Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-09-25
PAY ROLL STERILIZATION
STUDIED In EMPLOYMENT
Division of Work Among All Employees
With Reserve Wage Fund Proposed
to Prevent Idleness.

profitable to prevent accidents; be-
lieve that they will, in time, find 1t
profitable to prevent unemployment.
Any plan for assuring employment to
the workers must be national in scope
if it is to be effective. The United
States is one economic unit and, there
fore, the Federal Government is the
logical agency for setting up uniform
plan applicable to all industrial estab-
lishments. In the absence of action by
the Federal Government the States are
likely to follow the example OF Wiscon-
sin and set up plans of their own, thus
causing confusion and embarrassment
to both employers and employees. Fur
thermore, under a national system, the
insurance fund would be invested in
Government or State securities Of the
highest grade. whereas if the fund were
under control of private employers 1t
might be invested in plant expansion
or in securities of the company itself
which would not be readily convertible
into cash in time Of depression except
at great sacrifice.
Sterilization Reserve Pan.
The provisions of the employment
sterilization reserve plan are briefly as
follows:
First. a provision for creation Of an
employment Sterilization reserve fund
by contributions by employers and en-
ployes. the fund to be administered by
the Federal Government as trustee
without charge. The contribution by
the employee will be one-half the amount
contributed by the employer, and one
half of the contribution by the employer
will be deductible from his Federal in
come tax.
Second, a provision for reduction Of
the normal work week in order to di-
vide the available work among all
competent workers.
Third, a provision for further reduc-
I ton of the normal work week from
time to time as the introduction Of
mechanical devices diSplaces human
hands.
Fourth, provision for variation OF
the established normal work week from
time to time to meet seasonal and
cyclical changes resulting in increased
or decreased demands for labor.
Fifth, a provision for proportionate
increase or decrease in the wage paid
by the employer whenever a change &C.
ours in the work week due to seasonal
or cyclical fluctuations in demand for
goods.
Sixth. provision that whenever the
work week falls below an established
normal payment should be made to the
employe from the employment stabiliza-
ton reserve fund of an amount equal to
ore-half of the difference between the
normal wage and the proportionately
decreased wage paid by the employer,
the amount paid from the fund not to
exceed So a week to each employe.
How Plan Would Work.
Let us examine how this plan will
work out in actual practice. (See &C
companying chartD Imagine a bust
ness establishment that employs 5000
workers and has normal work week
of 40 hours. The primary object Of the
plan is to maintain stable force of
5000 in this organization at all times
by varying the hours of work and not
meet fluctuations in demand. If there
arises an increased demand for its
product, the business establishment will
increase the hours of work from 40 to
A or 48. If necessary, and will increase
the weekly wages proportionately. When
demand for its product decreases, hours
will be reduced; and If hours do not
fall below the normal Of 40, wages will
be decreased proportionately.
But when a reduction in hours below
40 becomes necessary wages will be
supplemented from the Employment
Sterilization Reserve Fund to the extent
of half the difference between the earn
ings for normal week of 40 hours and
the proportionately reduced wages
For example. the business establish
ment is paying an average of $50 for
its regular 4O-hour week at an average
basic rate of soc an hour. A reduction
CT 20 per cent in demand results in
decrease in hours from 40 to 80 and
decrease in wages from $40 to SIG.
In this instance the Employment Sta
bilization Reserve Fund pays half the
difference between $40 and SIG, or So,
thus increasing the weekly wage to $l8.
If hours are later increased from 81
to SO, the business establishment will