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wage was, what the average wage of the claimant was when he applied to receive benefits, what percentage of his wage he actually ended up getting in terms of unemployment benefits.

We have been constantly thwarted in that effort to find out what this claimant pattern looked like. They tell us they can't get it. It seems silly to me that they can't get that information.

Would you gentlemen, as State administrators, have any difficulty in getting, within the next 30 or 60 days, information as to what the average wage of these people was that came in and applied for benefits, and telling us what percentage of that wage he actually got in an unemployment compensation benefit?

Mr. ROSBROW. If I can speak for my own State, we would have considerable difficulty. We could get it, but only in terms of the interrogation of the individual claimant. Our only tax return information is on a $3,600 tax base with a cutoff at $3,600. Some States have that information and some do not.

Mr. BYRNES. You don't find out whether the person was earning more than $3,600 in the course of a year?

Mr. ROSBROW. No, sir; not unless he has been cut off by virtue of the $3,600 limit and he files a protest in order to have his wages prorated.

Mr. BYRNES. But he has to come in and file a little information blank, doesn't he, telling how long he has been working and who he worked for and what he earned?

Mr. ROSBROW. No, sir. We have quarterly reports filed by employers based on $3,600.

But if the Congress asks for the information, we could, I suspect, find some way of getting it. You ask if it would be difficult in getting and it would be. It would not be consistent with our present-day pattern of operations.

Mr. HILL. May I comment on this briefly?

Congressman, some of the States do this as a matter of course. In my home State of Virginia I became very interested in knowing this particular claimant characteristic. I asked the Research Division of our Commission what kind of sample of the universe of claimants would be necessary to interrogate in order to determine this. In our case we used a 20-percent sample which I was told was sufficient.

Therefore, all we do is inquire of the claimant when he comes in to file his claim what are his normal wages. What he has been earning. Maybe he has had a couple of jobs. In most instances we are willing to accept the highest paid job he has most recently been on.

So we collect this information and have been collecting it for years, simply for our own information. I know a number of States do collect it that are interested. It is not a required matter, but simply one that we happen to be interested in.

I would say to you that we have not found it to be particularly burdensome in our case, nor something that would require great expenditure. I doubt that most of the States now collect this.

I would respond to you that in my opinion most of the States could do this if they were interested or if the information was desired. We in Virginia have felt that it was a very important factor. I might further state to you that we have found that the average wage of the covered worker in the State will run somewhere in the vicinity of $16

to $20 a week higher than the average wage of the person filing a claim for benefits. This is simply true in Virginia.

Are there other people around the table who can comment on this? Do you collect this information?

Mr. COFFMAN. Not on a full-time basis. We did through 1964, through the whole year, record the recent earnings of every claimant on his initial claim, so that we came out at the end of the year with something in the vicinity of about 100,000 items of information as to what claimants were formerly earning. We did this on a one-time basis. We do not do it regularly.

It can be done without much difficulty, either for a period of time or it could be done rapidly, if necessary.

Mr. BYRNES. It is really hard to get to the question of how successful we are in obtaining 50 percent of the average wage if you don't know what the guy's average wage ever was, isn't it?

Mr. COFFMAN. Yes.

Mr. BYRNES. Yet we say that is what we are trying to get to. In Delaware apparently they don't know what the average weekly wage is of their claimants because they have a cutoff.

Mr. ROSBROW. We know the average weekly wage of all workers but not for claimants.

Mr. BYRNES. That is why I say of the claimants themselves. That is why I get back to this question you are overlooking, this objective which I guess started during the Eisenhower administration, or maybe even before that, where this word went out to the States to encourage them to get a majority of their claimants receiving 50 percent of their wage.

Mr. COFFMAN. In the study we made we found that the claimants' average weekly wage was about $20 a week less than the average weekly wage in the State.

Mr. BROWN. Isn't it true, though, as Mr. Harding has indicated, that the wage of the claimant would tend to average during a period of high employment at the lower level than during a period of recession, so that this changes; whereas, the average worker wage would tend to be more stable?

Mr. ROSBROW. There would be wild gyrations. For example, in a small State like ours, a single industry or a couple of employers can skew the entire relationship. We had a second shift turndown at the Chrysler plant and a mass layoff at the General Motors plant. The following year I would suspect that the average wages of the claimants were considerably higher than the average wages of all employees. A year later it would have been exactly in reverse.

Mr. BYRNES. I can see where economic situations would change the nature of your claimants, but I can also see where the general economy of one State, being different than the general economic makeup of another State, will produce a different type of claimant.

Mr. ROSBROW. That is why we suggest the 50-percent formula and nothing more arbitrary than that.

Mr. BYRNES. But the point is, I think some of these figures seem to indicate that the 50-percent formula doesn't resolve many of the differences. It makes changes, there is no question about that. But I am talking about changes in the direction of curing the criticisms that people have, or of obtaining the objectives that are deemed desirable.

There is one study, Mr. Chairman, I would like to have put into the record. It is not so much a study as a conclusion and analysis. It is an analysis of a 50-50 formula proposed in the Federal Advisory Council's recommendation in 1958. The analysis was made by two members of the New York State Advisory Council.

I will read the first paragraph. The analysis refers to the Federal Advisory Council's recommendation that the average weekly benefits should be fixed at two-thirds of the State's average weekly wage:

This is intended to achieve the generally accepted goal that the majority of the claimants should receive a benefit rate equal to at least half of their individual weekly rate. If this standard of fixing the maximum weekly benefit amount is a percentage of the State's average weekly wage to be adopted, it is an unfortunate fact (apparently not realized by the proponents of this particular standard) that there would be great variation among the States in the percentage of claimants who would be stopped at the maximum weekly benefit rate.

Then a further paragraph in conclusion states:

Thus, the proposed Federal standard fixing the maximum weekly benefit rate in each State at a percentage of the State's average weekly wage (whether this percentage is 50 percent, 60 percent, two-thirds, and so forth) would not and could not achieve an equitable result among the States. The existing State differences would still be present. Uneven, inequitable treatment among the States would still prevail and this type of proposed Federal standard would not achieve uniformity even as the minimum benefit standard which proponents of the Federal standards seek to achieve.

The CHAIRMAN. Without objection, that may be placed into the record, the entire document, at this point.

(The document referred to follows:)

ANALYSIS OF THE FEDERAL ADVISORY COUNCIL RECOMMENDATION THAT THE MAXIMUM WEEKLY BENEFIT SHOULD BE FIXED AT TWO-THIRDS OF A STATE'S AVERAGE WEEKLY WAGE1

This is intended to achieve the generally accepted goal that the majority of the claimants should receive a benefit rate equal to at least half their individual weekly wage. If this standard of fixing the maximum weekly benefit amount as a percentage of the State's average weekly wage were to be adopted, it is an unfortunate fact (apparently not realized by the proponents of this particular standard) that there would be great variation among the States in the percentage of claimants who would be stopped at the maximum weekly benefit rate. This fact may be illustrated by the following data for New York and North Carolina, on the one hand, and Illinois and Ohio, on the other hand. In the fiscal year ending June 30, 1958, 16 percent of the claimants in North Carolina and 24 percent of the claimants in New York State were receiving the maximum weekly benefit rate. Obviously, in these two States the great majority (84 percent in North Carolina and 76 percent in New York) were receiving at least 50 percent of their weekly wage, since they were not subject to the maximum limitation. During the same period, in Illinois 84 percent of the claimants and in Ohio 79 percent of the claimants were eligible for the basic maximum weekly benefit rate. In these two States, only a minority (16 percent in Illinois and 21 percent in Ohio) were receiving at least half their weekly wage, since they were not subject to the maximum limitation.

Assume that the basic maximum weekly benefits were set at 50 percent of the average weekly wage in each State as the result of a Federal standard. (This is actually what the public and labor members of the Federal Advisory Council recommended for the first 2 years of Federal standards.) The effect of this proposal in North Carolina would actually be retrogressive, since the present maximum benefit rate in North Carolina is already 52 percent of the

1 Abstracted from the New York State Advisory Council's 1958 annual report.

State's average weekly wage. The present $45 maximum in New York State is 49 percent of the average weekly wage, so that the 50-percent standard would require New York to raise its maximum to $46 and there would be 22 percent of the insured claimants eligible for this maximum (as against 24 percent under the present $45 maximum). Thus, the effect of this Federal standard of 50 percent would be negligible in New York and North Carolina. In Ohio, if this standard were adopted a rough estimate indicates that 53 percent of the insured claimants would still be limited by the maximum benefit rate and most of these would be receiving less than half their individual weekly wage. Similarly in Illinois, about 50 percent of the insured claimants would still be subject to the new maximum and almost all of these would still be receiving less than half their individual weekly wage.

(Thus the proposed Federal standard fixing the maximum weekly benefit rate in each State at a percentage of the State's average weekly wage (whether this percentage is 50 percent, 60 percent, two-thirds, etc.) would not and could not achieve an equitable result among the States. The existing State differences would still be present. Uneven, inequitable treatment among the States would still prevail and this type of proposed Federal standard could not achieve uniformity even as the "minimum benefit standard" which proponents of Federal standards seek to achieve.)

The many improvements that have been made in the State laws over the last 20 years indicate clearly that the State agencies have the ability and the willingness to continue to improve their unemployment insurance programs without the extra whip of Federal minimum standards, which are difficult, if not impossible, to formulate in a way that would meet the varied economic conditions among the States in an equitable and effective fashion.

It is of the essence of the American spirit that when the needs and the facts about any problem are understood by the people of any community or State, the local governmental units will take the required action. To assume that only through Federal benefit standards can these local community problems be met, is to surrender our faith in this fundamental aspect of the American character. In the field of unemployment insurance there has been no showing of the necessity for this surrender.

Mr. BYRNES. One of the things we constantly hear talked about is that we have to do something to equalize the costs between the States. We have high-cost States and we have to do something so that some lower cost State is not taken advantage of and they are not losing employers.

I understand that that is one of the rationales underlying the proposal to impose more uniformity in the benefit levels. But if we took, as I have had done, the cost figures representing the benefit payable weekly to a laid-off worker whose average weekly wage is $120— regardless of what State he resides in-he would get $60 a week if we replaced half of his wages.

In Delaware today, this person, as I understand it, would get $50. Mr. ROSBROW. That is correct, Mr. Byrnes.

Mr. BYRNES. If we set the Federal standard, he would get $59.

Mr. ROSBROW. That is 1964. As of 1965 it would be exactly $60. Mr. BYRNES. As of 1965 ?

Mr. ROSBROW. Yes, sir.

Mr. BYRNES. The interesting thing here is that in Alabama, for instance, that person today would get $38, which is $12 less than he gets in Delaware. But we are talking about equalizing these employees of these claimants wherever they are. Under the new formula, that person would be raised to $44, but he would be getting $15 less, or $16 less, than he would if he was living in Delaware.

So as far as those two States are concerned, we don't get an improvement of the situation, do we?

Mr. ROSBROW. We get improvement in the plight of the Alabama worker to start with, sir.

Mr. BYRNES. But do you equalize it as far as Delaware? I assume Delaware is a high-cost State. Is it?

Mr. ROSBROW. As far as overall benefit cost?

Mr. BYRNES. Yes.

Mr. ROSBROW. No, sir. We are fortunate enough to have a very low level of unemployment.

Mr. BYRNES. As far as the benefit to the individual?

Mr. ROSBROW. Yes. However, sir, I use the term "equity," not equalization, and I think there is a difference. I am not trying to bandy semantics. In other words, I think we would improve the relationship in each case.

None of us would come here and suggest a uniform dollar amount for the United States because this would not make good sense. Certainly in an industrialized area like northern Delaware, in particular, the cost of living would be considerably higher, and the meeting of nondeferrable expenses considerably more costly than in the State of Alabama. We do not propose that there be a rigidity, but only a floor, sir.

Mr. BYRNES. But we were talking on the advisability of looking at the individual claimant and to create equity, so that if he got unemployed in Michigan, in Wisconsin, in Delaware, or in Arkansas, he will receive a comparable benefit.

What I was suggesting was that if we use Delaware, for instance, as the base, and see what happens as far as the benefit level is concerned after we apply the 50-50 formula, the relationship between the person who is out of work in Delaware and the person who is out of work inArkansas, or any other State, according to the tabulation that I have, shows no improvement. In fact, in some cases, the situation is

worse.

The individual may get a higher amount of dollars as benefits, but that is a different factor. We are talking now about creating equity between persons with the same wages living in two different States.

In Arkansas, for instance, where that individual at $120 would receive a $38 benefit, which is about $12 below Delaware, he is going to be $22 below Delaware when the new Federal formula goes in.

Mr. ROSBROW. In other words, he would not benefit, but he would not be injured.

Mr. BYRNES. Because Arkansas would pay about the same amount? Mr. ROSBROW. Yes, sir; because they already have an escalator formula.

Mr. BYRNES. But the difference, as far as this individual is concerned, the disparity between these two individuals at the same wage, is broadened as a result of the 50-50 formula.

I wonder if you are improving this situation.

Does the 50-50 formula accomplish the objectives you have in mind? Does it even improve the situation?

Mr. ROSBROW. In high-pay escalator States it would. In these other areas, obviously there would be less changes.

Mr. BYRNES. Let me ask how we will handle this situation where we have a variable maximum, as Michigan, Indiana, and Illinois have, which is based on the number of dependents. Those States, of necessity, will be penalized, will they not, or else they will have to forget about their dependency and get down to the 50-50 standard with the normal escalator formula?

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