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CHART II

TOTAL INCOMES OF VETERANS RECEIVING VA
SERVICE-CONNECTED DISABILITY COMPENSATION
COMPARED WITH INCOMES OF ALL VETERANS
Median Incomes, Including VA Compensation,

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income is about $400 lower; in the age group 45 to 54 this difference is somewhat less-$275; while in the age group 55 and over the difference is about $430. (For total income by degree of disability see chart III.)

Earned income. In addition to other factors, it is quite plausible that the disability might be responsible for the reduction in earning capacity of this group. The figures show that for all ages combined, the median earned income of veterans with service-connected disabilities is about $365 less than the median in

CHART III

TOTAL INCOMES OF VETERANS RECEIVING VA
SERVICE-CONNECTED DISABILITY COMPENSATION

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come of nondisabled veterans. This differential changes with age. With respect to veterans who engaged in training under Veterans' Administration auspices, the median income of those in ages under 35 exceeds that of veterans without such training; however, in the older ages the reverse relationship prevails. For all ages together the 1955 median incomes of those with training were about equal to those without training.

Occupational status.-The proportion of professional, sales, operative and kindred workers, and laborers is higher for non

disabled veterans in comparison with disabled veterans. On the other hand, disabled veterans have a higher proportionate representation among managers, officials, and proprietors, (except on farms); clerical and kindred workers, service workers and farmers, and farmworkers. These excesses and deficiencies, however, show some reversal in specific age goups.

Employment. The above figures on occupational distribution relate only to veterans who are employed and may be affected by the significant differences in the employment ratio of disabled and nondisabled veterans. In October 1955, 83 percent of the disabled veterans were employed as compared to 93 percent of the nondisabled according to census data. The proportion who indicated that they were unable to work was 3.7 percent in the disabled group as compared to only seven-tenths of 1 percent in the group not receiving Veterans' Administration compensation.

Employability was significantly different as between World War II veterans and the much older World War I veterans. Among the World War II group, 97 percent of the nondisabled were employed; only 90.5 percent of the disabled. Of those, two-tenths of 1 percent of the nondisabled were unable to work as compared to 2.2 percent of those receiving compensation. Of the World War I veterans, however, only 52 percent of the disabled were employed as compared to 80 percent of those not on the Veterans' Administration compensation rolls. Significantly, 12 percent of the disabled indicated that they were unable to work as compared to only 4 percent of the nondisabled veterans of that war. This indicates that with growing age, disability may have an increasing effect on employability. It may also reflect to some extent the fact that older veterans, whose family responsibilities have been met, and who have regular assured incomes from the Government, tend to withdraw from the labor market earlier in life. This is indicated by the fact that nearly 30 percent of the disabled World War I veterans have left the labor force as compared to only 13 percent of the nondisabled.

In terms of extent of employment, the disabled veterans again compared unfavorably with the nondisabled. While 75 percent of the nondisabled worked fulltime, for 48 to 52 weeks during the 12 months preceding October 1955, only 61 percent of the disabled veterans were in this category.

Days lost by illness.-For those veterans who worked, the survey carried out through the cooperation of the Census Bureau showed that the extent of illness was significantly higher among the disabled. Of the nondisabled veterans, 71 percent did not lose any time from illness, 40 percent of the disabled; 16 percent of the nondisabled lost less than 10 days, 19 percent of the disabled; 13 percent of the nondisabled lost 10 or more days from illness, 23 percent of the disabled.

With respect to hospitalization, the experience among the disabled was also heavier. Of the nondisabled, 8 percent were hospitalized during the year preceding October 1955; threefourths of these took care of their own hospitalization. Among the disabled, 16 percent were hospitalized, and over half of these (55 percent) took care of their own hospitalization.

GUIDEPOSTS FOR IMPROVEMENT

The Basic Purpose of Disability Compensation

Foundations for rating and compensation.-Disability compensation is a complex and difficult subject because it deals with a wide range of human factors. It is clearly a national desireand fully within our national economic capacity—to do justice by those who were injured or disabled as a consequence of their military service. However, a formidable question arises as to what basis for compensation is just and equitable for all.

Many different factors can be identified as possible bases for compensating disabled veterans. These include: impairment of earning capacity, loss of physical integrity, shortening of life, social inconvenience, disfigurement, pain, suffering, anguish, and possibly others. Most of these elements may be identified in one or another of the various systems for awarding damages or compensating for disability. In the field of tort claims or common

lawsuits, for example, an increasingly broad range of factors is being reflected in the award of damages.

In the Veterans' Administration system, the law specifies that the percentage awards are to be based on average impairment of earning capacity. This recognizes that the fundamental purpose of disability compensation is to assure the disabled veteran and his family the essential means for economic maintenance. In actual administration, however, it is clear that the Veterans' Administration has not been able to adhere to this basic criterion as set forth in the law. Moreover, no studies have been made of the actual impairment of earning capacity among the disabled, and the basic standard used has been geared to the impairment of the individual who performs manual labor. Thus, since functional physical capacity is a major factor for a laborer, the Veterans' Administration standard has been predominantly a physical disability standard.

Anatomical disablement is more clearly identifiable in the supervening statutory awards which have been enacted into law over many years and which override or supplement the basic percentage awards. From the economic standpoint, statutory awards conform more to the pattern of a bygone generation when anatomical disablement had a much greater effect upon employment factors than today. Accordingly, statutory awards inject an unduly heavy element of compensation for purely physical factors. Similarly, percentage awards for such injuries as severe facial disfigurement are also a recognition of the physical factor. The compensation of minor wound scars at 10 percent cannot be related to impairment of earning capacity and indicates that an allowance for pain and suffering has been included, possibly disfigurement as well. There is some indication that Veterans' Administration ratings make allowance for shortening of life and social inconvenience resulting from disablement. Additionally, the response of medical specialists to the Commission's questionnaire showed that many of them believed some ratings included factors other than loss of earning capacity.

While there are some important exceptions, it appears thatdespite the inadequacies discussed above-on the whole veterans' compensation tends to work out in such a way that the

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