The Secretary said that this modified proposal was made to meet some of the objections presented with respect to the Department's original proposal. It appears to us that the same objections would be applicable to the revised proposal as were applicable to the original proposal even though applicable to a greatly reduced amount of employment. It would still be true that a large percentage of the covered farmworkers would not acquire eligibility for benefits even though payroll taxes were paid by covered employers. It would still be true that in States where substantial numbers of workers worked sufficiently to establish eligibility for benefits, that because of the temporary and seasonal character of most such employment, the benefits paid would exceed by several times the amount of taxes paid in connection with such employment. It would still be true that a substantial percentage of those with sufficient employment to qualify for benefits would have an employment history of employment by a series of employers in two or more States with all the problems this involves of acquiring data to determine eligibility for and amounts of and the duration of the benefits, and the sharing of the costs by the States involved. It would also be true that since it must be assumed that farmers payroll taxes would be at the maximum rate that a major incentive would be created to accelerate mechanization of farm operations so as to reduce employment below the covered level. It does not appear to us that this modified proposal has been the subject of very careful economic analysis that would warrant serious legislative consideration. Thank you very much, Mr. Chairman. (The balance of Mr. Triggs' statement follows:) SUPPORTING FACTS It was orginally proposed in H.R. 8282, and is proposed in S. 1991, that any farmer who employed 300 or more man days of labor in any quarter would be required to pay state and federal unemployment taxes with respect to all farm labor employment, and that such employment would be included in determining the eligibility of workers for benefits Understanding of the impact of the proposal to extend coverage to farm workers involves consideration of the nature of the farm labor force and the farmer-worker relationship, which is summarized briefly below: The number of farmworkers is declining Total hired farm labor employment is declining rapidly due to advances in new technology, a critical shortage of available farm workers, and increasing regulatory complications relating to the employment of farm workers. average hired farm labor employment has been as follows: Annual 3, 190, 000 2, 679, 000 2, 329, 000 1,869, 000 1, 604, 000 1, 482, 000 1, 355, 000 1 Based on comparison of first 6 months of 1966 with same period of 1965. Farm labor employment is highly seasonal A second major feature of the farm labor force is its seasonal variation, as illustrated by the following monthly data for the United States from USDA reports for 1965: The seasonal variations in a state will usually show stronger contrasts than for the United States as a whole. Thus in 1964 farm labor employment in Michigan varied from 18,000 at the lowest point in December to 80,000 at the peak in July. So far as the individual farmer is concerned the variation in employment for most seasonal crops will be even greater than for the state. Typically, producers of fruit or vegetables may not employ any workers during most of the year, but at harvest time employ 10 or more workers for a period of several weeks. Most farmworkers are not attached to the regular work force A third pertinent feature of the farm labor situation is that most workers employed by farmers who produce crops with high seasonal labor requirements are not a regular part of the labor force. This feature of the farm labor force is indicated in a recent USDA publication, "The Hired Farm Working Force of 1964." This report estimates the distribution by length of employment as follows: The first two groups listed in the above table, 2,293,000 workers or 68 percent of all farm workers, averaged only 23 days of employment in agriculture and 50 days of employment outside of agriculture. It should also be noted that, short term as most farm labor employment is, as indicated in the above table, the average duration of farm labor employment is getting shorter. "Not only is agricultural employment declining, but also farm jobs for hired workers are becoming of increasingly short duration." (Quoted from page 121 of "Farm Workers, A Reprint from the 1966 Manpower Report," U.S. Dept. of Labor.) So, even if it is assumed that 100% of the farm labor employment were to be covered-and even if it is assumed that all of the non-farm work engaged in by farm workers were covered-about 68% of all farm workers would never become eligible for benefits because the total of their covered employment is insufficient to establish eligibility. Since neither of these assumptions is correct the actual percentage of farm workers who would not become eligible for benefits would be much larger than 68%. That most farm workers are not a regular part of the work force is also indicated by the fact that the 3,370,000 persons who did some farm work during the year, included 2,140,000 whose chief activity during the balance of the year is reported as follows: The 1959 Census of Agriculture (Volume II, Chapter IV, Table 4) estimates the number of farm employers who employed specified numbers of workers as follows: This data is only indicative since (1) the data reported is for the week prior to the date the census enumeration was taken and may not repersent an average situation and (2) the number of hired farm workers has declined 31 percent since 1959. Migratory workers Although most hired farm workers are local people, there are a substantial number of migratory farm workers, estimated by the U.S. Department of Labor in "Farm Labor Market Developments," as follows: The only state with any significant experience with the coverage of farm workers by unemployment insurance is North Dakota. The North Dakota statutes permit voluntary coverage of workers employed by farmers on approval of the state agency administering the program. The state agency will not approve applications for farmers producing a crop involving seasonal labor. Even though this eliminates seasonal workers, and even though the payroll tax is several times as much as for non-farm employers, the benefits paid to such farm workers have been over twice the tax collections. The following information is from the North Dakota Unemployment Compensation Division: During the 1965 spring session of the California legislature consideration was given to bills to extend unemployment insurance to agricultural workers. The Director of the California Department of Employment, testifying relative to bills favored by the Governor, reported to the Assembly Committee taht the proposal would return annual employer contributions, at a flat 3.2% payroll tax, of about $24 million, that annual benefit payments would be about $75 million, and that the deficit to the state fund would be about $50 million a year. Conclusions relating to proposed coverage of farmworkers by unemployment insurance 1. Most farm workers are temporary, short term workers, and are not a part of the regular work force except when employed in agriculture. 2. In many cases farm workers would not acquire eligibility for benefits because the number of days of employment or earnings from employment would be insufficient. Of those who are employed less than 75 days (68 percent of the total), only a small percentage would qualify. An additional substantial number of workers would not qualify because they work for non-covered employers or for a mixture of covered and non-covered employers, or are self-employed when not working as hired farm labor. Yet unemployment tax collections would be made from covered farmer employers in connection with all such employment. 3. Because of the seasonal character of most farm labor employment, most of those workers who would acquire eligibility for benefits resulting from their farm labor employment would become withdrawing beneficiaries and would receive benefits for an extended period of time. This would represent a particularly heavy burden on the unemployment insurance funds of states with comparatively long periods of available farm employment, such as in Florida and California. This, of course, is the direct opposite of the situation reviewed in 2 above. But both situations would exist depending on the length of employment provided and the nature of the particular segment of the work force in an area. Most farm labor employment would fall into the one group (i.e., tax collections but no benefits) or the other group (i.e., benefits far outrunning tax collections). 4. The migratory farm labor force would constitute a particularly difficult administrative problem. Although reciprocal interstate agreements provide for exchanging data and sharing of benefit costs with respect to multi-state employment-the extension of coverage to the many multi-state workers in agriculture would represent a complex and difficult administrative problem. 5. A major protection of unemployment insurance funds is that most workers want to get another job as soon as they can. In the case of many farm workers the incentive to do so would be much less (1) because they are not and do not want to be a part of the permanent work force and (2) because most available farm work is temporary. For example, a worker in Florida who has acquired eligibility for benefits would be less inclined to follow his customary practice of going north for employment in New York, Indiana, or elsewhere. 6. Another major protection of unemployment insurance funds is that employers seek to avoid abuses to improve their experience ratings. In the case of farmer coverage the incentive to self-police the program would be eliminated because the benefit cost ratio of most farmers would be so heavily in a deficit position that they could not expect to improve their experience ratings. 7. Major problems of eligibility would be created. For example, let us assume a worker was employed for 15 weeks harvesting citrus fruits for 3 farmers in Florida, 10 weeks harvesting vegetables for 2 farmers in Pennsylvania and 1 week picking apples in Virginia; and then returns to Florida, where he applies for unemployment insurance because he can find no farm work in Florida. He could have continued to pick apples in Virginia for another 6 weeks. If we assume that all employers are covered employers, is he eligible for benefits in Florida and how are the costs of these benefits to be shared among the three states? Or, for example, a resident of Memphis, Tennessee participates in "day-haul" employment in Tennessee, Arkansas and Mississippi, working a total of 150 days for 40 different employers in 3 states. He turns down an offer of a permanent job in Arkansas, and applies for unemployment insurance in Tennessee where he asserts that he can obtain no employment. Is he eligible for benefits? If so, how are the records to be gotten together, and how are the costs of benefits to be allocated? Senator TALMADGE. Senator Williams? Senator WILLIAMS. Mr. Triggs, I understand that you would prefer the enactment of the House bill without any substantial changing amendments; is that correct? Mr. TRIGGS. This is correct. I should state that there are many provisions in the House bill with respect to which we simply do not have policy. Let me say that there are no provisions in the bill that we would feel we would have to vigorously oppose. Senator WILLIAMS. That is what I was meaning. From the standpoint of agriculture you had no objection to the provisions as they are incorporated in the House bill? Mr. TRIGGS. That is correct. Senator TALMADGE. Senator Gore? Senator Morton? Thank you very much, Mr. Triggs. Mr. TRIGGS. Thank you very much, Mr. Chairman, and members of the committee. Senator GORE. Mr. Chairman? Senator TALMADGE. The Senator from Tennessee. Senator GORE. I have the pleasure of having a very distinguished constituent in this committee room who is scheduled to testify next Monday but who, up to now, because of the situation prevailing in the airlines, has been unable to get a reservation to return. I would ask the indulgence of the committee that I may introduce him out of order, for him to make a preliminary statement, with the understanding he will be accorded the privilege of submitting a fuller statement for the record. Senator TALMADGE. Without objection, that will be done. The next two witnesses were Mr. Clarence Mitchell and Mrs. Geraldine Beideman. If they have no objection, we will be delighted to take the distinguished witness from Tennessee at this point. Senator GORE. Mr. Chairman, I would like to present Mr. Weber Tuley from Nashville, Tenn., a friend of mine of very long standing, a very reputable and highly recognized lawyer who represents a number of interests in Tennessee. Senator TALMADGE. We are delighted to have you at this time, Mr. Tuley. You may proceed at will. |