Evening star., 1938-07-17
Breakdown of Social
Security Insurance
BY OVEN L. SCOTT.

ment in the use of Government to pro-
vide social security" Yet, of all of the
Presidents experiments, the experiment
with attempted social security is provid-
ing the clearest breakdown.
The aim of this experiment is to re-
move some OF the insecurity from indus
trial employment and from old age.
Insurance against unemployment and
insurance against some of the economic
hazards of old age are being forced by
Government on employers and employees
alike.
Fortunately for Mr.. Roosevelt, the big
gest administrative mess in peacetime
history. N. r. A. excluded, can be kept
from public exposure until 1912. Not
until then does old-age insurance really
go into effect with payments OF the first
annuities. Until then, the Social secur-
ity Board can occupy itself by wrestling
with the task of keeping track of every
dollar earned every working day by every
one OF 38,OOO,0O0 individuals, employed
by several million employers.
But the other half of the program
unemployment insurance-right now ts
meeting its test and is cracking up in
the process.
oHcHpioymcHt Insurance is based
upon the idea Of building reserves that
can be used to pay benefits to workers
who lose their jobs. That idea was ac-
cepted by Congress three years ago in
the most complicated form that the off,
cial mind could devise
Each State was told to set up its own
variety OF insurance, subject only to
few national standards. The result is
10 varieties OF unemployment insurance.
each with a separate administration
Each variety Is financed by a tax, now
amounting to per cent, on the nav rolls
OF an employers OF eight or more persons.
More than a billion dollars has been
puiieo out OF the pay roll stream of the
country, or out OF corporation treasures
IN Ine past 81 months to create unem-
ployment insurance reserves. This bill
non and another billion, pulled out to
pulld old-age insurance reserves are
credited by the Governments own econ
omlsts with an important part of the
blame for today's depression.
But this is the point at which ,,nem-
pioyment insurance was supposed to en-
ter as an antidote for depressions,
The idea was that, after state reserve.
had been built up for two wears nav
ments would start to the individuaJ IN
employed, who had an established earn
ing record during the earlier months
1heSe payments, based upon the mast
earnings of each individual worker were
supposed to serve as purchasing power
cushion by providing that worker with
assurance OF some cash income during
the period in which he was looking for
another job
nj,
hover. There had been two years tn
smooth out administrative details. The
treasury was loaded with a big volume
OF cash available for use in making pay
ments. ihere were plenty of unem-
ployed individuals entitled to draw that
cash. Those individuals could be counted
upon 10 spend the money. thereby help
ing TO onset the cuts in private industry's
pay lol. Unemployment insurance pay
ments supposedly would ease the pressure
1or relief and simplify the depression
problem Of finance.
xE*H
On tap has been more than a billion
uoiars. nall OF 1t In States with operat-
ing systems of unemployment insurance
Iacn otate mas had its complicated ad-
mlnlstrative machinery geared to pour
tnls money into the pockets of the eligi-
ole unemployed individuals. Some money
mas been poured into those pockets.
Yet in period of acute unemployment
not as much as 5000, 600, 900 has been najd
out to these unemployed in a period of
five months.
workers have had to wait weeks and
months before receiving benefits n
which they were supposed to be entitled
ma Ia l. L
PERIODS and in small amounts, far less
attractive than w. P. A. or even than
dlrect relief when supplemented bv the
Iree 1000 and clothing that the Govern
ment makes available to relief clients.
Inc result is that workers, losing
their jobs, clamor to get w. P. A. Jobs or
TO go on rellef. Social Security Admin
1stration ohicials admit that they have
peen compelled to force unemployed in
olvlouals to apply for and accept benefit
payments to which they were entitled.
because acceptance of benefits tempo
rarily disqualified these individuals for
W. P. A. or direct relief.
X X
With money piled high in the Treasury
IN reserves built for the specific purpose
OF meeting problem of unemployment,
the Federal Government has been forced
to make record-breaking appropriations
for unemployed relief outside that sys-
TEN.
The fact seems to be that unemploy-
ment insurance. as designed in this
country Is not able to meet the compe-
htion OF other forms of aid.
A worker, to be eligible for insurance,
must have an earning record in the prev
ious six months. The size of the pay
ment' he is to receive depends on the
amount of money that he had earned
II that amount was large, he might,
after waiting for few weeks. receive as
much as $40 week during a period of
from IL to 16 weeks.
Actually, according to the American
Association for Social Security, the un-
employment insurance systems of Is
States paid out 42,641 900 to about 900,-
600 beneficiaries during the first quarter
OF this year, or an average of $15.46 a
month for each of the beneficiaries.
+ X X
Contrast that with w. p A. To get a
job with w. P. A., the unemployed work.
er needs to have no earning record. He
simply must be employable and must be
certified by local relief officials. On that
basis. he is entitled to job that pays
an average of more than SIS week for
an indefinite period. If skilled, he might
receive as much as $25 a week or 500
month the year around.
Relief offers an average compensation