With this vision made general and universally practiced, your business will advance on to higher ground with greater achievement than ever before realized. I congratulate you on the great opportunity for private and public service challenging your highest ethical endeavors, for human security and happiness. BUREAU OF FOREIGN AND DOMESTIC COMMERCE Analysis of Functions and Services V AUTOMOTIVE-AERONAUTICS TRADE DIVISION This Division, organized into Automotive, Aeronautics, and Highway sections, assists in the sales promotion of American motor vehicles, marine engines, trailers, motorcycles, parts, accessories, garage and service station equipment, aircraft and auxiliary products, and highway machinery and equipment. Trade opportunities from abroad are disseminated, and inquiries from American firms are handled individually, information in detail being furnished relative to tariffs, import restrictions, exchange regulations, foreign competitive conditions and similar technical data. Statistics and material relating to the development of civil aeronautics, motoring, and highway construction abroad is collected and evaluated. "Automotive World News" is issued thrice monthly, with an annual supplement on Highways of the World. "Aeronautical World News", thrice-monthly, includes monthly exports of aeronautical products. The "Automotive Foreign Trade Manual", consisting of five volumes, is a service including 50 pages of new or revised data issued weekly. SOCIAL SECURITY IN GREAT BRITAIN By Consul General Douglas Jenkins Five separate groups of Acts govern British Social Security. The legislation provides for (1) Unemployment Insurance, (2) Unemployment Assistance, (3) National Health Insurance, (4) Contributory Pensions Insurance, and (5) Workmen's Compensation. In addition to these provisions, and standing behind them are the Poor Laws under which "Public Assistance" is available to the destitute, and the non-contributory system of old age pensions providing for those persons over seventy years of age who have little or no means of livelihood. WORKMEN'S COMPENSATION The first four systems listed above are based on national insurance systems providing for compulsory contributions from workers and employers, plus added contributions from the National Treasury. The fifth, Workmen's Compensation, is provided by statute placing upon employers the liability for damages to workmen injured, or killed, during the performance of their work. There is no national or government insurance system for employers' liability for workmen's compensation. Employers must insure against this risk with private insurance companies. To make sure that this insurance shall not be unreasonably expensive to employers, the Government has an arrangement with the insurance companies by which premiums are limited so that claims paid are not less than 60 percent of premiums received, 40 percent of the premium being allowed for office expenses, collection, adjustment of claims, and profits. When the total amount of claims paid in any year falls short of 60 percent of premium income, a pro rata rebate on the premiums paid in the next year is made to policy holders on renewal of their policies. It is estimated that the arrangement leaves to the insurance companies a profit of about 5 percent which is said to be a lower rate of profit than that usually earned on other types of insurance business. Critics of this method of providing for workmen's compensation allege that it is more costly than would be a national insurance system on lines similar to those covering the risks of unemployment and sickness. For workmen's compensation, there is no social security "tax" or "contribution" in the sense of the tax in the United States, or the compulsory contribution in the sense of the British national insurance systems. UNEMPLOYMENT INSURANCE The first unemployment insurance system in Great Britain was established in 1911. It applied to only a limited number of trades, such as engineering, shipbuilding, and building, and covered about 2,250,000 workers. It was extended during the War to munition workers and others in war services, and after the War, to all workers except agricultural laborers and domestic servants. A separate scheme for agricultural workers was established in 1936, so that now practically all workers except domestic servants are included in the scheme which now insures a total of about 14,885,000 workers. At first, workers over 16 years of age were covered. In 1925 persons over 65 were excluded because they became eligible for contributory old age pensions, and in 1935 the age of entry into insurance was lowered to or the legal school-leaving age - SO that now workers between 14 and 65 years of age are covered. 14 CONTRIBUTIONS The British Government, not being a federation of states like the United States Federal Government, was able to establish directly a uniform system for the whole United Kingdom, and was also able to require in its law, a compulsory contribution direct into a special fund, whereas the United States Federal Government, in establishing an unemployment insurance system, had to obtain the passage of state laws and also found it necessary to collect the contributions in the form of a tax, since taxation is one of the federal powers of our government. The British social security insurance systems do not, therefore, provide for a "tax", but for "contributions." The British unemployment insurance system, throughout its history, has been based on compulsory contributions of equal amounts from worker and employer. The rates of contribution have varied many times in amount, but they have always been at flat rates throughout the country and throughout all wage scales. That is to say, each worker pays the same amount of contribution each week, no matter what his wage, and each employer pays the same amount each week for each worker he employs, irrespective of the wage he pays the worker. The only variations in the rates of contributions paid are those between men and women, and youths and girls, and between agricultural workers and all others. The first rates of contribution, paid in 1911, were 2 pence (5 cents) a week from the worker, and the same amount from the employer. The National Treasury added its contribution of 1 2/3 pence (3.4 cents) for each worker each week. Since 1930 the Treasury has paid "equal thirds" i.e., has paid the same rate as worker and employer. The present rates of contribution are as follows: The amount paid by the employer and also by the worker and the National Treasury. If one desires to learn the rates of contribution paid at various periods since 1911, they can be found on pages 68-71 of the 22nd Abstract of Labour Statistics published by His Majesty's Stationery Office in 1937. This volume, if not available in a local public library, can be borrowed or purchased from the British Library of Information, 270 Madison Avenue, New York. Payments are made by the fixing of special stamps, bought at any post office, by the employer each week, to the worker's unemployment insurance book. The money paid for these stamps is put into the unemployment insurance fund. The National Treasury's contribution is calculated from the amounts collected, and paid in from time to time. The fund is used to pay the "benefits" to insured workers when they are unemployed, and also to pay for the expenses of administering the scheme. Amounts in the fund are invested in Government loans by the National Debt Commissioners, and the interest from these investments is added to the funds. For a long period of years there was so much unemployment that the fund was not large enough to pay all the benefits. Money was borrowed from the National Treasury with the hope that later there would be less unemployment, more contributions, and less to pay in benefits, and that the money borrowed from the Treasury could be repaid. The fund's debt to the Treasury mounted very rapidly during 1930 and 1931; by March 1932 it reached £115,000,000 or about $575,000,000. This was such a serious situation that a big change was made in the system of paying benefits to people who had been unemployed for a long time and had consequently paid nothing into the fund for some time. These people were later transferred to the care of a new system, the Unemployment Assistance System, which will be discussed later. Since 1931 the fund, relieved of the drain of paying benefits for indefinite periods to workers unemployed for more than a fixed number of weeks, has begun to grow. It was arranged in 1934 that £5,000,000 ($25,000,000) should be paid to the Treasury each year as an installment of repayment and interest on the debt. Apart from these repayments, and the remaining debt which has now been reduced to about £103,000,000 ($515,000,000), the fund now has a balance of about £60,000,000 ($310,000,000). A new law is soon to be passed under which a large part of this fund is to be used to hasten the reduction of the debt to the Treasury, and some of it to pay increased dependents' benefit. A special committee called the Unemployment Statutory Committee was established in 1934 to watch over the fund, to try to calculate how much money would be needed for benefits in the future, and how much would be coming in from contributions. This Committee is set up to decide when there are sufficient funds to increase benefits or, on the other hand, lower contributions, and how fast the debt should be paid back to the Treasury. BENEFITS Throughout the history of the unemployment insurance scheme, unemployment benefit payments have been made in two ways. Most payments are made by the Employment Exchange to the worker who must register there, and be available there to try for any new employment which the Exchange suggests to him. A few benefits are paid, by special arrangement, through the worker's Trade Union when that Union guarantees to the Government that it will, from its own funds, add to the benefit a certain amount or more. Even if paid his benefit by his Trade Union, the worker must register and appear regularly at the Employment Exchange which decides, sometimes with the help of special advisory boards, representatives, et cetera, whether he is entitled to benefit. The Exchange receives applications for workers from employers and can often place men in jobs. If a worker refuses a reasonable job at a reasonable wage, he may no longer draw benefit. The most complicated and difficult problems that arise in administering an unemployment insurance system are those connected with deciding when a worker is entitled to unemployment benefits. Various rules have been made in this country from time to time, and a system of appeals has been worked out. The rules fall into (a) conditions for receipt of benefit, and (b) disqualifications for benefit. The rules as they stand at present are to be found in a pamphlet entitled "Summary of the Unemployment Insurance Acts 1935 and 1936," published by H. V. Stationery Office in 1937 (6d. or 2 cents) and procurable from the British Library of Information, (Pages 15-24). They include such requirements as (1) the payment of a given number of contributions in the past 30 contributions in the past 2 years; (2) the worker must claim his benefit in the prescribed way, registering at the Exchange; and (3) he must be genuinely unemployed, and available and capable of work. The disqualifications include: losing of a job through misconduct, omitting to try for a job offered, out-of-work because on strike, et cetera. Though the amounts of benefit payable to workers of different ages and sexes have varied many times during the history of the scheme, they have always been flat rates throughout the country and throughout all wage scales. The rates of benefit in 1911 were 7 shillings per week (about $1.70). They have been many times increased and occasionally lowered. Benefits for workers with wives and children or other dependents have been added. The varying rates throughout the history of the scheme can be found in the same reference as the varying rates of contributions mentioned above. The rates payable at present are as follows. Limited so that total benefit may never be more than 5s. ($1.20) per day or 30s. ($7.20) per week. 71250 0-38- 2 |