primary purposes of my position as a personnel director is recruiting, and I am finding that even in this period of relatively high unemployment good men are just as hard to find as in a tight labor market. While I would hope that Messrs. Kennedy and Karsten have the interest at heart of the unfortunate individuals placed in a situation over which they have no control, I am wondering if they are considering the invitation they would be extending the freeloaders and the unscrupulous to capitalize on the elimination of any disqualifications to draw unemployment compensation, even for fraud. Granting that most people are basically honest, some measures still have to be taken to insure proper compliance with the law. There are many cities throughout the State of Indiana in which $60 a week constitutes a very desirable income. By raising the maximum benefit to this amount or higher, as it is my understanding this bill would do in Indiana, it would encourage an individual not to work. If given a choice most people would refuse a job for a like amount on which taxes would have to be paid. It is also my understanding that this proposed measure is designed to cover business enterprises employing as few as one and two persons. If the Government is interested in encouraging small business to function, this measure is in direct contradiction to its intent as it will place an even greater burden on the small business owner. This measure, in addition to the proposed extended coverage of the wage-hour law, is going to place the small businessman in an even less advantageous position with the large corporations. Of equal importance is the inflationary effect of this legislation. As it applies to Indiana the bill would increase unemployment compensation costs by a minimum of 70 to 75 percent, which is bound to add fuel to the fires of inflation. To top off the many harmful effects of this legislation in our State, it appears to make it possible for a person to qualify for $1.56, or thereabouts, in benefits for every dollar in wages earned. This compares to the present ratio of $1 of benefits for each $4 earned. This, in my opinion, is absolutely contrary to the laws of economics. I think it's about time we recognize the fact that all the dips can't be taken out of the business cycle and quit trying to fashion our fine country into a welfare state. If we have to give the people monetary benefits, why don't we do it in the form of a reward for achievement? Maybe if we would reduce the taxes of the people who worked, more would get out and look for employment. As I mentioned earlier in this letter, we are still looking for men, but the effort that is expended is ours, not on the part of the men out of work. Last of all, in addition to my American heritage, I am proud to be a native of the State of Indiana and feel that we as a group of people have demonstrated our ability to provide for ourselves. Until proven otherwise, why not give us the opportunity to continue to do so. Sincerely yours, OWEN M. HAMILTON, Personnel Director. THE KENDALL CO., Boston, Mass., April 14, 1959. Re Proposed Unemployment Compensation Act of 1959, H.R. 3547. Hon. WILBUR D. MILLS, Chairman, Committee on Ways and Means, House of Representatives, New House Office Building, Washington, D.C. DEAR MR. MILLS: Our company employs some 7,000 persons and has over the years always endeavored to maintain steady employment and a low turnover rate. As a result, the above bill is of great interest to us. We are opposed to the bill for both human and economic reasons. Without reiterating the various technical analyses of the bill which have been made and with which you are familiar, we would like to point out the following: (1) The establishment of such high rates of unemployment compensation serves to destroy the incentive of the individual actively to seek new employment. When taxes, social security, and other wage deductions are taken into account, an employed wage earner nets little more than his unemployed neighbor. (2) The financial incentive to employers such as ourselves to make steady employment available is destroyed. By maintaining low turnover rates, our company now saves over $400,000 a year under the existing unemployment tax schedule. In the event this bill is passed and uniform rates are thus applied to all employers regardless of experience, this incentive toward low-turnover rates is destroyed. It will naturally follow that employers such as ourselves will reconsider the need for and importance of maintaining steady employment. (3) By the same token, this bill is detrimental to the employed wage earner in that his likelihood of having steady employment and low turnover is reduced. In short, we believe that this proposed Unemployment Compensation Act will aggravate rather than alleviate the unemployment problem by destroying incentives that make men want to work and that make employers want to provide that work. I would appreciate it if this letter could be considered by the committee and printed in the record of the hearings. MY DEAR CONGRESSMAN MILLS: It is my understanding that the Ways and Means Committee plans to hold hearings shortly of Federal unemployment compensation legislation and specifically with reference to H.R. 3547. Our company operates more than 50 plants and mines in 26 States. The management of our company believes that the best long-range interests of our employees, customers, and stockholders scattered throughout the whole United States would be served by continuing the States' control and handling of unemployment compensation and without the establishing of Federal standards. During the history of unemployment compensation, the States have gradually and continuously increased covered workers and benefits. Flexibility should be maintained as is required in the various areas of the country as to eligibility requirements, adequacy, and duration of benefits. Should certain present legislation before the Congress be made law, the majority of the States would be required to pay benefits in some instances in excess of the total wages required to earn them. Also, the present practice of variable scales of benefits within States between single persons and individuals with larger families, such as we have in Illinois, would be broken down. This would have the effect of placing the unemployment compensation program directly into the category of a relief program which, in our opinion, is not consistent with the original or present concept of unemployment compensation. Relief programs should be provided in other ways with proper control and administration for the same. We are appreciative of the opportunity to present our views by letter on this type of legislation to the Ways and Means Committee members prior to completion of hearings and would respectfully request that legislation establishing Federal standards and weakening State control of unemployment compensation not be favorably reported out of the committee. Very truly yours, A. C. THORNTON, Director, Personnel and Industrial Relations. YAKIMA VALLEY TRAFFIC ASSOCIATION, INC., Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR CONGRESSMAN: This association which represents fruitgrowers and shippers of the Yakima Valley in the State of Washington would like to go on record with your committee as opposed to the Karsten bill (H.R. 3547), a bill on unemployment compensation. We are against the idea of imposing Federal requirements on State unemployment compensation programs. We believe State governments are in a better position to determine what the needs of their unemployed are than the Federal Government, and should not be deprived of this responsibility. 39678 5974 Furthermore, the benefit standards set are so high as to encourage a worker to become unemployed because he could make almost as much money not working as he could working. For example, if a worker with a family of four earned $80 a week, his take-home pay after income tax and social security were deducted would be $72.80. His unemployment benefits as proposed by this bill would be $53.32, tax free. In our State, he could earn up to $12 a week without losing any benefits so this would increase his weekly spendable income to $65.32. The difference between $72.80 and $65.32 could easily be used up in additional expenses when working such as transportation to work, lunches, union dues, etc. Passage of this bill would destroy present State systems of employer experience ratings a device which provides tax incentives to employers who stabilize jobs. This would be a step backward. Yours truly, F. W. SHIELDS, Jr. HOUSE OF REPRESENTATIVES, Washington, D.C., April 14, 1959. Hon. WILBUR MILLS, Chairman, House Ways and Means Committee, DEAR MR. CHAIRMAN: Mr. Thomas A. Kirkwood, of Norwalk, Conn., a constituent of mine, has written me regarding H.R. 3547, the unemployment compensation bill now being considered by your committee. Mr. Kirkwood's letter is attached and I would appreciate his views being made available to the entire committee and also made a part of the official hearing record on this legislation. Sincerely, DONALD J. IRWIN, EDWARDS Co., INC., Norwalk, Conn., April 6, 1959. Hon. DONALD J. IRWIN, Washington, D.C. DEAR DON: I am writing you concerning the unemployment compensation hearings that are starting April 7. I refer to the Karsten-Kennedy bill, H.R. 3547-S. 791. I do not believe that the best interest of the employee, or the public, and I know, the best interest of the employer, is not served by this legislation. There are many provisions in the bill that are not sound, but I will point out only three: First, the federalization of the State unemployment compensation programs; second, the abolishment of merit rating; and third, the extreme liberalization of the benefit program. As to federalization, unemployment compensation is a State problem and has been very successfully handled at the State level. The citizens of the State best know and can decide what kind of a program is needed. The closer the government to the governed, the better the government from the governed's view. Let the States run their own business. Merit rating is a reward and an incentive to the employer to stabilize employment, to wipe out the peaks and valleys. To the degree an employer stabilizes his employment, he lowers his unemployment compensation rate, because he is reducing unemployment. Merit rating is in practically all of the State unemployment compensation programs, and has been for a long time. If it were not sound, I am sure it would have been discontinued by the States, so why change? The scale of benefits in the Karsten-Kennedy bill far exceeds the highest in effect in any State and the duration of payments is also greater. This could create a situation where a man could work no more than 4 months and earn about $1,000, then draw as much as $1,350 in the next 9 months. I have estimated that in our company, here in Connecticut (which State is tops in benefits), if this bill is enacted our unemployment tax bill would jump from about $17,000 to about $42,000 annually-quite a jump. These changes, I am sure you realize, are very inflationary and certainly anything that can be done to curtail the depreciation of the dollar should be done. I am sorry that I didn't see you when you were home for Easter, but I did hear part of a broadcast you made on Sunday, the 5th. I was returning from Massachusetts yesterday and was up near Sommers or Rockville, Conn., and turned on the car radio and who did I get? Congressman Irwin of the fourth, and in the Hartford Congressional District. You cover a lot of area. DEAR CONGRESSMAN MILLS: Our association represents the textile manufacturing industry in North Carolina, an industry which comprises nearly half of the total manufacturing within this State and which employs some 217,000 North Carolina workers. Speaking for this industry, we respectfully request that this letter be made a part of the official record in connection with the public hearings your committee is conducting on various unemployment compensation bills. We are completely opposed to the federalization of the unemployment compensation program in any degree whatsoever. It is our feeling that any legislation which would establish Federal minimum benefit standards and which would compel the States to take similar action, would deprive the North Carolina Legislature of its rightful authority in such matters. Industry in North Carolina takes pride in its sound unemployment compensation fund and in the manner in which the program is administered by the State. And we respectfully suggest that our own State government is better equipped to know, understand and meet our own unemployment compensation problems than would an agency geographically removed. We believe that our experience rating plan and procedures is sound and that it has been accorded judicious handling. We will do all within our power to preserve it. And, therefore, we strongly oppose any plan which would extend the wage base on which the unemployment tax is now paid. Obviously, any effort to increase the present wage base from the first $3,000 of earnings to the first $4,200 of earnings of an employee would undermine experience rating. Annual wages would be smallest in industries where there is heaviest unemployment. Conversely, they would be highest in industries which have stabilized employment to the highest degree possible, consistent with economic conditions. Broadening the wage base would, therefore, impose a penalty on those who have been most consistently endeavoring to stabilize employment. Recognizing the seriousness of any movement to federalize unemployment compensation administration, there has just been introduced in the General Assembly of North Carolina a joint resolution opposing federalization. The resolution embodies a provision expressing the dedication of the people of our State to the proposition that matters relating to the amount and duration of unemployment insurance payments should be left to the discretion of the State governments because of the widely varying economic and other conditions which exist among the States. We strongly urge that the present tax base of $3,000 in wages be left unchanged, so that experience rating in our State will not be weakened and possibly destroyed. With all the emphasis at our command, we register our opposition to the federalization of the unemployment insurance program in any manner. We have the deep and abiding conviction that these are State matters, and as such, should remain under State control. Respectfully, W. C. CANNON, President. ALABAMA TEXTILE MANUFACTURERS ASSOCIATION, INC., Congressman WILBUR D. MILLS, Chairman, House Ways and Means Committee, Congressman Mills, according to press reports from Washington, your committee will begin, on April 7, 1959, public hearings on a series of bills concerning various phases of unemployment compensation. We wish to express the views of the Alabama textile industry on the subject, and request that this letter be made a part of the official record. Some of the proposed changes cause much concern to those of us who constitute the management of an industry presently employing 42,200 Alabama workers. (This is the latest employment figure released by the State of Alabama, Department of Industrial Relations, for January 1959.) Primarily, we wish to register our complete opposition to federalization of the unemployment compensation program in any degree. There are sound reasons for such a positive stand. People are not, and cannot be, standardized. Conditions of employment are also involved and complex, and cannot be standardized. Amounts and duration of benefits are matters that can be understood only by State legislatures, which are close to their people and their problems. Even in neighboring States there are often major differences. In Alabama we have a sound fund and an excellent administration of our unemployment compensation program. In legislative matters we have evolved a method of handling that works. All bills pertaining to unemployment compensation are sent to one specific committee, and there referred to a special subcommittee, whose members have more knowledge of the complex subject than the full committee. Over a period of time, during the Alabama legislative session, representatives of industry and labor meet with officials of our department of industrial relations and study the proposals together. From these meetings evolve agreements that the special subcommittee of the legislature uses to shape the bills presented and it practically always is this agreed legislation that is passed—– because there has been a meeting of minds and an understanding of our own conditions. Under any federalization of unemployment compensation matters this democratic procedure would be completely abrogated. Experience rating is a phase of unemployment compensation that has been very wisely handled in Alabama, and we are positive and determined-insofar as we can do so to see that the purpose and original agreements of experience rating are continued. For example: We understand that the administration plans to advocate extension of the wage base on which the unemployment tax is now paid from the present first $3,000 of wages paid to $4,200 of wages paid to each employee. Anyone can see, without being a seventh son, that this would be a backward step in experience rating. Annual wages would be the smallest in industries where there is heaviest unemployment. They would be highest in industries which have followed good experience rating programs and maintained the best employment stabilization possible under economic conditions. To broaden the base would make it a penalty to continue efforts to stabilize employment and would offer a premium to those least interested in employment stabilization. That is why we feel broadening the base would be a definite backward step. It would also be a complete reversal of the basic premise upon which our State government sought and gained industrial backing which led to installing the unemployment compensation program in Alabama. We have been intimately connected and concerned with the subject since it was first proposed, during the administration of Gov. Frank M. Dixon. We urgently request that the Federal Government see the wisdom of leaving control of the unemployment compensation program in the hands of State legislatures, practically all of which are now meeting or will be meeting soon. We are emphatic in registering opposition to any proposal to federalize the unemployment compensation program in any way, because it is achieving its best results under State control, for it is the nature of this human subject that local control and administration will always provide the best human results. |