The Waterbury Democrat., 1941-09-04

slszz business bee
 RAaon .M cause of inabil-
 fly to secure priority on materials.
 That means, according to Amer ican Federation of Labor estimates, that anywhere from one to two million workers will have to find new jobs in defense industries and good many of them may have to- rely for time on their jobless insurance.
 In making his statement about reliance on unemployment com. pensation, the President made clear that every effort would be taken to provide a 6o-day leeway before any factory was actually closed down by material shortages. In that time, new jobs in defense in- dustries may be found, or plans made to give workers restraining courses which will fit them for de- fense jobs. It is only when these shifts fau to produce results that unemployment insurance will have to carry the load.
 ATTACK BIG RESERVES
 More than S21 billion in con- trihutions from the 48 states, the District of Columbia, Hawaii and Alaska are now on deposit with the federal government In the un. employment trust fund. One of the main criticisms of the compensa- ton plan has been that these re- serves were unnecessary = that the plan should be run more on the basis of letting current receipts in the form of payroll taxes take care of the benefits paid out to the temporarily unemployed. Total benefits paid out since the social security act became effective in January, 1888. have run more than SIS billion. What critics of the plan therefore advocate is Q down. ward revision of the tax so that the reserves would not exceed the collections and benefits by SO great margin.
 It must be borne in mind that the @ billion reserve is not in one pool that can be drawn on by any or all states. The account of each state Is kept separately by the gov- ernment, which merely acts aS ad- ministrator and trustee for the states, investing each states con. tributions In United States bonds, crediting the interest on those bonds, and making disbursements tA the states on demand. Penn. sylvania and Ohio, for instance, have reserves of over Sl60 million to their credit. Maine has only $4 million. Similarly, rates of unern- ployment benefits paid to work CTS and the length of time they can be paid vary in each state. DRAIN WON'T BE EVEN
 In considering the unemployment compensation picture nationally, 1t is impossible to make any accurate estimates of what the drain will be on the reserves in the trust fund, By the best averages which the So- cial Security Board has been able to make, the average benefits which an individual worker can collect when thrown out of job is from $10 to $l1 a week for g. period of from 10 to Ii weeks.
 If every one of the two million workers who may lose their jobs in this period of readjustment would collect this average $i00, that would mean a 4200 million drain on the reserve fund of $2.l billion or less than 10 per cent reduction. And 90 per cent of the total kitty would still be there
 The trouble with this calculation is that the drain will not come evenly. Industrial states will take the heaviest rap, and some states would normally exhaust their re- serves much sooner than others.
 Social Security Boards answer to the obvious inequalities and lin- certainties of the present systems is that the trouble is not so much with the building up of the big re- serve, but with the rates of benefit payments, which 1t considers too small and not of long enough dura- ton.
 Last year." says ssB Chairman Arthur J. Altmeyer, lover one-half of all the workers receiving bene- fits were still unemployed when they had exhausted all their bene- fit rights. Tn addition, some three million employees of smaller sized firms are entirely excluded from coverage."
 From this, 1t is apparent that the unemployment compensation plan, as now constituted, doesn't do the job 1t should. That will prob ably be even more obvious if the end of the defense effort means that the country goes into a long tailspin of depression. and the Treasury has to borrow money to redeem the bonds to meet the heavy demands of the states for their benefit payments.