Do you have the Kerr-Mills bill in South Dakota? Mr. FOSTER. No, we do not. We couldn't find enough people who needed it. In fact, we were just startled at the old age Senator LONG. I am curious. You don't have any sick people or old age people Mr. FOSTER. I said we couldn't find any. Senator LONG. I am curious. I read in the papers sometime back that the medical associations are collecting a fund Mr. FOSTER. I haven't seen any of that money. Senator LONG. I must have read that in one of the papers. I did read that in a news article. Mr. FOSTER. The State Medical Association of South Dakota has a dues income of $30,000 from its members and I assure you that not one penny goes anywhere but to the use of our own office. Senator LONG. Mr. Foster, you mentioned that you wanted inflation cut down and, of course, that is something that we all want, and that has been the situation that all State and national officials have faced in the past years. You suggested that was one of the problems and then you suggested that our social security program and our people should be paid their pensions irrespective of the salary or income which they had and I am at a loss to understand how that would affect inflation. Mr. FOSTER. The two things were stated separately. One, on people who are retired on limited incomes, whether it be social security or any other income, they have put away their money for the future, and it wasn't too long ago when if you could put away enough so that you would have $200 a month when you were 65 you were adequately taken care of, and now $200 a month doesn't go anywhere. It has been inflation that has eaten up the purchasing power of this $200. The second point I made is that social security-I didn't say it this way is not insurance. It has been held by the Supreme Court it is a tax. And if it is insurance, then it should be insurance. In other words, when I buy insurance from an insurance company to retire on and be paid $125 a month when I retire, I get it whether I am making $50,000 a year or nothing. But with social security I don't. We have marginal people who are making low incomes, who if they could draw their social security which they might have paid for for nearly 30 years, wouldn't have any problem that they may now have if they are paying for their nursing care or other types of care. This is a basic income problem rather than a problem of expense for nursing home care. Senator LONG. It is your feeling that the pension should be paid irrespective of the income? Mr. FOSTER. Yes, I do. Senator LONG. That is one of the problems that this committee, of course, is considering. Mr. FOSTER. I think it is a basic problem. Senator LONG. Now, I assume you didn't say that your association is opposed to a system where if they pay in for that pension they are entitled to it, if they pay more into it and have their medical care. Mr. FOSTER. You are talking about two different things. You are talking about money payments. Now, if you want to pay in more money and have the recipient get more money, yes. Senator LONG. You agree to that? Mr. FOSTER. Yes. Senator LONG. Irrespective of his income, though, you would agree that he could still pay in a little more and in addition to his pension get medical care. Mr. FOSTER. Would you give him groceries and determine what groceries you want to give him, too? Senator LONG. The doctor told me awhile ago that insurance companies would write whatever the people wanted them to write. Mr. FOSTER. I haven't seen the public demand. I have seen some people trying to create a public demand for such, but I haven't seen that public demand as such from our people in our State. Now, maybe our State is unique. We are one of the depressed States. We get 72.18 cents out of each dollar for Kerr-Mills Senator LONG. For pheasant hunters, I don't see how you can be a depressed area. Mr. Foster, thank you so much. We will recess until 2 o'clock. (Whereupon, a recess was taken until 2 p.m.) AFTERNOON SESSION Senator LONG. The committee will come to order. Our first witness this afternoon is Dr. Kenneth R. Larson, American Geriatric Enterprises in St. Paul. Doctor, we are running on a very tight schedule this afternoon. I think perhaps we have a prepared statement from you. Dr. LARSON. Yes. Senator LONG. Just touch briefly on the highlights of it, please. Your entire statement will be included in the record for the consideration of the staff. STATEMENT OF DR. KENNETH R. LARSON, PRESIDENT, AMERICAN GERIATRIC ENTERPRISES Dr. LARSON. I am president of American Geriatric Enterprises, a company that was created in St. Paul to create work for older employees. We found that there are a lot of people who can't get work because of their age. I found that in my office some of my patients were suffering from what I diagnosed as unemployment, which is actually a feeling of insecurity because of the inability to get work. They were capable of working but couldn't get work because of their age. I suggested to these people that they try to do part-time work or get hobbies. They didn't like that; they wanted to get practical work. Because of this I got busy and interested other people in this idea and we established a company. It is not a Community Chest project; it is a corporation. We sold ourselves stock. We have about 25 stockholders, who raised something like $13,000 by selling stock. We have a company that has been running now for 5 years, it is going on the sixth year. It is solvent, we have on the average 15 employees, average age 66, and we do work that consists primarily of repair of beverage cases for the 7-Up, Coca-Cola and other beverage industries. We build, repair pallets and create work in that manner. We also have a bottle exchange, we get strange bottles (bottles belonging to other bottlers), and sort them out, return them to the original owners. In so doing, we create work and create an income. Last year our gross income was over $70,000; our payroll was $33,000 and this was for an average of 15 men. When we first started we limited our employment to those age 50 to 65. However, as time has passed those older men have stayed with us, so our average age now is 66. I think it would be interesting to note that our average employee was out of work 9 months before coming to work with us; 40 percent of the employees were on relief for a period of 1 month to 2 years before getting a job, 50 percent of the employees last worked in firms that went out of business; in other words, these are displaced workers. The most important thing about AGE is that we have shown that these men are good workers, reliable, safe workers. We have only had $150 of medical expenses for accidents and we have men working on power saws, power drills, power presses, and various other power equipment, but in 5 years we have had only one serious accident-a man ran a drill through his hand. These men do not cause problems by absenteeism, because they feel they are on their last job and they are going to keep that job. We could expand if the other officers of the corporation and I had time to spend with it. This company is a good illustration of what the senior citizen, if you want to call him such, can do if given an opportunity. Senator LONG. Thank you so much. Certainly your work is very outstanding in that field. There is nothing that I believe is of more interest to our senior citizens than the opportunity of working after they reach 65 or older if they would just be able to do so. Many, many of them are anxious to be productive in any way they can, and certainly your organization gives many of them that opportunity. Dr. LARSON. I would like to say for the record that I think this could be done on a national scale very easily and it should be done. Those men are happy. We have only had one man that we had to lay off for lack of health and some of those men that we hired were not in physical condition to go to work but when they got to work their health improved and they continued to work. Senator LONG. Thank you so much. (The prepared statement of Dr. Larson follows:) PREPARED STATEMENT OF KENNETH R. LARSON, M.D., PRESIDENT, AGE, Inc., which stands for American Geriatric Enterprises, was established and financed privately to create employment for the ever-increasing number of workers in the age bracket 50 to 65, who need and can work, but who cannot obtain employment because of their age. This is a preretirement program. We started in a small way, but we have made a practical beginning at helping to solve an urgent need. The idea for AGE came to me because of my concern for a few of my older patients whose chief ailment I diagnosed as "unemployment." This inevitably leads to psychosomatic disorders. I learned that I was unable to treat these patients, whose complaints were not due to any organic disturbances but were caused by feelings of insecurity due to their inability to obtain employment. Even though they were physically fit and eager to work, they were unable to secure employment because of industrial age barriers. Many were jobless through no fault of their own, but because their concerns had failed, consolidated with other concerns, or had been forced to discontinue certain operations because of the obsolescence of their product. One patient in his late fifties had been employed by a gas manufacturing company all of his working life. When natural gas was piped into this area, the company went out of business and he could not find employment elsewhere because of his age. Another had worked for many years for a meatpacking concern which closed their local plant. Another had worked for a wholesale firm which had terminated its grocery business. Some of the reasons industry cannot hire the older worker are increased costs of retirement and insurance programs, difficulties with seniority rights, and greater expense associated with on-the-job training due to decreased subse quent work periods. I will not go into all the details, but about 61⁄2 years ago I started to interest others in the problem of finding suitable jobs for the employable senior citizens of this community. In order to lay the foundation for AGE, we formed a committee of about 30 industrial leaders and professional people with varied business experiences, and, with the help of the State division of security and unemployment, made a study in May 1956 that revealed there were more than 1,500 unemployed people in St. Paul and environs between the ages of 50 and 65 (exclusive of Minneapolis and environs). We wanted to include the senior achievement range of activities, but decided that we were shooting for too large an area. We decided to concentrate on the age bracket 50 to 65, because this is the group that cannot get help from pensions or social security-too old to get jobs, and too young to get aid. At the present time, because many of our workers have been with us for over 5 years, the average of their ages is over the age for our age group. This committee then raised $1,500 to make a survey of the leading industries in St. Paul in order to determine what type of work could be obtained that people in this age bracket could do economically and efficiently. Over a period of 3 months, we uncovered numerous potential projects, and seven of these were very carefully studied. At the first meeting of the board of directors in August of 1956, we elected officers and appointed committees. We then rented an empty garage, hired several workers, named as general manager a 72-year-old retired garment manufacturer, and went to work. The first contracts were for repairing, painting, and stenciling cases for soft drink bottles, and for repairing and building wooden pallets used as platforms in industrial firms. We obtained our first contracts from companies whose executives were on our board of directors, but we emphasize that we are able to keep contracts only because of our ability to meet competitive bids and by giving them their money's worth. We are able to specialize in quality work because our workers are capable, conscientious, and efficient. They believe in doing a day's work for a day's pay. AGE is currently serving several other large local industries on a contract basis covering operations that cannot be performed efficiently in their own plants because of greater overhead and higher priced labor. We now have aproximately 30 contracts with 20 different companies, and a number of additional projects are being studied. A constant search is being made for new projects. Ours is not a Community Chest project. We were incorporated as a profitmaking concern, and were authorized to sell $25,000 in stock. To date we have sold only about 1,334 shares at $10 a share. We want projects that require as much hand labor as possible and yet will bring income into the firm. Our equipment is expensive and we need working capital while laying the groundwork for a sound business establishment. At this time we average about 15 employees. The average age is now 66, and the range is from 50 to 73. The average employee was out of work 9 months before coming to work with us. Forty percent of the employees were on relief for a period of 1 month to 2 years before getting a job. Fifty percent of the employees last worked in firms that went out of business-in other words, these are displaced workers. From a practical point of view and one that every taxpayer will enjoy, during the fiscal year ending June 30, 1961, the payroll at AGE amounted to $33,000. During that same period of time, those who would otherwise have been on the relief rolls would have received at least $15,000 in relief payments. It should be noted also that five of the workers at AGE are on social security and therefore earning less than $1,200. AGE was organized in an attempt to meet the problem of finding suitable employment for the older worker, a problem which is now being recognized on a national scale. The corporate officers and directors are currently contributing their time and effort toward the realization of this goal. The incorporators have received no cash on their investment, nor do they expect to do so, but they have received satisfaction from helping others to help themselves. AGE has moved twice and survived a near disastrous fire. Last year we had a gross income of $71,000, and at the present rate, we should top that by a least another $25,000 in the current year. To quote from a recent article, "AGE means one less despondent man on a park bench, one less man in the parade to the welfare office. Instead, it is a man walking down Robert Street, head held high, feeling that at the age of 50 or 60 or 70 he is still useful and earning his way. The word 'AGE' has a happy, not a hollow, echo." Senator LONG. Let me say to our senior citizens that we have a short panel discussion and then we will be able to take up their part of the program. We will endeavor to hear our senior citizens at the Town Hall discussion in just a few minutes after we have the panel discussion here. So if you will be patient with us we will have you on the program shortly. In the panel discussion we have Prof. Arnold M. Rose, Department of Sociology, University of Minnesota; Prof. Wendell M. Swenson, Department of Clinical Psychology, University of Minnesota; and Prof. Marvin J. Taves, Department of Rural Sociology, University of Minnesota, and president, Midwest Council for Social Research in Aging. I would like you gentlemen to take 3 to 5 minutes, not over that, if you could, and then bicker around among yourselves to discuss it for a few minutes. Dr. Rose, if you would start, please. STATEMENT OF ARNOLD M. ROSE, PROFESSOR OF SOCIOLOGY, UNIVERSITY OF MINNESOTA, AND CHAIRMAN OF THE MINNESOTA DELEGATION OF THE 1961 WHITE HOUSE CONFERENCE ON AGING Dr. ROSE. Senator, and other members of the committee, you have heard expert testimony to the effect that Minnesota had made considerable progress in providing nursing homes for its incapacitated elderly citizens. While quality and quantity of nursing homes could stand improvement, the major problem today is how to make these and other medical facilities available to all the elderly people who need them. In other words, the major problem today for older people is how they are going to get the money to pay for medical services, including nursing homes. My philosophy about services of all sorts is that sometimes they can best be paid for by the individuals benefited, sometimes they can be provided best by vountary organizations, and sometimes Government must step in to aid in providing them. After giving considerable thought to the matter, and after reading the many studies describing the conditions of older people in this country, including studies we have conducted in Minnesota, I have come to the conclusion that the further financing of medical care costs to meet the special needs of older people will require Government intervention. Specifically, I have come to favor financing medical care costs through the social security system, such as would be provided by the King-Anderson bill now before the Congress. I have several reasons for this opinion: (1) Studies show that about 12 to 15 percent of the elderly population has enough savings to pay for almost any medical expense, and |