Imperial Valley press., 1935-12-26
Written for Central Press and Post-Press
By DALE cox
Financial Writer of Cleveland Plain Dealer

Financial Writer of Cleveland Plain Dealer
The third important section of the new So
cial Security act is that dealing with unemploy-
ment insurance so-called payments of which,
by employers. begin Jan. 1. The best actuares
and insurance experts insist that such an ephem-
eral thing employment cannot be insured
against loss Perhaps a better term than I'M
employment insurance would be unemployment
compensation.
This section of the act is not to be federal
controlled but provides for federal assistance to
those states that set up unemployment insurance
laws. The federal government will levy pay
roll tax on all employers of eight or more peo-
Pile and Will refund the money so collected to
those states that have unemployment insurance
laws who will it as reserves for their I'M
employment insurance systems. If a state does
not have an unemployment insurance law. the
federal government retains the tax. In effect,
therefore, this section of the act to force
or coerce all the states into adopting unemploy-
ment insurance acts. For each year after the
fiscal year ending June so, 1886, however, the
federal government will appropriate S49000,0OO
to the states for the administration of their
unemployment compensation laws
Some Not Included
The same classes of employees exempt from
the old age pension benefits also not in
cluded under the unemployment compensation
section, with the additional exempted class of
family employees
Only the employer is to be taxed to build up
the reserves for the payment of unemployment
compensation. Beginning Jan. l, and for the year
1896, all employers of eight or more people, en-
ployed for some 20 days during the year. each
day being in different calendar week, shall
pay into the federal treasury as an excise tax
one per cent of the wages of all employees COM
ing under jurisdiction of the unemployment
section of the act.
II is estimated that about % SOC, 900 workers
will come under this section of the act For
1886 therefore, their employers will pay taxes
of approximately S225,000O00 assuming the av-
erage annual wage of the workers to be around
10 olyn in no Nlrt
of the presidents committee on economic Sc
curity)
Tax Goes Up
Beginning in 1897 employers will pay two
per cent tax On the payroll Of all their quallf1ed
employees, and in 1888 and thereafter, they will
pay three per cent tax.
Jumping the taxes which the employer must
pay under the old age pension section, there
fore, with those he must pay under the un--
employment compensation section, 1t Will be
seen that the annual tax upon American en-
ployers from these sources will run into the BILL
lions of dollars annually. One statistical author
ity has estimated that within a few years the
total taxes upon American employers from these
two sections of the Social Security act VIII run
to nearly 50 OO0,000.00O annually-approximatey
the amount now raised from the internal revenue
taxes levied by the government.
How Soon Can Man Collect
How soon would an unemployed man begin
to collect some benefits under this section OF the
act? Inasmuch as Wisconsin was the only sta
when the federal law was passed, payments
could be made in 1897 to unemployed men only
in the state of Wisconsin. No unemployment
benefit payments will be paid in other states
until after 1887, and then only after the states
pass their own laws
The final sections of the Social Security act
deal with the help which the federal govern
ment will give to the states for various other
types of social welfare. The federal government
in these cases will make direct amounts OF money
to match similar amounts appropriated by the
state.
For each fiscal year beginning with the year
ending June 80, 1885, the act provides that the
federal government shall appropriate to the
states a sum of around 25y000000 for the care
of dependent children, provided the states APP
propriate a similar amount Each year for the
same period the federal government will appro-
pirate S38O0,000 fer maternal and child health,
s2850O00 for services for crippled children
Sl500O00 for child welfare services, about $1,000
600 for vocational rehabilitation, S2000,000 for
public health services and 100000 for aid to
the blind.
State Action Necessary
In every case these federal grants are de-
pendent upon state action
The money vii be appropriated directly from
the general funds of the federal treasury, there
being no specific taxes levied to build up re-