Evening star., 1940-03-25
While Virqiniu Goes Ahead


Governor Price of Virginia has
signed the new State unemployment
compensation law which puts into
effect an experience rating, or merit
system, under which the employers
pay roll tax will vary between and
~ per cent, depending on the en-
ployers' experience in the preceding
three years in stabilizing employ
ment. The employer who has shown
good record receives the benefit Of
reduced taxation, whereas the en-
ployer whose record had not been
good pays the maximum tax of 2.7
per cent.
Virginia thus goes ahead with a
plan which, experience may show,
has the desirable effect of stabilizing
employment by holding out the in
centive Of tax reduction to those who
contribute to stabilized employment.
Tax reductions amounting to $3,-
100000 annually are estimated.
But in the District of Columbia,
employers continue to pay an exces-
sive 3 per cent pay roll tax and
continue to add to an already exces-
Sive reserve. There are two explana-
t!ons OF this outrageous situation. In
the first place, the District Unemploy-
ment Compensation Board seems
incapable of taking the effective and
intelligent leadership necessary in
wise amendment OF the law. The
law and its administration by staff
selected on the basis Of patronage
instead of merit, without any audit
OF its huge tax receipts, are largely
discredited by taxpayers who can see
only the injustice of the present sit
uation. Furthermore, amendment of
the local law, instead Of being
approached on its merits as a local
issue, is regarded more or less as a
national issue, with consequent
jockeying between pressure groups
from the outside which leaves the
local taxpayer helplessly squeezed
between them.
Amendments to the local law, car
rying an experience rating COM
parable to that in Virginia, were re-
Gently agreed to after conferences
between representatives of local en-
ployers and local labor. Benefits
were liberalized and an experience
rating carried with it not only the
advantage Of needed tax reduction,
but the incentive-in the form of tax
reduction-to stabilize employment.
AS the experience rating is opposed
by the national labor organizations,
the proposed amendments were
scrapped before they were drafted
for congressional consideration. In
their stead amendments have been
proposed by the Unemployment
Compensation Board which so
greatly liberalize the benefits, along
with tax reduction, as to minimize
the chance for passage by Congress
and further handicaps amendment
Of the local law by requiring amend
ment Of the national law. Unless an
effort is made soon, the amendments
will get nowhere and District tax
payers will continue to pay the excess
sive rates now in effect.
In lengthy letter to the New York
Times last week, William Green
stated the reasons for American Fed
Grafton of Labor opposition to the
proposed experience rating in New
York. The prime consideration of
labor, of course, is to liberalize bene-
fits. The contention is made, and it
is reasonable, that before there is
tax reduction there should be an in
crease in benefits. Other arguments
against the experience rating are
far from convincing. And Mr..
Green's criticism Of the New York
situation does not apply to the Dis
trict, where amendments which
would have accompanied an expert
ence rating carried substantial lib
eraliZatiOn of benefits.