(Information referred to follows:)

IN SUMMARY

The Texas Manufacturers Association opposes H.R. 3547 on the following grounds:

(1) The principle of the bill violates the basic policy of the Texas Manufacturers Association that unemployment compensation laws should be administered at the State level, and that the National Government should refrain from interfering with or bringing undue pressure upon the State administrative agencies in the performance of their duty as directed by the respective State legislatures. Exhibit C, attached hereto, reiterates the Texas Manufacturers Association's opposition to this legislation.

(2) The Texas Legislature has been responsive to the needs of the employees covered under the Texas Unemployment Compensation Act from the inception of the program to the present date and has increased the maximum weekly benefit amount from $15 to $28, an increase of 87 percent, and the weekly duration of benefit payments from 15 weeks to 24 weeks, an increase of 60 percent, and extended coverage to employers with four or more employees, and the current session of the Texas Legislature has under consideration legislation formulated to further improve the program in Texas.

(3) The Texas Manufacturers Association has been and continues cognizant of the necessity for upgrading the program from time to time as economic and local conditions change, and it has supported legislation in the past for this purpose and is currently supporting legislation to improve the program. The -executive vice president of the Texas Manufacturers Association submitted a proposal to a subcommittee of the advisory council of the Texas Employment Commission which included an increase in the maximum weekly benefit amount to $35, extension of duration of benefit payments to 26 weeks and extension of -coverage to employers with one or more employees.

EXHIBIT A

Statistical summary of Texas unemployment compensation program Amount in the Texas trust fund available for benefits Aug. 31, 1958-..

Average tax rate of all employers, rate year 1957 (only Virginia had lower average tax rate) (percent).

Average tax rate of employers eligible for experience tax rates, 1957 (percent).

Total employers covered Aug. 31, 1958.

Employers eligible for experience tax rates on Aug. 31, 1958-Eligible employers with experience tax rates lower than 1 percent for 1958-.

Eligible employers with the minimum tax rates of 0.1 percent for 1958.

Total wages reported by covered employers for 4 quarters ending June 30, 1958.

Taxable wages reported for 4 quarters ending June 30, 1958--Net taxes collected during fiscal year ending Aug. 31, 1958 (adjusted for refunds).

Benefits paid fiscal year ending Aug. 31, 1958: Texas unemployment insurance_

Inemployment insurance averages:

Weekly payment__

Amount per individual..

Weeks per individual.......

$275, 052, 901. 83

0.64

49

69, 685

67, 316

155, 418

236, 796

$7,063, 946, 800 $4, 693, 939, 336

$26, 769, 881

$60, 805, 305

$23.86 $217.86

9.1

Weeks entitled to and might have drawn___

The estimated number of different individuals paid unemployment insurance benefits in year ending Aug. 31, 1958

19. 7

279, 100

EXHIBIT B

SENATE RESOLUTION 112

Whereas there is unemployment compensation legislation pending in the Congress of the United States, which legislation seeks to establish certain minimum benefit standards and would thereby remove from the States many of the powers now vested therein, which legislation is coercive upon the legislatures of the various States in that if they fail to comply with the proposed standards, drastic penalties would be imposed upon the taxpayers in such States; and

Whereas the Legislature of the State of Texas recently, in recognition of unemployment problems, increased the maximum weekly benefit amount by 40 percent, and is even now in the current session considering legislation which would provide further increases; and

Whereas the people of Texas are firmly dedicated to the proposition that matters relating to the amount and duration of unemployment benefits should be left to the discretion of the various State governments due to the widely varying economic and other conditions that prevail among the States: Now, therefore, be it

Resolved by the Senate of the State of Texas, That it opposes legislation which would establish Federal minimum benefit standards and which would compel the States to take similar action, thus depriving the legislature of its rightful authority in such matters; and be it further

Resolved, That a copy of this resolution be sent to the President of the United States, the Secretary of Labor of the United States, Senate Majority Leader Lyndon B. Johnson, Senator Ralph W. Yarborough, Speaker Sam Rayburn, and all Members of the House of Representatives from Texas.

BEN RAMSEY, President of the Senate. I hereby certify that the above resolution was adopted by the senate on February 23, 1959. [SEAL]

CHARLES SCHNABEL,
Secretary of the Senate.

EXHIBIT C

Whereas H.R. 3547 by Congressman Karsten and S. 791 by Senator Kennedy are companion bills pending in the U.S. Congress and such bills seek to prescribe certain minimum standards with respect to the terms and conditions under which unemployment compensation is paid under State laws; and

Whereas the Texas Manufacturers Association's policy on unemployment compensation provides that unemployment compensation laws should be administered at the State level and that the National Government should refrain from iterfering with or bringing undue pressure upon the State administrative agencies in the performance of their duty as directed by the respective State legislatures; and

Whereas the enactment of these bills would deprive the individual States of their historic control over their unemployment compensation programs and vest such control in the Federal Congress; and

Whereas the Texas Legislature, currently in session, has legislation pending before it to increase the unemployment compensation benefit amount and increase the duration of benefit payments in Texas and the Texas Manufacturers Association is cognizant of the need of a realistic increase in the weekly benefit amount: Now, therefore, be it

Resolved, That the board of directors of the Texas Manufacturers Association in their regular quarterly meeting in Austin, Tex., on April 8, 1959, go on record as opposing H.R. 3547 and S. 791 and other similar legislation depriving the individual States of their historic discretion in setting unemployment compensation benefit standards on an individual State basis and substituting Federal standards; and be it further

Resolved, That copies of this resolution be mailed to Senate Majority Leader Lyndon B. Johnson, Senator Ralph W. Yarborough, Speaker of the House Sam Rayburn, and all members of the Texas delegation in the House of Representatives.

Attest:

JAMES L. WHITCOMB, President.

ED C. BURRIS, Secretary.

Adopted by Texas Manufactures Association board of directors on April 8, 1959.

The CHAIRMAN. Mr. Gray, we appreciate very much your coming to the committee to discuss these matters with us and to express the views of the Texas Manufacturers Association. We are very pleased on this committee to have two members of your great State.

Are there any questions?

Mr. MASON. Shall we say stalwart members?

Mr. IKARD. I have nothing, Mr. Chairman, other than to just join you in your statement, and I know my colleague, Mr. Alger, joins me, in saying we are always glad to see somebody from Texas and we appreciate it very, very much.

The CHAIRMAN. We thank you very much for coming to the committee.

Mr. ALGER. Mr. Chairman, I would like to ask one question.
The CHAIRMAN. Mr. Alger.

Mr. ALGER. Mr. Gray, with regard to your summary and your entire statement, do you feel your viewpoint is expressive of the Texas Legislature viewpoint basically?

Mr. GRAY. Mr. Alger, I can answer that in this way: I think that the legislature is aware of the need to do something with the program in Texas, to improve it, and we feel the same way and we are working on concert in that direction at the present time.

Mr. ALGER. I should have been more explanatory in my statement. I have here the statement of Mr. Holleman, president of the Texas State AFL-CIO. Mr. Holleman will not appear today, I understand, Mr. Chairman, but he is filing this statement. I do not know whether you have seen it, Mr. Gray, but it directly contradicts severa of the things you said today, and that is what prompted the question.

Does Mr. Holleman represent the viewpoint of the majority of the Texas Legislature or would you say you do in this regard?

Mr. GRAY. That is a difficult question to answer and I think we will have to await the final action of the legislature.

However, I would say this: It is entirely within their prerogative to enact the type of legislation which they think should come out this session in this field, but from our contacts with them, we are confident that they are aware of the problem and are going to do something to correct the situation in Texas.

Mr. Holleman's statement I have just had an opportunity to read, and I do not want to comment without him here for the purpose of cross-examination, which might be taking unfair advantage of him, but, basically, the statement is correct as to the facts. I know here that he is generally agreed that some legislation will come out of this session, and he indicates it will not be above the maximum benefit amount of $35 and duration will not exceed 26 weeks. Of course, we do not know how that is going to come out in final form, but, as

I have indicated before, that there will be some improvement in my opinion.

Mr. ALGER. What I had in mind, to make my question more understandable, was Mr. Holleman's belief in Federal minimum standards being imposed upon the States. You have said you believe the States can work this out, and particularly the State of Texas, the State for which you are the spokesman.

Mr. GRAY. Yes, sir.

Mr. ALGER. There is quite a clash.

Mr. Holleman says we need Federal standards. You said the States are doing the job and we do not need Federal standards.

Mr. GRAY. Yes, sir.

Mr. ALGER. And so does the Texas Legislature?

Mr. GRAY. That is correct.

Exhibit B, which is attached to my statement, contains a resolution passed by the Texas Senate which puts them on record as opposing Federal control over the unemployment compensation picture very definitely.

Mr. ALGER. Thank you, Mr. Chairman.

May I ask permission-and I am asking, because, as a new member of the committee, I do not know the policy-may I put a brief statement in the record following Mr. Holleman's statement, and which I shall explain in his absence. I would like to put in this question I would have asked him had he been here.

Is that appropriate?

Mr. CHAIRMAN. It is not usually done.

Mr. ALGER. Where in the record, then, can I put a critique?

The CHAIRMAN. Why do we not do it this way: You write Mr. Holleman a letter forwarding the question that you have in your mind after having read his testimony, with the understanding that your letter and his response to your letter will be included in the record immediately following the point where his statement appears in the record?

Mr. ALGER. That is much better, Mr. Chairman, and with your permission I would like to do that.

The CHAIRMAN. Without objection then, we will handle the matter that way.

Mr. ALGER. Thank you.

The CHAIRMAN. Mr. Gray, again we thank you, sir, for coming to the committee. You made a very fine statement and we appreciate your appearance.

I understand that Mr. Jerry R. Holleman will be unable to appear in person, due to his having a prior commitment in Texas with the State legislature. For this reason, Mr. Holleman is filing a statement which will appear at this point in the record, if there is no objection. (Statement, and an accompanying letter, referred to follows:)

TEXAS STATE AFL-CIO,
Austin, Tex., April 9, 1959.

Hon. FRANK IKARD,
House Office Building,
Washington, D.C.

DEAR CONGRESSMAN IKARD: I sincerely appreciate your assistance in arranging an opportunity for me to appear before the House Ways and Means Committee in favor of the proposed new Federal standards for unemployment compensation.

I was notified by Leo H. Irwin, chief counsel for the committee, that I had been allotted 10 minutes on Tuesday, April 14, 1959.

Unfortunately, this is an extremely crucial time in the Texas Legislature with the new proposed tax program scheduled to come before the house of representatives on April 13 and 14. I feel that I must be here at that time.

I realize that this is asking a great deal, but I would be most grateful if you could arrange to have my attached statement read into the record of the committee hearings. I am enclosing extra copies for your use and under separate cover am sending to you the 60 copies requested by Mr. Irwin.

I realize that you are deluged with requests for assistance and that mine only adds to your burden; however, if you can oblige I would consider it a real favor.

Please give my best wishes to your staff and family.

Respectfully yours,

JERRY R. HOLLEMAN, President.

STATEMENT BY JERRY R. HOLLEMAN, PRESIDENT, TEXAS STATE AFL-CIO-FEDERAL STANDARDS: THE ONLY FOR FAIR UNEMPLOYMENT COMPENSATION

In the 22 years since the Unemployment Compensation Act of 1937 was passed by Congress, it has become increasingly apparent that the only way in which unemployed workers are going to be assured of fair and adequate unemployment compensation is through the adoption by Congress of minimum standards for State unemployment insurance programs.

I say this in view of the fact that experience in most States has clearly shown that fighting on 50 separate fronts in the separate State legislatures has failed in keeping unemployment insurance benefits in line with the original purposes of the law. Those purposes were to provide the worker who is out of a job through no fault of his own with funds to carry him over his period of unemployment at a rate approximating two-thirds of the State's average weekly wage or 50 percent of his own average wage, and to provide an economic cushion for businesses which depend upon those workers for their own income.

I believe the record will show that in most States, as in Texas, unemployment benefits have slipped far below that original goal of two-thirds of the State's average weekly wage. In Texas, the goal of a maximum benefit of 65 percent of the average weekly wage has not been achieved one single time since the first year of the program.

For the record, I would like to review the history of the unemployment compensation program in Texas since its inauguration on January 1, 1938, when the State of Texas began paying unemployment compensation.

At that time the maximum weekly benefit amount was set at $15. The State's average weekly wage was less than $23. As you can easily see, the Texas Legislature at that time recognized and accepted the two-thirds theory and set the maximum benefit at better than 65 percent of the average weekly wage.

By January 1945 the State's average weekly wage had increased to slightly over $40. This meant that, in those 7 years, the standard for the maximum unemployment compensation benefits had slipped from 65 percent to 371⁄2 percent of the State's average.

During the year 1945 the legislative increased the weekly maximum benefit amount to $18. This brought the standard up to 45 percent.

By January 1949 the State's average weekly wage had increased to $53 which meant that the maximum weekly benefit amount had slipped to 34 percent of the State's average weekly wage. During the year 1949, the Texas Legislature increased the maximum to $20. This brought the standard up to 37 percent.

By January 1955 the State's average weekly wage had increased to $73 which meant that the State's maximum benefit amount had slipped to 27 percent. During the year 1955, the legislative increased the weekly maximum benefit amount to $28. This brought the State standard up to 38 percent.

The present average weekly wage of all Texas employees covered by the Unemployment Compensation Act is slightly over $79. This means that the maximum weekly benefit amount has slipped to 35 percent of the State's average weekly wage.

Not once in these 21 years has the maximum benefit come even close to the basic maximum intended to be in effect when the law was passed.

When the unemployment compensation program in Texas began to function, it was established on the basis of benefits being paid for a maximum of 16 weeks. In 1945 this was increased to 18 weeks. In 1949 it was increased to 24 weeks, at