26 additional weeks of benefits are provided for unemployed workers who have exhausted regular benefits and who have been unemployed at least 6 months. Payment is made by the Federal Government, and extended benefits are payable regardless of economic conditions.

HOUSE BILL

Extended unemployment compensation is available to individuals who have exhausted all rights to regular compensation under state law for a period not to exceed 26 weeks. Benefits are payable only during periods of high unemployment. The Federal Government pays to each state an amount equal to 1⁄2 the extended compensation benefits. FINANCING

Neither Bill eliminates the experience rating which is undermining the financial base of the unemployment compensation system as the result of state competition for industry.

The House Bill is seriously inadequate. Although it contains many needed improvements, it does not eliminate the basic faults of the present unemployment compensation systems: inadequate coverage, inadequate benefits, and lack of national uniformity.

We respectfully urge your serious consideration of the McCarthy Bill. We suggest that enactment of a Bill along the lines of the McCarthy Bill would benefit industry, as well as wage earners, by stabilizing the purchasing power of wage earning families.

Respectfully submitted.

KARL F. FELLER, International President.

BIRMINGHAM, ALA., July 25, 1966.

Senator RUSSELL B. LONG,

Chairman, Committee of Finance,
U.S. Senate,

Washington, D.C.:

Birmingham Labor Council AFL-CIO urge you and committee to support uniform Federal standards for amount of week benefits and for minimum of 26 weeks of extended benefits in Federal unemployment (copy sent Senators Sparkman and Hill).

DONALD B. STAFFORD,

President, Birmingham Labor Council, AFL-CIO.

STATEMENT PRESENTED TO THE SENATE FINANCE COMMITTEE ON BEHALF OF THE RHODE ISLAND AFL-CIO BY THOMAS F. POLICASTRO, PRESIDENT

The Rhode Island AFL-CIO urges the Senate Finance Committee to recommend passage by the Senate of unemployment compensation legislation along the lines proposed in Senator McCarthy's Bill, S. 1991.

The Rhode Island AFL-CIO believes that modernization of the federal standards for unemployment compensation are long overdue.

The unemployment compensation legislation recently passed by the House of Representatives falls far short of meeting the needs of the unemployed. It would be a disservice to the workers of this country if the House Bill was enacted into law.

This nation has had thirty years experience with the operation of our employment security system. Very few changes have been made over the years that would keep federal standards up to date. Usually, Congress is called upon to take action when it is of an emergency nature. On these occasions, Congress has responded. During the Depressions of 1958 and 1961, Congress met the needs by enacting emergency temporary unemployment compensation programs. However, these actions were under pressure and were for short term situations. There is no emergency pressure on Congress at this time. Our nation is enjoying unprecedented prosperity. Therefore, the Senate Finance Committee had a golden opportunity to build in better federal standards that will protect the program in the years ahead. Now is the proper time to update our antiquated federal standards for unemployed compensation. Over the thirty year life of our Social Security System, employment security has been the ugly duckling of the Social Security family.

On two occasions, its constitutionality has been challenged. It has been under continuous attack by the National Association of Manufacturers, and other employer groups; the Interstate Conference of Employment Security Agencies; The Tax Foundation; Reader's Digest and other publications.

Unfortunately, these are the elements in our country who refuse to accept the fact that all segments of the Social Security family have become an integral part of the American economic and social system. They are built in fixtures of our economy and are firmly rooted in our society.

However, the opponents of a sound employment security system continue their devious methods in trying to destroy or severely cripple an essential program. The attacks upon the employment security system have been numerous. They have also been inaccurate and uninformed. These unrelentless attacks have been designed to confuse the public and the legislators. To a great degree, they have been successful.

The opponents of employment security have directed their attacks towards financing. They attempt to starve the program through under-financing. They seek unrealistic disqualification provisions. They would prefer to have the unemployed on the relief rolls rather than pay unemployment benefits. They have used the merit rating provisions as bait to pirate industry from one community to another.

Thirty years ago, when federal standards were first promulgated, there was some reason for setting them at such a low level. The economic nature of our states varied greatly. Since that time, our nation's economy has undergone considerable change. No longer do we have the wide economic difference be tween so called agriculture and industrial states. Just about all the states of our nation have become more uniformly industrial. We feel that the federal standards for unemployment security should be updated correspondingly.

Rhode Island is a geographically small state. Our working citizens are regularly confronted with confusing experiences with employment security laws. This is brought about because thousands of our people live in Rhode Island and work in nearby Connecticut or Massachusetts.

The basic standards of the laws in the three states vary to a high degree. Therefore, if federal standards were modernized, many of these confusing experiences would disappear.

One of the areas where federal standards should be updated, is in the matter of disqualifications. More realistic federal standards should be established and duration of penalties be made uniform.

Another role for federal standards is the matter of processing of interstate claims. Many of our unemployed have been forced to undergo unnecessary hardships because some states are dilatory about procesing interstate claims.

The Senate Finance Committee should look into the matter of adequacy of benefits. Experience has shown that benefits have lagged seriously behind. The proportion of benefits to wages has gone down. An unemployed worker can no longer provide the necessities of life from his unemployment benefits. As a matter of fact, unemployment benefits in most instances, are below the poverty level set by federal government agencies. Therefore, adequacy of benefits should be raised and where possible, tied to a percentage of his average weekly wage. In Rhode Island we have worked hard to keep our employment security law parallel with the times. However, we feel that our unemployed and our employers have been placed at a disadvantage because other states and the federal government have not kept their standards in conformity with the times. We feel that some state administrators and state legislatures are unconcerned about the original concept and intent of the law.

In addition to urging the Finance Committee to recommend to the Senate legislation along the lines of $1991, we feel that the Committee should consider other features that would give a higher degree of protection to the person so unfortunate as to become unemployed through no fault of his own. Therefore, we further recommend that federal standards be extended to provide unemployment benefits to those who are unemployed because of sickness. Four states already are experiencing such a desirable feature and Congress should encourage it in the other 46 states.

Also, as to adequacy of benefits, we feel that Congress should take steps in providing increased benefits for the family breadwinner. Congress should require that benefits also be provided for dependents.

In addition, we believe that the limitation placed on the taxable wages should be removed. One of the gimmicks used by the opponents of employment security, is to starve the program. This is done by establishing a low tax ceiling and a merit rating system that gives preferential treatment of favored employers.

We greatly appreciate this opportunity to lend our support to the passage of legislation along the lines of Senator McCarthy's Bill, S1991.

We feel very strongly that Congress must enact uniform federal standards for the amount of weekly benefits for the unemployed.

Also, Congress should enact provisions that a minimum of 26 weeks of extended federal unemployment compensation benefits be provided.

In addition, we request that the House Bill amending the federal standards for Unemployment Compensation, not be enacted.

DEAR MR. CHAIRMAN: May I take this opportunity to express the views of the Building and Construction Trades Department concerning legislation to improve our Federal-State Unemployment Insurance system which is pending before your Committee. The Department is composed of eighteen National and International Unions, representing approximately four million building tradesmen throughout the country.

We in the Building and Construction Trades Department feel that the Federal-State Unemployment Insurance system must be brought up to date and that this is a matter highly deserving of the close, careful and immediate attention of the Congress. This attention must turn itself to a farsighted and longreaching solution to the existing problems.

Due to seasonal employment and the unique nature of our industry, the building trades have the highest rate of unemployment of any industry throughout the country. We are deeply concerned that adequate legislation be enacted in order to meet the needs of the present unemployment situation.

As we see it, the main problems are: (1) the inadequacy of benefits presently being paid and their lack of uniformity among the states: (2) the vast gap between the number of people drawing unemployment insurance benefits and the total number of people who are actually unemployed. A little over 800,000 persons draw benefits every week, while over 3 million are currently unemployed.

The question is why this gap exists. This question must be looked at very searchingly.

Another point that is acute and that must be attended to is the fact that there are approximately 15 million people working in jobs where they have no protection. Should any of these people become jobless, they receive no help whatsoever. These 15 million represent about 25 percent of the working force. This is hard to believe and should be corrected immediately.

You have had extensive testimony from many expert witnesses on this measure. Among others, Secretary of Labor Wirtz and President Meany have given the Committee careful analyses of the overall scope of the existing problem. I will not impose on the Committee by repeating or reexamining the great volume of technical detail involved in this legislation. However, I would like to pinpoint the two basic areas in which action is direly needed. Before doing so, I wish to advise that the Building and Construction Trades Department wholeheartedly supports the recommendations of the AFL-CIO as presented by President Meany before the Committee on July 21, 1966.

In explaining the amount and extent of the benefits of unemployment insurance, I shall be very brief. Back in 1939, the Unemployment Insurance benefits were very close to 65% of the average weekly wage. Today, that ratio has dropped to 42%. To me this indicates that the program is sadly out of date. As far as the extent of benefits is concerned, there are today about 17,000 persons a week who do not find work before their benefits run out. This clearly illustrates the length of benefits should be extended.

The second point is coverage. I have said that about 15 million people are not now covered. In the House bill (H.R. 15119) about 3 million will be placed under coverage. Under the Senate bill, S. 1991, an additional 5 million will be covered. We thus much prefer the Senate bill because it provides greater coverage.

In addition to wider expanded coverage, we feel that S. 1991 is superior and thus preferable. It would allow a maximum benefit of half the average weekly wage which we feel is at least a step in the right direction.

I said earlier that what is needed is a comprehensive, farsighted and longreaching solution to these problems which I have outlined only briefly. We do not feel that H.R. 15119 provides such a solution. It does not even scratch the surface. An historical look at Unemployment Insurance in this country shows that Congress has up to now taken emergency measures aimed at specific problems as they arose such as in times of depression or recession. What is needed is an overall, ongoing program that will eliminate not only those problems which exist today but will also be tailored so that it may apply to the problems of the future. May I respectfully request that this letter be incorporated in the proceedings of the hearings on this subject.

In the firm hope and belief that the Committee will arrive at a strong and farseeing solution to this problem, I am

Sincerely,

C. J. HAGGERTY, President.

STATEMENT OF FRANK L. KING, EXECUTIVE VICE PRESIDENT, WRITING INSTRUMENT MANUFACTURERS ASSN., INC.

Gentlemen: This is an Association of eighty-three manufacturers of writing instruments and their suppliers and represents a quarter-of-a-billion-dollar industry employing approximately 20,000 persons and accounting for the livelihood of about 75,000 Americans.

We have taken a keen interest in unemployment compensation legislation because we are deeply aware of the possible impact which changes in the law would have on our members' operations and their cost of doing business. As businessmen, we are particularly concerned with the additional cost that. H.R. 15119 will have on us and what it will mean in terms of employment conditions for both employee and employer.

We have noted with satisfaction that the House Ways and Means Committee approved a measure, later referred to your committee, which will not disturb the present Federal-state relationship. We have been fearful of the program originally proposed to federalize unemployment compensation benefits. We do not believe that a revision of the Federal-state relationship now in effect would be beneficial and, in fact, we can see great harm flowing from such a change. The performance of our Unemployment Compensation program during the

past two recessions has been outstanding. We understand that in the most recent recession period of 1960-1962 nearly 9 billion dollars of jobless benefits were paid to unemployed claimants. Even in 1964, a year of record employment and prosperity, when higher weekly benefits were the rule, the system paid out a total of 22 billion dollars in benefits to Unemployment Compensation claimants. All of these funds consisted of moneys paid solely by employers.

We can not agree with a Department of Labor assertion that state systems have not been kept up to date. Since the original enactment of our Unemployment Compensation laws, the states have frequently increased weekly benefit payments, extended the duration of benefits, changed qualifications as conditions seemed to warrant, extended coverage, and also increased tax rates on employers to pay for the higher cost and increased coverage. Last year alone, twenty states increased benefits and during the past several years all fifty states have made improvements in their unemployment compensation laws. It would seem that whatever deficiencies might exist in the various states might be more easily and equitably remedied by state action rather than by Federal approach.

We believe that the Bill, H.R. 15119, as enacted by the House of Representatives, is a fair and workable law, which will neither weaken nor compromise the role presently exerted by the states in this field. We favor approval of the bill as passed by the House.

FRANK L. KING, Executive Vice President.

STATEMENT OF RUDOLPH T. DANSTEDT, DIRECTOR, WASHINGTON OFFICE, NATIONAL ASSOCIATION OF SOCIAL WORKERS

Mr. Chairman and members of the committee, the National Association of Social Workers welcomes this opportunity to register its general support for the proposals contained in the Administration's bill-S. 1991 introduced last year by Senator Eugene R. McCarthy.

The National Association of Social Workers is a professional organization with 45,000 members employed in governmental and voluntary health, welfare and recreational organizations. We believe we are particularly cognizant, because of the nature of the employment of many of our members, of the need for updating and improving this 30-year-old program of protecting individuals against loss of income because of unemployment.

At several Delegate Assemblies of our Association we have repeatedly endorsed proposals that would widen the coverage of unemployment insurance, provide benefit levels which reflect the increases in the wage levels and extend benefit periods to meet realistic unemployment situations as they exist in many localities. Inadequacies of H.R. 15119

While H.R. 15119, recently passed by the House does broaden coverage and in other areas provides some token improvement it is basically an inadequate proposal. While H.R. 15119 could be improved by the reinstatement of federal standards our decided preference is for the sort of balanced and progressive legislation represented by the administration's original proposal-S. 1991. Need for increase in benefits

While the great majority of unemployment compensation beneficiaries when employed earn wages substantially above the poverty level of $3,000 a year set by the Council of Economic Advisers as a guideline for the War on Poverty, they immediately fall below this guideline when they begin receiving unemployment compensation benefits. In some States, the benefits on an annual basis go down to only slightly more than one-half of this $3,000 a year guideline. Since the average annual earnings in even a highly industrialized State such as New York, for example, is only about $6,000, it seems obvious that there is practically no leeway for the unemployed head of a family and only a few weeks of unemployment is needed to put that family into the poverty category.

Our Association, as one of its major social action objectives this year, urged that every effort be put forth to provide a level of benefits under income maintenance programs-Social Security, public assistance, and unemployment compensation that would assure at least the floor of $3,000 a year to a family. We were delighted at the action taken by the Congress last year in increasing Social Security benefits and public assistance payments and further supplementing the income of older people by providing them with hospital and medical care, even