Evening star., 1936-09-23
BY BLAIR MOODY.

What Will Americas new system OF
unemployment compensation mean to
John w. Workingman?
Stripped of dispute over method.
possible future changes and argument
over constitutionality. what does this
vital section of the social security act,
as it stands today, do for him in dol
lars and cents if he loses his job?
In the first place, it does absolutely
nothing for him unless his State
passes a law dove-tailing with the
Federal act, and making it possible to
set up as a reserve for him 80 per
cent of the pay roll taxes which his
employer, or the employers OF the
State in aggregate, must pay to the
Government anyway.
Only IA States and the District OF
Columbia have such laws. Thirty
four have not From these States,
millions in taxes will roll into the
United States Treasury this year.
That amount will be doubled next year
and trebled the following year as the
rate of tax rises from to 3 per cent.
But where the State Legislature has
failed to act, the worker. to use good,
old-fashioned Anglo-Saxon, Is being
royalty gypped."
Effects Vary Widely.
Since, after long and bitter dis
pute, the idea of strictly Federal job
insurance program was abandoned
and joint Federal-State plan enacted,
the effects of the act on workers
vary widely, even among States that
have passed laws. The purpose Of
the Federal act was to encourage
States to pass job insurance laws. 1t
permits any employer in State with
an approved law to claim an offset
for the pay roll tax paid to the
State up to 80 per cent Of the Fed
eral tax. BY withholding 10 per cent
of the pay roll tax. then redistribut-
ing most of 1t for administrative
purposes, the Government keeps q
loose check-rein holding the States
within decent limits" But within
those limits they have wide latitude.
In most States, an employe Is
eligible for unemployment benefits
and his employer is subject to the
pay roll tax only If he works for
company having eight or more en-
ployes, the standard" required by
the Federal act If the Offset Of 90
per cent is to be allowed. But in
New York, New Hampshire, Oregon,
Rhode Island and Washington, the
size of the minimum" firm has been
set at four employees, and in the
District of Columbia it is one. 1t Is
probable the Federal requirement will
shortly be reduced to four.
Wisconsin Starts Payments.
The pay roll tax money go per
cent? goes into State reserve fund.
Wisconsin, pioneer in the movement,
started paying checks to the jobless
in August. 1t already has piled up
reserve of approximately $15,000,-
900. Other States are now building
their reserves to get ahead Of the
game" before starting to pay benefits.
There are three systems of handling
the reserve, all Of which have Uncle
Sans stamp Of approval. The first,
effective in Wisconsin and Utah, puts
the money in one bank account, but
keeps the tax payments Of each en-
ployer separate and "earmarked" for
his own employees. If he builds his
company reserve" to o level of 10
per cent of his last annual pay roll,
he is exempted from further taxes.
The second plan taxes all en-
ployers equally, whatever their record
Of regular employment, and pools"
all the money without earmarking.
The third. toward which most
States are trending. pools the money,
but provides for reduced taxes on q
merit rating" basis for employers
who provide regular employment. The
relative advantages of these three
plans are hotly n dispute, but that's
another story.
Now, how Is this money handled?
What does q workman have to do TO
be eligible to draw money from the
fund? Does he have to contribute to
it? How much does he get, and how?
Are all workers eligible?
Base of Payments.
The base Of insurance payments Is
generally so per cent Of previous pay,
but not more than SIS q week. In
Utah the maximum Is $18 q week.
Some States have no minimum. In
others it ranges from S. to $3.50 al
week.
To be eligible. . worker must have
had to be on . pay roll for (alwsys
varying by States) from four to 30
weeks Of the last 81. He must wait
two to four weeks after he loses his
Job before he draws his first compen-