We strongly advocate that the present tax base of $3,000 in wages be left unchanged, so that true experience rating will continue. This will continue to help achieve the original objective of stabilization of employment. To broaden the base is to offer a premium for nonstabilization. That is the opposite of the original idea underlying experience rating. In final summary, we offer these views because we are convinced that they are in the best interest of our workers in Alabama who are covered within the present unemployment compensation program. We request that these views be made a part of the official proceedings of the public hearings, and we shall appreciate your courtesy in so doing. E. R. LEHMANN, President. THE AMERICAN COTTON MANUFACTURERS INSTITUTE, INC., Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, Washington, D.C. DEAR MR. MILLS: We are submitting herewith a resolution on unemployment compensation which was adopted by the board of directors of the American Cotton Manufacturers Institute on March 18, 1959. It will be appreciated very much if you will have the resolution incorporated as part of the record in connection with the hearings your committee has held on this legislation. The resolution is filed on behalf of the American Cotton Manufacturers Institute, which has its headquarters in Charlotte, N.C., and other offices in New York, Clemson, S.C., and Washington, D.C. The institute is the central trade association for manufacturers of textiles from cotton, manmade fibers, and silk. Our concern as a trade organization and as an industry, therefore, includes the fibers which account for 93.8 percent of total fiber and filament consumption in this country. Our organization represents about 80 percent of the spindles and looms in the industry, which has a normal employment of approximately 1 million men and women. The enactment of the proposed legislation, H.R. 3548, would completely upset the present pattern of unemployment compensation insurance. Therefore we hope that you and the committee will not take action contrary to the position of ACMI expressed in the resolution. Sincerely yours, JAMES A. CHAPMAN, President. A RESOLUTION-UNEMPLOYMENT COMPENSATION Whereas the Federal Temporary Unemployment Compensation Act of 1958 has led to a depletion of the unemployment compensation tax reserves in many States and tends to encourage a dole system; and Whereas, the Kennedy bill, S. 791, and a number of companion bills introduced in the House of Representatives will result in expanding the harmful effects of the act of 1958, including large increases in the maximum weekly benefits, lengthening the payment periods, decreasing the requirements for eligibility of claimants, likely destruction of the merit rating provisions in the different State laws, will endanger the welfare of deserving employers and deserving employees and generally will lead to the establishment of a dole system with all of its disastrous results; now therefore, The Board of Directors of the American Cotton Manufacturers Institute urge the Congress to permit the Temporary Unemployment Compensation Act of 1958 to terminate and end on April 1, 1959, without extension; and further urge that the administration of unemployment compensation programs shall be left with the different States under the provisions of Federal legislation existing prior to 1958, with such amendments to the State laws and programs as have been adopted or may hereafter be adopted by the several States. And further resolved, That the members of our institute should acquaint themselves with the dangers of the proposed Kennedy and companion bills and they are urged to communicate their views on these measures to their respective Senators and Congressmen. STATEMENT OF THE AMERICAN FARM BUREAU FEDERATION ON AMENDMENTS TO UNEMPLOYMENT COMPENSATION LAWS AND IMPOSITION OF FEDERAL STANDARDS The pending legislative proposals to establish certain Federal standards in the administration of unemployment compensation should not be enacted. The existing program, designed to aid in the relief of temporary involuntary unemployment is essentially a State-operated program. State legislatures, in developing the State programs, have designed them in the main to meet local conditions. In discharging this responsibility there is much evidence that individual States have pioneered the enactment of new provisions, which having been proved satisfactory under trial, have been adopted by other States. We believe the opportunity for development of policies and administrative techniques at the State level represents one of the sound features of the prevailing program. The enactment of Federal standards would greatly weaken if not actually destroy this feature. State government has not been too late with too little in this field. It is reported that: (1) The weekly benefit amount has increased faster than the cost of living than the average weekly benefits now buy about 40 percent more goods than the benefits of 1939; (2) duration of benefits has increased substantially; the total real protection provided by the program has nearly doubled; (3) the waiting period before starting to draw benefits has been steadily shortened. Compared with 1939, when a 3-week period was common, no State now requires more than 1 week and 5 States require no waiting period at all. In short, a claimant today, compared with 1939, starts receiving benefits more quickly, gets them for a longer period, and can buy more real goods with them. The American Farm Bureau Federation favors decentralization of responsibility to the greatest extent possible as indicated in the following resolution: "We favor increased emphasis on the assumption of responsibility by States and local units of government for the exercise of their appropriate functions. Proper public functions should be performed by that division of government closest to the people which can administer them effectively." We believe the imposition of Federal standards is undesirable in that it represents a departure from a policy of a generation, which, once it is broken, will lead to an ever-continuous invasion by the Federal Government of this domain. The Federal system of government has done too much for America to place it in a position to be weakened through assumption at the national level of responsibility for functions now being carried on at the State level. We recommend no action be taken on the pending bills. We respectfully request this statement be incorporated in your hearing record. STATEMENT ON FEDERALIZATION OF STATE UNEMPLOYMENT COMPENSATION BY THE CONFERENCE OF STATE MANUFACTURERS' ASSOCIATIONS The Conference of State Manufacturers' Associations, composed of State associations of manufacturers, appreciates the opportunity to express its opposition to federalization of the unemployment compensation systems of the States. The State associations joining in this statement are: Associated Industries of Alabama Associated Industries of Arkansas, Inc. California Manufacturers Association Manufacturers Association of Colorado Manufacturers Association of Connecticut, Inc. Associated Industries of Kansas, Inc. Associated Industries of Maine Associated Industries of Massachusetts Michigan Manufacturers Association Minnesota Employers Association Mississippi Manufacturers Association Associated Industries of Nebraska New Hampshire Manufacturers Association West Virginia Manufacturers Association The Conference of State Manufacturers' Associations is opposed to the imposition of Federal benefit standards upon State unemployment compensation laws. Federalization of benefit policies would take from the States the right and responsibility to determine unemployment compensation policies. It would completely disregard the experience gained over many years by members of State legislatures who have become thoroughly familiar with this complicated and technical field of legislation. It is completely contrary to the principle this same committee stated in 1935 that: "Except for a few standards *** the States are left free to set up any unemployment compensation system they wish without dictation from Washington." Under a federally dictated, uniform system, as proposed in the measures presently before this committee, concepts completely foreign to a well-balanced unemployment compensation system would be embraced. States would be required to pay the same benefits for the same length of time to everyone, regardless of whether the unemployed person had worked only a few weeks or 5 years. Benefit payments would be so high, in many cases, that very little margin would exist between weekly benefits and the take-home pay an individual might expect to earn if he should seek a job. The States would be prohibited from denying benefits to applicants who quit their jobs without cause and refuse to accept suitable jobs. The States would be invited to reduce their own taxes, to finance benefits from Federal funds, and to confine their experience rating programs within such a narrow range as to severely limit, if not eliminate, the existing incentives for employment stabilization. Misrepresentation has been used in attempts to support federalization. Those who exhaust present State benefits are not necessarily dependent upon wages, as has been stated, and, in fact, about half are usually young people and women who are not family heads. Unemployment compensation has been criticized for its failure to meet problems of long-term unemployment when it was never intended for that purpose. Unemployment compensation was designed to provide partial compensation during a relatively short period. Proponents of federalization have stated that payments are generally inadequate, without backing up the charge with anything more factual than their own opinions. State laws have been criticized as not fulfilling the original intent of the Social Security Act of 1935 when, in truth, States are paying far more in benefits than was originally contemplated; benefits are being paid sooner; benefits are being paid longer. In short, the Conference of State Manufacturers' Associations believes unemployment compensation is a State matter which has been and can be handled successfully by the States. We also firmly hold that the preservation of a sound unemployment compensation program in the United States depends upon protection of the integrity and independence of State systems. To the Chairman, Hon. Wilbur D. Mills, and the Committee on Ways and Means, U.S. House of Representatives, Washington, D.C.: We respectfully request consideration of the position of Louisiana business as outlined herein on the various proposals before your committee to specify Federal standards for employment security and tax increases which the States would be forced to meet. This position is coordinated and endorsed by the trade and business associations of Louisiana whose names are subscribed hereto, the membership of which totals some 50,000 businessmen. POSITION OF LOUISIANA BUSINESS ON FEDERAL STANDARDS REGARDING EMPLOYMENT SECURITY AND UNEMPLOYMENT COMPENSATION Recommendation of the President's Committee in 1935 was for a Federal-State unemployment compensation system, with the States to establish the benefit amount, duration, eligibility requirements, and disqualification provisions, subject to a minimum standard restricted to the following: (1) Benefits must be paid through employment offices. (2) All contributions collected by the State must be deposited in the unemployment trust fund in the United States Treasury. (3) All money wihdrawn from the fund must be used solely for the payment of benefits, with certain exceptions. (4) Benefits may not be denied to a person for refusing to accept new work under any of the following conditions: (a) if the position offered is vacant due directly to a strike lockout, or other labor dispute; (b) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; and (c) if as a condition of being employed the individual would be required to join a company union or to resign or refrain from joining any bona fide labor organization. The House committee report and the Senate committee report on the provisions of the bill which was finally enacted into Federal law contained the bases on which the Federal-State system was adopted. Since then, all State and Territorial legislatures, hundreds of State management-labor committees, advisory councils, and thousands of experts have worked millions of man-hours to develop fair and realistic unemployment compensation systems and the State governments themselves have spent even more time in their proper administration. Each State and Territorial legislature can do what is proper for its State and it knows its State's problems. Is it realistic for the Congress to assume that the work of the States and local people has been all wrong, and that the Federal Government could do a better job than all the people in the States have been able to do in nearly a quarter of a century? The decision of whether an unemployment compensation system is adequate or inadequate should rest with the people of the State involved. The law establishing such a system should reflect the desires of the people of that State. Certain fundamental principles are basic to the proper functioning of the unemployment compensation system. The demands made upon the system will vary from State to State because of the differences in industrial, economic, and social characteristics. What may be sound policy for one State may not be sound for another. It is neither fair nor sound to establish a standard of benefits based upon a high industrial economy for application to a low-wage nonindustrial State, or to apply low benefits to a high-wage industrial State. As the economy of a State changes, the legislature recognizes changing conditions and acts to adjust its unemployment compensation law to meet the challenge of the new economic structure. To deny the legislative processes of the States is to deny the propriety of the very basis of our constitutional system, which recognizes the sovereignty of the constituent States and the capacity of the people to govern. Accordingly, the position of Louisiana business is very clear as expressed in the following: I. Louisiana business is dedicated to maintain the constitutional relationships between the Federal and State Governments. In resisting changes by usurpation, it is resisting the process of death in the elimination of the legitimate rights of the States to keep governmental responsibility and authority in the hands of their people. II. Louisiana business therefore witnessed with deep regret the usurpation of States rights in the field of unemployment compensation by the Congress of the United States when in 1955 it amended Federal standards to tax employers of four or more rather than eight or more as originally adopted in 1935 and as then proposed to the States. The States were not permitted to concur in or ratify such action but by the device of an overhanging vast Federal tax increase were constrained to amend their laws. Such action could be construed as not affecting the rights of the State of Louisiana since that State in 1940 (or 15 years before the 1955 usurpation of rights) had seen fit to enact voluntarily identical legislation for the good of its economy and the employment security of its people. Nevertheless, the action of the 1955 Congress infringed upon the rights of Louisiana and now further usurpation is proposed to your committee. III. Confidence of Louisiana business was stimulated by the action of the House Ways and Means Committee in (a) Rejecting the Sidney Hillman war displacement bill in 1942. (b) Rejecting amendments to the George reconversion bill in 1944; (c) Voting down supplementation proposed in the administration war mobilization and reconversion bill in 1945. (d) Rejecting the proposal in the Moody-Dingell bill of 1952. It is prayed that the House Ways and Means Committee in 1959 will again consider inviolate the rights of the States to amend their laws on employment security as they find advisable without interference by the Congress of the United States. IV. Louisiana business considers that the rights of the State of Louisiana would be usurped by any action of Congress which would force the State by means of an overhanging vast Federal tax increase to extend coverage when its legislature has consistently refused to do so during the past 8 years. During those years the Louisiana Legislature has not deemed that such measure would contribute to employment security in this State. Thirty-one other State legislatures have rejected similar proposals. The recommendation before your committee proposes to remove their right to judge this matter and to repeat the usurpation of that right by the 1955 Congress of the United States. V. Louisiana business doubts the propriety and questions the competency of any person or small group, particularly those not citizens of this State, to categorically state as is done in the enacting clause of some of the bills before. your committee that: (a) The State of Louisiana has not carried out the purposes and objectives of the Social Security Act of 1935. (b) Substantial categories of workers are not covered for such benefits. (c) Benefit payments are inadequate to provide the worker and his family with the basic necessities of life. The State of Louisiana has most closely adhered to the purposes and objectives of the Social Security Act of 1935 despite the efforts of outside forces to change them. These purposes and objectives are: (a) Unemployment benefits were originally and now are intended only for those out of work through no fault of their own, who are able to work, available for work, and willing to accept suitable work at the prevailing rate in the community. (b) Unemployment benefits are a partial replacement of wages to meet basic necessary living expenses. (c) Such benefits should be on a sound economic and fair basis both to the worker and to business, without reducing incentive to work and to seek work and without destroying the incentive to employers to stabilize employment. As late as 1958 the Louisiana Legislature by its actions confirmed these purposes and objectives and rejected every proposal made to depart from them. Proposals before your committee, in principle, seek to repudiate the action of the Louisiana Legislature and to require it to adopt almost identical measures which it has just rejected, as being unsound and a deterrent to employment security in Louisiana. In 1938, the year benefits were first paid, Louisiana was primarily an agricultural State with its manufacturing confined principally to lumbering, food products, and textiles. The population was largely rural. Since then, there has been a change in our economy to one tied to oil and gas, with increased industrial activity and reduced agricultural development. The population has shifted much from rural to urban. While industry required an investment of $7,000 per employee in 1938, today an investment of some $80,000 is needed for each employee in new manufacturing establishments. Industrial development brought about higher wages, greater employment, and higher standards of living. |