Montana labor news., 1939-12-28

BY A. F. of L. Weekly News Service.
WASHINGTON, D. C.-In a letter
to all State Federations of Labor,
President William Green of the
American Federation of Labor called
for a concerted campaign to raise
the standards of unemployment
compensation as administered by the
states.
Mr.. Green also urged upon the
State Federations to prevail upon
their senators and representatives to
support legislation for the establish
ment of a representative advisory
committee by Congress to study i'm
proved benefit standards.
Until higher standards are made
effective, Mr.. Green declared, the
American Federation of Labor will
oppose social security tax reduc-
tons. Mr.. Green's letter follows:
AS soon as Congress convenes in
January, we shall be faced with a
drive to reduce the federal tax on
employers of eight or more en-
ployees.
The justification which persons
advocating such reduction will offer
is that there are now large idle re-
serves in the unemployment COM
~pensation accounts of many states.
The total funds available for bene-
fits throughout the nation as of Oc-
tober 81, 1889, were S. ,479, 800, 900.
This is an increase of 1856, 274,000
over the funds available as of Octo-
Der 81, 1888. On that date the
amount was 1923, $4,000.
This increase occurred in spite of
the fact that since July of this year
every state has been paying bene-
fits. The amount of benefits, how
ever, has been small compared with
the collections. For the current year
an average of only 1854 has been
paid out for each dollar collected.
Only one state has paid mort in
benefits than it collected in taxes
this year, and only eight have paid
more than $O.75 for each dollar coll
lected.
There is considerable variation
among the states in the size of the
reserve fund in comparison with the
amount of benefits paid within the
past year, but 1889 has seen a def
mite trend toward increasing the
unused reserves in practically every
part Of the country.
Benefits Do Not Provide Decent
Security for JObless
The large reserves do not, how
ever, indicate an excessive tax rate.
Rather they should emphasize the
need to improve benefit standards in
every state.
When the Social Security Act was
being considered originally, l en-
phasized the importance of better
benefit standards than those adopt
ed and warned that the money re-
ceived from taxes might not be fully
used.
However, Congress was persuaded
that it was unnecessary to write
Federal standards into the law and
that pressure in each state would
full use of the funds.
The states were concerned that
they should not set benefits too
high for the expected funds to pay.
The result was that standards are
too low to provide decent security
in any state and have permitted such
meager benefit payments that x
cess reserves have been accumulated
in nearly every state.
Present Unemployment Tax Must
Be Retained and Benefit
Standards Raised
We have seen the pressure for tax
reductions through the expensive
and cumbersome merit" and Tex
perience" rating plans. When Con-
gress reassembles in January, there
will be a vigorous demand from m
ployers of many states to have the
Federal tax rate cut. The Ameri-
can Federation of Labor believes
that no tax reductions should be
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