The latest figures I have seen on the number of compensation claimants in my State show 101,518 on the rolls, a figure just over 100 percent more than in the same week a year ago. This is not merely disturbing it is verging on being alarming. Except for mining, virtually all the hardest-hit industries now suffering recession have important operations in the New Jersey area-construction, manufacturing, transportation, wholsale and retail trade, and the service trades. The men and women who have been thrown out of work and onto unemployment compensation are in that unenviable position entirely because of factors beyond their control. They have been caught in a general backwash of recession.

I would like to impress on the members of the Ways and Means Committee that the kind of situation we are encountering today is exactly the kind the unemployment compensation program was created to combat. The idea behind it was to maintain purchasing power.

Now how is it possible, I ask, to maintain purchasing power in a family whose income drops from around $100 or more per week to $30 per week? The most such a family can do with an income of that amount is to pay the rent or the mortgage costs and not much more than that. Figures furnished me by the New Jersey Council, CIO, show the average nondeferrable costs of maintaining a family of four to be $70 per week in the New York metropolitan area.

This means for unemployed heads of families that they must dig into whatever savings they have in order to exist. It means deferring everything else. And when the present 26-week period of benefits expires, it may well mean destitution. Exhaustions of benefits in New Jersey have now risen to 5,000 each month.

For the worker in New Jersey this is particularly cruel because, unlike the workers of any other State except Alabama, he helps pay for his unemployment compensation insurance out of his own earnings. New Jersey and Alabama are the only States which have a contributory system involving the workers as well as the employers. Yet, despite this, his benefits are restricted to a maximum of $30 per week.

I know that our Governor, the Honorable Robert B. Meyner, is anxious to liberalize our system, and has proposed legislation to accomplish that purpose. But his experience in that regard points up dramatically the overriding need for the kind of legislation Representative Forand and 80 others of us in the House of Representatives have introduced.

The Republican Party leadership in New Jersey has turned thumbs-down on any further increases in unemployment compensation in our State, and it has the power within the legislature to enforce that decision. So our Governor's hands are tied.

That is why it is so urgent that Congress proceed now to enact legislation to increase benefits and to extend the period of payments. Since this bill provides Federal funds to pay the increased benefits until a year from July, it will give the States plenty of opportunity to bring their own laws up to the new standards.

They will be required to do so by the time limit set in this bill. For it is one thing for a State legislature under normal circumstances to fail to get around to the issue of increasing benefits; it is another for a legislature to face the prospect of having higher benefits provided by the Federal Government reduced as of a certain date by reason of the State's inaction. Once our workers have become used to the higher benefits provided in this legislation, they will be in a position-they and the businessmen and others who benefit from adequate standards of unemployment compensation—to require State legislative action to continue benefits at those new levels.

H. R. 9430 is, by and large, an excellent bill. I urge the support of this committee in approving it and launching it on the way to Congressional enactment. It fits in so closely with recommendations made by President Eisenhower that I am sure he would be glad to sign it into law-if we can just get it through the House and Senate.

STATEMENT OF CONGRESSMAN THOMAS J. LANE (DEMOCRAT, MASSACHUSETTS) FAVORING H. R. 9430 A BILL TO PROVIDE REINSURANCE GRANTS TO THE STATES, TO REVISE, EXTEND, AND IMPROVE THE UNEMPLOYMENT INSURANCE PROGRAM, AND FOR OTHER PURPOSES

No jobs? More unemployment compensation. From its lack of leadership, and decision, in failing to respond to the distress calls from labor-surplus areas, the Federal Government betrays a callous disregard for a very human and critical problem.

It is no secret that a number of areas have been suffering from critical unemployment for years.

When unemployment compensation runs out and there are still no jobs what then?

The Federal Government looks the other way.

At last we have a bill before the Committee on Ways and Means to provide greater security against unemployment that cannot be brushed aside as a matter of minor concern.

I represent a district that has had a very substantial surplus of labor for several years.

The above statement is not open to opinion or interpretation.
It is a very serious fact.

We have importuned the Government time and again to extend some help. We have asked for a program to stockpile goods in order to keep industries going. We have tried to get United States contracts routed to jobless areas. We have suggested that military and atomic installations be built in such localities. We have shown how Federal loans in part to industrial development committees, would spur the building of new and modern plants to attract diversified industries and create jobs.

No constructive help has been forthcoming.

H. R. 9430 *** recognizes the danger signals that have been blinking from labor surplus areas *** as well as the need for improving Federal standards for unemployment compensation in relation to the Nation as a whole.

None too soon.

By the end of May, 51 major labor markets were listed as having a "substantial surplus" labor force, an increase of 16 over the previous report.

Plus *** 73 smaller areas.

What happens when claims are exhausted, as they are within 16 weeks in some States?

What does a person do who is laid off in an establishment that is not covered by unemployment insurance?

These questions can only be answered in their full meaning by the individuals and families who suffer from unemployment.

To a lesser extent, they have a bearing upon the economy.

With overtones of challenge to free enterprise and representative government * * * testing whether one or the other or both *** can solve the fundamental problems of *** today.

On their own *** a number of States have increased benefits *** and have extended coverage *** but there are laggards who "freeze" against

progress.

It was understandable * * * 19 years ago, when there were no precedents in to guide us***that we should proceed carefully at the start.

Now, therefore, there is no excuse for maintaining a “split" program * * * some covered, and some uncovered.

Every person having one or more individuals working for him is an employer in exactly the same sense as a huge corporation is an employer. The difference is one of degree, not of kind.

Furthermore, unemployment compensation payments, rigid in amount, have fallen behind wages and the cost of living.

Again, the evidence from distressed areas, proves that the maximum duration of benefits is not long enough to enable the unemployed to search for jobs that are not available in their city or town.

Finally, although it is not incorporated in this bill, we must bear in mind the further necessity of extending coverage to employees of the Federal Government, to be consistent with the purpose and the goal of unemployment compensation. There is no sound reason for "economic segregation" in this field.

Any person who works for a living is entitled to insurance that will protect him *** in some measure *** for unemployment that is beyond his power to prevent.

No one State *** high or low *** can set the standard for the Nation. That is the function of the Federal Government.

A well-rounded unemployment compensation program * * * both as to coverage and benefits *** is inevitable.

No free government could survive if it continued to ignore these imperatives. We are well advised * * * by an overwhelming majority of the American people to make progress in strengthening unemployment insurance * * * at this

session.

STATEMENT BY CONGRESSMAN JOHN LESINSKI, DEMOCRAT, OF MICHIGAN, ON UNEMPLOYMENT COMPENSATION LEGISLATION-EFFECTIVE ACTION AGAINST RECESSION

I urge this committee to act favorably at this time not only on the bills it originally intended to take up in these hearings but also on H. R. 9430, the Forand bill which I have joined in cosponsoring.

At the time these hearings were scheduled, the Forand bill had not been introduced. The committee announced it was taking up a series of measures of limited scope, none of which would increase benefits or extend the period of benefit payments. The Forand bill does both of those essential things, and therefore deserves and requires attention at this time.

For these are vital needs for our economy.

To add additional people to the roles of covered employment, making them eligible for unemployment compensation, is a worthwhile step, and I support that. In Michigan, it will mean the addition of several hundred thousand workers not now covered by unemployment compensation-231,098 employees working for some 88,000 employers. Also, covering in Federal employees, who presently have no protection of this kind, would add 38,600 more Michigan workers to the rolls.

The bills that would accomplish these purposes deserve support from every Member of Congress, both because they are good legislation in themselves and also because they would further strengthen our defenses against reduced purchasing power and more recession.

But these things only begin to skim the surface of a deep problem. I am referring to the problem created by from 3 to 31⁄2 million unemployed in this Nationusing the most conservative Government statistics, and the fact that the much heralded business upturn seems terribly slow in coming about. Being optimistic about the future is a good American habit. action to bring a better future about. We don't applaud inaction in time of emergency.

But we like to see

The

And, gentlemen of this committee, we are in a real economic emergency. Unemployment in Michigan has increased about 400 percent in 1 year. Detroit area has been particularly hard hit. We are used to periodic fluctuations in employment in our area due to the nature of the automobile industry and related industries; a plant will shut down for some weeks for retooling or other purposes, and we're somewhat used to that.

But let me tell you how serious the situation has become. Today, when employment rises 2,000 in the Detroit area in a 3-month period, it is big news. It gets headlines. That's because we have somewhere around 135,000 workers walking the streets looking for jobs. That is in the Detroit area alone. In Michigan, it's around 208,000.

In connection with what I said earlier about broadening unemployment compensation coverage, as proposed in many of the bills before you, about 100,000 of our unemployed in the State are not on the unemployment-compensation rolls. Some of them are not eligible; others have exhausted their benefits.

The tragedy of this situation is that much if not most of this unemployment is of a long-term nature. During the first quarter of this year, 23,200 workers in Michigan exhausted unemployment-compensation benefits. On the average, each was unemployed for 17 weeks before exhausting benefits. We don't know how much longer the typical one remained out of work, but in a declining job market and under normal seniority rules, those first off the job would be the last to go back. It is in consideration of this unfavorable situation that I support the proposal of the Forand bill for extension of benefits to cover a maximum period of 39 weeks. These people must pay rent or pay on the mortgage whether they have jobs or not. Unless we are prepared to say that our major industrial areas are on the long-range_decline and I completely deny that we aren't going to suggest to our unemployed that they move out of our industrial centers. So they have to pay rent. And they must eat and feed their families. How do they do these things with no income?

Now as to benefits: the present maximum primary benefit in Michigan is $30 a week for a maximum of 26 weeks. This is well below the reasonable level of benefits suggested not only in the Forand bill but in President Eisenhower's various commission studies and reports to the States on this matter. He and his advisers have suggested primary benefits equal to one-half a man's regular pay, up to a maximum of two-thirds of the particular State's average weekly wage. In Michigan, our skilled workers have enjoyed good wages and the average weekly wage is above $83 a week. That means, the maximum primary benefit, as recommended by the administration itself, should be $56 a week. But it is now only $30.

I am disappointed that the individual States have not all acted to put into effect the benefit levels the President and his commissions and advisers suggested. In fact, no State has done so. I am further disappointed that in view of this fact, the President himself did not send recommendations up here to the Congress to enact such a program nationally, as an antirecession measure.

Many of us waited patiently for some such action. When it was not forthcoming, we joined with Congressman Forand to put in our own bill to accomplish this. We are convinced that steps must be taken now-effective and strong steps-to reverse the trend toward more joblessness and lower production. Many of us on the Democratic side have introduced bills to strengthen the economy. Those bills are pretty much bottled up while the administration marks time, and while the Congress heads for adjournment.

Since you are taking up this matter of unemployment compensation-opening up the law to needed changes then I urge that you do a thorough job and revise the benefits and coverage and duration of benefits to provide our people with some real protection against want and suffering resulting from unemployment.

Otherwise, more of our industrial centers will go down that sad path to a group IV labor surplus area, and pretty soon every part of the country will be heading into a distressed category. Here is one way to stop that unhappy march to distress, for it is based on reduced purchasing power.

Attached is a table which I have received from the Labor Department of their most recent figures of those receiving unemployment benefits, those exhausted, and initial claims.

Number of initial claims, insured unemployment and number of beneficiaries who exhausted their benefit rights in Michigan, January 1953-May 1954 1 1

STATEMENT OF ROBERT H. MOLLOHAN, REPRESENTATIVE FROM THE FIRST CONGRESSIONAL DISTRICT OF WEST VIRGINIA, IN SUPPORT OF H. R. 9430, To REVISE, EXTEND, AND IMPROVE THE UNEMPLOYMENT COMPENSATION PROGRAM Mr. Chairman and members of the committee, thank you for this opportunity to present my views with regard to the important legislation which this committee now has under consideration. In this present era of economic uncertainty, unemployment insurance is proving a vital factor in the stabilization of the national economy. Its benefits, however, obviously fall far short of today's needs and I heartily commend this committee for its recognition of this fact, as evidenced by these hearings directed toward remedying the program's shortcomings.

In the 18 years during which the unemployment insurance program has been operating, it has clearly demonstrated, even to its most uncompromising opponents the soundness of both the economic principles and the humanitarian purposes which inspired the original legislation. This is no better exemplified than by the comments of the President in his Economic Report to the Congress this year:

"Because the floor of security to the individual has been built primarily upon welfare considerations, its contribution to the economic progress of the United States has not been adequately appreciated * * * Unemployment insurance is a valuable first line of defense against economic recession."

Further to support this generally changed attitude toward the philosophy of this program, it is also interesting to note that in the administration's testimony presented before this committee on June 8, 1954, by the Under Secretary of Labor, it was said:

"I need hardly point out that unemployment benefits are now universally accepted as a means of slowing up the forces that go to make a depression in periods of falling employment of workers. The community benefits because such protection increases the effectiveness of the unemployment insurance program in providing a cushion against declining purchasing power.'

Since, then, there is now mutual agreement by both political parties regarding the importance to the national economy of the unemployment insurance program there remains only the need to examine, with equal impartiality, whether the program as it now stands is adequate to accomplish the dual purposes for which this legislation was originally enacted.

These dual purposes were, of course, to maintain a reasonably stable purchasing power within the community and to provide our workers and their families with a sense of security and a measure of protection--or insurance against the hazards of economic downturns with the inevitably attendant misery and hardship of involuntary joblessness.

If we accept as valid the original intent of the supporters of the Social Security Act of 1935 and of State laws enacted in conformity therewith-which was to provide unemployment compensation payments equal to at least 50 percent of fulltime weekly wages, up to a maximum of two-thirds of such wages-a comparison between average weekly benefits and average weekly wages today offers convincing proof that the current unemployment insurance program is on the whole woefully inadequate. It is neither sufficient to sustain the average wage earner's family over a period of joblessness-nor is it adequate to maintain within the community the consumer purchasing power which is essential to bolster its economy over a period of economic recession.

In support of these statements, I offer for this committee's consideration the following facts:

In the year 1939, 48 of the States and Territories provided a maximum payment in excess of 50 percent of average weekly wages. Today, only 3 States pay over 50 percent, the remaining 45 having benefits ranging from 20 to 49 percent of weekly wages. But during this same period, average wages increased from an index of 100 to 164.2, while average weekly unemployment benefits rose to only 121.2.

In the month of April 1954 the national average weekly benefit for total unemployment was $24.79 (inclusive of dependents' allowances in the 11 States which have a provision for such allowances in their unemployment insurance programs). This represents 33 percent of the national average weekly wage.

In West Virginia, where unemployment for the week ending June 5, 1954, stood at 12.9 percent of total insured employment, the average weekly benefit was $23.48, representing approximately 34 percent of the average weekly wage in the State.

Meanwhile, the number of claimants who have exhausted their benefit rights during the first quarter of 1954 were up 64 percent from the total for the comparable period in 1953. This, however, represents only those workers whose unemployment began in the June-July period of 1953, when employment figures were still soaring. In March 1954 the national total was 96 percent above the March 1953 figure. But, again, these claimants represent those who lost their jobs between September and October of 1953 and before what I hope will be the peak of our current unemployment period was reached.

In West Virginia there was a total of 2,519 exhaustions in the month of May 1954 as compared with 907 for the corresponding month in 1953.

These facts and figures, it would seem to me, offer clear and incontrovertible proof that immediate legislative action is urgently needed to increase both the benefit payments and the duration of the period of payment in order that the unemployment insurance program may realistically carry out the intent and purpose for which this legislation was originally enacted. It is, therefore, my most earnest hope that this committee will give full and favorable consideration to H. R. 9430, the bill introduced by our distinguished colleague, Mr. Forand, which I have been most pleased to cosponsor and which encompasses the improve. ments so greatly needed in our Social Security Act.