referred to some, I believe, 6,400 manufacturers, and 32 percent of them did not Mr. LOESCH. You have a copy of the statement that I presented? Senator MORTON. Yes. Mr. LOESCH. It is on page 6 of that statement beginning at the top of the page. Senator MORTON. Yes. In your second paragraph, the second sentence, "This means that if the wage base is raised to more than $3,000, 34 percent of the employers who were most responsible for the financing problem in Indiana will pay no additional unemployment compensation tax." Now, not to make it a part of the record, but could you furnish the committee, just for its information, any report made to or by the State legislature to indicate the type of employer that was involved in this 34 percent? I mean was it-in your State you have Scott County, you have got Stokely-Van Camp operations that are obviously seasonal in nature. You have to can a vegetable when you harvest it. You cannot just wait and spread your work out. I personally would be interested, just as a matter of information, in seeing whether this was really made up of companies engaged in the manufacture of production of durable goods, and how much of it was made up of those who, through no fault of their own, happened to operate a seasonal business. Mr. LOESCH. Well, Senator, I know that the employment security division in Indiana has a complete breakdown of the type of employers who do have deficit accounts. I do not know for sure whether this study which they made-and, by the way, these figures are from an employment security division study, I do not know whether they do have a breakdown by industry of the ones who would not pay any additional taxes. Senator MORTON. But you do Mr. LOESCH. If you get the distinction between the two. Senator MORTON. Yes, I see. But it would be interesting for me, as one member of the committee, to have the information that you referred to first that is available. Mr. LOESCH. Yes. Senator MORTON. Would you ask the employment security division to be good enough just to send me a copy of that and have it available? Mr. LOESCH. If they have both I will send you both of them. I will send you whatever they have, Senator. Senator MORTON. Thank you very much. Thank you, Mr. Chairman. The CHAIRMAN. Thank you very much, Mr. Loesch. We have been receiving a number of letters from labor groups, and in view of the fact that it was agreed by the leadership of the American Federation of Labor-CIO that Mr. Meany would appear on behalf of that organization, and that they would not bring in the State representatives, as well as those who spoke for other international unions, we are inserting those letters into the record as we go along. As Senator from Louisiana I feel I should read into the record some exerpts from the letter from the Louisiana State AFL-CIO, signed by Mr. Victor Bussie and Mr. E. J. Bourg, Sr. I want them to know that I received the letter and appropriately noted it. There are one or two sentences I feel I should note. They say: The federal standards for maximum weekly benefits amounts should be set at two-thirds the states average weekly wage with the minimum benefits equal to one-half the workers weekly wage. The average weekly wage in Louisiana is approximately $103.50 per week in covered employment. The recent session of the Louisiana Legislature set the maximum weekly benefit amount at $45.00 per week effective August 1, 1966. This compares to an average weekly wage in Louisiana in 1940 of $20.00 per week and the maximum weekly benefit amount of $18.00 per week. This means the maximum weekly benefit amount received in 1940 was 90 percent of the average weekly wage in the State as compared to 42 percent after August 1, 1966. They go on to say: Federal standards for uniform disqualification penalties should be established in any reform Unemployment Compensation Legislation. In Louisiana, if an employee leaves his or her employment for any reason other than "good cause connected with his employment" they are disqualified from receiving benefits until they have returned to work and earned ten times their weekly benefit amount and then laid off through no fault of their own. We have had thousands of persons in Louisiana leave their employment for legitimate and good moral reasons and be unemployed for several months and be denied unemployment benefits until they return to work and earn ten times their weekly benefit amount. A person needs assistance when they are unemployed and should never be denied benefits if they left their employment "with good cause" even if the cause was not directly connected with his or her employment. The states should be allowed to withhold benefits only up to six weeks when a worker leaves his employment voluntarily for good cause. Also, we would urge your committee to extend the coverage of the Unemployment Compensation program to cover employers with one or more employees. There is little or no justification to deny an unemployed worker benefits solely because he was unfortunate and worked for an employer with only two or three employees. His financial needs are just as great when unemployed as a worker that worked for an employer that had a thousand employees. His family can get just as hungry, have just as many doctor bills and yet be fully entitled to maintain their human dignity as any other worker who is unfortunately unemployed. To supplement the States Unemployment Compensation Program, there should be established a program of extended federal unemployment compensation benefits. This type of program would provide benefits for long-term unemployment when plants are closed, automation is introduced, or a general recession occurs. A worker, that is 45 years of age and is laid off for any reason, most always witnesses a period of long-term unemployment before securing employment and in these instances this type of program of extended federal benefits would be most desirous. I will ask that the entire letter be printed in the record. (The letter referred to follows:) Hon. RUSSELL B. LONG, Chairman, Committee on Finance, LOUISIANA, AFL-CIO, 1966. DEAR SENATOR LONG: The Louisiana AFL-CIO, representing 140,000 workers in Louisiana, respectfully requests that you, as Chairman of the Senate Committee on Finance, prevail upon your committee to recommend to the U.S. Senate a good, strong Unemployment Compensation reform bill. The Unemployment Compensation reform bill as passed by the House of Representatives is seriously inadequate and does not get at the heart of the problem of workers in all of the fifty states on an equal basis of being able to draw unemployment benefits. It is our considered judgment that the McCarthy bill S. 1991 does get at the heart of the problem of Unemployment Compensation benefits and any Unemployment Compensation reform bill passed by the U.S. Senate should be patterned after this measure. We in Louisiana believe that such a reform bill should set federal minimum standards particularly in the area of weekly benefit amounts, eligibility requirement, duration of weekly benefits, disqualifications for benefits, and broader coverage. The minimum duration of weekly benefits should be not less than twenty-eight weeks plus a minimum of twenty-eight weeks of extended Federal Unemployment Compensation benefits. The federal standards for maximum weekly benefit amounts should be set at two-thirds the states average weekly wage with the minimum benefits equal to one-half the workers weekly wage. The average weekly wage in Louisiana is aproximately $103.50 per week in covered employment. The recent session of the Louisiana Legislature set the maximum weekly benefit amount at $45.00 per week effective August 1, 1966. This compares to an average weekly wage in Louisiana in 1940 of $20.00 per week and the maximum weekly benefit amount of $18.00 per week. This means the maximum weekly benefit amount received in 1940 was 90% of the average weekly wage in the State as compared to 42% after August 1, 1966. Federal standards for uniform disqualification penalties should be established in any reform Unemployment Compensation Legislation. In Louisiana, if an employee leaves his or her employment for any reason other than "good cause connected with his employment" they are disqualified from receiving benefits until they have returned to work and earned ten times their weekly benefit amount and then laid off through no fault of their own. We have had thousands of persons in Louisiana leave their employment for legitimate and good moral reasons and be unemployed for several months and be denied unemployment benefits until they return to work and earn ten times their weekly benefit amount. A person needs assistance when they are unemployed and should never be denied benefits if they left their employment "with good cause" even if the cause was not directly connected with his or her employment. The states should be allowed to withhold benefits only up to six weeks when a worker leaves his employment voluntarily for good cause. Also, we would urge your committee to extend the coverage of the Unemployment Compensation program to cover employers with one or more employees. There is little or no justification to deny an unemployed worker benefits solely because he was unfortunate and worked for an employer with only two or three employees. His financial needs are just as great when unemployed as a worker that worked for an employer that had a thousand employees. His family can get just as hungry, have just as many doctor bills and yet be fully entitled to maintain their human dignity as any other worker who is unfortunately unemployed. To supplement the States Unemployment Compensation Program, there should be established a program of extended federal unemployment compensation benefits. This type of program would provide benefits for long-term unemployment when plants are closed, automation is introduced, or a general recession occurs. A worker, that is 45 years of age and is laid off for any reason, most always witnesses a period of long-term unemployment before securing employment and in these instances this type of program of extended federal benefits would be most desirous. We, in the Louisiana AFL-CIO, hope that you and the other members of the Senate Committee on Finance will merge the House passed bill with S. 1991 and report to the Senate a reform bill that will provide the unemployed worker with a guarantee that his economic needs will be cared for during periods of unemploy ment, regardless of which State he lives in, whether it be in the North, South, East or Western part of this great Nation. Your consideration of this matter will be deeply appreciated. You are further requested to insert the contents of this letter in the printed record of the Committee hearings. With kind personal regards and best wishes, we are, VICTOR BUSSIE, President. E. J. BOURG, Sr., Secretary-Treasurer. The CHAIRMAN. In addition to that here is a letter from I. W. Abel on behalf of the United Steelworkers of America; a statement from the Communications Workers of America signed by their president, Joseph A. Beirne; and Mr. J. F. Friedrick, president of the Milwaukee County Labor Council, AFL-CIO; in addition to that here is a letter from the Oklahoma State AFL-CIO, stating its position. (The letters referred to follow :) UNITED STEELWORKERS OF AMERICA, Pittsburgh, Pa., July 22, 1966. Hon. RUSSELL B. LONG, Chairman, Senate Committee on Finance, DEAR SENATOR LONG: Revision of the unemployment compensation system has been a long-range objective of the labor movement. The system has been in operation since the early 1930's without any major changes. Such a fact does not necessarily attest to its perfection. As a matter of fact, we in the labor movement have been urging various amendments which would establish minimum Federal standards on the operation of the state administered systems. Too long have the states bargained away their state systems for the dubious advantage of pirating industrial plants. Actually, the direct impact of this kind of competition leaves the working man without any protection and the state with marginal employers. Our Union views the House-passed bill as completely devoid of any realistic provision to inaugurate a program of Federal standards. In particular, there are no standards on benefit payments or eligibility disqualifications. Even the ICESA accepted the principle of a Federal percentage standard on benefits (although the 50-50 formula is below our expectations in that it limits the number of unemployed workers who could obtain 50 percent of their average weekly wages). Any unemployment compensation bill without a standard on benefits would fall far short of what labor could reaosnably support. Furthermore, the Administration's provision on the extension of benefits after the exhaustion of state benefits adapts the system to the modern-day realities of long-term situations of individual unemployment, whether there is an economic recession or not. The House-passed version barely approaches this concept. Our deep disappointment with the House version evolves out of our shock in realizing what is not in the bill. Certainly the extension of coverage to new employees and correction of benefits for seamen are good features. But they are appended to a skeleton—which, like all skeletons, should be left in the closet. Our Union hopefully anticipates more favorable treatment from the Senate Committee on Finance, under a Chairman to whom the concept of income maintenance in times of distress is no strange notion. Sincerely yours, I. W. ABEL, President. COMMUNICATIONS WORKERS OF AMERICA, Hon. RUSSELL B. LONG, Chairman, Senate Finance Committee, DEAR MR. CHAIRMAN: On July 21, 1966, AFL-CIO President George Meany presented the views of labor on the need for improving the federal-state unemployment insurance system, before the Senate Finance Committee. While the Communications Workers of America fully supports the testimony given by Mr. Meany, I would be remiss in my obligation and responsibility to the over 400,000 workers whom I am privileged to represent were I to forego the opportunity to apprise the committee of our thinking on this important issue of the day. More than a quarter of a century has elapsed since our Federal-State Unemployment Compensation system was born. Unfortunately, the system has fallen short of many of the original purposes and functions for which it was originally intended. The basic purpose of our Unemployment Compensation system was to provide for human need against the ravages of unemployment, and also, to form a first line of defense against economic chaos by providing purchasing power to unemployed workers and their families. These are most worthy and noble objectives. But under the present system, far too many American workers are excluded from the benefits of the various Unemployment Compensation laws. Among these, millions who are denied protection are government workers, domestic workers, farm workers, many categories of workers in the service trades, and those who work for small employers. It is undeniable that the pangs of unemployment apply just as severely and bitterly to these unprotected workers as to those who are now covered by the Unemployment Compensation laws. Simple justice demands that all workers be given the benefit of existing law. Unemployment Compensation laws are as varied as the number of states. The weekly benefits are different state by state; the duration periods run the gamut; and eligibility and disqualifications present a crazy-quilt pattern of differences and complexities. Experience over the years indicates that the weaknesses of the Unemployment System cannot be reformed by action of the various states. Experience dictates that if the System is to fulfill its originally intended purpose; if desperately needed reform and uniformity are to be achieved, it is necessary that the United States Congress provide uniform minimum standards to be applicable to the entire country. H.R. 15119, a token measure passed by the House, does not get to the roots of the problems. It is an unsatisfactory bill. On the other hand, S. 1991 approaches reforms in a fashion that centers on the real problems. The Senate bill calls for needed reforms of broader coverage, fair weekly benefits, adjustment benefits for long-term unemployment, uniform disqualification penalties and modernized financing. The Communications Workers of America wholeheartedly endorses S. 1991, and respectfully urges the Senate Finance Committee to report this bill for Senate floor action. Passage of S. 1991 will make a wholesome contribution to our economy and to the health and well-being of unemployed workers and their dependent families. In conclusion, Mr. Chairman, I respectfully request that this letter be made a part of the official record of the Senate Finance Committee's hearings on Unemployment Compensation reforms. Sincerely, JOSEPH A. BEIRNE, President. STATEMENT OF J. F. FRIEDRICK, PRESIDENT, MILWAUKEE COUNTY LABOR COUNCIL AFL-CIO The Milwaukee County Labor Council AFL-CIO, representing some 200 local unions with a combined membership of 125.000 working men and women, at its meeting on July 20th, 1966 voted to support Bill S. 1991. This action was taken because the delegates to the Council are convinced that improvement in Unemployment Compensation to meet modern day conditions is a matter of great necessity and that such improvement can best be obtained through a revision of the minimum standards prescribed in the Social Security Act. We in Wisconsin are proud of the fact that our state legislature passed an Unemployment Compensation Act in 1932. We also recognize, however, that other states followed largely because of the enactment of the Social Security Act by Congress. The Congress did in that Act provide for certain minimum standards which state acts had to meet in order to be entitled to the offset of the federal payroll tax. So there is no fundamental issue involved in a change of these minimum standards to meet conditions which have occurred during the past 30 years. Some states have valiantly tried to keep abreast with these changes, while other states have done very little outside of what they had to do to meet federal standards. The sad fact is that some states have failed to keep pace with changing conditions with the deliberate intention of using their low standards and accompanying low payroll taxes as a means of a competitive advantage in their campaigns to attract industry. We believe that with the great mobility of labor and the even greater mobility of the products of labor, competition for industry is unfair competition if it is based not on what is fair to meet the needs of people but rather on how little can we get by with. |