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TABLE II. States with taxable wage bases in excess of $3,000

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TABLE III.-States with maximum tax rates in excess of 2.7 percent 1

Tax rates
above 2.7

State Continued

New Hampshire_
New Jersey-.

3, 600 13, 600

Tax rates above 2.7

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percent

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4.0

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3.9

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1 Maximum rates assigned to employers thus far during calendar year 1965.

TABLE IV.-Consolidated summary survey of unemployment compensation data [Compiled from 110 member companies of the Council on Employee Benefits representing 32% million

3.2

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INTERNATIONAL UNION,

ALLIED INDUSTRIAL WORKERS OF AMERICA,

Milwaukee, Wis., July 22, 1966.

Re S. 1991.

Hon. RUSSELL B. LONG,

Chairman, Committee on Finance,
United States Senate,

Washington, D.C.

DEAR SENATOR: While we are aware that a tremendous amount of material relating to the hearings on unemployed compensation reform, and in particular S. 1991, have been called to your attention, we feel that the problem presented to your Committee is of such far-reaching significance that we take the liberty of adding our views to the many already expressed.

We are particularly concerned about the present lack of uniform federal standards, both in terms of the amount of weekly benefits and the duration of weekly benefits, as well as the lack of additional unemployment benefits from the federal government.

Ours is an international union. We have members in many states and we have contracts with large corporations which operate in many states. Accordingly, we are often confronted with the serious and contradictory situation in which our members who are employed at separate plants of the same employer and doing essentially the same type of work are laid off about the same time but, only because of an invisible state line, do not receive uniformity of treatment in their unemployment compensation benefits. For example, our members in the midwest area of our country, if on layoff at the same time from the same employer but at different plants in different states, can receive as low as $33.00 a week, or less than 1% of their average weekly wage, in Michigan (exclusive of dependency benefits) to as high as $55.00 a week, or more than 2 of their average weekly wage, in the State of Wisconsin. The benefits in between will range at levels of $38.00 in Illinois; $40.00 in Indiana; and $42.00 in Ohio, all of which will be a different percentage of the average weekly wage. It is our understanding that under the federal standard proposed by the McCarthy Bill (S. 1991) the above figures will be adjusted to result in a minimum weekly benefit of $70.00 in Wisconsin to a maximum of $83.00 in Michigan, with $73.00 in Indiana, $76.00 in Illinois, and $75.00 in Ohio. The important factor here is not so much the increase in benefits as it is that the benefits under the McCarthy Bill will all bear the same ratio to the average weekly wage, which will mean that all the employees will be treated alike in that respect.

In addition to the obvious inequity in the amounts of unemployment compensation in the states we have used as an example, there is also a very serious inequity in the duration of such benefits. While in all of the states mentioned the maximum duration may be set by statute at 26 weeks, the variation in the eligibility requirements for the maximum duration are such that employees working for the same employer but in different states will not receive the full benefit for 26 weeks.

And, of course, the provision of the McCarthy Bill which will permit additional federal unemployment compensation benefits after the 26 weeks would pick up the economic slack resulting from longer periods of unemployment.

While we have emphasized in this letter the need for greater uniformity in the computation of benefits, as well as in duration, we also subscribe to the provisions of the Bill which will require broader coverage of unemployment compensation.

We are enclosing herewith a fact sheet which was published for our membership in our monthly magazine, The Allied Industrial Worker, for July 1966. We would appreciate your making that fact sheet, together with this letter, a part of the records of the hearings before this Committee.

We earnestly urge that your Committee give the fullest and most sympathetic consideration to the McCarthy Bill because of its great forward step in eliminating the economic distortions, as well as the personal suffering caused by unemployment.

Very truly yours,

CARL W. GRIEPENTROG, International President.

[From the Allied Industrial Worker]

NO FEDERAL STANDARDS-SENATE ONLY HOPE AFTER HOUSE KILLS JOBLESS PAY REFORMS

WASHINGTON.-When all but 10 members of the House of Representatives votes for "improvements" in unemployment compensation, it's a safe bet that the improvements will be strictly limited.

This was precisely the case when, by a 374 to 10 vote, it approved a jobless pay amendment denuded of its most vital provisions-federal standards—which was knocked out in the House Ways and Means Committee. Supporting the watered-down measure were some of the House's most ultra conservatives. Organized labor and the Administration are now looking to the Senate to restore this provision and other meaningful changes.

The bill, as passed by the House, would broaden unemployment compensation by bringing in 3.5 million additional workers. The Administration and organized labor had asked extension of coverage to 5 million more. The bill would provide 13 weeks of extended jobless insurance payments during periods of recession. The Administration and organized labor favored an additional 26 weeks of such extended benefits.

Prior to the House vote, Rep. Jeffery Cohelan (D-Calif.) said he was particularly distressed that the bill "ignores the plight of America's farm workers by refusing to bring even a limited number of them under the act."

Rep. William F. Ryan (D-N.Y.), expressing views of both the Administration and organized labor, listed four major respects in which the bill falls short: "The most important shortcoming is its failure to provide for Federal unemployment compensation standards. The Administrations' measure would have required the states to meet minimum standards of compensation-50 per cent of wages, duration at least 26 weeks-and qualification. Thus, unemployment compensation would be propped up in those states which have programs that do not meet these standards, and the whole system would be more uniformly beneficial.

"Second, the committee reduced the number of employees to whom new coverage would be extended. Under H.R. 8282, 5 million workers would have been able to receive for the first time the benefits of unemployment compensation. Under H.R. 15119, the revised bill, only 3.5 million new workers will enjoy these benefits.

"Thirdly, under the Administration's proposal, the wage base would have risen to $5,600 in 1967 and $6,600 by 1971. I might point out that the wage base has not been increased in the Federal law since the inception of the program 30 years ago. Eighteen states have already adopted a wage base well in excess of $3,000. Yet the committee saw fit to cut the wage base proposal. The present $3,000 figure will remain in effect until 1969, when it will rise to $3,900, eventually rising to $4,200 in 1970.

"Finally, the committee did not adopt the supplemental benefits provision, which would have provided extended benefits for an additional 26 weeks after an unemployed worker exhausted his regular 26 weeks of payment. Instead, it has provided for 13 additional weeks, and also restricted the extended program to times of unusually high national unemployment. This is a reversal of the original objective of this provision."

STATE UC SYSTEM PROVIDES LITTLE PROTECTION FOR MOST

America's unemployment insurance system is a patchwork of state programs in which jobless workers in some states, clearly, have far less protection than in others.

To bring about some uniformity-to treat all workers approximately the same the Johnson Administration has proposed that federal standards be established. This proposal has the solid endorsement of organized labor.

Federal standards were included in H.R. 8282, introduced by Chairman Wilbur Mills, (D-Ark.), of the House Ways and Means Committee and introduced as S. 1991 in the Senate by Senator Eugene McCarthy (D-Minn.) and 15 other Senators.

There were provisions in the bill other than federal standards but the principle of federal standards was the heart of the proposal.

So, when the Ways and Means Committee turned down federal standards, it removed the heart of the plan to modernize jobless pay. Organized labor is now looking to the Senate to restore this "heart" if unemployment compensation reforms are to have any real meaning.

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Federal standards, as proposed, would cover these areas:

Increased Benefits-Higher weekly amounts would be required of the states. Maximums must be raised in steps until they reach two-thirds of each state's average weekly wage. Benefit floor will be half of each unemployed worker's weekly wage loss subject to the new maximums.

Extended Duration-Long-term adjustment benefits would go to those who use up all their state allowance. Payments would continue at the state's weekly amount for six more months, if needed, so long as the unemployed worker maintains his eligibility. Benefits are also payable during an approved training period.

Disqualification Penalties-States would be allowed to withhold benefits up to six weeks-the average duration of a spell of involuntary unemployment-in cases where the worker quits voluntarily, was discharged for misconduct or refused suitable work. Local employment offices could withhold longer, however, if there was evidence of continued violations.

To most people this would seem to be reasonable and enlightened legislation in line with other socially progressive legislation passed in recent years.

Opponents, however, charge that the bill is "a shocking grab for federal power" and "nothing less than total revolution in our system for giving benefits to the unemployed:" This is the contention of the ultra conservative Reader's Digest magazine.

Rep. Charles Vanik (D-Ohio) has answered this charge fully. He says: "There is no 'grab' for federal power, and H.R. 8282 is not a revolutionary federalization of the unemployment compensation system. The system was created not by the states but by the taxing power of the Congress when it passed the Social Security Act of 1935

"There have always been certain standards in the federal statute that state laws must meet, for employers in that state to receive almost 90 percent credit against the federal tax. H.R. 8282 would now provide some additional standards that state laws must meet in the future for full credit to be allowed . . .

"The bill imposes no penalties-it just contains provisions for tax credit. And as several independent scholars have pointed out, the federal government must be able to use some incentive to encourage the states to make needed adjustments within a reasonable length of time. And it should be noted that the new federal 'standards' allow, as of now, great initiative and variation to be made by the states."

Opponents of federal standards also claim that employers would be saddled with an estimated increase of 60 percent or more in payroll taxes.

Vanik, however, points out that in 1965 the total cost of jobless pay was about $2.2 billion. Proposed improvements would have added less than another half a billion dollars.

If the proposed federal standards were written into the law it would make considerable difference in the benefits received by jobless workers. Here are some examples of the maximum weekly benefits in some states: Alabama-from $32 to $58; California-from $55 to $80; Colorado-from $50 to $68; District of Columbia-from $53 to $70; Illinois-from $38 to $76; Indianafrom $40 to $73; Michigan-from $33 to $83; Minnesota-from $38 to $67; Missouri-from $40 to $69; New Jersey-from $50 to $75; New York-from $50 to $76; Ohio-from $42 to $75; Oregon-from $44 to $69; Pennsylvania—from $45 to $67 and Wisconsin-from $55 to $70.

The difference between the present maximums and proposed maximums is, unquestionably, the difference between not being able to provide for your family and being able to provide; to live in poverty and not live in poverty when you are out of work. A myth has been built up that hundreds of thousands of workers are receiving unemployment compensation illegally, getting something for nothing rather than working for it. Proposed legislation would in no way limit a state's ability to detect, prosecute and obtain criminal convictions for fraud. The important thing is that in the America of today, adequate jobless insurance is imperative. And if we are going to get it, the Senate of the U.S. now holds the key.

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