Maximum benefits under the law are $32 a week for 26 weeks. Labor wanted $32 for 32 weeks. The AIK was opposed and demanded a less liberal policy. Watkins said the AIK will not seek lower benefits. UNIONS TO BE CONSULTED "We hope our proposal won't be too controversial when it hits the floor. We will try to consult with unions on it," he added. In a talk at the Brown Hotel yesterday to AIK members, Watkins said the law at present is so costly to employers that it discourages new industry. "Don't kid yourselves for a minute that firms scouting around for locations fail to take into consideration the cost of doing business" including jobless pay and taxes, as well as wage levels and the labor climate, he told the manufacturers. He said that while Kentucky has added 605 new industries in 10 years, Georgia gained 3,000, Texas 2,800, and North Carolina 2,400. Only Mississippi had less than Kentucky in the South, he asserted. After Watkins' talk at luncheon, a seminar was held on the jobless-pay law. It was conducted by John E. Steger of the AIK, and Fred Hosley of Reynolds Metals Co. They discussed methods of protecting themselves against improper jobless claims. The seminar was the seventh conducted in the State in the past year. Seminars at Hopkinsville and Harlan are planned. [From the State Journal, Frankfort, Apr. 17, 1957] INSURANCE LAW SCARING AWAY INDUSTRIES, SAYS SPEAKER LOUISVILLE, KY.-Kentucky's unemployment insurance law is scaring industries out of the idea of settling in Kentucky, according to an official of Associated Industries of Kentucky. Rayburn Watkins, managing director of the AIK, described the law as "liberally written" generously administered and "so expensive to employers" that it has created a "bad business climate" in Kentucky. Watkins spoke to AIK members prior to a seminar on jobless pay conducted by John E. Steger, of the AIK and Fred Hosley of Reynolds Metals Co. CONSIDERED UNFAIR Watkins said the AIK considered it unfair for a person who quits his job, who gets fired for misconduct or who works intermittently to draw jobless benefits for the full 26-week duration. Many States do not permit this, he said. He said that for a company to pay an unemployed worker a maximum benefit of $832, it must sell $20,800 worth of goods to realize an off-setting profit. He said Kentucky's maximum benefit rate of $32 per week for up to 26 weeks is higher than any Southern State and amounts to 80 cents an hour for the claimant. Hosley told the seminar group he hopes the AIK will draft legislation for consideration by the 1958 legislature to correct some of the weaknesses of the unemployment compensation law. AIK President John J. Delker, Henderson, urged members to let legislators know where businessmen stand on bills that affect them. "Frequently business lose by default on legislation," he said. UNIONS RANK FIFTH Another speaker, William F. Gutwein, Louisville, labor relations consultant to the AIK, said unions rank only fifth among the loyalties of workers. Gutwein said employees generally put first their loyalties as a family man, a citizen, a consumer, and an employee. He said management should bear this in mind in its labor relations program. [From the Park City Daily News, Bowling Green, Apr. 17, 1957] UNEMPLOYMENT INSURANCE LAW "Too GENEROUS" LOUISVILLE, KY.-Kentucky's unemployment insurance law is scaring industries out of the idea of settling in Kentucky, according to an official of Associated Industries of Kentucky. Rayburn Watkins, managing director of the AIK, described the law as liberally written, generously administered, and so expensive to employers that it has created a bad business climate in Kentucky. Watkins spoke to AIK members prior to a seminar on jobless pay conducted by John E. Steger, of the AIK, and Fred Hosley, of Reynolds Metal Co. Watkins said the AIK considered it unfair for a person who quits his job, who gets fired for misconduct, or who works intermittently to draw jobless benefits for the full 26-week duration. Many States do not permit this, he said. He said that for a company to pay an unemployed worker a maximum benefit of $832, it must sell $20,800 worth of goods to realize an offsetting profit. He said Kentucky's maximum benefit rate of $32 per week for up to 26 weeks is higher than any southern State and amounts to 80 cents an hour for the claimant. Hosley told the seminar group he hopes the AIK will draft legislation for consideration by the 1958 legislature to correct some of the weaknesses of the unemployment compensation law. AIK President John J. Delker, of Henderson, urged members to let legislators know where businessmen stand on bills that affect them. "Frequently business loses by default on legislation," he said. Another speaker, William F. Gutwein, Louisville, labor relations consultant to the AIK, said unions rank only fifth among the loyalties of workers. Gutwein said employees generally put first their loyalties as a family man, a citizen, a consumer, and an employee. He said managements should bear this in mind in its labor relations program. [From the Paris Daily Enterprise, Apr. 17, 1957] KENTUCKY'S UNEMPLOYMENT INSURANCE SAID SCARING LOUISVILLE, KY.-Kentucky's unemployment insurance law is scaring industries out of the idea of settling in Kentucky, according to an official of Associated Industries of Kentucky. Rayburn Watkins, managing director of the AIK, described the law as liberally written, generously administered, and so expensive to employers that it has created a bad business climate in Kentucky. Watkins spoke to AIK members prior to a seminar on jobless pay conducted by John E. Steger, of the AIK, and Fred Hosley, of Reynolds Metals Co. Watkins said the AIK considered it unfair for a person who quits his job, who gets fired for misconduct, or who works intermittently to draw jobless benefits for the full 26-week duration. Many States do not permit this, he said. He said that for a company to pay an unemployed worker a maximum benefit of $832, it must sell $20,800 worth of goods to realize an offsetting profit. He said Kentucky's maximum benefit rate of $32 per week for up to 26 weeks is higher than any southern State and amounts to 80 cents an hour for the claimant. Hosley told the seminar group he hopes the AIK will draft legislation for consideration by the 1958 legislature to correct some of the weaknesses of the unemployment compensation law. AIK President John J. Delker, Henderson, urged members to let legislators know where businessmen stand on bills that affect them. "Frequently business loses by default on legislation," he said. Another speaker, William F. Gutwein, Louisville, labor relations consultant to the AIK, said unions rank only fifth among the loyalties of workers. Gutwein said employees generally put first their loyalties as a family man, a citizen, a consumer, and an employee. He said management should bear this in mind in its labor relations program. [From the Corbin Tribune, Apr. 17, 1957] AIK EXECUTIVE HITS JOBLESS PAY SETUP LOUISVILLE, KY.-Kentucky's unemployment insurance law is scaring industries out of the idea of settling in Kentucky, according to an official of Associated Industries of Kentucky. Rayburn Watkins, managing director of the AIK, described the law as liberally written, generously administered, and so expensive to employers that it has created a bad business climate in Kentucky. Watkins spoke to AIK members prior to a seminar on jobless pay conducted by John E. Steger of the AIK and Fred Hosley of Reynolds Metals Co. Watkins said the AIK considered it unfair for a person who quits his job, who gets fired for misconduct, or who works intermittently, to draw jobless benefits for the full 26-week duration. Many States do not permit this, he said. He said that for a company to pay an unemployed worker a maximum benefit of $832, it must sell $20,800 worth of goods to realize an offsetting profit. He said Kentucky's maximum benefit rate of $32 per week for up to 26 weeks is higher than any southern State and amounts to 80 cents an hour for the claimant. Hosley told the seminar group he hopes the AIK will draft legislation for consideration by the 1958 legislature to correct some of the weaknesses of the unemployment compensation law. AIK President John J. Delker, Henderson, urged members to let legislators know where businessmen stand on bills that affect them. "Frequent business loses by default on legislation," he said. Another speaker, William F. Gutwein, Louisville, labor relations consultant to the AIK, said unions rank only fifth among the loyalties of workers. Gutwein said employees generally put first their loyalties as a family man, a citizen, a consumer, and an employee. He said management should bear this in mind in its labor relations program. [From the Advocate-Messenger, Danville, Apr. 17, 1957] UNEMPLOYMENT LAWS CALLED DETERRENT TO KENTUCKY INDUSTRY LOUISVILLE, KY.-Kentucky's unemployment insurance law is scaring industries out of the idea of settling in Kentucky, according to an official of Associated Industries of Kentucky. Rayburn Watkins, managing director of the AIK, described the law as "liberally written" generously administered and "so expensive to employers" that it has created a "bad business climate" in Kentucky. Watkins spoke to AIK members prior to a seminar on jobless pay conducted by John E. Steger of the AIK and Fred Hosley of Reynolds Metals Co. Watkins said the AIK considered it unfair for a person who quits his job, who gets fired for misconduct or who works intermittently to draw jobless benefits for the full 26-week duration. Many States do not permit this, he said. He said that for a company to pay an unemployed worker a maximum benefit of $832, it must sell $20,800 worth of goods to realize an offsetting profit. He said Kentucky's maximum benefit rate of $32 per week for up to 26 weeks is higher than any southern State and amounts to 80 cents an hour for the claimant. Hosley told the seminar group he hopes the AIK will draft legislation for consideration by the 1958 legislature to correct some of the weaknesses of the unemployment compensation law. AIK President John J. Delker, Henderson, urged members to let legislators know where businessmen stand on bills that affect them. "Frequently business loses by default on legislation," he said. Another speaker, William F. Gutwein, Louisville, labor relations consultant to the AIK, said unions rank only fifth among the loyalties of workers. Gutwein said employees generally put first their loyalties as a family man, a citizen, a consumer and an employee. He said management should bear this in mind in its labor relations program. 39678 59 24 SENATE BILL 7 REPRESENTS * ASSOCIATED INDUSTRIES OF KENTUCKY, ANOTHER TAX BOOST FOR EMPLOYERS IN ADDITION It is time that Senate bill 7 is described exactly for what it is: Another tax on Kentucky Business and Industry, following in the wake of the heavy income tax boost proposed in H.B. 1. These taxes, of course, are earmarked for idle-pay benefits, but they are still taxes and must be paid by employers exclusively. Those who draw the benefits make no contribution to the fund. The following quotation came from page 20 of the January 1956 Statistical Journal of Economic Security: "The Department of Economic Security paid $1,956,100 in unemployment benefits during the month of January.” During 1955 approximately $28 million was paid out in idle-pay benefits. All this money came from employers in the form of a tax based on payrolls. The tax ranges up to 3.7 percent of payroll, depending on the amount of turnover. In practice, more firms are rated at the 2.7 percent tax figure than any other on the scale. 1,588 firms pay 3.7 percent; 8,197 pay 2.7 percent; 1,877 pay 1.8 percent; 3,130 pay 0.9 percent, and 3,209 firms have a “zero” rating because of near-constant employment. "To increase idle-pay benefits *** with a resulting increase in pay-out from the unemployment insurance fund * * * means that employers must pay more into the fund to keep it at its present level." Although solvent, the "pooled account" is already at least $8 million too low. (This is the account from which benefits are paid when they cannot be charged against an individual employer's account). By one method or another, Kentucky employers are being called upon to make up this $8 million. "In addition to this $8 million, which Kentucky employers recognize they are obligated to pay * * * and in addition to the other 1956 tax increases * * * shall the general assembly now pass another bill that will increase further the taxes of Kentucky business and industry?" With Kentucky's law already considerably more liberal than most States in many of its administrative features with disqualifications running only 4 per 1,000, four times as liberal as the National average, with idle-pay benefits, based on total covered employment, running twice the national average and higher than any State east of the Mississippi, it would be an unwise move indeed. If Kentucky shows a tendency to "gig business and industry" at every opportunity, the job of attracting more business and industry to the State will become increasingly difficult. Heaven knows it's no easy job at present. RAYBURN WATKINS, Managing Director. GENERAL ELECTRIC CO., Mr. MORRIS WEINTRAUB, APPLIANCE AND TELEVISION RECEIVER DIVISION, House of Representatives, Frankfort, Ky. DEAR MR. WEINTRAUB: You may recall that we wrote to you just the other day in an effort to give you some thoughts about what appears to be of utmost importance to all Kentuckians-individual citizens and businesses and industries alike as we approach the start of another session of the Kentucky legislature. The Sunday Courier-Journal did all of us a very real service last week when it published an excellent digest of Kentucky's unemployment insurance situation. The article serves to effectively highlight shortcomings in one particular Kentucky law that are not only placing an undue burden on businesses and industries already in, and furnishing thousands of jobs to residents of our Commonwealth, but also that are a deterrent to new industries that could elect to locate in Kentucky, and create the new jobs you and we know are sorely needed by Kentuckians. A copy of the article, marked up to focus attention on some of the more significant portions, and enclosed with this letter, calls attention to the fact that Kentucky's unemployment insurance law undoubtedly will be one of the most controversial issues to come up for discussion during this session of the legislature. Throughout the article Mr. Hugh Morris of the Courier-Journal's Frankfort Bureau explores the question whether Kentucky's unemployment insurance dilemma is caused by high unemployment, or too liberal a program, and goes on to supply evidence that it is the result of both factors. This is a question which well may be on your mind and on the minds of your colleagues as you meet together in Frankfort beginning early next week. So far as the high rate of unemployment in Kentucky is concerned, we firmly believe, and are sure most other representatives of industries in Kentucky share the belief, that this is a problem which can only be relieved by attracting more industries to locate in our Commonwealth. Unfortunately, however, problems with regard to our laws, and with regard to our unemployment insurance law in particular, are keeping industries from choosing Kentucky as their location. Instead, they are going to other neighboring States which not only declare their interest in having industries locate there, but which also show through their legislative actions that they are not inclined to enact punitive, or discriminatory laws that will make it uneconomical to locate in those States. Attracting more industry to Kentucky is one of our greatest needs, and is an avowed and announced intention of the current State administration. It, therefore, would appear that legislative action is in order at this session to correct shortcomings in the present unemployment insurance law. Action is needed, for example, to restore the original intent of the law, which was that benefits should be provided for "persons unemployed through no fault of their own." Unfortunately, subsequent legislatures have enacted changes in the original law which now provide "Jobless Pay" for workers who voluntarily quit their jobs without good cause, or who are discharged for misconduct. Another evidence of laxity in our unemployment insurance law that discourages industry from locating in Kentucky, and thus from providing the vitally needed new jobs they would bring, is the fact that a claimant can draw a weekly benefit check-for doing nothing-that is almost as high as his full-time weekly earnings, if his last employment was in one of the low-paying industries. And, the claimant can draw his "rocking-chair" paycheck for as long as 26 full weeks. Also, if he has not found a job within 6 more months, he can draw benefits for another 26 weeks. It is not difficult to understand why so many people resent a law which provides extended periods of payment for doing nothing, and which will even pay such benefits to people who quit their jobs, or who are discharged for misconduct, and why industry considering Kentucky as a place to locate would weigh heavily the cost of doing business under such a law, in reaching a final decision. (You may recall that one enclosure in my recent letter to you pointed out that Kentucky's job insurance cost is the sixth highest in the Nation.) Kentucky's rate of insured unemployment, as Mr. Morris points out in the enclosed article, has been higher than the national average ever since the legislature authorized full payment of benefits to those who voluntarily quit or who are fired for misconduct. And, as he further states, the difference has widened each year until, by 1954, and since then, the difference has been about double the national average. Under most circumstances, people writing to you probably would ask that you do what you can, as their representative, to correct the situation, and help provide conditions that would be attractive to industry, and thus provide more jobs for Kentuckians. We certainly concur in this idea that something must be done to effect necessary changes, since what we need in Kentucky is more jobs, not more unemployment benefits. In addition, however, we want to assure you that we are willing-in fact, most anxious-to discuss our views with you on needed legislation, and will be glad to come to Frankfort either to talk with you personally, or to meet with members of any committees of the legislature who would like to discuss these matters in greater detail. Sincerely, L. H. MEANS, Manager, Relations and Utilities. |