Evening star., 1940-02-16
JobIess Tax Rating System
Under Study by Employers
D. c. Groups Seek Trial Of Plan
Conceived to Stabilize Employment

so that it has been characterized as
a model for the States.
In the arguments as to whether
there is merit to employer expert
ence ratings, these questions are
being debated:
Are such plans workable? Do they
tend to stabilize work and reduce
unemployment? Would such plans
deplete State jobless insurance
funds? Would operation of the
plans permit the employer to hurt
the cause of the laid-off worker,
assuming that he would want to?
Does the employer with good un-
employment risk deserve prefer
entail or lower tax rate? And, with
out a rate differential, what incen-
tive would there be to an employer
to strive to stabilize his pay roll?
Numerous statements have been
compiled on these points, in ma
tional discussions of the issues.
Wisconsin Advocate Gives Views.
Among the proponents of rating
system is Prof. Emerson p. Schmidt
OF the University of Wisconsin. In
reference to the experience there,
Prof. Schmidt is quoted in the jan
uary /, 1910. issue Of the Barron's
National Financial Weekly, in part,
as follows:
"The writer has had occasion to
interview a large number Of Wis
consin employers in this respect
during 1899 and found what NAV
be actually called q movement to
stabilize. Chambers OF commerce,
manufacturers associations and
trade associations frequently refer
in their weekly news bulletins to the
tax savings which employment
stabilization will yield. In q num-
Der of cases special bulletins on the
subject have been sent to all mem
bers. In other instances, groups of
employers have held meetings for
the discussion Of ways, and means
for providing more steady employ
ment.
Every large employer with whom
the writer has talked has had a
special study of employment and
stabilization made with reference to
his own plant. Out of hundreds of
interviews with employers, the writer
has not encountered single en-
ployer in Wisconsin who has not in
some way altered his policies so as
to qualify for a reduced unemploy-
ment compensation premium rate.
In one striking case a meat packer
who laid off an average of about 65
per cent of his employees annually
from 1926 to 1885, has been able to
achieve almost complete pay roll
stability. In the last six months of
1886, after his stabilization plan
went into effect, he laid of fewer
than 40, out Of a total pay roll of
about 1900. Formerly, he would
have as many as 500 layoffs in the
first six months of the year. Incl
dentally, this employer is now seri-
ously considering the placing Of all
his employees on an annual wage
basis.
Jewelry Case Cited.
In another case, a jewelry man
ufacturer who specializes in the
production of type of production
which simply cannot be sold at all
during the summer months has
achieved stability. Since the un-
employment compensation law went
into effect he has not laid of q
single employe because of lack Of
work."
The A. F. of L., meeting in con-
vention in Cincinnati last October.
adopted q report by its Executive
Committee, calling for elimination
of all employer experience rating
plans, and since then the national
officers have issued a pamphlet
arguing that merit rating would not
reduce unemployment, insisting that
fiat rate was fairer than differen-
tial rates, contending that "unem-
ployment is social problem, not
largely controllable by management.
Often that which appears as stable
employment in one plant may in
crease instability elsewhere. The
total cost is therefore not reduced.
- To force out of business by
high unemployment compensation
risks those plants in normally un-
stable industries which cannot ma
terially reduce that instability will
increase the problem of unemploy-
ment. = There is no justice in
putting the cost of that instability
on the producer who cannot lessen
1t and removing it from the buyer
who caused 1t. A fiat rate recog-
nizes the interdependence of all In
dustries and the real nature of un-
employment controlled by forces
reaching throughout the entire labor
market, across individual plants
and industries"
Reduction "Alibis" Feared.
Again, the A. F. Of L. states: 1.-THE
employer will have q direct financial
interest In keeping down the amount
of benefits paid to his ex-employes.
He will seek to prove discharge for
cause or voluntary, leaving which
do not give benefit rights rather
than compensate layoffs. It will
mean that workers and their rep
resentatives will have to be con-
tinually on the alert to defend
rights which the employer would
have had no reason TO contest II
his 0Ax) rate were not Affected.
The 4. Z. of L. document also
suggests That ,ths Wisoonsin plan