Hon. RUSSELL B. LONG, PATTERN MAKERS LEAGUE OF NORTH AMERICA, Chairman, Committee on Finance, U.S. Senate, Washington, D.C. Washington, D.C., July 19, 1966. DEAR SENATOR LONG: The Senate Finance Committee is now conducting hearings on proposals for unemployment compensation reform. It is urgently requested that your Committee favorably consider and report out reform and changes along the lines of Bill No. 1991 introduced by Senator Eugene McCarthy and other Senators. We feel that present standards of unemployment compensation are totally inadequate and outmoded in view of the economic changes which have taken place over the last several years. The present lack of uniformity is both unfair and confusing. We urge uniform Federal standards for the amounts of weekly benefits plus a minimum of twenty-six weeks of extended benefits. In industrial plants that have pattern departments, the Pattern Makers' League represents comparatively small and separate units of its craftsmen. We are so certified by the National Labor Relations Board. We negotiate and have our own contracts. Yet when other unions go on strike and our groups are either laid off or otherwise prevented from working, we are more often than not denied unemployment compensation. We strongly urge, therefore, that together with other contemplated reforms the matter of unemployment compensation eligibility for such separate and, with other union contracts uninvolved groups, be given favorable consideration and action. Sincerely and respectfully yours, G. HALLSTROM, STATEMENT SUBMITTED BY MAX GREENBERG, PRESIDENT, RETAIL, WHOLESALE & DEPARTMENT STORE UNION, AFL-CIO The Retail, Whole and Department Store Union represents 175,000 workers including 30,000 employees in nonprofit hospitals and nursing homes. Its largest affiliate, Local 1199, Drug and Hospital Employees Union, represents 25,000 workers in 68 nonprofit hospitals and nursing homes in New York and New Jersey. I am therefore addressing my comments to that section of H.R. 15119 which would extend coverage under our federal unemployment compensation laws to the more than one million employees in nonprofit hospitals and state hospitals throughout the nation. We regard this section of the bill as a most heartening development which recognizes for the first time that these workers must be accorded the same rights and benefits enjoyed by all other workers. Historically excluded from virtually all federal social legislation enacted during the past 35 years, these employees, who perform a most vital and essential service in maintaining the health and well being of our citizens, are for the most part members of minority groups. Their wages are at the poverty level. When unemployment strikes, it creates untold hardship and misery. These low-wage workers do not have funds set aside for "a rainy day." When the rain does fall, they are compelled to seek assistance from public welfare agencies. This unfair and unjust situation was most dramatically exposed last winter during the 13-day transit shutdown in New York City when hundreds of thousands of workers were unable to get to work during this period. To help these workers meet a difficult financial crisis, Governor Rockefeller waived the normal one-week waiting period for applying for jobless benefits. This was an important service to New York City workers. But it meant absolutely nothing to the several hundred nonprofit hospital workers who turned up at unemployment insurance offices only to be informed they were excluded from jobless benefits. Denied the elementary right, these workers were compelled to go into debt or to apply for public assistance to help tide them over this difficult period. While this was perhaps a most dramatic illustration of the urgent need for extending unemployment compensation coverage to nonprofit hospital workers there are many other fundamental reasons for this long overdue protection: For example, more than 2,000 hospital employees in New York City, most of them Negroes and Puerto Ricans, were laid off from their jobs during the past two years due to the closing of several nonprofit hospitals, the leasing of food, laundry and other services to outside commercial companies and the introduction of automatic equipment. Here, too, our files indicate that more than 65 percent of those laid off were compelled to apply for public assistance from welfare agencies to support themselves and their families. It becomes ever increasingly clear that the continued exemption of these workers from our federal and state unemployment compensation laws is not only unfair and unjust but violates every concept of human dignity. Further, the idea that nonprofit hospital employees are any different from private industry employees is a false and outmoded argument. For example, hospital workers cannot understand why they are protected for unemployment compensation when they work in a private or proprietary hospital, and denied such protection when they obtain employment in a nonprofit hospital a few blocks away. Nor can they understand why they are covered when they work in a hotel, restaurant or laundry but are exempt when they perform identical tasks in a nonprofit hospital. Nor can anyone argue that extension of coverage to these workers will provide an economic burden to the hospitals and other nonprofit institutions. H.R. 15119 would permit states to adopt special financing methods for such coverage. In this way, institutions would have the option to provide coverage on a reim'bursable cost basis or in the same manner as in private industry. The reimbursable cost method of financing coverage has already been adopted in New York and California to become effective once this legislation is enacted. We regret the failure to include meaningful federal benefit standards in H.R. 15119 and we endorse the proposals to provide such standards as recommended by the AFL-CIO. We are in full support of the section extending coverage to nonprofit institution employees and urge its adoption by the Committee. Such legislation, urgently needed and long overdue, would represent a significant step forward in eliminating the second-class citizenship status of more than one million nonprofit hospital workers throughout the nation. As I have indicated, the RWDSU fully supports the position of the AFL-CIO with respect to uniform federal standards for the amount and duration of weekly benefits as well as for a minimum of 26 weeks of extended federal unemployment compensation benefits. In addition to coverage of workers in nonprofit institutions, we urge that workers in small establishments with one or more employees be brought under the protections of the law as well as employees of large farms and other workers with a regular employee relationship who are presently excluded. A thorough overhaul of our unemployment compensation system is long overdue. This cornerstone of our social legislation must be made meaningful in the context of today's wages, living standards and employment situation. The impact of automation, the shift in geographic location of mass industry and the rehabilitation of depressed areas must all be dealt with in human terms, and a fundamental consideration is the provisions of fair and adequate unemployment benefits to cushion the blow of widespread and long-term unemployment. We must correct the present situation where only one out of every two jobless workers receives any kind of jobless benefits and only $1.00 out of every $5.00 lost through unemployment is compensated. I strongly urge on behalf of the Retail, Wholesale and Department Union that the Senate Finance Committee report out a bill along the lines of the McCarthy Bill S. 1991 and rectify the shortcomings of H.R. 15199. MONTANA STATE AFL-CIO Hon. RUSSELL B. LONG, Chairman, Committee on Finance, U.S. Senate, Washington, D.C. DEAR SENATOR LONG: I wish to place the Montana State AFL-CIO labor organization on record with your committee in strong support of unemployment compensation reform along the lines of the McCarthy bill, S. 1991. The Montana Unemployment Compensation law is grossly unrealistic as to weekly benefits and duration. Also disqualifications are unfair. The wage base of $3,600.00 and contribution rates are not sufficient to provide a fair program. The past several sessions of our Legislature have failed to adjust either the rate structure or to provide realistic benefits for the jobless. The 1965 session failed to enact any changes in the law. Montana needs increases in weekly benefits and duration. We also need coverage for many workers not now covered. Our long cold winters when construction is down and other jobs in retail stores and the service industry have to lay off workers creates a serious hardship on workers families, forcing many jobless to go on relief. Employer groups fight any attempt by the State Legislature to improve the program or to develop realistic financing. Thus they throw the burden of help to the jobless on the backs of the taxpayers through the public welfare department. Our organization believes that Federal minimum standards is the only answer to our needs for a good State Unemployment Compensation program. I respectfully urge you to give every consideration to S. 1991, and that my letter be made a part of the record. Respectfully yours, JAMES S. UMBER. NIAGARA MOHAWK POWER CORP., Re hearings on H.R. 15119 and S. 1991, the Unemployment Insurance Amendments of 1966. Hon. RUSSELL B. LONG, Chairman, Senate Finance Committee, U.S. Senate, Washington, D.O. DEAR SENATOR LONG: It is our desire that this letter be considered as a written statement for inclusion in the printed record of the hearings on H.R. 15119 and S. 1991 in lieu of my personal appearance as a witness. I submitted a statement to the House Ways and Means Committee on August 25, 1965, copy of which is enclosed, in opposition to many of the features of H.R. 8282 (S. 1991), a bill which would have had serious repercussions upon the future course of a stable Unemployment Insurance system in this State and in this country. The House Ways and Means Committee weighed all of the pros and cons of the proposed legislation and drafted a substitute bill, H.R. 15119, which, in our opinion, is far superior to its predecessor even though it does not -cover all of our objections to H.R. 8282. It is respectfully urged that the Senate Finance Committee concur in the view of the House, that the substitute bill constitutes a sound and reasonable compromise. Very truly yours, R. D. CONSTABLE, STATEMENT BY NIAGARA MOHAWK POWER CORP. OPPOSING CERTAIN FEATURES OF H.R. 8282 AS Now DRAFTED (1) Experience Rating: Our gravest concern is with the changes affecting experience rating in the various states. Present Federal law provides that any reduced contribution rate must be related to the experience of individual employEvery state in the Union has an experience rating program based on this -ers. fundamental requirement. Reverend Joseph M. Backer, S.J., one of the most impartial and knowledgeable authorities on unemployment insurance, believes this concept of experience rating to be one of the best and strongest features of our unemployment insurance system. Individual experience rating provides employers with incentives that are consistent with the objectives of unemployment insurance, that is, the stabilization of employment to the greatest possible extent and the payment of benefits only to those claimants legitimately entitled thereto. HR-8282 would permit any form of pooled experience rating. If any state, because of political pressure, should change its system from individual employer to pooled experience, the important incentives for employers to stabilize employment, to cooperate in maintaining a sound State Unemployment Insurance law and to assist in the policing of benefit payments would be lost. We submit that such a development would not be in the interest of the country's work force and would penalize the most desirable types of employers. (2) Disqualification Standards: The proposed disqualification standards of HR-8282 are unduly liberal and abort the basic concept of unemployment insurance to the effect that benefits should be available only to claimants who are atatched to the labor market and who are unemployed through no fault of their own. New York has a reasonable qualification for persons who voluntarily left their jobs or were discharged for cause, to the effect that they must demonstrate their attachment to the labor market by subsequently working in employment on not less than 3 days in each of 4 weeks or have earned remuneration of at least $200. The prohibition against any disqualification of retiring employes, either partial or full, is particularly unreasonable and imposes an unjustifiable burden on employers with liberal pension plans. At Niagara Mohawk, the great majority of retiring employees receives a non-contributory pension, exclusive of any Social Security benefit, greater than Unemployment Insurance benefits. Taking into account their Social Security benefits and tax advantages, if they receive both unemployment benefits and pensions, their net spendable income during their period of eligibility would be substantially in excess of such income prior to retirement. We believe this is not consistent with the purposes of unemployment insurance, would constiute an unwarranted drain on reserves and inflicts a heavy penalty on employers with liberal retirement plans. New York has a sensible provision in this area, to the effect that a non-contributory pension will be offset against unemployment benefits while 50% of a contributory pension will be offset with the retired employee receiving the difference, if any, in each case. The proposed law would provide what, in effect, would be a bonus to retirees. At Niagara Mohawk we estimate that this bonus would amount to at least $150,000 annually and would constitute an unjustifiable cost to the customers we serve. (3) Extending Benefits: While we recognize the need for the extension of benefits beyond 26 weeks in certain circumstances, we believe the provisions of HR-8282 lack the necessary safeguards to avoid abuse. Individual cases of unemployment beyond 26 weeks in times and areas of low unemployment rates suggests a problem of a national social nature unrelated to the basic concept on which unemployment insurance is based. They should, therefore, be handled on an entirely different basis, lest the system itself be broken down by their inclusion. Any extension of the system along the lines contemplated by HR-8282 should be based on a demonstrated lack of employment opportunities by establishing some type of area trigger point geared to unemployment rates and consideration should also be given to restricting eligibility to primary wage earners only. (4) Excess Benefit Grants: The bill provides for grants, payable from the "Federal Adjustment Account", to states equal to two-thirds of state benefit costs which are in excess of 2% of the states' total covered wages. We believe this is an invitation to profligacy on the part of the states. Although the Labor Department claims that this provision will decrease the disparity between the tax costs of employers in various states and thereby eliminate competition between the states based on unemployment insurance taxes, we believe the opposite effect will result. For example, based on the record of the past ten years, New York would have received grants of about $14,000,000 during this period while five competitive industrial states would have received about $451,000,000. (5) Wage Base: Finally, we would like to express opposition to increasing the taxable wage base to $6600, the same base used in the O.A.S.D.I. program. Unemployment Insurance benefits are not computed on the same basis as Social Security benefits and therefore there is no valid reason for following the O.A.S.D.I. base. To do so now would establish an unwarranted precedent for the future and could result in much unnecessary juggling of state tax rates in the future. Actually, the function of the tax base in unemployment insurance is the production of tax revenue on an adequate and equitable basis. While increasing the base in New York from the present $3000 maximum to $6600 can be partly offset by appropriate adjustments in the tax tables, a substantially increased burden will nevertheless fall on the highest wage employers with the most stable employment. There is at present a disparity against such employers chargeable to the "social" rather than the "insurance" aspects of the unemployment insurance system. While this is accepted as necessary within limits, we believe these limits would be exceeded beyond reason by requiring an increase of 120% in the New York State tax base. As illsustrated below, the impact of HR-8282 on this Company's Uneloyment Insurance costs would potentially be very heavy. This data assumes a continuation of present pay scales and no change in the New York experience rate tables or in the Federal tax between now and 1971. Barring repeal of experience rating in New York, an appropriate adjustment in the rate tables could no doubt materially reduce the above State taxes. However, the payment of benefits to retirees in the amount of at least $150,000 annually, to claimants now disqualified and to legitimate claimants in increased weekly amounts, could be expected to offset the tax table adjustments so far as can now be determined. RUBBER MANUFACTURERS ASSOCIATION, Washington, D.C., July 21, 1966. Subject: Finance Committee hearings on H.R. 15119, proposed Unemployment Insurance Amendments of 1966. Hon. RUSSELL LONG, Chairman, Committee on Finance, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: The rubber manufacturing industry, which is an employer in every State, strongly recommends that H.R. 15119 be favorably reported and enacted in its present form. Representatives of this Association testified before the House Ways and Means Committee in opposition to H.R. 8282 (S. 1991). As a matter of reference and information to your Committee, enclosed with this letter is a copy of our statement as presented at that time. In the judgment of this industry, H.R. 15119-meeting previous objection to H.R. 8282-represents a responsible effort to bring about meaningful amendments to the Federal-State Unemployment Compensation program, yet in a manner that maintains the integrity of the program as it is presently administered by the States. H.R. 15119 would assist the unemployed by extending coverage to some 31⁄2 million workers and by providing extended weekly benefits during periods of statewide or national recessions. It would provide for the fiscal stability of the program by a realistic increase in the employer's tax and the wage base of the employee to which this tax is applicable, and by making available additional U.C. tax receipts to help support the extended benefits program. |