Evening star., 1935-03-07
Local Employment Insurance.

tional social security legislation, has
explained that the national bill "rec-
ognizes that, because of divergent
business problems in different sections
of the country, each State should be
free to enact its own unemployment
insurance law" But here in the Dis
trict, of course, the enactment of the
local law, to conform with provisions
of the national law, is left to Con-
gress in which the local community Is
not represented. The local bill, intro
duced in the House by Mr.. Ellenbogen
of Pennsylvania, has been drawn by
the Presidents Committee on Eco
nomic Security with the frankly
avowed purpose of trying out the
social theories involved on the District
Of Columbia.
There is no background of expert
ence with such legislation in this
country against which to study the
provisions of the Ellenbogen bill. It
is something entirely new. 1t is based
largely on theory. Whether it can
accomplish what it sets out to do is
q matter of pure conjecture.
What it sets out to do, however, is
to create a general unemployment
fund pool" from which all unem-
&,lo
a week for maximum of twenty-six
weeks in the year, may be drawn.
Everybody who has worked as much
as twenty weeks out of the f1fty-two
weeks preceding application for ben
eft is eligible. Unemployables, of
course, do not come within the pro-
visions of the bill, nor do those who
have been out of employment for
year or more.
To create this pool" of money to
meet the community problem of un-
employment a three per cent tax
against the pay rolls of all private
employers of four or more persons,
plus contribution from local reve-
nues amounting to one per cent of
such pay rolls, is required. The total
tax thus to be levied, based on rough
estimates-for there are apparently
no exact figures available-would be
about s2,500,000. That is a guess.
The bill merely provides for the pay
roll tax and appropriates from local
revenues $750,000 for the first fiscal
year and s1,50O,0O0 thereafter. In
addition, there is Federal payroll
tax of three per cent in the national
1egislation-as yet acknowledgements
which a ninety per cent credit is al
lowed against the local payroll tax.
In all, the tax-local and national
will amount to 43 per cent of local
pay rolls.
This tax, of course, will be passed
on to the public in one form or an
other. One form may be higher prices,
the other may be reduction of wages.
But that is in conformity with the
theory of the bill, which assumes that
the unemployment costs should be
borne by the community at large
Under the bill the employe makes no
contribution to the fund. 1t is un-
fortunate, if logical, that the tax
paying employer may take enough out
of wages or by discharging workers to
meet the tax. There is nothing to
prevent it.
The bill, although following the
principle of insurance, charges the
good risk" a higher premium than
the "bad risk"-that is, the employer
whose pay roll is steady and does not
fiuctuate with the seasons is taxed an
i1ually at the same rate as the en-
ployer whose employees are liable to
seasonal shifts. The employer who
keeps his men working all year round
will pay more than the employer who
hires and fires with seasonal or other
demand. And the employer who has
voluntarily established some benefit
system receives no consideration.
For the District the administration
of the. local bill is placed entirely in
the hands of national board created
through the national legislation-the
National Social Insurance Board. The
only representation Of the community
on this board would be through an
advisory council" representing EN-
ployers, employees and community. Its
powers. however, are purely advisory
and the members are to serve without
nay. Secretary Perkins and the Pres
ident's Committee on Economic secur-
ity are strong for this feature. It
gives the national experimenters an
ideal laboratory. How the guinea
pigs will fare remains to be seen.
For the administrative problems
implied in the bills provisions are
many. Some OF them-the decision
Of disputes concerning employment
between employer and employe Is
merely one--are detailed and tntri!
cate, and the establishment Of q
heavy bureaucracy in this single phase
Of social security" is inevitable. And
while imposing new, heavy tax to
guard against future eventualities IN
svav1oupoent the existing ur0hlem of