The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1940-05-16
GOVERNOR LEHMAN VETOES CLIFFE PLAN

SOME of the employers in New York State are
making desperate effort to reduce their rate of
contribution to the unemployment compensation
fund by means of so-called merit or experience
rating formula. Despite the tireless efforts of
these organized employers, the Advisory Commits
sion on Unemployment Compensation did not rec
ommend a merit rating plan either for this or last
year. The Advisory Commission, composed of
representatives OF Labor, employers and the pub
lic, last year recommended further study of the
subect. This year it split and made three separate
reports: the majority emphatcally condemned the
proposal in principle 1t pointed out that great
irreguarity exists in the capital goods and other
heavy industries. No one pretends that this con-
dition can or will be remedied" Although it is
commonly recognized that the well-being of our
economic structure rests these industries, they
would be penalized in favor of the consumer goods
which as this report indicates are, in a
sense, subsidiary to the capital goods industries.
Although displacement of industries is the normal
course of economic history, so-called INERT rat
ling" would reduce the costs of unemployment pro-
visions to new, expanding industries and increase
these costs as the industries shrink and decline.
This is obviously bad business policy from the
standpoint of society. Any industry that can
stabilize will do so in order to benefit by more eco
|nomc production costs. The so-called merit for
mulas which would tend to freeze the size of pro-
|duction forces would entail costly methods of pro-
lduction and would reduce total employment.
The majority report concluded by asking the
Social Security Board to get amendments to the
Federal Act, to prevent the variations in state
rates which threaten equal competition between
|States
The three employer representatives made re-
port urging the immediate enactment of legisla-
ton establishing the principle of merit rating ano
providing for only downward revisons in rates fol
employers in proportion to the surplus in the fund
and with no penalty rate on those who do not stab
]lize
One representative of the public favored the
principle of merit rating but recommended further
study to find sound system which would not jeop
|ardze the fund
Despite the advice of the majority of those who
had been studying this very technical problem
the employers rushed to the Capitol and urgeC
the passage of the Young -Wadsworth bill. The
chief spokesman of the measure were Timothy j
Murphy of the Borden Company and F. C. Cliffe
Of the General Electric Company The measure
would provide lower insurance rates to firms with
stable employment and higher rates to those whose
Operation could not be stabilized
| The representatives of industries opposed tt
merit rating and of unions affiliated to the Ameri
can Federation of Labor petitoned Governor Leh
man to veto the measure. In his veto message
the Governor cited the failure of able and conscien
tious members of the Advisory Committee to reacl
agreements on policy and stated that the particular
plan for experience rating was too difficult and in
volved too important consequences to be adopted
without further study.