term, has not been a problem. This is true also for most categories of health care workers. But we recognize the necessity of providing additional benefits to the long-term unemployed, and support the proposal for federally supported extended benefits programs. The Administration's unemployment insurance proposals are certainly a necessary and welcome advance. Many areas could be improved further as a number of other associations have indicated over the years and in their published comments to H.R. 12625. But our purpose is to lend support to the proposal's accomplishments with the hope that the near future will bring further improve ment. Sincerely, HILDEGARD E. PEPLAU, R.N., Ed.D., THE METHODIST RETIREMENT HOMES, INC., In Re: H.R. 12625. Hon. WILBUR MILLS, Chairman, Committee on Ways and Means, DEAR MR. MILLS: I am writing to you on bealf of The Methodist Retirement Homes, Inc., which owns and administers a retirement home for the aged on behalf of the North Carolina Conference of the United Methodist Church in Durham, North Carolina. This home has been in existence since 1955 and presently is caring for 175 aged persons many of whom require some benevolence on the part of the Church in order to live at the Home. The Retirement Home is a non-profit organization which is supported by the Church. At present it is not paying any unemployment tax upon the salaries which it pays its employees. I understand that the Committee on Ways and Means is conducting hearings on the administration's proposal to amend the Federal Unemployment Compensation Statute in order to include nonprofit employers for the first time. I am writing to you in opposition to this proposal. It has been the experience of the Methodist Retirement Home that it has no seasonal unemployment of its employees and that, based on our operating experience over a period of 14 years, there are very few employees who are ever laid off for reasons which would entitle them to claim unemployment benefits. It is my feeling that the net result of this proposal would be to impose an additional cost upon the Home while rendering very few, if any, benefits to its employees. It is my feeling that most other homes for the aged have had this same experience and would share my feelings on this matter. Rapidly rising costs have served to increase steadily the amount which is required each year to care for the aged people who are members of the Home. The Home is concerned about every additional cost which it must incur because this cost must ultimately be borne, either by the aged people who are in a position to pay, or by the United Methodist Church which supports the Home in its operation. I hope that your Committee will see fit to continue the exclusion of non-profit employers from the unemployment insurance program. Yours very truly, JOSEPH F. COBLE, Secretary. PHILADELPHIA GERIATRIC CENTER, MR. JOHN M. MARTIN, Jr., Chief Counsel, Committee on Ways and Means, House Office Building, Washington, D.C. DEAR MR. MARTIN: I am writing on the question of unemployment insurance for nonprofit homes for the aging. What is not kept in mind is that most nonprofit homes for the aging carry large numbers of older people on public assistance, and in most cases, such as in Pennsylvania, the reimbursement rate does not approach reasonable costs. If we were to be subject to an unemployment tax, it would work a hardship on the institution involved by causing an additional expense and tend to add to the nation's problem of inflation. We realize that this is not applicable to states where reasonable reimbursement costs are being met, and, if this were in effect universally, then the problem of unemployment tax would be irrelevant. This bill, while it is of help to some employees should be delayed until all the states are covered under Title 19 for long term care. I would urge the committee's consideration for delay in enactment of this amendment. Sincerely, ARTHUR WALDMAN, Executive Vice President. FRIENDLY ACRES, Newton, Kans., October 6, 1969. MR. JOHN M. MARTIN Jr., Committee on Ways and Means, House Office Building, Washington, D.C. DEAR MR. MARTIN: We have learned that a Hearing is being conducted, relative to the inclusion of Non-profit Agencies under the Federal Unemployment Тах. We, as such an Agency, have tried to be fair to our Employees and have given every consideration to provide them security in their employment. I represent a Retirement Home for the Aging, with skilled nursing facilities for those who are in need of such care. We find ourselves in a very difficult situation, as our costs are increasing much faster than income sources increase to meet demands. We are constantly under pressure to keep our rates at a low level; at the same time legislation is forcing our costs to increase at an alarming rate as requirements become more demanding. If such Agencies as ours were to be placed under, and assessed for Unemployment Tax, it would add to the burden that we must pass on to those whom we serve most of them with very limited resources to provide for their last years; and a large percent whose funds have now become inadequate. We are in hopes that we may be allowed to continue to operate as we have been doing. Sincerely, WILMER H. NELSON, Administrator. THE LUTHERAN CHURCH-MISSOURI SYNOD, Mr. JOHN M. MARTIN, Jr., Chief Counsel, Committee on Ways and Means, DEAR MR. MARTIN: I would like to share with you my observations regarding the proposed legislation to broaden unemployment insurance to include non-profit employers. My feeling is to broaden the unemployment insurance coverage to non-profit homes at all levels of employment so that such employees would share in comparable insurance coverage. The service personnel and others in similar positions usually have less reserves and fewer opportunities to utilize private insurance plans. It does work a distinct hardship on those people who are least able to battle such a hardship.. I believe a review of the original social security coverage in which many of the service jobs were not included worked a definite hardship on service personnel. These individuals were making their contribution to the total operation but were not receiving the kinds of benefits to which they were entitled. I would urge that all employees benefit from unemployment insurance coverage. Sincerely, ALFRED Y. ARMSTEAD, Secretary. STATEMENT OF HAROLD F. HAMMOND, PRESIDENT, SUMMARY OF COMMENTS AND RECOMMENDATIONS The Transportation Association of America, with a broad-based membership of transportation users, investors, and air, freight forwarder, highway, oil pipeline, rail, and water carriers, has an established policy position to the effect that taxpayers' funds, or government-managed or government-sponsored funds, should not be available to strikers. More specifically, the TAA Board of Directors has voted its opposition to the use of unemployment compensation funds for striking employees in a labor dispute. Section 121 (a) of H.R. 12625 proposes to amend Section 3304 (a) of the Internal Revenue Code by adding a new paragraph (10), containing language required to be included in state unemployment compensation laws as a condition to the approval by the Secretary of Labor of such laws. The amendment would prohibit the payment of unemployment compensation to a disqualified individual pursuant to a labor dispute disqualification provision of state law, whose disqualification is terminated by the expiration of a specified period of time. The Transportation Association of America supports the enacement of the foregoing amendment. This statement is submitted to the Committee on Ways and Means of the United States House of Representatives by the Transportation Association of America (TAA) in connection with pending legislation on unemployment compensation (H.R. 12625). Section 121 (a) of the bill contains numerous provisions required to be included in state laws. The Transportation Association of America urges the Committee to support enactment of the following provision contained therein: "... compensation shall not be paid by reason of the expiration of a specified period of time to an individual who has been disqualified under a labor dispute disqualification provision in such State law...." DESCRIPTION OF THE TRANSPORTATION ASSOCIATION OF AMERICA For the record, the Transportation Association of America is a non-profit national transportation policy-making organization. The Association counts among its members more than 900 representatives of transport users of all types, investors and carriers of all modes, including air, freight forwarder, highway, oil pipeline, railroad, and water carriers. The 116-man Board of Directors includes executives from the modes of transportation mentioned above, as well as senior officials of leadings banks, insurance companies, investment companies, manufacturers, suppliers, agricultural interests, and other transportation-oriented professional people. These representatives, both individually and collectively, actively participate in the continuing drive to establish sound national policies for the maintenance of a strong transport system within the context of he private enterprise system. As a representative of the transportation sector, the Transportation Association of America is interested in the national unemployment insurance laws which are presently under consideration by the Committee on Ways and Means. The transportation industry, which annually accounts for about 20 percent of the total Gross National Product and which employs hundreds of thousands of workers covered by either state unemployment insurance laws or the Railroad Unemployment Insurance Act, has a particular interest in one of the provisions of H.R. 12625. We address ourselves to the proposed new paragraph (10) to Section 3304(a) of the Internal Revenue Code of 1954, as amended, as detailed in Section 121 of H.R. 12625. This amendment would deny the Secretary of Labor the right to approve tax credits to states which provide compensation, after expiration of a specific period of time, to individual employees disqualified under a labor dispute disqualification provision in such state laws. TAA supports this amendment. WHY TAA OPPOSES THE PAYMENT OF BENEFITS TO STRIKING EMPLOYEES The Transportation Association of America has long advocated legislation which would eliminate the provisions of state unemployment insurance laws requiring an employer, in effect, to subsidize the strike activities of his employees. As early as January 14, 1964, the Board of Directors of TAA adopted a resolution establishing a policy that "Taypayers' funds, or government-managed or government-sponsored funds should not be available to strikers." (See Attachment A, entitled "Government Aid to Strikers-An Inequitable Inflationary Practice," prepared for th TAA Transport Labor Committe of the Transportation Association of America (1969). This policy was reaffirmed on October 3, 1969, by a resolution of the TAA Board of Directors disapproving the payment of unemployment compensation to strikers. (See Attachment B hereto). The resolution emphasizes that: "... the inherent difficulties of resolving labor-management differences in collective bargaining are aggravated by the intrinsic imbalance in federal and state law of providing such financial assistance to only one of the bargaining parties." Historically, the American system of unemployment insurance has been generally patterned after the British unemployment compensation laws of 1935. The British legislation however, sought to exclude striking employees from such benefits, both because of a desire to maintain government neutrality in employer-employee relations and because of the drain that such benefits placed on the insurance fund as a whole. These principles, however, were not transferred to the American system due to historical context in which many of the state acts were adopted. Thus, it has been noted that ". . . from a historical perspective, the unemployment compensation statutes of the fifty states and the District of Columbia were enacted in a time of national pro-union sentiment . . ." ("The Purpose and Provisions of the 'Labor Dispute' Disqualification from Unemployment Compensation," 56 Northwestern L. Rev. 662, 1961). The pro-labor result of this historical development is reflected in the current conditions summarized as follows: (1) In 42 of 52 jurisdictions (the 50 states, Puerto Rico, and the District of Columbia), strike-idled employees qualify for unemployment insurance benefits if they can prove that they are not "participating" in the dispute; (2) In 30 of the 52 jurisdictions, such employees are eligible if they have not helped "finance" the dispute; and (3) In 41 of the 52 jurisdictions, such employees are eligible if they are not "directly interested" in the dispute. Perhaps the sharpest example of this historical bias is revealed in the adoption of legislation in the State of New York. In a recent study by the New York State Department of Labor it was noted that: "Because the 1935 law was drafted by representatives of organized labor and of the public-representatives of employers having refused to cooperate in the drafting and introduction of this measure-it contained many provisions not found at that time in other state laws. There was no disqualification for voluntary quit. A ten-week extended waiting period was provided for unemployment caused by an industrial controversy or a discharge for misconduct, or following the commission of an act of wilful misrepresentation for the purpose of obtaining unemployment benefits." (Evaluation of the New York Unemployment Insurnace Fund with Analysis of the Operation of the System, page 2, 1965.) The Transportation Association of America respectfully submits that these historical developments cannot be justified in the context of present day employer-employee relations, for the reasons set forth below: First, the object of unemployment insurance is to enable a cyclical or seasonably unemployed worker to locate other employment which will take full advantage of his skills and experience gained in previous employment and training. This financial assistance was never meant to become a strike fund to benefit employees temporarily displaced by a labor dispute, whether voluntarily or involuntarily. Indeed, President Nixon's Message of July 8, 1969, submitting such proposed legislation to Congress, emphasizes that the basic purpose of the program was to ". . . prevent a severe cut in a worker's standard of living when he is between jobs." The compelling need for government neutrality was appropriately summarized in a report prepared for the New York State Advisory Council on Employment and Unemployment Insurance in 1963, which stated that: |