The Daily Alaska empire., 1938-01-21
insurance" and Relief
(New York Times)


 The committee headed by Senator Byrnes is wisely beginning to consider a problem that should have received general consideration many months ago. This is the problem of harmonizing and CO., Iordinating unemployment insurance and re- lief programs.
 The two programs have been largely thought of hitherto in separate compartments almost if there were relation between them Only few weeks iago, for example, a number of Congressmen asked about the prospects for balanced budget, all talked lof the burdens that would fall upon the relief program because of the growing unemployment. Not one of them to have mentioned offset the unemployment insurance program which has just now gone into effect in twenty States and the District of Columbia Yet of the main arguments for unemployment insurance at the time the legis- lation being enacted precisely that it would greatly reduce the relief burden in bad times and make it negligible in normal" times. The unemploy ment insurance systems have already built up a total reserve of $438000O00
 Failure to recognize the close relationship of the two programs has been largely owing to the fact that called insurance" and the other relief Both, however deal with what is essentially the same probem-how to help the unemployed without reduc- ing their incentive to seek employment.
 In dealing with this problem insurance" has sev eral merits compared with relief First, the worker does not have prove need" the insurance benefit payments be demanded earned right tThe situation would be better in this respect If in all the States the employees themselves made some direct contribution to the insurance funds, they do in eight States and in virtually every European system) Second under the insurance sys- tenn the benefits paid do not go indefinitely but are determined by the length of the workers previous employment. Finally the amount of the insurance benefit bears definite relation to the amount that the recipient is demonstraby able to earn in private industry
 The last point is very important In nearly all the States the benefit payments fixed at 50 per cent of the weekly wage that the unemployed person previously received. If this would bring the payment below certain then the insured worker in most of the plans is entitled to high ee-quarters of his previous The obvious purpose of this is to pay jobess man less when he is idle than he pre- vouSly got for working to insure that he will have some monetary incentive to find work. It not tain that this incentive will always be enough. There the troublesome problem of certain types of persons who will contrast $15 week in insurance payments with, say, SIS offered for private work, and ask: Whats the of working for $3?" But the incen- tive in such is at least greater than when relief payments actually exceed what given person could earn in private work.
 Most of the unemployment insurance laws pro- vide for benefit payments for a maximum of sixteen weeks in any year There little point in setting up carefully safeguarded unemployment insurance system and then, the worker has exhausted his benefits under it. turning him to permanent relief plan without safeguards. Permanent relief should certainly not be made desirable for the unemployed than the fxed-term relief granted by the insurance plan And yet, in New York State are already going on the assumption that relief will frequently be larger and attractive than in surance that the relief authorities will have to compel unemployed persons to apply for insurance benefits
 The problem is far from simple one On the one hand, insurance" relief" must be adequate On the other hand. it must not be such to remove the incentive to find new employment or to create an army of permanent reiefers. In any case the insurance nust he hrOll into harmony As unemployment insurance is ad- ministered under State laws, perhaps the first step toward that end would be the transfer of the relief program also, through carefully worked-out system of Federal grants-in-aid to State and local admin istration