Evening star., 1938-07-19


mas until now r.-,.,
been IN out ted d
down by the cry that unemployment
insurance would cushion the depres-
sions of the future and prevent large
relief expenses.
Yet what has happened in the
present depression. The unemploy-
ment insurance system is so unWieldly
and cumbersome that payments actu-
ally cannot be disbursed rapidly
enough to prevent the necessity for
Works Progress Administration and
direct relief The system is so full of
red tape and technical complications
that it is better for many citizen
not to ask for unemployment insur
ance but to stick to w. P. A. or relief
as the case may be.
The defects in the operation are
no longer denied. They are officially
conceded. Yet nothing has been done
by the President to remedy this acute
and unjust situation. AS an outline
of only the bare essentials of the
breakdown in social security, the
official sources:
/. Through May 81 Of this year,
the several States had deposited with
the Federal Treasury nearly billion
dollars-ss93, ,ss3, 900 to be exact-and
yet in the period of most acute
unemployment the first four months
of 1888, only s153,250,oo0 was with
drawn from the Treasury to pay
unemployment benefits,
Deposits Jump $500, ,OOO, 900.
q At the end of the first five
months, when presumably the fund
should have been used to care for
the unemployed there was $200,000,-
900 more on deposit than on January
!, 1888.
3. With only 81 States actually
operating the system, the pay roll tax
took out of the stream of purchasing
power of the Nation many more
millions OF dollars than it paid out.
The economic disadvantages of such
a process are recognized as highly
def1ationary to Nations business
structure.
4. Instead Of using effectively the
unemployment insurance fund, bill
lions of dollars are borrowed for direct
relief and w. P. A. and pump
priming." Had the unemployment in
surance system been functioning as
claimed for 1t at the time the law
passed, there would have been less
need now for public borrowing and
more budget unbalancing.
S. Instead of turning to unemploy-
ment insurance the unfortunate VIC
tins of the present depression have
turned to direct relief and w. P A.
because often it is positively to their
advantage. But let the prepared state
ment from the Social Security Boards
own director of research, Evan Clague,
tell the story:
The unemployed workers and their
families had certain advantages in
their existing situation and were to
some extent reluctant to change to a
benefit status.
Months Wait Prescribed.
THE reasons for this reluctance on
the part of the workers are readily
Understandable. The most obvious
fact was that unemployment COM
pensation requires waiting period
of two to four weeks, during which
no benefits can be paid. Admins
trative delays might increase this
period some weeks more. Further
more, the benefits of unemployment
compensation for some families did
not compare favorably with the grants
for direct relief and the w. P. A. Sc
curity wage. In such cases there was
little incentive to change,
Again, since unemployment bene-
fits for total unemployment were lin
tied to a maximum of 13, IA or per-
haps l6 weeks, there was apparently
more security in direct relief or in
w. P. A. job than there was in un-
employment compensation.
Finally, workers were faced with
the fact that having accepted unem-
ployment compensation they might
have administrative difficulties some
weeks or months later in getting back
on relief or in obtaining another w.
P A. job"
To put it another way, workers
found it better to stay on direct
relief or on w. P. A. than to try to
get the funds laid aside for them
through a system of pay roll taxes
which had nearly broken the back
of American industry and itself had
caused unemployment-and to what
, end? So that billions of dollars in
cash could be piled up to be spent
by the Treasury to meet current
operating expenses and particularly
to be used on more expensive forms
of relief than are necessary either for
the workers or for the Nations eco
nomic system to absorb.
Competing Systems.
Here we have the administration
setting up two competing and self
destroying systems to care for the
unemployed-the administrative task
Is colossal. Imagine the amount of
bookkeeping that has to be done to
figure out the detailed earning record
of every individual, including changes
| from job to job. Imagine also the
task Of keeping track of from 100000
to 100000 persons whose employ
ment is interrupted and yet who are
not eligible for benefits till they are
out of job for certain period-a
factor in itself which creates hard
ships.
The clerical mess is not camoufaged
or concealed. 1t is admitted. The
Social Security Board itself has done
the very best it could. Blame does
not rest with the board but with
the law itself, and the haste-makes-
waste policy of the President.
The impracticability of 48 separate
social security systems is pointed out
by those who now urge Federal
system for the whole thing. And be-