impedes the movement of workers from State to State as required in this national emergency.

If congressional support for such a national system cannot now be obtained for all workers, we favor as an immediate interim step, in spite of its limitations, a Federal bill to provide adequate Federal standards on unemployment insurance, to extend coverage, to make reinsurance grants available to States with high costs, to end experience rating, and to provide national benefits for servicemen and Federal employees.

We favor adequate appropriations for the agencies administering unemployment insurance, the public employment offices, and other phases of the manpower

program.

We urge immediate repeal of the Knowland amendment so that unemployment insurance will not be used to undercut wage standards and destroy unions.

We condemn the activities of the interstate conference in arrogating to themselves functions assigned by Congress to the United States Department of Labor, and we urge that the Department and Congress end such activities by denying funds for them.

Mr. EDELMAN. I should like also to quote one paragraph from CIO convention resolution No. 14, on old-age, survivors and disability insurance and public assistance. This paragraph reads:

The strength of antilabor forces was demonstrated by the passage of the Knowland amendment without hearings and with 21⁄2 minutes' time allowed for opposing it on the Senate floor after the Senate Finance Committee had refused to accept it. It is shocking that this amendment, undermining the Federal safeguards for labor in the unemployment insurance system, should represent the only major action by the Eighty-first Congress in the field of unemployment insurance.

In World War I and World War II it was found absolutely necessary to have a Federal system of employment offices. The Nation's manpower cannot be mobilized efficiently if the employment service is split into 51 separate jurisdictions. The essential inefficiency of this patchwork, or State by State system, made a sort of springboard for those who are constantly seeking an excuse for promoting some totalitarian method of organizing our manpower reserves. Technically, the State systems are subject to some measure of Federal control, but even these vague and weak strings have been loosened by the vicious Knowland amendment. Pious declarations by State agencies indicating a general willingness to cooperate with the national administration are simply not good enough. There must be national policies, Nation-wide mobility of labor, Nation-wide clearance of job openings, national cooperation of unions and management in communities to supply trained men and women for the war effort. The Office of Defense Manpower cannot perform its functions fully and swiftly unless the public employment offices are part of its machinery; with their federalization, and adequate national system of unemployment insurance is needed.

The general arguments for a national system of unemployment insurance were well summarized in a memorandum appended to the report of the Advisory Council on Social Security to the Senate Committee on Finance in the Eightieth Congress. This memorandum appeared as appendix IV-C. It is entitled "Memorandum by Five Members Dissenting From the Majority Report With Respect to Continuation of Unemployment Insurance and the Employment Service on a State Basis." It was concurred in by President Emil Rieve, of the Textile Workers Union, also vice president of the CIO; Nelson Cruikshank, social security director of the A. F. of L.; Prof. J. Douglas Brown, now dean of Princeton University; Prof. Sumner Schlicter, of Harvard University; and Mr. John Miller, associate

director of the National Planning Association. With your permission, I will include that memorandum as part of this testimony. Mr. FORAND. Is that a substantial volume? Mr. EDELMAN. It is four and a half pages.

Mr. FORAND. Mr. Byrnes informs me that all of us have the complete document which you have in your hand.

Mr. BYRNES. Right at that point, that memorandum constitutes a part of the report made to the Senate Committee on Finance, does it not, and is published as an official document?

Mr. EDELMAN. That is correct, sir.

Mr. BYRNES. So it has official publication at this time?

Mr. EDELMAN. That is right.

Mr. FORAND. But what you have in mind consists of just a few pages?

Mr. EDELMAN. That is right-just this particular section which I want to be included with this testimony.

Mr. BYRNES. I do not see any point in taking one part of an official document that is available to the public and available to the committee. I think it should be incorporated by reference, without reprinting. I wonder about the advisability of taking out and separating just the minority views from an official document we already have. However, I would not make an issue of it.

Mr. EDELMAN. I think you will find if you check, that copies of this document are no longer available. We do not wish to make any particular issue of this but I think it would be some convenience for both the members of the House Committee on Ways and Means and others interested if there was this additional reprint of this set of views appended to this statement.

Mr. BYRNES. I would suggest we hold in abeyance this matter of incorporating in this report the minority views until the committee can give consideration to the advisability of a reprint of the whole report so that it will be available to the public in connection with our committee's full discussion of the unemployment insurance problem. In that way, we will have the whole and total recommendations of this advisory committee rather than just the dissenting views, when apparently both are scarce at this time.

Mr. FORAND. It is your view that its incorporation in the hearings be conditional upon the fact that we can get a reprint and just have it inserted by reference?

Mr. BYRNES. That is the point.

Mr. FORAND. Without objection, that will be done.

Mr. EDELMAN. Mr. Chairman, as I say, I do not wish to overstress this point, but Emil Rieve, who is chairman of the social security committee of the CIO, wrote a special two-page dissent to the five-page five man dissent, and it rather points up the particular point of view of the national CIO on this particular problem.

Mr. FORAND. Would it be agreeable to insert at least that part in which the CIO views are given?

Mr. BYRNES. I think it would be most proper. I understand Mr. Rieve was speaking for the CIO, also, at the time he filed this report. Mr. EDELMAN. Exactly.

Mr. BYRNES. So I think certainly it would be proper to incorporate it as a part of your testimony if you want.

Mr. FORAND. Will that be agreeable, Mr. Edelman?

Mr. EDELMAN. Yes, sir.

Mr. FORAND. To insert as part of your remarks that portion of the report prepared by Mr. Rieve?

Mr. EDELMAN. Yes, sir. I will give the particular document to the committee staff.

(The matter referred to follows:)

CONCURRING DISSENT RY MR. RIEVE IN SUPPORT OF A NATIONAL SYSTEM OF UNEMPLOYMENT INSURANCE AND IN OPPOSITION TO THE RECOMMENDATIONS OF THE MAJORITY OF THE COUNCIL WITH RESPECT TO CONTINUATION OF UNEMPLOYMENT INSURANCE ON A STATE BASIS

I heartily agree with the four other Council members who believe in a national system of unemployment insurance. As our joint dissent explains, such a national system would make possible adequate benefits, would promote necessary mobility of labor during full employment or national defense emergencies, would meet the realities of our national economic organization, would overcome the present widespread differences in treatment of workers and of employers, and would make possible the development of a unified, comprehensive, adequate program of social insurance against the hazards of sickness, costs of medical care, old-age and survivorship, as well as unemployment.

It is already more than clear that only a national system can achieve these results. The State-Federal set-up has shortcomings even greater than those described in the majority report.

The four other members who support a national system seem to doubt that it can be obtained now. This doubt was valid during the life of the Eightieth Congress which appointed our Advisory Council, but the election has basically changed the situation. This is not the time for patchwork poultices that do not meet basic needs.

Even if a national system is not voted by this Congress, the recommendations of the majority do not contain sufficiently far-going improvements in the present State-Federal system. Employees are being asked to share half the costs of unemployment insurance with no assured gain in return. No Federal benefit standards are established, although the recommendation on disqualifications would mean improvement. Extension of coverage is certainly desirable, though not to Federal employees on a State basis. Certain minor advances in administration are more than offset by the proposal that funds be given the States for administrative purposes over and above congressional appropriations, thus confusing budgetary problems and weakening the Federal agency in its efforts to improve State programs.

It seems important to explain in more detail my opposition to this suggestion for administrative financing and the recommendation for an employee contribution.

At present employers are paying an average tax of 1.5 percent on pay rolls. The majority proposes that this be cut in half and that employees should accept a tax burden of 0.75 percent of their wages to make up the difference. This contribution amounts to a wage cut averaging 1 cent an hour. I believe that the evidence is insufficient to bolster the majority's argument that the combined flat rate will assure improvements in benefits by putting a floor under experience rating and taxes and thus theoretically weakening employer opposition to improve benefits. The Council's own estimates show that the flat amount would not be enough for even meager increases in benefits in an important group of States, including Alabama, Massachusetts, Michigan, New York, and Rhode Island. This statement would be true even if unemployment does not rise above 5,000,000. If unemployment rises to 10,000,000, these States as well as others, such as California and Missouri, would exhaust all their reserves. These are the Council's own estimates based on what, to me, are too low benefit provisions.

I have never accepted the idea that the unemployment-insurance contribution should be split equally between employers and employees. I certainly cannot agree to the idea that workers will show sufficient interest in unemployment insurance only if they pay for it. In New Jersey, in spite of the employee contribution for this program, the CIO State industrial union council has been unable to secure representation on the State advisory council and labor has lost representation on appeals boards. A national system would make it far easier for workers to understand unemployment compensation and would permit unions to acquaint their members with their rights and to participate more actively in the various

administrative processes. When one system takes the place of 51 State and Territorial systems, the number of complexities, ambiguities, and uncertainties will be reduced by approximately 50 fifty-firsts; hence, it will for the first time be possible for any one person to understand unemployment insurance in the United States.

As for administrative financing, State employment security agencies should have enough money to operate properly, just as Federal agencies should. Congress should appropriate sufficient funds for all important Government functions. I am now supporting additional Federal grants for unemployment insurance and the employment offices. But this Council would give millions of collars back to State agencies to be used for the same purpose as the money voted by Congress. I agree with the Bureau of Employment Security in opposing this suggestion, which in the current fiscal year would have given Illinois 2.8 million dollars over and above its budgetary administrative grant, or an addition of 44 percent. Pennsylvania, Indiana, Missouri, Ohio, and Wisconsin would have received 36 to 42 percent in addition. These proportions would be increased if Congress should lower rather than increase its appropriations. Supporters of this type of financing have frankly indicated that one objective is to escape from Federal controls, whereas I believe that the Federal agency should have increasing power to promote proper performance.

Mr. EDELMAN. I wish also to insert in the record excerpts from the May 1950 issue of Economic Outlook, published by the Department of Education and Research of the CIO. These passages are a careful statement of our position with respect to the inadequacies of State laws.

Mr. FORAND. Without objection, that may be done. (The matter above referred to is as follows:)

DEFECTS OF PRESENT LAWS

The inadequacies of present State laws are illustrated by the accompanying table. This includes the most up-to-date information available on size and duration of benefits, on benefit exhaustions and employer contribution rates. Notice the great differences between the States, which are highly confusing to beneficiaries and others who are trying to improve the laws. Notice also how low the benefits are in most States. The higher maximums are available only to large families. But even $30 a week for a family of four would be less than half what is required for the very minimum budget of the Bureau of Labor Statistics for a city worker's family.

Workers who have been payin $10 or $15 a week rent cannot, under present crowded housing conditions, suddenly move to cheaper quarters that are decent. They have to keep paying for heat, light and fuel. Kids continue growing even if there is not money for new clothes. The low-cost menus of the United States Department of Agriculture for an adequate diet come to about $18 a week for a family of four and $22 for a family of five.

Because benefits are so low, workers' families have to draw on savings to supplement them. Then, when benefits are gone savings are gone, too. And in no State do benefits last more than 6 months, while in many States workers are entitled to far less.

In contrast to the inadequate benefit levels, notice how the States have cut the employers' tax or contribution rate below the 2.7 percent of payrolls provided in the Federal law. Yet now many conservatives oppose more liberal benefits on the grounds that they would cost too much.

The table hits only the high spots. Much additional evidence on shortcomings of present State laws is available. Because maximums on benefit amounts are so low, average benefits in December, 1949, were only 39 percent of average wages of covered workers. More than one-half of new claimants are eligible for the maximum so that many receive substantially less than 50 percent of the wage loss suffered.

Fifteen million jobs are not covered by unemployment insurance, although they well could be. Many workers have too little covered employment to qualify for benefits. States have in general enacted more severe disqualification provisions in recent years for quitting a job voluntarily, for misconduct, for availability for work, and refusal of suitable work. Although some disqualifications are necessary to prevent abuses, present provisions inflict great hardships.

In many instances workers who move from State to State are denied protection of unemployment insurance or receive lower benefits than they would otherwise. Since between 5 and 10 percent of all workers do move from State to State, this is a very serious defect of the present Federal-State set-up.

AN ADEQUATE NATIONAL SYSTEM

A completely national system of unemployment insurance and employment offices has many advantages over the present confused and inadequate maze of 51 different State and Territorial systems for which few Federal standards are set. Unemployment is a national problem which is not the result of conditions arising within a particular State. Why should employers' taxes and workers' benefits vary greatly from State to State? Corporations and labor markets cross State lines. Separate State systems are ineffective both in pooling jobs in labor markets that cross State lines, and in giving adequate benefits to the large number of workers who move from State to State.

Only the National Government can undertake to gear the unemployment insurance system to a program for restoring and maintaining full employment. The State laws have taken a narrow approach, assuming that benefit payments should not exceed taxes already collected. Experience rating operates in just the wrong direction so far as relating taxes to purchasing power is concerned; it results in lower taxes in good times and higher taxes in bad times. Only the National Government can use its credit and fiscal powers to pay truly adequate benefits when mass unemployment is growing.

Some of the smaller States are especially handicapped by an unusually heavy load of unemployment. Rhode Island, for example, has for years had an unemployment rate several times that of Texas, and is too small an area to carry the cost alone.

One national system would be more efficient and economical. There would be one law and one set of rulings and interpretations instead of 51 different sets. One set of offices could administer all the insurance programs, including old age, survivors', and disability insurance, and employers would have to submit only one set of records. Workers would be able to understand their rights and thus could better see that they secured what was due them.

The people as a whole could for the first time understand how unemployment insurance operates throughout the Nation instead of being completely baffled by the complexities of 51 different schemes. Cooperation with local employers and workers could be much better than it is now, since many States have failed to utilize such groups properly in making local determinations and exploring improvements.

A unified national employment service would help pay adequate benefits in bad times, would help minimize frictional employment in good times, and would be ready in a national emergency to mobilize manpower as in the last 2 wars. The CIO Social Security Committee has approved the following provisions for inclusion in such a national law:

1. Benefit amounts should equal 60 percent of average weekly wages for a person with no dependents up to a maximum of $36 a week; 70 percent for a person with one dependent up to a maximum of $42 a week; 75 percent for a person with two dependents up to a maximum of $45 a week, and 80 percent for a person with three or more dependents up to a maximum of $48.

2. Benefits should be paid for as long as 52 weeks if work cannot be found. 3. Virtually all types of employment should be included so that all jobless workers are protected.

4. Disqualifications should be limited to 3 weeks except in case of a real strike when 7 weeks' postponement of benefits is permitted. The CIO believes a shorter period of disqualification for strikers is justified but fears that insertion of such a provision in a bill would be seized upon to defeat the measure. Suitable work should be defined so as to protect individuals from being forced to take lower graded jobs.

5. Present State trust funds, totaling about $7,000,000,000, should be made available to the national system, and employers should pay a uniform 2 percent payroll tax. This would abolish so-called experience rating, which relates the employers' tax to benefits paid his workers.

Unfortunately labor will have to have greater political strength before such a national law can be obtained. Reactionaries have used the cry of States' rights to defend the present weak Federal-State system and have then fought improvements in the States.