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materials or power, there will be a thousand and one forces which will cause some business enterprises to decline, to reduce their working force temporarily or permanently, or even to close their doors.

In many cases, as we have found already under the impact of automation, and as we shall find to an even greater extent with the further development of industrial atomic energy and eventually solar energy, there have been and will continue to be large-scale shifts of industry from one location to another.

All of them involve at least temporary unemployment of workers, and in some cases there may be unemployment over relatively long periods before new employment opportunities open up for all the workers affected.

For all of us, economic change and dynamism produce benefits in which we share. For some of us, however, at any given time, they produce unemployment. In the absence of an adequate unemployment insurance system, the cost of obtaining the benefits of economic change fall with crushing force on the families of those whose jobs are eliminated in the process.

It is not only illogical that the costs should fall with crushing weight on those haphazardly selected by blind economic forces, while the benefits are shared by all-it is immoral.

The establishment of adequate minimum standards of unemployment compensation throughout the country is not only a matter of justice, but of economic commonsense. One of the most frequent subjects of comment with respect to the current recession, both by businessn and economists alike, is the cushioning effect of various social security measures.

Unemployment compensation in particular, by helping to maintain some purchasing power in the hands of unemployed workers, slowed down the rate of decline in the economy and speeded up the rate of recovery.

In round figures, it is estimated that even our present inadequate unemployment compensation system contributed some $4 billion in much-needed purchasing power during the 12-month period from October 1957 to October 1958.

An adequate unemployment compensation system is one of the most effective of antirecession devices. It has been referred to by President Eisenhower as "our first line of defense."

If it is financed with sufficient reserves it is doubly counter-cyclicalit not only puts dollars into the pockets of consumers when they need them most, and when the economy most needs their added spending, but it draws those dollars off and puts them into the reserves for the most part in periods of buoyancy, when they can best be spared.

Our present unemployment compensation system, however, is only doing a part of the job it should in adding strength and stability to the economy, because it provides nothing at all to far too many jobless workers, not enough to most of the rest of them, and frequently for too short a time.

When we consider the consequences of those policies which we adopt today, we must not confine our view to our own country. Hunger and want such as far too many American families are suffering today are in themselves proper subjects of deep concern for us, but our concern must be sharpened by the fact that they are also material for headlines,

not only in Moscow and Peiping, not only in Warsaw and Bucharest and Prague, but in New Delhi, Jakarta, and Accra.

The basic issue before this committee and the Congress is whether the Federal interest in the unemployment compensation program is sufficient to warrant the Federal Government having some responsibility for the determination of policies regarding the amount, duration and eligibility for benefits.

Unemployment compensation in this country was the direct result of Federal action. It was the passage of the Social Security Act of 1935 by the Congress that resulted in the enactment of State unemployment compensation laws.

In passing the Social Security Act, it is clear that the Congress intended to accomplish more than the enactment of mere token unemployment compensation laws.

It ceded to the States access to a 2.7-percent payroll tax. In return, it expected a system that would give adequate relief to the unemployed. This was recognized by the Supreme Court of the United States in upholding the constitutionality of the unemployment compensation provisions of the Social Security Act. The court, through Justice Cardozo stated:

An unemployment law framed in such a way that the unemployed which look to it will be deprived of reasonable protection is one in name and nothing more. With regard to the weekly benefits amounts there are a whole battery of tests which expose the inadequacy of our present unemployment compensation laws.

Our present system is a long way from meeting the objective of a benefit amount sufficient to maintain an unemployed worker and his family without their having to turn to other programs for assistance.

A substantial number of unemployed who were able to meet the requirements of State unemployment compensation laws have had to depend for additional assistance upon local relief agencies and the Federal surplus food program. From October 1957 to October 1958, general relief roles of local governments increased 30 percent.

In December 1958 over 5 million people were receiving butter, flour, and other staples from the Federal Government.

Unemployment compensation laws when originally enacted were intended to provide an unemployed worker with 50 percent of the wage loss he suffered during the week of total unemployment. This standard has been repeated annually by President Eisenhower.

Fifty percent of his prior wage is the weekly benefit that an unemployed worker would receive in most States today if it were not for the limitation imposed by the low maximum weekly benefit amounts. For example, when a State law has a maximum weekly benefit of $30, all workers earning up to $60 a week are permitted to qualify for a weekly benefit of one-half of their prior weekly wage. A worker, however, who earns $85 a week-which was about the average weekly wage earned by all workers covered by the unemployment compensation program in 1957-would be entitled to the maximum weekly benefit of $30, but in his case the weekly benefit equals only 35 percent of his prior weekly wage.

Although it has been argued before this committee that higher maximums than those now fixed by State legislatures will make unem

ployment too attractive, this argument has not been accepted in the past by the technical staff of this committee.

In its 1946 reports entitled "Issues in Social Security," the staff pointed out that there was no reason to assume that the higher paid worker would have his "will to work" dulled by a weekly benefit of one-half his wage while the low paid worker who receives one-half his weekly wage would not be so affected.

The 1946 report stated certain yardsticks as to what the weekly maximum might be. It recognized that it must be high enough not to requre undue reduction of living standards; that it should be adjusted to the rise and fall of wage rates; and, finally, that it not be so low as to produce a flat benefit for a substantial number of unemployed workers.

The President has stated these same criteria in another way. From 1954 on, he has urged the States to increase their maximum weekly benefits so that the great majority of covered workers would be able to receive 50 percent of their gross weekly wage when unemployed. This committee has already had adequate data and testimony presented to it to demonstrate that the maximum benefits under State laws are too low. In every single State the maximum weekly benefit on January 1, 1959, was a smaller percentage of the average weekly wages in such State than it was in 1939.

Changes enacted by the several State legislatures during the past few months have not altered this conclusion.

As a result too many workers who are drawing benefits are victimized by the weekly maximum and are receiving benefits of less than 50 percent of their prior weekly wages.

It should be clearly understood of course that the requirement of a maximum weekly benefit of 66% percent of the State average weekly wage does not mean that any unemployed worker will receive 66% percent of his own weekly wage.

No worker need be paid more than 50 percent of his own weekly

wage.

H.R. 3547 in gearing the maximum weekly benefit amount in a State to the average weekly wage in that State also eliminates the bugaboo of uniformity that has been injected into these hearings by the opponents of Federal action in the field of unemployment compensation. It recognizes the differences between State economies without permitting the States to accentuate these differences through the threat of substandard unemployment compensation payments.

The picture when one looks at the period for which benefits are paid-is no brighter. As a result of the inadequate duration of benefits payable under State laws, almost 30 percent of the workers exhausted their benefits before they were able to find a job.

Studies made in several States have demonstrated that a period of 39 weeks for all claimants is necessary if the program is to serve its purpose of tiding most workers over during periods of unemployment. Even in the good years of 1956 and 1957 more than 1 million workers were still out of work after they exhausted their State benefits.

It is not necessary to go into more detail as to the inadequacies of our State unemployment-compensation laws. These inadequacies have been recognized by every single objective study that has been made down through the years.

Decency and elementary humanitarianism cry out for the proposed improvements in unemployment compensation standards. Simple, basic justice requires favorable action by Congress to end the sufferings and hardships that inadequate and too brief unemployment compensation payments have caused hundreds of thousands of Americans in the past. Simple, basic justice demands that other hundreds of thousands be saved from similar deprivation and misery in the future. Mr. Chairman, with the permission of the members of the committee I would like to comment on the testimony of the representative of the Chamber of Commerce for the United States of America. He happens to be the same man who presents the case for the General Electric Co. to our negotiating committee. In my presence just a few months ago Mr. Willis presented as a main reason for not providing supplementary unemployment compensation that the General Electric Co. and the employers generally were seeking the improvement in the standards of unemployment compensation.

The statements he made before us, and I quote what he said to us, was directly in conflict with what he told this committee. I discussed this in part with Mr. Mason before this hearing got underway. Mr. Willis told us on September 18 that unemployment compensation should not be discriminatory between (1) an employer and his competitors, (2) employees of different competitors, and (3) all employees in the same company.

This was in reference to the fact that in GE we have employees covered in Georgia and other Southern States, plus Western, Eastern, and Northern. We take point 1, regarding no discrimination between an employer and his competitors. Mr. Willis shows on page 11 of his statement that in Massachusetts the tax rate is 1.7 percent, but in Florida, 0.8 percent. In New Jersey where GE just closed down a plant with a thousand employees, the rate is 1.9 percent, while in Texas where the work was moved to it is 0.6 percent.

In Rhode Island the rate is 2.7 percent, while in South Carolina it is 1.2 percent, and so on.

An employer in the high-rate States is discriminated against as compared with one in a low-rate State. While this difference is not the sole factor, when it is combined with differences in wage rates and fringe benefits it makes an overwhelming case for many employers to seek an unfair competitive advantage by moving to a low-rate State. These high-rate States I mentioned are all, incidentally, States where GE had plants and moved them to the low-rated States, some of which I mentioned.

Take Mr. Willis' point No. 2. Certainly an employee of a company in a higher benefit State has a competitive advantage over one in a low-rate-benefit State. For example, in GE's presentation to our union on September 19, 1958, GE stated that its aim was to assure the unemployed 50 percent of their average wages. Yet GE is located in States where this is impossible. Even in New York it is impossible to get 50 percent of wages if wages are $2.25 an hour or more.

In New Jersey or Massachusetts it is impossible if the wages are $1.75 or more.

In Ohio a single person earning over $1.65 an hour could not get 50 percent. In Indiana the top limit for anyone is $1.65. In Virginia and Alabama it is $1.40.

We take point No. 3 a GE employee in Georgia who earns $1.75 an hour can get a mamimum of $910 in New Jersey, $1,170 in New York, $600 in Georgia, and $480 in Florida. Is this discrimination between employees of the same company?

Furthermore, Mr. Willis points out that on the whole employees got increased unemployment-compensation benefits larger than the increased cost of living since 1939. Alabama real benefits fell from $300 to $272, in Florida from $240 to $233. Mr. Mason asked me if these employers were serious about the fact that there is an unfair competitive situation.

In General Electric propaganda papers directed to their employees, the company sets forth the fact that there is an advantage to move their plants out of Massachusetts because of unemployment and workmen's compensation costs.

They have been blackmailing a considerable number of communities, opposing any improvements by the States on the grounds that they will lose industry. They are moving plants out of the State of Indiana, out of New Jersey, and elsewhere. I hope that this committee will recognize that thousands of American workers, the most productive people in the world, are being hurt by these actions.

Employers say that is not a matter for collective bargaining; that is a matter for the States. There is a measure of hypocrisy associated with the problem. I would suggest, Mr. Chairman, if the law that we enacted in 1935 is to remain a Federal-State unemployment compensation program, then we ought to make sure that when the Federal tax-offset law provides the State with the opportunity of enacting some measures, such as weekly benefit amount and duration, that is what it means.

A State has methods now of providing an incentive to employers by which their tax payments may be reduced. That results from a Federal standard. It requires experience rating in all the States. I hear some discussion that this program that has been proposed by the eight members of this committee would eliminate the State influence over these matters.

There is no effort here by these bills to impose upon the States conditions that are not acceptable to the people directly affected. The employers tell us that they want these standards to be established to eliminate unfair competition, but the reason the good Governor of New Jersey can't do much is because he has been threatened, as have other Governors and other States, that if they carry out the wishes expressed by President Eisenhower and improve their standards, they will lose industry.

Governor Meyner has been confronted with General Electric's action in closing down a plant employing 1,000 people and moving the operations down to Texas, and I might note that those workers in that Texas plant are members of the same union. Now GE is telling those workers in Tyler, Tex., that they have to be competitive and that because the wages established in Tyler, Tex., are much lower than they were in Bloomfield, N.J., the company found it necessary to open three operations in Puerto Rico.

We see companies moving their operations like gypsy caravans all over the country looking for what they claim is a better business atmosphere. We see companies like Singer Sewing Machine now

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