(The statement referred to is as follows:)

STATEMENT OF JEFF KIBRE, WASHINGTON REPRESENTATIVE INTERNATIONAL LONGSHOREMEN'S AND WAREHOUSEMEN'S UNION, WASHINGTON, D. C.

The International Longshoremen's and Warehousemen's Union welcomes this opportunity to testify in support of legislation to amend the Longshoremen's and Harbor Workers' Compensation Act.

Some 500,000 workers are covered by the Longshoremen's Act. The principal groups are engaged in maritime employment. These include the following categories; longshoremen or stevedores, ship repairmen, ship servicemen, harbor workers, and other workers on the navigable waters of the United States but excluding seamen. The Longshoremen's Act is also the basic workmen's compensation law for employees privately employed in the District of Columbia; and it is the basic law covering employees of contractors holding contracts with the Government whose operations take place outside continental United States. As the representative of over 16,000 longshoremen and related crafts employed on the west coast, in Alaska and Hawaii, we have continuously sought to keep this act in harmony with changing conditions. Our approach was well summarized in 1948 by William McCauley, Director, Bureau of Employees' Compensation, when he said:

“*** workmen's compensation legislation, to properly serve the purpose for which it is intended, should be reviewed from time to time in the light of changes in the level of wages and earnings. Compensation for disability is intended to replace the wage lost by the injured worker while incapacitated for work due to his occupational injury. The rate of compensation should have a realistic relationship to the average wage received by the injured person." Improvements in the benefit features of the act are long overdue. When the act was first passed in 1927 it provided the average disabled longshoreman with benefits equal to two-thirds of his weekly earnings. Today, under the act, the average longshoreman can only obtain little more than one-third of his weekly wages.

With the exception of a moderate revision of benefits in 1948 and technical amendments in preceding years, the act remains as written in 1927. This not only accounts for the failure of the act to carry out its original intent, it also points up the need for action by this Congress.

PROPOSED AMENDMENTS

There are presently pending before this committee some 19 House bills to amend the Longshoremen's Act. In addition, this committee has before it a bill S. 2280-which was unanimously approved by the Senate last July 18. This latter measure was cosponsored by 23 Senators.

It will be noted that 14 of the House bills, like S. 2280, propose to revise the benefit rates in the Longshoremen's Act. These include the following: H. R. 621, 2033, 2841, 5520, 5757, 7153, 7215, 7216, 7237, 7243, 7903, 8175, 9147, 9356. It will also be noted that these bills are substantially similar in that they propose to increase the benefit rates to the same levels. Moreover, the increases proposed are generally the same as those included in the Senate-passed bill, S. 2280.

Of the remaining 5 bills, one measure, H. R. 5129, is similar to certain provisions of S. 2280 relating to the special fund under the Longshoremen's Act. H. R. 8333 proposes to amend section 41 of the act for the purposes of strengthening provisions relating to a national safety program. H. R. 2032 would revise the system under which doctors are selected to grant free choice of doctor. H. R. 5357 would strengthen provisions relating to third-party liability. The ILWU has long been in favor of legislation to strengthen the safety provisions of the Longshoremen's Act and to provide for a system of free choice of doctors. We also favor, in principle, the proposal contained in H. R. 5357. At the present, however, we would prefer that the Congress concentrate on the most pressing issues-the low benefit rates.

With regard to the question of selecting doctors, we have recently agreed on certain measures with the Bureau of Employees' Compensation, which admin

1 Hearing before a subcommittee of the Senate Committee on Labor and Public Welfare, 80th Cong., 2d sess., April 13, 1948.

isters the Longshoremen's Act, to eliminate abuses arising under the present system. We are hopeful that these measures will help bring about a practical application of the principle of free choice of doctors, at least to the extent of having panels available. The working out of this program will also permit a further study of this problem and thereby establish a foundation for realistic legislation in the future.

In regard to the question of an improved safety program in the longshore industry, we are happy to call attention to the fact that the Bureau of Labor Standards has recently inaugurated a program based on voluntary acceptance of minimum standards of safety on the job. Such a code of minimum standards was recently approved on the west coast by the ILWU and the PMA, acting for the shipowners. We feel that this program is a step in the right direction and that it should be given ample opportunity to be tested in the field before additional legislation is considered.

The most immediate and pressing problem is to alleviate the hardships caused by the low-benefit rates in the Longshoremen's Act. The ILWU feels that the proposals contained in S. 2280 will bring benefit rates substantially in line with current conditions. And since this bill is generally similar to the 14 House measures concerned with the question of rates, we urge prompt consideration and approval of S. 2280.

My discussion is, therefore, directed at the provisions of the Senate-approved bill. I shall deal with the main features of S. 2280; namely, weekly benefits, the waiting period, scheduled indemnities, death benefits, the maximum limitation on compensation, and liberalization of the special fund.

WEEKLY MAXIMUM AND MINIMUM BENEFITS

In reading the Longshoremen's and Harbor Workers' Compensation Act, we see repeatedly stated the principle that benefits should be equal to 66% percent of wages. Note for example, sections 8 and 9. At the same time, however, we find that section 6 (b) completely nullifies this principle. Section 6 (b) provides that weekly benefits shall not exceed $35 and that compensation for total disability shall not be less than $12 per week. There is also a proviso that if average weekly wages are less than $12 per week, compensation for total disability shall equal the average wage. Section 6 (b) effectively controls the rate of benefits and renders meaningless the proposition that benefits should be equivalent to 66% percent of average wages.

S. 2280, along with 13 of the pending House bills, proposes to increase the maximum weekly benefit from $35 to $50. This bill also proposes a minimum benefit of $18 weekly.

The ILWU has en 'orsed the $50 maximum as a solid step in the right direction. Such a rate is more than justified if we consider the original intent of the act in relation to current wage levels and the benefit standards embodied in the 1949 amendments of the Federal Employees' Compensation Act. As a matter of fact, we find that a weekly benefit of more than $60 is warranted.

In the original act as passed in 1927, a ceiling on weekly benefits was set at $25. An examination of the hearing records shows that this ceiling was set on the basis that the average longshoreman would be eligible for benefits equal to 66% percent of his wages. This meant that the repeated use of this percentage figure in the act had meaning with refernce to the benefit structure.

Data available in 1927 before the House and Senate Labor Committees, showed that most longshoremen were earning much less on the average than $37.50 a week-the figure used to establish the $25 ceiling. For example, in hearings before the House Committee on Education and Labor it was pointed out that only 9 percent of the men employed in the port of Seattle, one of the few areas which enjoyed regularity of employment, would be entitled to the $25 maximum.' Subsequently, in 1931, data released by the Bureau of Labor Statistics showed that longshore earnings averaged little more than $30 weekly and pointed out that employers and the union in New York had agreed on a figure of average weekly earnings of $30 as a basis for computing accident compensation under the law."

In 1948, after a long period of rising wage levels, the maximum weekly benefit was increased to $35. Both the House and Senate reports on the 1948 amend

Testimony of John Ambler, of the Seatte Waterfront Employers' Association, before House Committee on Education and Labor, on S. 3170, 69th Cong., 2d sess. BLS Handbook of Labor Statistics, 1931 edition, Bull. 541, September 1931, p. 784.

ments made it clear that the increased weekly benefit did not measure up to prevailing wage levels. Liberalization of other features, notably the schedule of indemnities, was proposed in order to bring "the act into relative harmony with current economic facts." * However, the liberalized indemnity schedule was dropped before the amendments obtained final approval. In effect, the 1948 amendments represented a downpayment in bringing the act up to date with that period.

Since 1948, longshore wage rates have continued to rise steadily. Hourly rates now have reached a level approximately 3 times the average 75 cents an hour paid in 1927-when the original ceiling of $25 was placed on weekly benefits.

Complete data on prevailing average earnings in the longshore industry are admittedly not available. However, satisfactory figures are available regarding current and recent earnings on the Pacific coast. They are maintained by the Pacific Maritime Association and published monthly in the PMA Research Bulletin. There is attached hereto, as exhibit I, a table showing average weekly hours and earnings for all Pacific coast ports for the years 1953, 1954, and 1955. Because of hiring hall procedures, requiring equal division of work opportunity, the earning averages are truly indicative of what the typical longshoreman makes. It should be noted, however, that these figures include the earnings of casuals, who work intermittently during periods of peak operations. The figures are computed by dividing aggregate payrolls by the number of men working. The statistical consequence is that the figures understate the average earnings of registered longshoremen. The amount of understatement is unknown though probably small.

Exhibit I shows that weekly earnings averaged $97.86 in 1953, $94.21 in 1954, and $101.60 in 1955. With allowance for the understatement referred to above, it is quite appropriate to say that weekly earnings in the Pacific coast are averaging above $100.

Examination of available data for the east coast points to an estimated average weekly earning of approximately $92. When this is combined with the west coast, the average weekly earning for these 2 basic areas is probably in the neighborhood of $95. It is unlikely that the inclusion of other ports such as those in the gulf, would pull this average below $90.

It follows from these figures that the maximum weekly benefit rate under the Longshoremen's and Harbor Workers' Compensation Act should be at least $60. This points up the fact that a $50 maximum, as proposed in S. 2280, represents only a moderate application of the 66%-percent principle.

A more liberal application of this same principle was approved by Congress in 1949 when far-reaching changes were made in the Federal Employees' Compensation Act. For example, the ceiling on maximum monthly benefits was increased from $116.66 to $525. It should be understood that the $525 monthly maximum makes it possible for all employees earning up to $787.50 monthly to receive benefits equivalent to two-thirds of their wages. This means that the overwhelming majority of Government employees are covered by the 66%-percent principle.

The basic policies behind the 1949 amendments to the Federal Employees' Compensation Act are clearly stated in the report of the House Committee on Education and Labor. In introducing this legislation the House report said: "Any flat monthly maximum, the effect of which inevitably in some cases prevents the employee from receiving a fair proportion of his wage loss in total and partial disability cases, is, by its very nature, unrealistic, and inequitable." It is submitted that what Congress provided for Federal employees in 1949 should now be applied to the Longshoremen's and Harbor Workers' Compensation Act. Actually the proposed ceiling of $50 does not go as far as the maximum in the Federal Employee's Compensation Act. In practice it will mean that the overwhelming majority of longshoremen will be entitled to less than 66 percent of their wages. With respect to the minimum benefit of $12 for total disability, as presently set forth in section 6 (b), it will be noted that S. 2280 proposes an increase to $18. It is urged that conditions more than justify such a rate.

The minimum benefit is designed primarily to provide protection for casual workers. It will apply only when weekly earnings are less than $27. If weekly earnings are less than $18, workers will only be entitled to their actual average earnings in the event of total disability.

S. Rept. 1315, 80th Cong., 2d sess., p. 3. H. Rept. 2095, 80th Cong., 2d sess., pp. 98-99. & H. Rept. 729, 81st Cong., 1st sess., p. 9.

WAITING PERIOD AND RETROACTIVE BENEFITS

Section 6 (a) of the Longshoremen's Act provides for a waiting period of 7 days before disabled workers are eligible for benefits. It also provides that in case the injury results in disability of more than 49 days, the compensation shall be retroactive to the date of disability.

S. 2280, along with 12 of the House bills, proposes that the waiting period shall be reduced to 3 days. The Senate bill also proposes that benefits shall be retroactive to the date of injury if the disability exceeds 28 days. It is urged that the proposal in S. 2280 is in line with general compensation practices and worthy of approval.

For many years there has been a growing trend in favor of reducing the waiting period or eliminating it entirely. As shown in the table which is attached as exhibit II, 1 west coast State, Oregon, has no waiting period; 8 States and Alaska have a waiting period of 3 days; Florida and Puerto Rico have 4 days; 4 States and Hawaii have 5 days; Illinois has 6. Altogether, 15 States and all 3 Territories have shorter waiting periods than that now provided in the act.

The Federal Employees' Compensation Act has a 3-day waiting period. When this act was amended in 1949 an unsuccessful attempt was made to eliminate the waiting period entirely.

In Canada, every Province has a waiting period shorter than in our Longshoremen's and Harbor Workers' Compensation Act.

With regard to retroactive compensation for the waiting period, the Longshoremen's Act is relatively even more backward, as shown in the table attached as exhibit III. Of States having this type of provision, only California and the District of Columbia have the 7-week provision-all other States have shorter periods.

Eleven States and Puerto Rico pay compensation for the waiting period after 2 weeks or less. Four States, Hawaii and the Federal Employees' Compensation Act, pay after 3 weeks.

In Canada, every Province has a more liberal provision than the Longshoremen's and Harbor Workers' Compensation Act.

As long ago as 1948, the committee on workmen's compensation of the National Conference on Labor Legislation [15th conference]-a conference sponsored by the United States Department of Labor and attended by State labor departments personnel from all over the country-recommended that the waiting period be compensated for after 14 days.

SCHEDULED INDEMNITIES

Subparagraphs 1 through 12 of section 8 (c) of the Longshoremen's Act provide a specified number of weeks of compensation when there is permanent partial disability consisting of a total or partial loss, or loss of use of, certain members of the body such as arms, legs, hands, feet, et cetera. The compensation provided in each category is considered as an indemnity. There has been no change in this schedule, other than a technical amendment in 1934, since the act was written. The only liberalization came in 1948 when the dollar value of weekly benefits was increased.

Section 2, of S. 2280, proposes to increase the number of weeks of compensation in each subdivision of this schedule by approximately an aggregate of some 12 percent. This proposed schedule is identical to the indemnity bene fits now contained in the Federal Employees' Compensation Act. Moreover, this schedule was approved by both the Senate and House during consideration of amendments to the Longshoremen's Act in 1948. As a result of faulty language the new schedule was dropped in conference.

More liberal payments for specific injuries are particularly justified for longshoremen. Present provisions granting 280 weeks' compensation for loss of an arm, or 248 weeks' compensation for loss of a leg, are not only inadequate for any worker but even more so for longshoremen. Longshoremen use their arms and legs in heavy manual labor and in the event they suffer loss of these members, they can no longer be longshoremen. The loss of an arm or leg, which would not totally handicap another worker in his regular occupation, places a longshoreman in the position of seeking other employment. Liberalization of the indemnity schedule would bring the present act more in line with modern concepts of workmen's compensation. On this subject the Secretary of Labor recently pointed out:

"We should attempt not only to compensate the injured worker, but to restore him to his former producing capacity. We no longer think of workmen's compensation as a private contest between employer and employee but as a type of income insurance. No longer do we think of workmen's compensation as a cash payoff but instead as a means of restoring not only the worker's wages but the worker himself." "

COMPUTATION OF DEATH BENEFITS

The basis for computing death benefits under the present act is set forth in section 9 (e). This section provides that in computing death benefits the average weekly wages of the deceased shall be considered to have been not more than $52.50 nor less than $18. It also contains a proviso that total weekly compensation shall not exceed the weekly wages of the deceased. It will be noted that the maximum and minimum figures used in this section represent presumed wage levels arrived at on the basis of the maximum and minimum weekly benefits set forth in section 6 (b). [For example, $35 is two-thirds of $52.50.]

Section 4 of S. 2280 would correlate section 9 (e) of the act with the proposed new maximum and minimum weekly benefits. Under S. 2280 death benefits would be computed on the basis that the wages of the deceased shall be considered to have been not more than $75 nor less than $27.

MAXIMUM LIMITATION ON CERTAIN BENEFITS

Section 14 (m) of the act provides limitations upon total compensation payable for certain classes of disabilities. There is no limit on cases of permanent total disability or death.

Section 5 of S. 2280 proposes to repeal the limits now provided under section 14 (m). This proposal has substantial merit and we strongly urge its approval. It will be noted that under section 14 (m) there is a limit of $11,000 for compensation payable for cases of temporary total disability arising under section 8 (b), and for all classes of disabilities arising under section 8 (c), excepting subdivision 21. It will also be noted that most of these categories have built-in limitations. For example, the subdivisions under section 8 (c) set forth a specified number of weeks of compensation for loss of a member of the body or impairment of any function of the body. The only open-end provision here is the period of temporary total disability. Obviously, patients are under medical care during this period and, therefore, have little opportunity to prolong, unduly, the healing period. It will also be noted that subdivision 21 of section 8 (c), which is under a limitation of $10,000, provides for supervision of the affected person by the Deputy Commissioner of the Bureau of Employees' Compensation. These built-in limitations should provide ample safeguards against abuses. On the other hand, the flat dollar limitations can only result in arbitrary ceilings upon compensation.

In recent years there has been a growing trend against arbitrary limitation. Many States have eliminated such provisions. The Federal Employees' Compensation Act has never contained a limitation upon total compensation and this law has stood the test of time for many hundreds of thousands of Government employees.

It must also be pointed out that an increase in the maximum weekly benefit, along with an increase in the schedule of indemnities, will be sharply limited unless section 14 (m) is repealed or revised substantially. An example will establish this beyond question. Let us take the case of a worker suffering loss of an arm. Under the proposed new schedule of indemnities this worker would be entitled to 312 weeks' compensation at the prescribed weekly benefit, plus additional compensation for the healing period. If the maximum weekly benefit is $50, the worker would be entitled to 312 weeks' compensation at $50 a week, or a total of $15,600. In addition he would be entitled to an appropriate number of weeks of compensation at $50 weekly for the healing period. In other words, unless the limit of section 14 (m) is at least $18,000, an increase in the maximum weekly benefit and the schedule of indemnities, would be of no benefit.

It is urged that the most equitable basis for operation of the act will be achieved if section 14 (m) is repealed outright.

• Annual Report of the Secretary of Labor for 1954, p. 17.