Evening star., 1935-05-31

the Federal Government In turn says
to the State, If you set up an un-
employment insurance system, your
employers can get credit up to 80 per
cent of the Federal tax for payments
they make into State unemployment
funds. And in addition, If you set up
this system, the Federal Government
will allot out of the Federal Treasury
funds to assist you in paying operating
costs of your unemployment compen-
Sation system" Thus it will be to
the employers advantage, and to the
advantage of his employees and of the
whole community, to have the State
keep local money at home by passing
an unemployment insurance law.
Regular employment is. from the
viewpoint of the worker and the
country as a whole, a most important
object to be accomplished, and ac-
cordingly the employer who Is en-
couraged by the State to give regular
employment by having his State pay
ments reduced when his employment
record Is good, Is also allowed credit
against the Federal tax.
For several years now carefully
drawn unemployment insurance bills
have been introduced in a majority of
the Legislatures of the States. Until
this Winter only one State had passed
such bill. One argument. more than
any other, kept the States from pass
ing these important measures. This
argument was that II business in a
particular State was to have imposed
upon 1t even the small cost Of unem-
ployment insurance contributions. 1t
would Immediately find itself at dis
advantage when competing with SIM
liar industries in other States where
no such laws had been enacted. 1t
has been clear from the first that If
the Federal Government really wanted
to promote the passage of these laws
in the States its first task would be
to make it impossible for this argu-
ment to be used to defeat State action.
If the social security bill becomes law,
the employer will no longer make this
argument, for If his State acts and
the neighboring State does not act
he will be paying his contributions to
his State fund, and his competitor in
the neighboring State will be paying
a similar amount in taxes to the Fed
eral Government.
Reserves Needed.
The time to start building up re-
serves is when things are on the up
grade, and industrial conditions are
getting better. Industrial conditions
are getting better right now. This is
the time, therefore, to start unem-
ployment insurance. 1t should be
started promptly. but at low contri-
button rate. 1t should be started by
the States, each State plan to be
adapted to local conditions 1t should
be helped by the Federal Government
removing the obstacles to State action.
The social security bill will remove
those obstacles and will promote the
passage of State laws and will thus
indirectly bring to the workers of the
United States new sense of security
in their jobs.
AS matter of information. the bill
provides for tax on the pay roll of
industries that employ four or more
persons. which begins at per cent
in the first year, 1886. In the second
year. 1887, the tax is increased to 2
per cent. and not until 1888 is the
maximum of 3 per cent of these pay
rolls reached. In the proposal we have
made certain exemptions from the tax.
For instance, domestic, agricultural
or casual occupations are not taxed.
Neither do they obtain any benefits
from the unemployment insurance
fund. Religious, charitable, literary
and educational bodies are exempt
from the tax. In other words. we have
tried to confine the unemployment in
surance to those engaged in industry.
The unemployment insurance pro-
visions which I have discussed have
been formulated after most careful
study with view to ameliorating the
hazard of normal unemployment. in
so far as it lies within the power of
the American Government to do so.