As we understand the provisions of this bill, it seeks to accomplish three things: (1) Extend coverage of unemployment insurance to employees of small firms; (2) continue the present exclusion of hired farmworkers from unemployment insurance coverage but extend coverage to employees who process, pack, store, or deliver agricultural products for a farm operator, if the operator has produced less than half of the commodities concerned; and to the employees who perform these operations off the farm on fruits and vegetables; (3) enable new employers to qualify for a reduction in the unemployment tax after 1 year instead of the 3 years now required.

The Department of Agriculture's interest in this bill is both indirect and direct. We are inclined to think that the benefits to agriculture from its indirect effects are most important. The direct involvement of agricultural and closely related industries is quite minor, since only about 200,000 out of the estimated 3.6 million workers who will be brought into the unemployment insurance system by the proposed bill are in the commercialized agricultural processing or servicing operations, and no farmworkers engaged in occupations customarily considered as farmwork are to be included.

On the other hand, the indirect effects of unemployment compensation during periods of significant amounts of unemployment are important in supporting consumer purchasing power and thereby sustaining demand and prices for agricultural commodities.

The legislation incorporates 3 of the 5 recommendations on unemployment insurance made by the President of the United States to Congress in his Economic Report. The President's recommendations are designed to achieve progress in affording economic security to a greater number of workers against the hazard of unemployment and to strengthen the unemployment insurance system as a bulwark against economic instability which this system provides as one of the built-in stabilizers of consumer purchasing power.

About 36 million wage earners are currently covered by this program. The extension provided in the bill will bring in an additional 3.4 million wage earners in nonagricultural industries who are employed by small businesses-meaning in most States firms with fewer than eight persons on the payroll.

An additional 200,000 workers employed in establishments processing agricultural products or delivering such products to storage or to market will be brought in as a result of the redefinition of agricultural labor and the extension of the act to employers with fewer than eight workers.

Farmers who pack, freeze, or otherwise process farm products will continue to be exempt from the Unemployment Tax Act, if more than half of the farm products thus processed are produced by the farmer employing processing labor. Cooperatives engaged in processing activities will not be exempt inasmuch as they are covered under the present act, although any unincorporated group of 20 or fewer farm operators who process only their own products will be exempt. Hired farm workers will continue to be excluded from the unemployment insurance provisions.

We are in agreement with the objectives of the proposed legislation since the benefits to agriculture resulting from the supporting effects of unemployment insurance payments on consumer purchasing power are very considerable, and since there appears to be no

reasonable basis for excluding processing workers whose employer is also a farm operator, regardless of the commercial nature of the processing operation. Moreover, employees engaged in commercial canning and commercial freezing are covered under the existing unemployment insurance legislation.

We fully appreciate the interest this committee has in ascertaining the possible impact of the proposed legislation on those sectors of the economy that would be directly affected. It is our understanding that insofar as workers in industries related to agriculture are concerned, the bill would include the following types of services performed on agricultural commodities:

(1) Drying, packing, processing, freezing, grading, storing, and similar services on agricultural commodities performed for a farm operator when he has produced less than half the commodities processed or handled.

(2) The same services when performed on fresh fruits and vegetables in the employ of an individual who is not a farm operator. Thus the preparation for market of fruits and vegetables in their raw or natural state will be covered when done in establishments operated independently of farming operations.

(3) The same services when performed for any unincorporated group of 20 or more operators. Such groups would thus be treated in the same manner as formally organized cooperatives under the present act.

(4) Services performed off the farm in connection with the raising or harvesting of mushrooms, or the hatching of poultry, or irrigation services performed by employees of companies operating for profit.

(5) Services performed off the farm in connection with the processing of maple sap into maple sirup or maple sugar.

We would like nothing better than to be able to give to this committee the specific facts and figures relating to the number of workers involved in each of these occupations and services and the volume of production of each of these commodities in their sectors now covered or proposed to be covered.

However, we are dealing with a group of workers and industries that are at present in what might be termed a statistical no man's land, since neither the statistics of agricultural employment or of nonagricultural employment fully embrace these borderline groups.

However, we believe that the overall estimate of the number of workers involved which was estimated as around 200,000 in the Economic Report of the President is reasonable and of the right order of magnitude. Insofar as specific impacts upon specialized types of enterprises are concerned, including administrative and operating problems, undoubtedly the committee will hear the views of the trade organizations or individuals concerned.

It is also likely that additional detailed information is available from the State agencies directly concerned with the administration of the unemployment compensation program. We shall be happy to give this committee such assistance as we can in connection with your consideration of the proposed legislation.

Mr. HOLMES. Mr. Chairman.

The CHAIRMAN. Mr. Holmes will inquire.

48088-54 -8

Mr. HOLMES. I did not quite understand. Did you make comment about the 200,000 that you were talking about on the subject of the seasonable worker in farm operations?

Mr. WELLS. Farmworkers themselves are specifically excluded, seasonal or otherwise. This is the commercial operation incident to packing and preparing farm commodities, and I made no comment, Mr. Holmes, one way or the other. I do understand that at the operating level in the States arrangements are made which take care of this seasonal labor problem in packing and servicing and things of this kind.

Mr. HOLMES. Do you interpret it as being a matter that would be handled by the individual State?

Mr. WELLS. Yes, sir; I do. I understand that the States, Mr. Holmes, have regulations and so forth when they are dealing with seasonal labor and that outside the season they are not considered employed and that they have worked out ways. I am not an expert on unemployment compensation, but they have worked out ways of taking care of seasonal labor and my people tell me they see no reason why this could not be handled in the same manner.

The CHAIRMAN. By and large, Mr. Wells, it is dealing simply with

processors.

Mr. WELLS. Yes, and commercial packinghouses, and things of that kind.

The CHAIRMAN. Relating to farm products.

Mr. WELLS. That is correct.

Mr. CURTIS of Missouri. Mr. Chairman.

The CHAIRMAN. Mr. Curtis of Missouri will inquire.

Mr. CURTIS, of Missouri. Are there any States whose unemployment system includes these groups now?

Mr. WELLS. There are several States that include considerable portions of these groups. I believe both Florida and California, for example, in the case of citrus fruit and some other commodities. They are included.

Mr. CURTIS of Missouri. Do you have any statistics that you wish to supply for the record of what States might already have provided for these groups or a portion of these groups? Any State could provide for them, could they not? There is nothing that prevents them under the present Federal law.

Mr. WELLS. Let me ask Mr. Ducoff.

Mr. DUCOFF. Mr. Curtis, we shall be glad to look into the availability of any statistics in cur department with reference to Florida and California or any other State that may have gone to some extent in extending the unemployment compensation system to some of these groups.

I am not sure what such a search will turn out. It may be that the States themselves may have more information than we have at our disposal.

Mr. CURTIS of Missouri. The reason I raised the point was this: You gentlemen were in the audience when we were discussing this question of eight or more employees. Of course the States that want to have a more comprehensive program may do so and actually they gain a benefit by going into it inasmuch as they do not have to pay 0.3 percent for that additional coverage. The question immediately comes to my mind: Are we really doing a good thing by making a

mandatory system in these fields when the States right now, if they showed the initiative, could have moved into those fields? It appears to me that perhaps there are some States that have realized that and have covered additional fields, and I think before this committee should really move ahead we ought to know what States have availed themselves of these options, if they have, and what States have not. Mr. WELLS. Two of our most important fruit-producing States, Florida and California, have it, and I think in the State of California it pertains to vegetables; is that correct?

Mr. DUCOFF. In California that is correct. In Florida that would be fresh citrus fruits.

Mr. CURTIS of Missouri. Then of course we come to the philosophical question of why are you people recommending that the Federal Government make this mandatory when those States, some States, at any rate, have met their own problems in these particular areas? What are we gaining by making this mandatory, in other words?

Mr. WELLS. I think, Mr. Curtis, what I have tried to say for the Department of Agriculture is that even though we recognize the direct benefit to the 200,000 people that might be involved, from the standpoint of agriculture generally the extension of unemployment-compensation to the 3.6 million people would have, I think, a significant stabilizing influence on the market in periods of unemployment or temporary distress periods which would go quite a bit to support the prices for goods and farm products.

Mr. CURTIS of Missouri. I might agree with that, but we are concerned here partly with how do we accomplish that result. Do we accomplish that through the method that would be proposed in this bill of making it mandatory that all States do this, or do we adopt the procedures that we have of setting up the basic formula and then the States on their volition can go forward and have a broader unemployment program than the Federal Government prescribed?

That is the issue, I would say.

Mr. WELLS. I do not think my comments would add much to what Mr. Larson said because the problem with respect to the 200,000 people employed in agricultural processing is exactly the same with respect to the entire group in that connection.

Mr. CURTIS of Missouri. Another question would be, when you get your figures of 200,000, and I appreciate what you have said about the limitations concerning the accuracy of the figures, if you do not have the figures of what States already have programs that might cover them, some of those people might already be covered. Mr. WELLS. The only States that I know of are California and Florida.

Mr. CURTIS of Missouri. I thought you were not sure of the extent of that coverage. That was information you were going to check and supply because you have not compiled that information; have you? Mr. WELLS. We can endeavor to find out. I asked this same question before I came up.

(The information referred to follows:)

(The following information is based on data supplied to the Department of Agriculture by the Department of Labor.)

PROVISIONS AFFECTING BENEFIT RIGHTS OF SEASONAL WORKERS

The benefit rights of seasonal workers, such as those in food processing or food manufacturing, are affected both by the general benefit eligibility requirements applicable to all workers, and by special seasonal provisions. All State unemployment-insurance laws contain provisions requiring minimum amounts of recent past employment or earnings as a condition for receipt of benefits (see table 1). These provisions are intended to restrict the payment of benefits to workers who have indicated regular attachment to the covered labor force in a recent past period, and to deny benefits to seasonal workers and others who work only for short periods. All laws also require workers to be in the labor force and available for work during any week for which benefits are to be paid. In addition, 15 States now have effective provisions defining seasonal industries. and seasonal workers, and placing additional restrictions on the payment of benefits to seasonal workers. While these provisions vary considerably, as indicated below, and in table 2, their general effect is to provide that seasonal workers can draw unemployment benefits only for unemployment during the normal operating season.

GENERAL QUALIFYING REQUIREMENTS

Seasonal workers are generally subject to the same eligibility and qualifying requirements as other workers. In all States eligibility for benefits for any week is restricted to workers who are registered for work at the public employment service, are in the labor force during that week, and are available for work—that is, to workers who are ready and willing to take work. In 26 States, there is an express requirement that the worker be actively seeking work, and all States can require an individual to take those steps to find work which a reasonable individual. who wanted work would take in the particular personal and economic situation. All States provide that benefits may be denied to any individual who refuses a job offer which the agency regards as suitable for him, in terms of whatever factors of experience and economic circumstances the law prescribes as relevant. In addition, State laws restrict benefits to workers with at least a certain amount of wages or weeks of work during the preceding year. The amount of benefits paid for a week, and, in 37 States, the number of weeks, is also related to past earnings or employment. Consequently, workers with very little past attachment to covered employment will either not qualify for any benefits, or qualify for very small amounts (see table 1).

In 12 States, a worker with a specified amount of earnings in the base yearis eligible, without regard to the quarterly distribution of those earnings:

North Carolina...

Iowa, Virginia...

$100

250

300

400

500

600

Illinois, Maine, Oregon..

In 17 other States, all workers are required to have earnings in at least 2 quarters, or to have more than 13 weeks employment:

In 19 States, earnings in more than 1 quarter are required for all workers: except those who have earned at least the indicated amount in 1 quarter:

Kansas.

District of Columbia.

South Carolina_

Arkansas...

California, Louisiana, Delaware, Rhode Island, Hawaii.

Alabama

Wyoming

Colorado

Maryland, Nevada, Pennsylvania, Mississippi, New Mexico.

Georgia

Tennessee.

$200

250

600

660

750

770

780

840

900

1, 183

1, 300