Secretary TOBIN. Well, in 1949 I believe the payments were $25 a week, and I believe for a duration of 23 weeks. That is correct within a dollar one way or the other. Mr. MASON. That would be the extreme, but the average was what? Secretary TOBIN. The average weekly benefit was $23.39 in 1949, and the average duration was 11.6 weeks-average potential duration 17.9 weeks. Mr. MASON. I am glad to have that because, Mr. Secretary, it seems to me that the retention of the ordinary retail business is not a true index of the cushion that these unemployment-compensation payments provided in view of the fact that many of these unemployed people had bonds and other things that they could get rid of to us to meet their requirements in general. Mr. Goodwin, I believe, stated that unemployment-compensation payments about that year ran from $55,000,000 up to $170,000,000, or something to that effect, and that is considerably less than 1 percent of the total $240,000,000,000 income of the Nation. It would not seem to me to be much of an effective cushion. Secretary TOBIN. Oh, the State of Massachusetts alone paid out more than $55,000,000. The total payments in the Nation in the year 1949 amounted to $1,735,000,000. Mr. MASON. Then I must have misunderstood the statement of Mr. Goodwin. On page 1 he said unemployment benefits rose from 55.4 million dollars in October 1948 to 170.6 million dollars in August of 1949. Secretary TоBIN. Oh, that was for 1 month. Mr. MASON. Oh, that is for a month? Secretary TOBIN. Yes. If you multiplied that figure by 12 you would probably come out with the right figure. Mr. MASON. Then I misinterpreted his statement on that. Secretary TOBIN. I am wrong, not an average figure of $175,000,000 times 12, but if you average it at $150,000,000 average for the 12 months it would be about $1,800,000,000, or in that vicinity. Mr. MASON. That clears up that point for me. Now, then, on the top of page 3 you say that these changes should be made promptly. In fact, you say should be enacted now so that we can be prepared to meet any increase in unemployment. What do you mean by that? Now, I asked Mr. Goodwin that question and he said as soon as the new Congress meets. Secretary TOBIN. I meant this, that they should be enacted in the Eighty-second Congress as promptly as possible, because, as I pointed out, if the Congress were to enact in 1951 legislation then that has to be implemented by the legislatures of the 48 respective States and they will not, in most cases, meet again until 1953 because the overwhelming majority of the States have biennial sessions and there will be no sessions of the legislatures in the great majority of the States in the year 1952. Therefore any action taken by Congress now will not be effective until the latter part of 1953. So that is, you might say, 3 years from now, and any action taken by the Congress of the United States in 1951 will result in these changes becoming effective in probably the latter part of the third quarter or the early part of the fourth quarter of 1953. Mr. MASON. Now, Mr. Secretary, as I understand it, there are some 40 legislatures preparing to meet in January. They are meeting for from 60-day limits in some States to 6 months in Illinois. So that any legislation that we pass would have to be acted upon rather early in the session, would it not? Secretary TOBIN. It would. Mr. MASON. In order to get it before those legislatures before they adjourn. Secretary TOBIN. As the State legislative bodies work I think we would get very little effective legislation out of the 1951 sessions of the State legislatures. I think you would have to look to 1953 for legislation that would implement these standards. Mr. MASON. Well, then, we really have, according to that, a 2-year period before we can expect effective State legislation backing up what we do. Two years does not mean now, does it? Secretary TOBIN. Well, some legislatures such as Massachusetts will be in session. If Massachusetts follows its illustrious historic pattern it will still be in session in the month of September, not only in the even years, but also the odd years, and it probably is a good thing to have some States act. The more promptly Congress acts the sooner will it be possible to get legislation in some of the States, and so, then, having legislation by the State legislatures in session in either January or February it will be very helpful to the legislatures that will meet in 1953. Mr. MASON. Now, Mr. Secretary, would you suggest, then, that the Ways and Means Committee, early in the new session take this matter up and push aside the general revision of the tax law which we had all understood was to come up? Secretary TOBIN. There is no one who appreciates the great burden that will be on the Congress in the next session of Congress more than I do, and I appreciate this work that the various committees will have to do. Anything that has to do with the strengthening of the defense of the United States immediately and strengthening our internal economy definitely should take priority over this, but I can think of few programs or proposals that will be before the Congress that should take priority over this program after those vital defense and economic problems have been taken care of that are of immediate urgency. Mr. MASON. As I gather it, the way the Ways and Means Committee operates, if we take up a general tax revision bill we will not get at this for 5 or 6 months at least, and that would be too late for any action in the legislatures, so that we could only begin in the Eighty-second Congress. Secretary TOBIN. Well, there will be 11 sessions of legislatures in the year 1952. Mr. MASON. Then any time next year that the Congress might act on this they could act at least in those 11 legislatures. Secretary TоBIN. Yes, sir; that is correct. Mr. MASON. Then you state on page 12, in your second paragraph, that we will have very little unemployment for quite a period of time, and that the next 5 or 6 years are going to be pretty full as far as employment is concerned because of the demands of production. If that is true, then this is not such a pressing problem, is it, during this period of high employment that we anticipate in the next 5 or 6 years? Secretary TOBIN. These changes, in my opinion, should be made at a time like this, because we cannot start too soon to be ready for the period that will come after this defense effort terminates, and I believe that probably the Congress should have acted many years ago. Now, one State has a $15 maximum today, and inevitably there are going to be more dislocations over the country, and the individual who lives in a State with a $15 maximum is going to find it indeed difficult to be able to support a family on that amount of money in view of the inflation that has occurred in the intervening years since the law was written, and I would think that it would be the concern of the Congress to correct such injustices. Now, there are many phases of this program that tie in directly with the defense effort. There is going to be a much greater migration of workers from State to State and that phase of these recommendations which deals with the accrued credits of a worker who has moved from State to State should be enacted as rapidly as possible in order that he can be dealt with in a just manner and in an equitable manner. Mr. MASON. On page 5 of your statement you have an argument there which I would like to understand. You say that many of these States have laws now covering employers of eight employees or less, and those that have not are only waiting for the Federal Government to pass a law requiring them to before they will, and you say that indicates that they are ready and anxious to do it. What is the provision in the State laws providing for the extension when Congress enacts such requirements? Secretary TOBIN. Well, 17 States now have laws covering one or more workers, and 28 additional States have provisions in their law that in the event Congress establishes a standard to cover workers working with an employer with one or more workers, that immediately that law becomes operative because it is already written into their State laws, and it indicates to me that they intend to put that into effect as soon as practical, as soon as Congress provides a standard for their coverage. Mr. MASON. Now, Mr. Secretary, I was in the State senate in Illinois when this law was passed, and it was explained at that time that that was our only protection as a State in being able to collect a tax that was levied for the State, that we would conform to the Federal law when it did lower the number of employees necessary, and so that is practically automatic for self-protection, is it not? That does not indicate that they are anxious for that to be done? Secretary TOBIN. I would not think that would be a compelling factor because six States did not put it into their laws and they have not been adversely affected. Mr. MASON. Well, I do not know about that. That was the way it impressed me at that time, anyway. Secretary TOBIN. You see, I feel strongly for these 31⁄2 million workers who are not covered because they work for small employers. At the time it was believed that it would be very difficult to administer the law where you had to deal with one, two, three, four, five, six, or seven employees, but experience has shown that is not so. Those same employers today have to insure, and have to go through the bookkeeping process for even one employee for old-age and survivors insurance. Now it is going to be not only helpful economically to these employees, but it is going to do justice to these 3% million workers who work for employers who have less than eight employees the same as those employed by employers who have eight or more employees. Mr. MASON. I can understand that, Mr. Secretary, but the argument which was made in your statement was that the States, because they had this in their statutes, are anxious for the Federal Government to do it. You are putting it now on the basis of justice for these employees who work for employers who have eight or less employees, which is a different proposition entirely. I might tell you that the advisory committee to the Senate in 1948. made certain recommendations, and I also had a unanimous recommendation from the Federal Advisory Council on Employment Security. I do believe that each one of the 48 State administrators of the United States favored this proposal. I think you will find no opposition any place to the suggestion of insuring employees of employers with one or more workers. Mr. MASON. I wouldn't see any great opposition to it, but I was just analyzing your argument. Now, on page 5 of your statement you refer, and you have just referred, to the Federal Advisory Council. Has that a statutory basis? Secretary TоBIN. Yes; it has. Mr. MASON. I had a copy of the roster here somewhere, and in that roster I noticed that the representatives of labor on that Council do represent different labor organizations, and the representatives of veterans do represent different veterans' organizations. But the roster of public representatives, about half of them, are university professors, school teachers. Being a former school teacher myself, I wondered why the representatives of the public were weighted down so heavily with professors. Secretary TOBIN. Every one of them is an expert in this particular field. They are really the authorities. I think you will agree that the business people on the Council are very substantial business people. Mr. MASON. The one thing that doesn't satisfy me mainly is the management representatives here. I would like to know how the management representatives were selected. Secretary TOBIN. I inherited most of them. When they came in I didn't make changes except as vacancies occurred. The overwhelming majority of these members were members of the Advisory Council when it was in the Federal Security Administration. Mr. MASON. Yes; but it had just been formed, as I understand it; and then it was transferred to your Department and you accepted it as it was. Isn't that right? In the Reorganization Act it was moved from one Department to yours just shortly after it had been formed. Secretary TOBIN. I do not know how long the Advisory Council had been in effect, but I kept every single individual who was on it. Mr. MASON. I want to know about the management groups such as the National Chamber of Commerce, the National Manufacturers Association, and the rest of them. Were they consulted in the selection of these members? Secretary TоBIN. I will be glad to talk about this with the Federal Security Administration and find out for you. Mr. MASON. I wish you would, and I would like to have you file for the record a statement as to how they were selected, upon what basis of qualifications, and also the present status of these members of the management group insofar as their being active in industry at the present time is concerned. Secretary TOBIN. Yes, sir. (The following statement was subsequently submitted for the record :) ORGANIZATION OF THE FEDERAL ADVISORY COUNCIL The Federal Advisory Council is authorized by the Act of June 6, 1933, (48 Stat. 113, U. S. C. Ti. 29, sec. 49j) and by Reorganization Plan No. 2, 1949. * * The act of June 6, 1933, popularly known as the Wagner-Peyser Act, which established the national public employment service, provided in section 11 (a) that the Federal Advisory Council shall be "composed of men and women representing employers and employees in equal numbers and the public It provides that "members of such Council shall be selected from time to time in such manner as the Director (of the United States Employment Service) shall prescribe." The number of members of the Council was not specified. The Council functioned continuously from 1933 until the war, but no meetings of the Council were called during the war. Instead, a management-labor committee was established to advise on the day-to-day activities of the war manpower program. In 1948, the Federal Advisory Council was reestablished to advise the United States Employment Service, and an organizational meeting was held on January 30, 1948. With the transfer of the United States Employment Service from the Department of Labor to the Federal Security Agency in the summer of 1948, the Federal Advisory Council membership was enlarged and its functions expanded to include both the unemployment insurance and employment service programs. Reorganization Plan No. 2 of 1949, which transferred the Bureau of Enployment Security, including the United States Employment Service and the Unemployment Insurance Service from the Federal Security Agency to the Department of Labor, took cognizance of the expanded functions of the Federal Advisory Council by providing that in addition to its duties under the Wagner-Peyser Act, it shall "advise the Secretary of Labor and the Director of the Bureau of Employment Security with respect to the administration and coordination of the functions transferred by the provisions of this reorganization plan." Since the transfer of the Federal Advisory Council to the Department of Labor, the membership has remained the same, except for replacement of persons resigning from the same. The principle that has been followed, by both the Department of Labor and the Federal Security Agency in appointing members to the Federal Advisory Council has been to select persons who by their knowledge and experience can contribute to the solution of employment security problems. Persons are appointed who are representative of various groups in the public, and of employers and employees, rather than being the representatives of specific organizations. In practice, this has meant, of course, that persons who are members of the various organized groups have been represented. Meetings of the Federal Advisory Council: 1949: September 14-15, December 15-16. Subcommittee on Unemployment Insurance meetings 1950: January 18-19, February 21, March 20, March 28, May 8. Mr. MASON. On the list of the members of the Federal Advisory Council I notice that there is one member, Mr. Lovett of Michigan. Does he represent the Michigan group of managers? Secretary TOBIN. He is the official spokesman for the Michigan Manufacturers Association on most problems dealing with public matters, particularly in the State of Michigan. He is probably one of the finest authorities you could find on unemployment compensation. Mr. MASON. I understand that at several times he has stated that he is expressing his own opinion and not representing any group in Michigan. Those are his own words, so he is really expressing only an individual opinion on that Council. |