Evening star., 1940-02-16
BY DONAS. WARREN.

~ DOANNos AN0GNs
Since employer experience rating
as a part OF unemployment COM
pensation insurance is contemplated
in the Federal program and is pro-
vioed for in the laws Of 80 States,
there is wonder why some influences
have been thrown against it-before
the plan has been given a fair,
practical trial. So far such a plan
has been in force as long as a year
in but one State, Wisconsin, and is
just now going into effect in three
others.
The Federal social security plan,
dating back to an act of 1885, pro-
vides for the use of rating plans, and
the question Is currently of interest
to the District since its present law
calls for adoption of such program
for use beginning next January /
Amendments to the District act
proposed in the McGehee bill, now
awaiting House action, calls merely
for further study of the formula
Washington business interests are
urging that such system. perfected
and modernized, be given a trial
here.
Board Policy Undetermined.
1t is noted that while the Amer
ican Federation Of Labor and the
Congress Of Industrial Organiza-
tionS have gone on record as op-
posed to experience rating plans for
employers, their objections 50 far
have not been directed at the Dis
trict program which, admittedly
has come exceptional basic condi-
tions. Also, while Director John A.
Marshall of the District Unemploy-
ment Compensation Board has told
The Star he believes the rating
plan is unavoidable, the Social
Security Board has not taken any
official stand on the pending WASH
ington legislation. This is in keep
ing with its general policy not to
speak out. formally at least, on
State legislation. It may respond,
If Congress calls on it for a report
on the pending McGehee bill.
Belief that the Social Security
Board is backing away" from use
of the rating system. however, Is
supported by references the Federal
agency made to the subject in its
annual report for the past fiscal
year. In that document, forwarded
to Congress by Chairman Arthur j.
Altmeyer last November 10, appear
these arguments:
That present operations of State
laws have not yet developed a sig
nificant body of information on the
validity Of the assumption" that
differential contribution rates would
inspire employers to stabilize en-
ployment and permit them to offer
their workers a greater degree of
economic security. (This argument
is contested by some spokesmen for
Wisconsin. the one State where ex-
perience rating has been given an
actual trial for as much as full
year,;
Cost Item Watched.
That continuing careful study"
should be made of the stated as
sumption and of the procedures
used in various types Of rating plans
and Of the probable administrative
costs of their use. Proponents Of
the rating plans urge that nc
handicap be placed in the way of
further and more extensive trial
of such methods to seek employ
ment stability;
And that operation Of State laws
has not yet been extended over q
sufficient period to warrant final
conclusion as to the adequacy Of
present resources to meet the effects
Of the swing of business cycles.
To this the Federal board added !:
"It is clear, however, that no con-
tribution rate yielding less than 81
per cent of pay rolls can be con-
sidered a safe basis for general
operation of the programs Of the
States. Should the circumstances
in any particular State indicate,
after continued and varied expert
ence, that the funds available for
benefits exceeds the amount re-
quired to finance the States exist
ing provisions, the board believes
that the first charge on the excess
should be to make benefits more
adequate"
Reserve Piles Up.
In the District case, the compen-
sation fund has a surplus now ex-
ceeding $4,000, 900, and this will
grow to more than $40 0,o00, 900 by
the end of this year: the present
pay roll tax rate is 3 per cent
the highest fiat rate in the country;
present taxes are producing more
than four times the amount Of
benefit charges under the present
law; and, under the proposals in the
McGehee bill for liberalization
measures for both the worker and
the employer, 1t is estimated the tax
still would be producing twice the
amount Of benefit charges, creating
q surplus each year Of between $2,-
600, 900 and $4,000, 900.
It also should be noted that while
the McGehee bill permits the Dis
trict rate to be reduced to 81 per
cent-in line with the new national
policy, which the States have
adopted-it also calls for increased
benefits In variety Of ways for the
eligible jobless, to an extent which
would set the District program out