The people's voice. [volume] (Helena, Mont.) 1939-1969, 1955-09-09
By ]. L. McBREEN, Portland,
Gen. Vice-Pres. Init. Assn.
of Machinists

By j. l.. McBREEN, Portland,
Gen. Vice-Pres. Init. Assn.
of Machinists
Unemployment Insurance seems to
be going the same way as many other
laws originally enacted for the bene-
fit of labor, but which was later
turned around and used as an instru-
ment against labor.
At time when the attention of
labor and of the general public is
focused on the problem of job Sc
curity and unemployment benefits,
as a result of the recent negotiations
in the automobile industry for a
guaranteed annual wage, the true
facts of what is happening in the field
of Unemployment Insurance should
be brought out.
Since the first day of January, the
legislatures in the Pacific Northwest
states and in Alaska have met and
considered amendments to the I'm
employment Insurance laws. What
happened in the legislatures reveals
clearly the inadequacies and defects
of the present Federal-State Unem-
ployment Insurance system. Unless
these defects are corrected, it is safe
to predict that before many more
years have passed, Unemployment In
surance will have so deteriorated and
been so distorted that it will be neces-
sary for labor to unite their efforts
to have the program abolished.
AS in the rest of the country, the
level of Unemployment Insurance
benefits has become more and more
inadequate in relation to wage levels
and the cost of living as the years
have gone by. Whereas in 1889, when
the program first went into effect,
the benefit formulas in state laws
We're designed to provide workers
with benefits equal to about 500 of
their regular fulltime weekly wage, by
1854 benefits under the state laws
had declined to nationwide average
of about rs of the average weekly
wage of covered workers. The states
of Pacific Northwest were no excep-
ton.
EXPERIENCE RATING"
GIMMICK
One of the gimmicks inserted in
the Unemployment Insurance Laws
when they were first enacted was a
system called experience rating" by
which employers tax rates were sup
posed to vary inversely with their
ability to maintain stable employ
ment. Actually, experience rating was
designed to and has served primarily |
to develop well-financed, aggressive
employers lobby which has been in
strumental in keeping benefit rates |
down and gradually distorting the |
disqualification and eligibility pro-
visions of the state laws so as to
change them from their original pur-
pose. Theoretically, however, the ex-
per1ence rating provisions are based
on the notion that Unemployment
Insurance is designed to compensate
workers for the normal unemploy-
ment that occurs-as distinguished
from the recession or depression type
of unemployment-and that with
tax incentive employers can and will
take steps to reduce the amount of
this normal" or "regularly-recur-
ring unemployment. The reason the
distinction between normal" and
recession" unemployment was i'm
,ortant to experience rating advocates
IS that it is clearly impossible for the
employer to stabilize or solve by him
self the problem of recession unem-
oloyment. Moreover, if Unemploy- |
nent Insurance was designed primar-
ly to serve as cushion against de- ,
,ressions and recessions, then clearly ]
he experience rating tax system i
which lowers rates during boom times ,
md raise them during recessions-is {
wrong. ,
In actual practice, experience rat c
rig has tended to result in extreme I
treasures by employers to disqualify /