It would promote equity in administration of the program by granting the States the right to seek judicial review of determinations of the Secretary of Labor as to their compliance with Federal requirements.

The 180 rubber manufacturing companies who are members of this Association thus strongly urge that your committee take early and favorable action on H.R. 15119 without amendment.

Sincerely yours,

W. J. SEARS, Vice President.

STATEMENT OF THE MINNESOTA AFL-CIO FEDERATION OF LABOR

Our organization was extremely disappointed with the bill passed by the House concerning federal standards in the field of unemployment compensation. Over the years, we have fought the legislative battle in our state legislature for proper benefits to the unemployed workers, and the record in this state has been a sorry one. Nothing at all was enacted between 1957 and 1965, and the employer-sponsored proposals during this period actually amounted to decreases in total benefits. In 1965, the weekly maximum benefit was increased, but in order to get this, it was necessary to agree to reduced total duration benefits and to accept various employee-penalizing restrictions and disqualifications.

The constant, and apparently impressive argument to many state legislators, advanced by employers every session is that the legislature should not improve the law because this would be an increased cost of doing business and put local employers at a competitive disadvantage in relation to surrounding states. One state vies with another in attempting to hold unemployment tax costs down, with the result that the unfortunate unemployed worker and his family and the social and national objectives of the unemployment compensation program are forgotten.

This is why we strongly favor federal standards as originally proposed in H.R. 8282, the Mills Bill and S. 1991 introduced by Senator McCarthy and others. In this fashion, all employer would be placed on a basic equal footing. and the past inter-state race to emasculate the original purposes of the unemployment compensation program would be at an end.

Although, after eight long years, our maximum weekly benefit was increased from $38 to $47 in 1965 (and based on 50% of an employee's earnings), it is obvious with statewide (which are substantially less than metropolitan) average weekly earnings in construction of $156, in mining of $127, transportation $130. and manufacturing $117, that the great majority of Minnesota unemployed workers are not receiving anything like 50% of their weekly wage during periods of unemployment which is a commonly accepted and desired standard for weekly unemployment benefits. It is also obvious that it is impossible for an unemployed worker to take care of housing, food, utilities and other non-deferrable living expenses for himself and his family on $47 a week.

With respect to duration, the maximum in Minnesota is 26 weeks. However, since duration in Minnesota is based on 70% of credit weeks, only those workers who have 37 weeks of employment in their one-year base period will be entitled to 26 weeks of benefits, and because of the complexities of determining the base period, an average of 20 weeks of the employee's most recent work experience are disregarded. We therefore strongly favor the proposed benefit and duration standards of the McCarthy bill.

We are also much concerned with the minimum 26 weeks of extended federal unemployment benefits. Anyone familiar with the northern part of our state for a number of years, and up until most recent times, is aware of the tragic problems of unemployed workers on the Iron Range and related areas. The same kind of problem can occur in any area with plant shutdowns and other long-term-unemployment-producing economic events.

We think the events of the last 30 years have shown that unemployment problems are national problems, and that the individual states are unwilling and individually incapable of properly handling the unemployment compensation program, unless there be minimum federal standards which all states are required to observe. The amount of the weekly benefit and the duration thereof are the most essential ingredients of the program, and when the House deleted standards in these areas, it left its bill a mere shell.

We strongly urge that the Senate look to the McCarthy proposal, and pass a bill adopting its principles, and then in conference committee the purposes of a good, strong unemployment compensation reform bill with minimum basic federal standards can be achieved.

Hon. RUSSELL B. LONG,

Chairman, Committee on Finance,

U.S. Senate, Washington, D.C.

IOWA FEDERATION OF LABOR, AFL-CIO,
Des Moines, Iowa, July 20, 1966.

DEAR SENATOR LONG: We understand that your committee is now conducting hearings on proposals for unemployment compensation reform.

The Iowa Federation of Labor is asking your committee to support unemployment compensation reform as outlined in the McCarthy bill, S. 1991.

We feel that uniform federal standards for the amount of weekly benefits and the duration of weekly benefits, plus a minimum of 26 weeks of extended Federal Unemployment Compensation benefits, are of utmost importance for the working people of this great nation.

As you know, unemployment benefits are the main source of support when the family breadwinner loses his pob. Most jobless benefits, in most states, are inadequate so we again urge you and your committee to support S. 1991.

Will you please have this statement printed in the record of Committee hearings.

Sincerely,

HUGH D. CLARK, President.

STATEMENT OF FELIX C. JONES, GENERAL PRESIDENT, UNITED CEMENT, LIME & GYPSUM WORKERS INTERNATIONAL UNION

The proposals which this Commitee is considering will make the first major improvements in unemployment insurance legislation since the system was enacted in 1935. This modernization of jobless insurance is urgently needed to restore protections to jobless workers that have been eroded over the years. The United Cement, Lime and Gypsum Workers International Union endorses and supports S 1991.

In 1939, the unemployment compensation benefits when first paid, in no state was the maximum less than 50 percent of the average weekly wage. By mid1965, the maximum weekly benefit was less than 50 percent of the average weekly wage in 40 states. In 1939, the maximum was more than 60 percent of the average wage in 34 states. One state achieves level that today.

The decline of maximum benefits relative to weekly wages can be seen in the chart below:

The effect of this development has been to change the program to a flat benefit system for the majority. The wage-related principle that the individual should receive benefits of half their weekly wage is now confined to lower-paid wage

earners.

In addition, the obsolescence of the present unemployment insurance program is manifested in several ways, such as:

State legislatures have added many new disqualifications which now form a network of benefit denial that entraps both the deserving and undeserving. The growing severity of punishment suggests a spirit of vindictiveness which is utterly inconsistent and inappropriate to a social insurance program.

An experience rating device attached to the tax system under which employers contribute to unemployment insurance funds has helped cut reserves, and states hesitate to impose special taxes not paid by competing employers elsewhere. There is no indication that the states can free themselves to place primary emphasis on benefit adequacy and the needs of the unemployed. Instead, the states continue to emphasize low tax rates, small tax bases, low reserve peril points, and

other characteristics of cheap financing. Experience rating schemes function not to stabilize employment, but rather as an arsenal of tax-reducing techniques. Competition among the states for industrial development continues to emphasize tax-reducing methods and thereby undercut any modernization of the unemployment insurance program.

Rapid technological change has created a class of long-term unemployed who have lost a lifetime skill, a career, with loss of jobs, and these became exhaustees those whose benefit periods have run out. A Federal program of adjustment benefits, beginning with the 27th week of unemployment until the 52nd week if the worker did not find a job in that time, would continue compensation to the long-term unemployed who had exhausted their state rights. The need for the extended Federal adjustment benefits is due to the prevalence of unemployment beyond six months. This varies at any one time from 200,000 to 900,000 persons depending on general conditions, but it persists at the lower level even in good times. Unemployment of this length is also attributable to factors other than automation and other technological developments; there are shifts in defense production and geographical movements of industry not restricted by state boundaries. The wage loss resulting from such factors can be adequately and equitably compensated only by a national program.

The prospects for a restoration of unemployment insurance and adaptation to new economic needs depends on Federal action, both to remove benefit standards from destructive competition among states, and to provide for national financing of the long-term unemployment that is caused by nation-wide economic displacement. Basic reform is needed to put jobless benefits again into the forefront as our first line of defense against current unemployment and future recession. The individual states are unable to achieve this goal. Enactment of S. 1991 by the United States Senate would achieve this goal.

STATEMENT OF THE NATIONAL COAL ASSOCIATION, PRESENTED BY BRICE O'BRIEN, GENERAL COUNSEL

Mr. Chairman: The National Coal Association is the trade association for producers of more than two-thirds of the Nation's commercially-produced bituminous coal. Basically, it is our position that Congress should reject Administration proposals to enlarge and expand the benefits and to loosen the safeguards against abuse beyond the provisions of the House-passed version of H.R. 15119. The coal industry is fully aware of the fact that predominant philosophy today requires an adequate protection by society against the perils of unemployment which can occur without fault on the part of the individual. We believe H.R. 15119 as passed by the House fully accomplished that objective. To go further, as proposed by the Administration, would in our opinion injure the economy of the Nation by tempting the individual whose personal philosophy is readly adapted to becoming a ward of society.

An appropriate system of unemployment compensation should provide sufficient funds for food, shelter, and dignity for those who want to work but who (for reasons not of their own choosing) do not have opportunity to work. H.R. 15119 does that. The Administration proposal, as embodied in H.R. 8282 and S. 1991, goes much further; it would provide benefits competitive with the urge for dignity.

Specifically, the Administration proposal would grant benefits competitive with wages for persons who quit their employment without good reason—and eliminate the employer's incentive to contest such cases, through elimination of the "experience rating" system.

As to the proposed further increase in the taxable wage base and the proposed lengthening of benefit periods, we believe the objections are the same. If society feels it should assume the burden of furnishing a higher standard of living, and a longer period therefor, then the burden should be borne by society in general and not by those industries which have a heavy wage cost.

The coal industry, through mechanization forced upon it in order to remain competitive with imports of foreign residual oil and natural gas, and with government-subsdized hydroelectric power and atomic energy, has reduced the number of job opportunities per unit of production. Unless this had occurred, coal production would have been greatly curtailed, resulting in even fewer jobs and with lower wages. Even so, coal is still a "job opportunity" industry. Payroll taxes can increase this problem-industries which are highly "wage oriented" are put at a severe disadvantage when payroll taxes are unwisely increased.

The coal industry is willing to pay (and, of necessity, pass on to the consumers of coal) the cost of unavoidable unemployment for its workers. With a welfare fund of 40 cents per ton (nearly 10 per cent of total selling price), the coal industry is already showing its awareness of responsibility to employees. But unnecessary and unwise increases in the "payroll" burden can and will cripple those industries (like coal) which furnish a high percentage of job opporunities. If society must furnish a high standard of living for those who become permanently unemployed, the burden of doing so should fall on the income of society in general, through the general tax structure. If this burden is shifted to payroll taxes, it will simply mean that industries (like coal) which furnish job opportunities will be further discriminated against in competition with industries which involve a low incidence of job opportunities (like atomic power and imported energy).

We believe it would be detrimental to our Nation to offer unemployment benefits (on a level competitive with the "take-home pay" of available job opportunities) for an extended period of time to persons who simply quit their jobs because of preference. H.R. 8282 and S. 1991 would do this. H.R. 15119 would not. We therefore urge that you refuse to expand this program-its benefits, the duration thereof, and the standards therefore-beyond the bounds contained in H.R. 15119 as passed by the House.

STATEMENT OF HERRICK S. ROTH, PRESIDENT, ON BEHALF OF THE COLORADO LABOR COUNCIL, AFL-CIO

Colorado has often been the object of special attention when it comes to both the administration and the standards set for its program of unemployment insurance and unemployment compensation payments.

Part of this attention has been attracted because the Department of Employment for our State has had the same administrator since its establishment in the 1930's and since he has been considered both a strong and conservative executive, even as he has dealt with the State Legislature in establishing the guidelines for unemployment compensation benefits and coverage.

The maker of this statement has had twenty years of intimate involvement in both labor's position on the entire program and the legislative program established on the state level. He has served for the greater part of that time in elected union positions; has served for the last four years on the Governor's Advisory Council for the State Department of Employment; and has served as a member of the House for two years and four years as a member of the Senate of the Colorado General Assembly with membership on committees in both Houses that have dealt with this area of concern.

The Sixth Biennial Convention of the Colorado Labor Council, AFL-CIO, held in early May of this year, endorsed unanimously the original proposal of Senator Eugene McCarthy's S. 1991. We did this because our members and the offices of our Council have been deeply involved in recent years in dealing with the problems of entitlement of benefits under our Colorado law. All of this experience has simply underscored what we have basically believed for at least the last two decades; namely, that unemployment benefits and coverage are national problems that deserve the same kind of minimum federal attention already provided by law in fields relating to other social security areas such as old age, survivors and disability programs.

At the moment, Colorado has relatively decent monitory payment for the unemployed worker, provided that he can establish eligibility. This is not the easiest thing in the world to do, however. For instance, since 1963, Colorado has had an award system unlike any other state in which limited optional or discriminatory judgments based on the facts of an individual's case are available.

We have a fixed benefit system that arbitrarily rules out many who should be otherwise eligible simply by fixed determinations written in the law. Some of these are set at "50% Awards" and others at "No Awards." In a sense, this is a substitute for penalty waiting periods which, as you know, vary in length in different states.

We use this point to illustrate the fact that political pressures from time to time make unusual and sometimes unrealistic changes in laws affecting workers, even though the workers continue to find the business of being out of work the same personal and economic problem for themselves no matter what their states of residence.

Other examples could be quoted at length, including the manner in which the judgment of an employment office about eligibility can be appealed, the nature of coverage of seasonal workers, the kind of employment tax placed upon the covered employer, the number of employees required for an employer to be covered by law, the length of the benefit period available to the employee, the amount of wages and duration of wage payments that are to be used for wage credits, the percentage of earned wage that is to be used as the base for payment of compensation benefits, the relationship of the number of dependents which a worker has to the amount of the benefit paid, the additional benefit payable because of continuity of service with a single employer, and the like.

In brief, no matter where a worker works to earn his benefit of coverage for the payment of unemployment compensation, he is in a highly mobile work force and needs to know that certain basic standards will prevail from state to state as he seeks to find work best suited for himself and his community. He needs this assurance not simply because of the possibility of layoff from work which he has primarily trained himself to do and perhaps has actually done all the years, but he needs it so that he can even quit work to seek a better job with the full knowledge that some protection exists for him in case the better job ceases in due time. The variations among the states are so great in this one area alone that the federal benefit standard is needed to insure incentive as well as security as the worker tries to find the job suited to his skill or is given the time to train himself for the new job markets available.

We subscribe to the AFL-CIO standards because they are basic, decent and yet minimal. We will not, therefore, repeat them here except to say that any worker out of work needs to know, if at all possible, that his full wage credits on jobs previously held are being applied to a benefit standard that the benefit standard must be no less than a basic minimum standard of living for him and his family as he makes himself available for new work, and that the duration of this benefit must be sufficient for both him and the business community to place himself in the best possible work fitting his abilities.

If S. 1991 does become law, as we believe it should, then our feeling is that a considerably lesser number of unemployed workers in our own state will be properly entitled to payments which they do not now receive. This, in turn, will provide for them better opportunities to seek, train for, and find employment, while at the same time removing them from private or public charitable assistance paid for on a general tax base that serves both the worker and the community less well than the federal benefit standard program for unemployment would provide.

We urge this important reform.

STATEMENT OF THOMAS T. SNEDDON ON BEHALF OF THE NATIONAL LUMBER AND BUILDING MATERIAL DEALERS ASSOCIATION

I am Thomas T. Sneddon, Executive Vice President of the National Lumber and Building Material Dealers Association, 302 Ring Building, Washington, D.C. The Association of 13,000 member firms is the sole national representative for the building materials distribution industry which accounts for over seven billion dollars in building materials annually.

Our interest in the current Unemployment Compensation Bill S. 1991, is in general opposition. We urge the Committee to accept and adopt the provisions of the House of Representatives Bill H.R. 15119.

Being mindful of the vast changes in the incidents of our post-depression economy, we believe an updating of the Unemployment Compensation Program is appropriate, particularly at a time of a relatively low unemployment rate. The Committee is in a position to objectively anticipate the assistance needs of the responsible individuals who find themselves unemployed through no fault of their own, that is, those individuals for whom the original programs were conceived.

Recognition of the need for change does not, however, permit us to discount the need for financial responsibility in advocating change. Attempts to convert a necessary assistance program into an extended welfare plan are obtuse to the motives which prompted the program initially. S. 1991 is just such an attempt. The House of Representatives repelled the effort and in the alternative passed a reasonably sound proposal incorporating a liberal expansion of coverage and a long needed provision for Judicial Review. More importantly, they reindorsed the need for State administration of the existing programs and rejected the unacceptable demands for a Federal Benefits Standard.