Evening star., 1934-11-16
WORK INSURANCE
PLAN PRACTICAL
President Approaches Prob
lem With Experience.
Cost From Pay Rolls.
BY DAVID LAWRENCE.

of unemployment insurance. His
speech was called conservative by the
social welfare workers who want ex-
treme proposals. But Mr.. Roosevelt,
as Governor of New York, learned
frst-hand some of the difficulties of
the whole unemployment insurance
problem. He is proceeding cautiously
because any plan, to be successful.
means a new item for industry and
business to bear.
The cost would come out OF pay
rolls instead of general taxation. The
idea is that there would be set up a
reserve against unemployment and
the benefits would be paid to those
forced into idleness.
The discussion here involves con-
fiict between what has been called the
American and European ideas. The
latter assumes permanent unemploy-
ment and has, to some extent, by It's
operation, encouraged loafing Mr..
Roosevelt said plainly. the United
States must not make the same mis-
takes as were made in Europe.
The American concept is the setting
up of unemployment reserves by en-
ployers, and takes into account the
long range as we'll as short range
view of economic conditions.
Complications Numerous.
There are all sorts of suggestions
and plenty of complications. Shall
all contributions by all employers
within State be put in common
pool for the benefit of all the unem-
ployed in a State? Shall the con-
tributions of each employer be kept
separate and be applied to his own
employees? Shall the State govern
ment contribute and shall employees
and employers share the expense?
Shall individual employer arrange
ments be exempted from State sys-
tens?
Notwithstanding the agitation for
the last 13 years, Wisconsin is the
only State to have in actual opera
ton an unemployment compensation
plan. 1t provides that the industrial
commission of the State shall exempt
from the compulsory State system a
plan submitted by any individual
company, provided it is "on the whole"
as beneflclal in all other respects to
It's employees as the compulsory State
system.
Mr.. Roosevelt Is convinced there
must be Federal cooperation with
the States. The Wagner-Lewis bill
pending would place a tax on all
States which have not enacted un-
employment insurance plans. In
other words. the Federal Government
would force action by the States,
Forty-four Legislatures meet next
January. Most all of them are Demo-
cratic. Undoubtedly the Presidents
leadership will be influential in
getting Nationwide attention for
the problem.
The President has number Of
persons from industrial and from So
cial welfare groups studying the best
form OF unemployment insurance.
Arthur Deane Suggestion.
An interesting plan has been sug-
geSted by Arthur Deane, now deputy
housing commissioner and recently
one OF the executives of General
Motors. Industrial and business lead
ers are taking a deep interest in all
the various ideas now under con-
sideration here because it is evident
that some kind Of legislation is going
to be adopted at the coming session
Of Congress.
The only question now is what kind
OF unemployment insurance law shall
be passed. Mr.. Roosevelt knows how
complicated the subject is, so, when
he put unemployment insurance
ahead OF old-age pensions and health
insurance, he was not rejecting these
two latter reforms, but merely giving
priority to the most acute subject.
Also, II an unemployment insurance
system is set up and accepted by the
country, it will be easier to get health
insurance and old-age pension laws.
1t is obvious, too, that State action is
essential to all of these plans because
each state Will wish to handle these
questions in its own way so as to ac-
commodate itself to local conditions,
The President feels that the invest
ment of the reserve funds should be
in charge Of the Federal Government
and that each State shall work out a
satisfactory plan. This is not likely
to be done in few months. 1t will
take years to get a really effective
scheme into operation. England has
struggled with one for % years and
Is only now perfecting a reasonable
formula for handling national relief.
The British solution might not fit our
case at all; in fact, IN many respects
1t certainly would not, but it does
illustrate how much more than a mere
matter of emotionalism or sentiment
tallsm the establishment of any ma
tional relief plan must be to succeed
in accomplishing its objective.
Huge Tax Possibility.
1t has been estimated that the
British plan, If applied to our popula-
tion, might mean tax of $4,000 ,OOO,-
600 year on industry. This is an
added cost not to be lightly regarded,
for industry is bound to add these
items to the cost of commodities as
far as 1t can or to absorb the costs
and use the item as factor in COM
petition with marginal producers, who
may be forced out of business and thus
increase the total number of unem-
ployed. To prevent unemployment in
surance as a cost item from being a
factor in competition within or outside
State is one of the incidental but
nevertheless important questions un-
derlying the various schemes being
suggested. But of one thing the public
can rest assured-unemplo in
surance is coming, and industry and
government and labor will have to
agree on its form to get anything
started that is to prove effective.
(Copyright 1934)