Senator RUSSELL B. LONG, MARYLAND STATE AND D.C. AFL-CIO, DEAR SENATOR LONG: The Maryland State and D.C., AFL-CIO strongly supports H.R. 8282-the Unemployment Insurance Bill now before your committee. Unless you have been on the unemployment rolls or have worked closely with those who are unemployed, you cannot really understand the problems of the peo· ple who, for one reason or another, through no fault of their own, find themselves among the unemployed. The disqualifications and obstacles that are thrown in the way of the unemployed person only creates that many more hardships for the individual and his family to endure. We believe that the bill before your committee will do a great deal toward eliminating many of these problems by— standardizing the disqualifications establishing uniform Federal standards for the unemployment benefit structure establishing a minimum of twenty-six weeks of extended Federal unemployment compensation benefits There are other features in the bill which are just as important as those enumerated above. However, we believe that we must recognize the problems facing the person, 45 to 60 years of age, who has been displaced by automation or technological developments-displaced by a piece of machinery and unable to get a job because of age or lack of skills. We urge you and your committee to act favorably on H.R. 8282 and to fight for its passage in Congress so that those who are unemployed can get a little better break out of life. We would like to have this letter printed in the record of the committee hearings. Cordially yours, CHARLES A. DELLA, President. ANCHORAGE, ALASKA, July 20, 1966. Senator RUSSELL B. LONG, Chairman, Committee on Finance, Alaska State Federation of Labor AFL-CIO urges U.S. Senate beef up House Unemployment Compensation Act by adoption of McCarthy bill S. 1991. Uniform Federal standards weekly benefit amounts. Duration plus minimum of 26 weeks extended Federal unemployment compensation benefits badly needed as the best bulwark against business recession or undermining of living standards conceived in original principle of job insurance. Minimum Federal standards Nation's Unemployment system should be No. 1 goal of Congress to stabilize economy in preparation for attainment of world peace and indication to world neighbors our concern for little people. State legislatures reluctant to improve standards because they believe standards should be set by Congress. Please insert in committee record. HENRY HEDBERG, Legislative Representative, Alaska State Federation Labor, AFL-CIO. COLORADO SPRINGS, COLO., July 21, 1966. Hon. RUSSELL B. LONG, Chairman, Committee on Finance, The democratic concept of concern and protection for the American worker and his family has been manifested by the International Typographical Union throughout its 114-year history. Never as today has our Nation in this transitional period of automation and movement of industry been confronted with so serious a task of shoring up its responsibility toward the welfare of the American family. It is in this vein that the protection of the worker and his family necessitate reforms which would require minimum Federal standards in the Nation's unemployment compensation system. The International Typographical Union endorses Senate bill 1991 as filling this need and respectfully requests the committee's consideration and concurrence with the provisions thereof and further respectfully requests that this statement be printed in the record of committee hearings. ELMER BROWN, President, International Typographical Union. Hon. RUSSELL B. LONG, Chairman, Senate Committee on Finance, LOS ANGELES, CALIF., July 20, 1966. The Los Angeles County Federation of Labor urges you and your committee to support the McCarthy bill S. 1991. It is our opinion that this legislation is seriously needed to bolster the economy and to stabilize the unemployment compensation program nationally, thereby extending vitally needed support to persons who are unemployed through no reason of their own. W. J. BASSETT, Secretary Los Angeles County Federation of Labor, AFL-CIO. INTERNATIONAL MOLDERS AND ALLIED WORKERS UNION, Hon. RUSSELL B. LONG, Chairman. Committee on Finance, DEAR SENATOR LONG: I am writing to you in behalf of the International Molders' and Allied Workers' Union to express our concern regarding unemployment compensation reform. The inadequacies of our present system of unemployment compensation are most glaringly visible, and exist, because of a lack of uniform federal standards. In order to protect workers-irregardless of the particular state they might live in-benefits must be standardized throughout all of our fifty states. These benefits should vary as the average weekly wages vary in the different states but benefits should meet federal standards relating benefits to wage levels. Thus the unemployment compensation an unemployed worker in Ohio would receive would be relatively (referenced to wage levels) equal to the unemployment compensation available to workers in Texas or any other state in the union. The McCarthy bill, S. 1991, which warrants our support erases the above deficiency. The McCarthy bill succeeds in avoiding any distortion of a state's economy because it relates maximum benefits to the average wage levels in each state. The effect of the McCarthy bill would be to insure that the majority of the workers covered would receive benefits amounting to one-half of their earnings when unemployed. It is thereby consistent with the aim of unemployment compensation-which is to replace the loss of income. With the onrushing advent of automation many workers find themselves unemployed for months after they have exhausted their state benefits. The McCarthy bill goes a step in the right direction by providing federal benefits for 26 weeks after state benefits have been exhausted. Of course this only applies to workers who have a definite attachment to the labor force. But it does acknowledge the general responsibility of society to combat long-term unemployment by providing the extended benefits. Training, especially for the hard-core unemployed, should not result in a decrease of withdrawal of benefits. No one should be penalized when attempting to once again become a productive member of our society, and therefore no penalty should be invoked because one is technically "not available for work". The President's Commission on Technology, Automation and Economic Progress reported that, "In the long run, unemployment insurance funds would probably be saved by offering a monetary incentive (over and above unemployment insurance benefits) for training to be at least equal to the added clothing, meals, transportation and tuition costs involved", and we agree. The price of meeting the additional costs are met, under the McCarthy bill, by modernizing unemployment insurance financing. The present financing, literally born in the depression, does not meet the needs of our society. The federal government's responsibility is met when it matches, from general revenue, the funds raised by the small-15/100ths of 1 per cent-increase in the tax rate. It is the hope of the International Molders' and Allied Workers' Union that the Senate Finance Committee will report out a bill, along the lines of the McCarthy bill, which will bring unemployment compensation into the 1960's where it can complement programs of the Great Society. We respectfully request that this letter be made a part of the record of the Senate Finance Committee hearings. Sincerely, WM. A. LAZZERINI, President. STATEMENT OF THE TEXTILE WORKERS UNION OF AMERICA, AFL-CIO, SUBMITTED BY WILLIAM POLLOCK, GENERAL PRESIDENT, IN SUPPORT OF EMPLOYMENT SECURITY AMENDMENTS OF 1965 (S. 1991) SUMMARY OF COMMENTS AND RECOMMENDATIONS Existing provisions for protecting workers against the hazards of unemployment are inadequate and inequitable. The workers in states which have the most need of higher benefits actually reecive the least protection. Their weekly benefits are far too low to meet their needs. The duration of their benefits is so limited that more than a million workers exhaust their benefits each year and are compelled to rely on the charity of friends and families or public relief. The reserves of states suffering from heavy unemployment are depleted. Federal action is imperative. The unemployment insurance system must be restored to its original purpose-to provide American workers with benefits adequate to preserve their dignity and self-respect during periods of unemployment. A federal system of grants-in-aid must be applied to give reality to the principle of insuring the risks of unemployment. Long-term adjustment benefits are essential to meet the needs of workers who are unable to find a job within the limited periods provided by state laws. Textile workers are in particular need of this program because of the difficulties they encounter when mills in one-industry towns are liquidated or curtailed. DETAILED STATEMENT The proposed Employment Security Amendments of 1965 (S. 1991) represents a significant forward step in making our unemployment insurance system responsive to the needs of the times. Federal action to establish minimum standards for the amount of unemployment benefits and to provide long-term adjustment benefits with sound financing of the entire program is vital to modernize the laws, to equalize competition, and to meet the nature of the new unemployment problems generated by our economy in this age of automation. The unemployment problem in the textile industry has been of such a grave nature that the shortcomings of the present state standards and the difficulties of securing improvements are most sharply projected among the workers associated with this industry and in the area where textile workers reside and work. The long-term trend of contraction in the textile industry, the displacement of hundreds of thousands of workers and the continued distress in textile areas in the New England, Middle Atlantic and Southern states have all conspired to make the present provisions inadequate. The benefits are too low to meet the original intent of the law and to keep up with the rising costs of living and wage standards in the United States. The duration of the benefits is too short to meet the needs of people faced with long term unemployment. The present laws make no provision for applying the insurance principle outside of the individual state. By breaking up the program into separate state funds, the sharing of risks is effected within but not among the states. It is vital therefore that insurance be applied on a national basis. The failure of the repeated efforts by the federal government to secure adequate general improvements in the provisions for unemployment insurance by the states indicates that reliance upon voluntary appeals is futile. They have been made repeatedly in the past decade but no state, except Hawaii, has yet come close to the recommended standards. Gains in the form of higher payments and longer benefits have often been offset by more rigid qualification requirements and severely restrictive maximum benefits. Severity of unemployment in textile communities The problems of the textile worker are due to the serious contraction of the industry over the past 15 years and the disappearance of hundreds of thousands of jobs. Productivity has been increasing at the rate of four to five percent a year. Intense competition has forced many mills to close and thousands of workers have been permanently displaced. No part of the country has been spared. During the fifties the textile industry suffered from a series of reverses which caused employment to decline sharply. A Senate Special Subcommittee under the chairmanship of John A. Pastore reported in 1959 that the industry had "failed to share in the postwar growth which has occurred in our economy since 1947." It most succinctly summarized the problem in the following paragraph of its report: "Production has declined slightly, but employment in the industry has dropped precipitously as technological change has reduced man-hour requirements by a much larger relative amount than the drop in production. Because consumers are spending a declining portion of disposable personal income on textile mill products, the aggregate domestic demand for textiles has increased at a slower rate than the rate of population growth. Meanwhile there has been a pronounced decline in the industrial demand for textiles due to the substitution of a wide variety of nonwoven materials for textile mill products. Finally, the domestic textile industry has lost two-thirds of its export market due to heightened competition in the world market for textiles, and at the same time there has been a substantial increase in the flow of textile mill products into this country from abroad." While economic conditions in the industry have improved in the past few years, only a small part of the decline in employment has been recovered. Increased productivity enabled the industry to produce more yardage of broadwoven fabrics in 1965 (13.4 billion yards) than in 1951 (12.9 billion) with 325,000 fewer production workers. Employment declined from 1,146,200 in 1951 to a low of 793,400 in 1963 and moved up to 821,200 in 1965. As a result of these developments unemployment in textile areas has been exceptionally severe, affecting a large part of the labor force and extending for long periods of time. The unemployment rate for this industry has exceeded the nonagricultural industry average in all but one of the past eight years (Table I). The marked decline in textile employment affected all sections of the country in which substantial numbers of textile workers are employed. While New England and the Middle Atlantic states have suffered the greatest declines, the South has also experienced a drop in textile employment (Table II). Textile mills are generally located in small towns, far from other centers of industrial employment. Textile workers who lose their jobs have scant opportunity for alternative employment in their labor market areas since they tend to be single-industry communities. An examination of the available statistics on unemployment in particular labor market areas reveals the distressingly high rates of unemployment prevailing in textile areas (Table III). Even after more than 2 years of rising textile employment, there are still 22 textile areas classified by the U.S. Department of Labor as areas of substantial or persistent unemployment including the following major labor areas: Fall River, Mass. (7.5%), Lowell, Mass. (6.8%), New Bedford, Mass. (7.0%), Scranton, Pa. (7.6%), and Wilkes-Barre-Hazleton, Pa. (7.9%). Because of the drastic character of the contraction of employment in the textile industry, unemployment tends to be of long duration. When a mill is liquidated, particularly if it is in a single-industry town, the displaced workers have considerable difficulty in finding jobs. As noted by William H. Miernyk in his study of the experience of 1,705 workers displaced by the closing of six New England textile mills, "the protracted decline in textile employment and the relative immobiilty of the displaced workers have produced a considerable amount of persistent unemployment in many textile centers in New England. The problem is not being solved by the growth of new industry in the region.. Nor can this unemployment be regarded as a temporary phenomenon . . . There is no reason to expect a larger proportion of displaced workers to be absorbed by other industries in the future." (William H. Miernyk, Inter-Industry Labor Mobility, Northeastern University, 1955). A large part of the unemployment of textile workers has been caused by mill closings. Since the war, more than 980 textile mills have been liquidated, displacing over 263,940 workers (Table IV). Many of these mills were located in predominantly textile areas, where employment in the remaining mills was declining. The difficulties encountered by displaced workers in finding work are indicated by the fact that only 45% of the former mill workers contacted by Miernyk in his surveys of six closed mills were at work at the time of his surveys (usually a considerable time after the closing of the mill). Women and older workers had particular difficulty in finding jobs. Sixty-five percent of the displaced females were unemployed at the time of Miernyk's surveys. More than half of the workers who found new jobs were under 45 years of age, while only 29% of the unemployed were 45 years of age or under. A study published by the U.S. Departmnt of Commerce in 1963, Economic Effects of Textile Mill Closings, Selected Communities in Middle Atlantic States, throws additional light on the difficulties encountered by displaced textile workers in finding new jobs. Eight communities were studied in which more than 30,000 textile workers lost their jobs as a result of textile mill closings and cutbacks since 1950. About half of the displaced workers had been employed in some 70 plants which either liquidated or moved to other localities. The findings of this study are summarized as follows: "Many older workers were unable to find new jobs, many younger men left their home communities to find employment elsewhere. Long periods of unemployment were common, and many displaced textile workers were forced to seek assistance from relatives or public relief agencies, or eventually to take lower paying jobs in other industries. Emigration and lower paying jobs for women had the effect of changing the character of the labor force in some communities, raising the average age of workers and increasing the proportion of women." It is significant that 50% of these communities (Amsterdam, N.Y., Gloversville, N.Y., Bridgeton, N.J., and Cumberland, Md.) are still classified as areas of substantial or persistent labor surplus. Persons who have no intimate knowledge of the problem of chronic unemployment have argued quite casually that the people should move rather than stay in areas where opportunities for employment are slim. The workers should move on. Actually, many workers do move away. Unfortunately, for the future of these communities, it is the young and unattached who do so. This mobility solves the problem for the few but not the difficulties of the many. There is a high mobility among textile workers. They have joined the mass movements which have built up the western states, Florida and Michigan. But the process is a slow one. The average population increase for communities which have become chronically distressed is smaller than for the remainder of the country, but the loss is not great enough to change the condition. It must be understood that there are many obstacles o such movement. There are strong local attachments, particularly among the middle-aged and older persons. They have become accustomed to their ways of life and have acquired a long term investment in homes and in their skills and acquaintances. Need for Federal standards It is evident from the statistics on unemployment that textile workers have borne an inordinate share of the burden of joblessness in our dynamic economy. It would be fitting that special provision be made to meet the needs of these distressed workers. However, under the present system of state-determined unemployment benefits, textile workers actually suffer from discriminatory treatment. The amounts of their benefits are generally lower than in nontextile states and the maximum durations of benefits are inadequate to tide them over until they can find work. It is grossly unfair to deprive these longsuffering workers of the protection of an American standard of unemployment compensation. The textile states have demonstrated their inability or unwillingness to establish decent standards. It is time the federal government set such standards and put an end to the inequitable practice of providing the most niggardly unemployment benefits to those most in need. The maximum weekly benefit provided in textile states varies from $35 to $55. In the Southern textile states the maximum basic weekly benefit is particularly low, ranging from $35 to $42 (Table V). |