Page images
PDF
EPUB

Mr. ATKINSON. Yes, sir. It has been diametrically opposed at all times and the national offices of both CIO and A. F. of L. have been diametrically opposed.

Senator Ives. Thank you.

Mr. ATKINSON. Incidentally, to destroy experience rating would raise tax rates at a time when we are trying to cut taxes.

Thank you, gentlemen.

The CHAIRMAN. Thank you very much, Mr. Atkinson. The Chair apologizes to you for rushing you through. It is not in my interest. It is to accommodate others.

Mr. ATKINSON. Pardon me if I have intruded upon your time.
The CHAIRMAN. You did not.

The next witness is Mr. Goodwin. We do want to hear at least three, and I hope we can hear the four witnesses listed this morning, so as you come on the stand, bear it in mind and file your prepared statement.

STATEMENT OF ROBERT C. GOODWIN, DIRECTOR, BUREAU OF EMPLOYMENT SECURITY, SOCIAL SECURITY ADMINISTRATION, FEDERAL SECURITY AGENCY, WASHINGTON, D. C.

Mr. GOODWIN. I have some notes, Mr. Chairman, from which I should like to talk.

My name is Robert C. Goodwin and I am Director of the Bureau of Employment Security in the Federal Security Agency. From September 1945 to July 1, 1948, I was Director of the United States Employment Service in the Department of Labor, and from February '45 to September '45 I was Executive Director of the War Manpower Commission which included the United States Employment Service. In addition, I served nearly 3 years as regional director of the Social Security Board in the Cleveland region, which included the responsibility for both the Employment Service and the unemployment insurance function.

I would like to address myself briefly, Mr. Chairman, and members of the committee, to the point that has been raised on bias in the Department of Labor and say simply that in my almost 3 years of experience in the Department of Labor as the Director of the United States Employment Service I was not at any time subjected to pressures from any source within the Department to make decisions in the interest of any particular group, including labor.

The CHAIRMAN. Let me ask you at that point: Did you undertake to subject State administrative groups and officials to any point of view that was held by the Department of Labor in the administration of the law? There has been testimony here that you undertook to put on pressure at the local level in the State to get certain legislation that you wanted, to get the experience-rating clause knocked out and other features of the program to which organized labor objects. What do you say about that?

Mr. GOODWIN. As a matter of fact, Mr. Chairman, at that time only the Employment Service was in the Department of Labor. Experience rating was not involved in any way. But as a matter of fact, I found the philosophy of the top officials of the Department of Labor during that period to coincide with my own to the effect that they regarded the program as a public program and that it should be administered in the public interest.

I might add that I have found that same point of view in the Federal Security Agency. I don't think there is any material difference as far as that point is concerned.

The CHAIRMAN. You did not directly answer my question whether you undertook to subject any officials at the local level of administration to pressure. You said none was applied on you in the position you held, but there has been testimony here that you undertake to use this position to impose the views of labor or the Labor Department on the several States and their administrative agencies. I am giving you an opportunity to deny it. I am trying to at least.

Mr. GOODWIN. In my view, Senator, we did not. We carried out the law in the way Congress intended it to be carried out.

The CHAIRMAN. As I understood some of the evidence, that charge was made and I wanted you to have the opportunity to deny it. Mr. GOODWIN. Yes, and before I get through there are a couple of points I would like to deny specifically.

The CHAIRMAN. You may proceed.

Mr. GOODWIN. During the course of the hearing some of the witnesses have expressed the fear that the approval of Reorganization Plan No. 2 will result in various actions to which they are opposed. Those included federalization of the system and elimination of experience rating. I think perhaps by this time the testimony has made it clear that on these two points changes can be made only by the Congress or by the State legislatures in the case of experience rating.

The area of discretion left to any administrator in the determination of these laws is limited, and under no circumstances could it be stretched to the point of basic modification of the system. That certainly has been my experience in dealing with these laws. It is my understanding that in his testimony Mr. Williamson, commissioner of the Employment Security Department of South Dakota, cited the fact that the Federal Security Agency had determined that a rule proposed by the State administrator was not in conformity with section 1602 (a) (1) of the Internal Revenue Code. That is the section of the act having to do with experience rating. This was cited, as I understand it, by Mr. Williamson, as an example of the wide discretion on the part of the Federal Security Administrator. The rule that was proposed by Mr. Williamson would have provided that employers could obtain tax reductions based upon one preceding year of benefit experience. We read the section of the act here the other day, 1601 (a) (1) of the Internal Revenue Code, and, as you know, that made it very clear that reduced rates must be based on the employer's experience with respect to unemployment or other factors bearing a direct relationship to unemployment risks during no less than the three consecutive years immediately preceding the computation date.

It is, I think, clear that no Federal Administrator would have had any alternative in this case. I cite that because it was used as a basis for arguing about the alleged wide area of discretion which can be used on the part of the Federal Administrator.

Several questions have been raised before the committee about the policies governing the operation of State employment services. These policies have been developed over the years with full cognizance of the fact that the Employment Service is a service function, and it must serve both management and labor if it expects to stay in business. The policies under which the Employment Service now operates were proposed by me and promulgated by the Secretary of Labor at the time the Employment Service was returned to State operation in November 1946. I think that the committee would be interested in how we arrived at these policies.

Based on previous experience in the service and the policies that existed prior to wartime federalization of the program, a draft was drawn up which was then submitted to each State administrator for comment. These comments were then given careful consideration in the redrafting of the policies. Following that, a committee of State administrators, named by the Interstate Conference of Employment Security Agencies, then sat down with officials of the Employment Service and discussed the policies one by one. Based on these discussions a number of changes were made and the final draft was acceptable to the committee of State administrators.

I won't take the time of the committee to discuss the several misrepresentations that have been placed on these policies in the testimony that has been given here, but it seems to me that the fact that they were acceptable to a representative committee of State administrators is adequate testimony as to their reasonableness.

I might make just a couple of points regarding misinterpretations of the policies which have confused the issue. One is on the issue of suitability of work. Suitability of work is covered in the State unemployment-insurance laws. Every law in the country deals with the question of suitability of work. It has not been dealt with by Federal regulation. The referral policies of the Employment Service have; and these two things are sometimes confused.

On the question of referral policies, I was interested in Mr. Atkin. son's testimony as to what management's position was on referral policies, because what he described is exactly the policy that the United States Employment Service has had; that is, that there should be a reasonable effort made to place the man in his highest skill. If he can't be placed in his highest skill, then attempts should be made to place him in the next best job.

The CHAIRMAN. In that regard, what about the imposing on the prospective employee himself of the task of seeking work? Mr. GOODWIN. Of what, Senator?

The CHAIRMAN. To seek work; to try to find a job himself. What is your attitude regarding that?

Mr. GOODWIN. We are opposed to some of the provisions that have been placed in State laws, which require as a regular thing, as a routine thing, that a man go to a certain number of industries and apply for work on his own, and then bring in evidence that he has been there. Our experience has been that employers generally are opposed to the requirement that an active search for work take this form, because they don't want to be bothered with it. We are not opposed to the principle of a man doing everything to help himself. We think that this particular proposal in many cases has created administrative problems in handling the volume concerned, and it has been an unnecessary burden on employers.

The CHAIRMAN. You say you are not opposed to the principle. Are you opposed to the requirement that he undertake to do something to help himself?

Mr. GOODWIN. We are opposed to the requirement that every man go to a given number of employers and bring back from those employers evidence that he has been there.

The CHAIRMAN. Do State laws fix the number of employers he must go to?

Mr. GOODWIN. I am not sure whether they fix the number of employers or not.

Senator Ives. Not all of them, certainly.

The CHAIRMAN. No; certainly not all of them.

What I am trying to determine is: Do you oppose the requirement that a man who registers for unemployment compensation be required to put forth some effort on his own part to find a job?

Mr. GOODWIN. No; I do not.

The CHAIRMAN. You do not oppose that requirement. But you do oppose it if it requires that he go to a certain number of industries, for example, and make application, and then be required to bring back proof to the effect that he has made such effort?

Mr. GOODWIN. Yes; we think that in many cases of that kind it is useless effort on his part, and it is just an annoyance to the employers, and not a practical proposition.

Senator SCHOEPPEL. Let us take, for example, my town of Wichita, which is a pretty compact city. It would not require much effort on the part of an honest labor-seeking individual to go to 5 or 10 comparable type employers in that city. Do you mean to tell me that that would be an unreasonable requirement, and that your Department would frown on that?

Mr. GOODWIN. I would say that it could very well be an unnecessary requirement.

Senator SCHOEPPEL. Well, why?

Mr. GOODWIN. Because this man has no way of knowing whether those employers are laying off that day or whether they are hiring. Why is it not much more reasonable for the employer to indicate to one central place what his needs are, and let the man be referred from there? The employer doesn't like it if he has 50 men appear at his gate, and he is laying off men the same day. The employee doesn't like it because he has to run around for 3 or 4 miles and maybe spend 40 or 50 cents for carfare when he is unemployed.

Senator SCHOEPPEL. I appreciate that.

Mr. GOODWIN. I really think this gets at the heart of the idea involved in the Employment Service. And what we need is more cooperation from employers in placing their orders with the Employment Service, so that you can avoid this unnecessary effort involved in this kind of a scheme.

Senator SCHOEPPEL. You would rather, then, have some agency do that for the employee than have the employee be required to?

Mr. GOODWIN. Yes. I don't want to be misunderstood on the principle of a man's obligation to help himself, and we must encourage that in every way; because there are many ways of obtaining a job which no organized employment service can explore for a man as well as he can for himself. We recognize that, and we feel that it is important that that idea be gotten over, and that that philosophy control in the operation of the system.

Senator Ives. Do you recognize that dilemma which was posed so nicely by Mr. Atkinson, as between the requirements or requests; let us put it that way of labor organizations, and the desires of management? I do not think I ever heard it posed more skillfully or better than Mr. Atkinson did for us. He did not have the answer. Do you have it?

Mr. GOODWIN. No. I am sorry, but I don't have it. Senator Ives. It is something that has got to be given some thought, and an answer has got to be found.

Mr. GOODWIN. It is certainly there, and from the standpoint of the Employment Service policy

Senator IVES. I take it that from your standpoint you have gone right ahead and had an over-all plan, an over-all procedure, regardless of anything. Is that right?

Mr. GOODWIN. That is right. We are talking about broad general policies that are applied by the States. We have encountered no difficulties regarding these policies in our dealings with States, gentlemen. I mean, they are policies that are recognized as reasonable by the people that are administering them on the State and local level, and they are not a matter of controversy as of today between the Federal Government and the States.

Senator Ives. Thank you.

Mr. GOODWIN. A number of statements have been made, and I have heard them at least half a dozen times I think, that employers would discontinue their practice of recruiting workers through State-operated employment service offices, if the Bureau of Employment Security was housed in the Department of Labor. It seems to me that this fear is entirely refuted by the experience. Between 1933 and 1939, when the Employment Service was in the Department of Labor, there was a constant increase in the use of the Employment Service by employers. The volume of business handled by the Employment Service between 1945 and 1948, when the service was in the Department of Labor was the highest in the history of the Service. The CHAIRMAN. That was when employment was the highest in the history of the Nation, too, was it not?

Mr. GOODWIN. No, sir. This covers both types of periods. It covers the depression period of the thirties, for example.

The CHAIRMAN. What years did you say?

Mr. GOODWIN. 1945 to 48. When the United States Employment Service was in the Department of Labor, the placement figures during that period, Nation-wide, were the highest in the history of the service. The CHAIRMAN. Did we not have the highest rate of employment in the Nation at that time?

Mr. GOODWIN. That is true.

The CHAIRMAN. And there was a greater labor market or demand for labor in that period than in any other time in the history of this country.

Mr. GOODWIN. That is true.

The CHAIRMAN. Labor supply in the employment market was scarcer than at any other time in history.

Mr. GOODWIN. That is true. But the figures for those 3 years were also higher than they were for the last year (fiscal 1949).

The CHAIRMAN. Have you anything in the way of percentages there, Mr. Goodwin, that would show the increase in the percentage of the use of it?

« PreviousContinue »