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UNITED STATES DEPARTMENT OF LABOR
W. N. DOAK, Secretary
BUREAU OF LABOR STATISTICS
ETHELBERT STEWART, Commissioner
BULLETIN OF THE UNITED STATES!
1VT
CAA
BUREAU OF LABOR STATISTICS/................. IlO e 0*1^
EMPLOYMENT
AND
UNEMPLOYMENT
S ERI ES
UNEMPLOYMENT-BENEFH PLANS
IN THE UNITED STATES
AND
UNEMPLOYMENT INSURANCE
IN FOREIGN COUNTRIES
JULY, 1931
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1931
For sale by the Superintendent of Documents, Washington, D. C.
Price 50 cents
Acknowledgment
This report was prepared under the direction of Hugh S. Hanna,
of the United States Bureau of Labor Statistics.
ii
Contents
Page
Introduction_______________________________________________________
Part 1.— Unemployment-benefit plans in the United States...... ................
Summary:
Company plans________________________________________________
Joint-agreement plans__________________________________________
Trade-union plans,_____________________________________________
Detailed reports of plans:
Company plans—
Dennison Manufacturing Co., Framingham, Mass____________
Columbia Conserve Co., Indianapolis, Ind___________________
Dutchess Bleachery (Inc.), Wappingers Falls, N. Y ___________
Crocker-McElwain Co. and Chemical Paper Manufacturing Co.,
Holyoke, Mass__________________________________________
United Diamond Works (Inc.), Newark, N. J________________
John A. Manning Paper Co. (Inc.), Troy, N. Y _______________
Behr-Manning Corporation, Watervliet, N. Y ________________
S. C. Johnson & Son, Racine, Wis___________________________
Leeds & Northrup Co., Philadelphia, Pa_____________________
Procter & Gamble Co., Cincinnati, Ohio_____________________
Brown & Bailey Co., Philadelphia, Pa_______________________
Consolidated Water Power & Paper Co., Wisconsin Rapids, Wis__
General Electric Co________________________________________
Joint company plan, Fond du Lac, Wis_______________________
Rochester (N. Y.) unemployment-benefit plan________________
Delaware & Hudson Railroad_______________________________
Joint-agreement plans—
Men's clothing industry, Chicago, 111________________________
Men's clothing industry, New York City_____________________
Men’s clothing industry, Rochester, N. Y ____________________
Women's garment industry, Cleveland, Ohio_________________
Cloth hat and cap industry, New York City__________________
Cloth hat and cap industry, Philadelphia, Pa_________________
Straw-hat industry, New York City_________________________
Full-fashioned hosiery industry__________________ ___________
Lace-curtain industry, Kingston, N. Y _______________________
Lace industry, Philadelphia, Pa_____________________________
Lace industry, Scranton, Pa________________________________
Lace industry, Wilkes-Barre, Pa------------------------------------------Trade-union plans—
Deutsche-Amerikanische Typographia_______________________
International Association of Siderographers___________________
Diamond Workers' Protective Union of America______________
Bookbinders—
Local No. 31-125, San Francisco, Calif__________________
Local No. 119, New York City__________________________
Local No. 8, Chicago, 111_______________________________
m
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5
7
14
19
26
29
32
34
37
39
43
44
45
49
51
54
55
60
62
65
67
72
74
77
81
84
86
91
93
96
100
103
105
107
108
110
111
112
IV
CONTENTS
Detailed reports of plans—Continued.
Trade-union plans—Continued.
Electrotypers—
Local No. 3, Chicago, 111_______________________________
Local No. 72, Philadelphia, Pa__________________________
Lithographers—
Local No. 17, San Francisco, Calif---------------------------------Local No. 14, Philadelphia, Pa__________________________
Local No. 8, Cincinnati, Ohio___________________________
Local No. 1, New York City____________________________
Local No. 45, Seattle, Wash____________________________
Photo-engravers—
Local No. 5, Chicago, 111________ _______ _______________
Local No. 13, Cincinnati, Ohio________________ __________
Local No. 7, Philadelphia, Pa_________________________
Local No. 1, New York City-----------------------------------------Local No. 3, Boston, Mass_____________________________
Local No. 24, Cleveland, Ohio__________________________
Local No. 6, Minneapolis-St. Paul, Minn________________
Local No. 8, San Francisco, Calif_______________________
Local No. 2, Baltimore, Md____________________________
Local No. 19, Milwaukee, Wis---------------------------------------Local No. 11, Indianapolis, Ind_________________________
Local No. 10, St. Louis, Mo____________________________
Printing pressmen—
Local No. 51, New York City___________________________
Local No. 6, St. Louis, Mo_____________________________
Printing-press assistants, Local No. 23, New York City________
Typographical Union—
Local No. 6, New York City___________________________
Local No. 53, Cleveland, Ohio__________________________
Local No. 16, Chicago, 111______________________________
Local No. 2, Philadelphia, Pa___________________________
Local No. 13, Boston, Mass_____________________________
Bakery and confectionery workers—
Local No. 16, Buffalo, N. Y ____________________________
Local No. 4, St. Louis, Mo_____________________________
Local No. 22, New York City___________________________
Local No. 118, Washington, D. C_______________________
Local No. 126, Tacoma, Wash__________________________
Local No. 24, San Francisco, Calif______________________
Local No. 9, Seattle, Wash_____________________________
Local No. 74, Spokane, Wash___________________________
Local No. 233, Madison, Wis___________________________
Brewery, flour, cereal, and soft-drink workers, Local No. 1,
New York City__________________________________________
Wood carvers, Boston, Mass________________________________
Lace operatives—
Branch No. 2, Wilkes-Barre, Pa. (employees of Wyoming
Lace Mills)__________________________________________
Branch No. 1, Philadelphia, Pa. (employees of North
American Lace Co.)__________________________________
Page
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115
116
117
118
119
121
122
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125
126
128
129
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132
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137
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146
148
149
151
152
153
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157
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169
CONTENTS
Detailed reports of plans—Continued.
Trade-union plans— Continued.
Lace operatives—Continued.
Branch No. 1, Philadelphia, Pa. (employees of Quaker Lace
Co.)________________________________________________
Branch No. 18, Philadelphia, Pa. (employees of North
American Lace Co.)_________________________________
Part 2.—Unemployment insurance in foreign countries________________
Austria________________________________________________________
Belgium_______________________________________________________
Bulgaria_______________________________________________________
Employment offices------------------------------------------------------------Insurance against unemployment____________________________
Czechoslovakia-------------------------------------------------------------------------Denmark______________________________________________________
Public employment offices__________________________________
Unemployment insurance___________________________________
Finland_______________________________________________________
France________________________________________________________
State subsidized unemployment insurance____________________
State subsidized local government unemployment funds_______
Germany______________________________________________________
Great Britain__________________________________________________
Northern Ireland___________________________________ _______
Irish Free State________________________________________________
Italy------------------------------------------------------------------------ --------------Luxemburg____________________________________________________
Netherlands-----------------------------------------------------------------------------Norway_______________________________________________________
Poland________________________________________________________
Wage earners______________________________________________
Salaried workers___________________________________________
Queensland____________________________________________________
Spain_________________________________________________________
Switzerland____________________________________________________
Federal system_____________________________________________
Canton of Appenzell Inner Rhodes---------------------------------------Canton of Appenzell Outer Rhodes__________________________
Canton of Aargau__________________________________________
Canton of Basel-Land______________________________________
Canton of Basel-Stadt______________________________________
Canton of Bern____________________________________________
Canton of Fribourg________________________________________
Canton of Geneva__________________________________________
Canton of Glarus________________________________ __________
Canton of Grisons__________________________________________
Canton of Lucerne_________________________________________
Canton of Neuchatel____________________________________ - - Canton of St. Gall____________________ ____________________
Canton of Schaffhausen_____________________________________
Canton of Schwyz__________________________________________
Canton of Solothurn________________________________________
Cznton of Thurgau_________________________________________
V
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374
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381
VI
CONTENTS
Part 2.—Unemployment insurance in foreign countries— Continued.
Switzerland—Continued.
Canton of Ticino___________________________________________ __ 381
Canton of Uri________________________________________________ 382
Canton of Valais___________________________________________ __ 382
Canton of Vuad______________________________________________ 383
Canton of Zurich_____________________________________________ 383
Canton of Zug______________________ _________________________ 385
BULLETIN OF THE
U. S. BUREAU OF LABOR STATISTICS
n o . 544
WASHINGTON
J u ly , m i
UNEMPLOYMENT-BENEFIT PLANS IN THE UNITED
STATES AND UNEMPLOYMENT INSURANCE IN
FOREIGN COUNTRIES
Introduction
This bulletin has been prepared in response to many requests, both
official and unofficial, for a brief review of the various unemployment
benefit and insurance plans in the United States and foreign coun
tries. In the United States there has been no legislation in this
field. Such measures as have been devised have been solely upon
private initiation and under private control. In many foreign
countries, however, unemployment insurance has been made a mat
ter of State legislation.
Part 1 deals with the unemployment-benefit plans (including guaranteed-employment plans) in the United States. The basic infor
mation was obtained by bureau agents directly from the companies
and unions concerned, and copies of the agents’ reports were sent
to the persons furnishing the data for verification and correction
of the facts and figures contained therein.
Owing to time limitations, the survey could not reach all em
ployers and trade-unions in the country, but it is believed that it
did cover practically all plans of importance. This is particularly
the case as regards company, joint-agreement, and national tradeunion plans. As regards local trade-union plans, visits were made
to all locals where there was any information suggesting the possi
bility of such locals having unemployment-benefit plans, and in
addition intensive inquiry was made in certain of the larger cities.
Part 2 deals with the public unemployment-insurance systems in
effect in the 18 countries which, according to the bureau’s informa
tion, had adopted such systems up to May, 1931. The descriptive
reports for these countries were prepared by the consular representa
tives of the United States Department of State in the several coun
tries concerned, in accordance with an outline and a memorandum
of instructions prepared by the Bureau of Labor Statistics. Because
of space restrictions, several of the original reports from the consular
representatives had to be condensed, but otherwise no changes,
except those incident to editing, have been made in the text of these
reports.
1
2
UNEMPLOYMENT BENEFIT PLANS AND INSURANCE
The reports here presented, for both the United States and foreign
countries, are intended to be entirely objective in character, no
attempt being made to evaluate the merits or success of any plan.
In the case of the reports for foreign countries, however, the opinions
of competent authorities, representing various points of view, are
presented in so far as such opinions could be obtained.
The Bureau of Labor Statistics wishes gratefully to acknowledge
the assistance of the many organizations and persons who furnished
information for the part of the study dealing with the United States,
and to.express its appreciation of the cooperation of the State
Department in the preparation of the reports on foreign countries.
PART 1
UNEMPLOYMENT-BENEFIT PLANS
IN THE UNITED STATES
PART 1.—UNEMPLOYMENT-BENEFIT PLANS
IN THE UNITED STATES
Part 1 presents the results of a survey made by the Bureau
of Labor Statistics of the unemployment-benefit plans in the United
States. For the purpose of this survey no very precise definition
was attempted as to what constitutes an unemployment-benefit plan.
Broadly speaking, the effort was to include all plans which sought
to protect the worker against the evils of unemployment either by
assuring him a certain steadiness of work or by guaranteeing him
a certain money benefit in case he should be laid off because of lack
of work. Plans concerned solely with the stabilization of produc
tion and thus of employment, but which offered no guaranty to the
employee either of work or income, were not included.
The survey was made, for the most part, in April, 1931, and state
ments regarding existing conditions may be taken as referring to
that date, although in a few cases later information was secured,
and in a few cases also the latest statistical data available were for
a somewhat earlier period.
There have been several previous official and unofficial reports on
the subject of unemployment-benefit plans in the United States,1
but most of the information thus made available relates to condi
tions existing prior to the depression in industry which began in
the latter part of 1929. As a result of the depression, interest in
this subject was greatly* intensified and several new plans were
established. The bureau’s survey was undertaken primarily to find
out what the later developments had been, and its objects may be
briefly described as follows: (1) To complete and verify the exist
ing information; (2) to study the plans recently established; and
(3) to ascertain wnat effects, if any, the depressed industrial
conditions may have had upon the operation of the several plans.
The bureau has no means of knowing whether its survey was en
tirely complete, but it believes that it included practically all plans
now in existence which are established on a systematic and more or
less permanent basis. No effort was made to cover what may be
termed “ relief ” plans, set up to meet emergency conditions, and pre
sumably of a temporary character.
The survey, as noted, was made in April, 1931, and at that time it
was found that 79 unemployment-benefit or employment-guaranty
plans were in existence. The number of employees potentially
affected by these plans was about 226,000, but, for reasons noted
1 O f particular value a r e : American Federation o f Labor, Unions Provide Against Unem
ployment, Washington, 1929; Unemployment Benefits in the United States, by Bryce M.
Stewart, New York, 1930; United States Senate, Committee 011 Education and Labor,
Unemployment In the United States, hearings pursuant to Senate Resolution 219, a reso
lution providing fo r an analysis and appraisal o f reports on unemployment and systems
for prevention and relief thereof, together with Senate Report No. 2072, Washington,
1929; and various articles in the M onthly Labor Review o f the U. S. Bureau o f Labor
Statistics.
5
6
UNEMPLOYMENT-BENEFIT PLANS----UNITED STATES
below, the number actually eligible to benefit at the time of the survey
was considerably less than this number. The plans were distributed,
by type, as follows:
Fifteen company plans; i. e., those established by employers either
individually or in groups. These companies employed about
116,000 employees at the time of this study, and of this number
it is estimated that slightly more than 50,000 were eligible to
benefits.
Sixteen joint-agreement plans,® established by agreement between
trade-unions and employers, and covering approximately 65,000
workers. In some instances union membership totals were
used, as the figures representing number of persons eligible
were not available.
Forty-eight trade-union plans,2 maintained solely by labor organi
zations, either national or local, for the benefit of their own
members. These covered about 45,000 persons.
The character and significance of these several plans, and their
operating experience, particularly during the current period of indus
trial depression, are summarized in the next few pages. A detailed
account of each of the plans covered is given on subsequent pages.
No general statement can be made regarding the degree of success
of these plans. In this connection, however, it is of the utmost impor
tance to note that the real success of a plan must be judged in rela
tion to the degree of protection it offers to those covered. For in
stance, if all or a large portion of the unwanted workers are simply
discharged, or dropped after a short period of benefit, a plan may
function very successfully for the retained workers, but will have
done very little toward meeting the real problem of unemployment.
On the other hand, if the effort is to take care, for a considerable
period, of all the workers under a given plan, the statistical showing
may be unfavorable, but the plan may be fundamentally much more
successful than the one cited in the previous illustration.
“ A fter this survey was made the Industrial Council o f Leather Goods M anufacturers
(In c.) and the International Pocketbook W orkers’ Union in New York City entered
an agreement on June 23, 1931, to set up an unemployment-beneflt plan for union
employees. This plan is to be supported by equal contributions from employers and
union employees amounting to 2% per cent o f weekly pay roll and earnings, respectively.
Other terms are not yet known. The join t plan takes the place o f a trade-union plan
established in 1930 and discontinued shortly before the join t plan was established.
2A fter this survey was completed, Photo-Engravers’ union, No. 32, o f Los Angeles,
Calif., adopted an unemployment-beneflt plan, to be maintained by assessments at the rate
o f $1.50 per week fo r journeymen and 50 cents for advanced apprentices, and providing
benefits to the amount o f $10 per week for journeymen and $5 per week fo r advanced
apprentices.
SUMMARY
Company Plans
There are now in existence 15 company plans for guaranteeing
employment or the payment of unemployment benefits. This num
ber does not include the plan of the Delaware & Hudson Railroad
which can not properly be classed as an unemployment-benefit plan
but does include the plan of the United Diamond Works (Inc.),
which, although it has not been given up by the firm, is at present
inoperative (except for a small number of retained employees)
through the closing down of the plant. Two additional plans, those
of the Rockland Finishing Co. and the American Cast Iron Pipe
Co., were started in 1920 and 1924, respectively, but were abandoned
after a rather brief experience.
The total number of employees of the companies included in the
15 existing plans was approximately 116,000 in the first quarter of
1931. As one of these plans is at present suspended and the joint
company plan in Rochester has not gone into effect, the number in
the plants of those actually operating is about 90,000. The period
of service required for eligibility varies in the different plans, rang
ing in general from three months to two years although one company
requires five years’ service. The number of employees covered by
the plans, therefore, is considerably less than the total number of
employees, the estimated number of eligible employees at the time
the study was made being slightly more than 50,000.
Dennison Manufacturing Co.
The earliest plan is that of the Dennison Manufacturing Co.,
Framingham, Mass., which was started in 1916, and became effec
tive for the payment of benefits in March, 1920. Various sums had
been set aside by the firm between 1916 and 1919, so that at that
time the fund with accrued interest amounted to approximately
$147,000. No further contributions have been made to the fund.
As first formulated and up to Januarv, 1931, the plan provided for
the payment of benefits to workers who were unemployed because
of lack of work or whose earnings were reduced because of transfer.
But early this year the plan was changed to guarantee to those
employees having at least six months’ service, who were retained on
the pay roll, a certain percentage of their normal weekly pay. The
drain on the fund during recent months has been great. At the end
of March, 1931, there was a little over $35,000 remaining in the
treasury. It has been necessary to discharge workers and in April,
1931, there were about 1,600 covered by the plan as compared with
more than 2,400 in 1927.
7
8
TJNEMPLOYMENT-BENEFIT PLAN'S— UNITED STATES
Columbia Conserve Co.
The employment-guaranty plan of the Columbia Conserve Co.,
Indianapolis, Ind., covering the permanent employees of the com
pany who are on a salary basis, was adopted in April, 1917. At
the same time a works council was formed which was given con
siderable authority. The workers came into possession of 51.3 per
cent of the common stock of the company June 30, 1930, and are
now in practically full control of the business. Regular workers
are considered for membership in the salaried class within three to
six months after being employed, and upon being placed on a salary
basis are automatically covered by the guaranty which insures full
pay for the entire year. In February, 1931, 140 of the 162 employees
were included in the guaranty plan. Although the plant has felt
the depression to a certain extent, there have been no lay-offs or
discharges on account of lack of work since the beginning of the
depression.
Dutchess Bleachery (Inc.)
Unemployment benefits were provided for in the plan of the
Dutchess Bleachery (Inc.), Wappingers Falls, N. Y., which was
adopted in December, 1919. It was originally planned that the un
employment fund was to be maintained from the net profits of the
company, and in 1922 the fund had reached the sum of $93,000.
Since that time, however, there has been no available surplus and
as no further contributions to the fund have been possible it has
gradually been reduced so that it now amounts to only a little more
than $10,000. It is evident that it is only a question of time when
the plan will be abandoned, as there is no indication that the
company will be able to resume payments.
Crocker-McElwain Co. and Chemical Paper Manufacturing Co.
The employment-guaranty plan of the Crocker-McElwain Co. and
the Chemical Paper Manufacturing Co., Holyoke, Mass., first in
stituted in 1920, was amended in February, 1931, to cover 44 weeks of
guaranteed employment only, instead of 52 weeks as in the original
lan. The first plan also guaranteed full-time earnings to employees
aving five years’ service with the company, while now the guaranty
covers up to 80 per cent of the full-time earnings. The change in
the plan was decided upon in January as a result of the excessive
cost of the plan during the depression. The plan, as amended, is
not made effective for any definite length of time. There is ordi
narily little seasonal unemployment in these plants with the excep
tion of July and August and these are the months which have been
excepted in the employment guaranty.
E
United Diamond Works (Inc.)
Benefits to unemployed workers were first paid by the United
Diamond Works (Inc.) in April, 1921. There was no formal plan
and no fund was set aside, but benefits have been paid out of the
SUMMARY OF PLANS
9
surplus earnings of the company. During shutdowns men have been
paid 25 per cent and women 20 per cent of their average full-time
earnings. The industry is particularly subject to the effects of
business depression, as its product is purely a luxury. During the
past jear and a half the plant has been shut down for long periods
and m March the payment of benefits ceased, as the surplus was
exhausted. When the company resumes work, however, it is probable
that the accumulation of a reserve fund for the payment of unem
ployment benefits will be begun.
John A. Manning Paper Co. (Inc.)
A modification of the unemployment-benefit plan, due to the effects
of the depression, has occurred in the plants of the John A. Manning
Paper Co. (Inc.), Troy, N. Y. The original plan was adopted in 1922
and tentatively amended April 1, 1931. Originally, unemployment
benefits were paid entirely by the company as a part of operating
expenses, but under the new plan a fund will be formed by a con
tribution of 1 per cent of the operating employees’ wages, matched
by the contribution of an equal sum by the company. In an unem
ployment emergency the fund will be supplemented by a 1 per
cent deduction from the earnings of the salaried group, including
officials. One year’s service with the firm and membership in the
Manning Welfare Association is required for eligibility for benefits.
The emergency provision of the plan is now in effect; the mill is
operating on a 3-day schedule, but an extra half day’s pay is being
made up from the emergency fund which is being supplemented by a
contribution from the company.
Behr-Manning Corporation
The Behr-Manning Corporation, Watervliet, N. Y., whose em
ployees are members of the same paper unions and welfare associa
tion as the Manning Co., has operated under an identical plan, but
is now considering the adoption of a joint contributory plan.
S. C. Johnson & Son
Six months’ service with the company and membership in its
mutual benefit association is required for eligibility for unemploy
ment benefits among employees of S. C. Johnson & Son, Racine, Wis.
The plan was adopted in 1922. Benefits vary from $1 to $4 per
day for the first 100 days of unemployment, according to the salary
or wage rating of the employee, and from 50 cents to $2 per day for
the second 100 days. The cost of the plan is borne entirely by the
company. During the eight years the plan has been in effect, only
$4,241 has been paid in benefits and during 1930 and the first three
months of 1931 there were no lay-offs and consequently no benefits
were required.
Leeds & Northrup Co.
First appropriations to an unemployment-benefit fund were made
by the Leeds & Northrup Co., Philadelphia, Pa., in 1923, and the
first benefits were paid in 1924. Benefits amount to 75 per cent of
10
UNEMPLOYMENT-BENEEIT PLANS----UNITED STATES
the wages or salary for the normal working week of 44 hours, exclu
sive of the attendance bonus for employees who have dependents and
50 per cent for those without, and are graded according to length of
service, ranging from 3 weeks’ benefit for 3 months’ service to 26
weeks’ benefit for service of 5 years and over. The discharges on
account of lack of work in 1930 were chiefly among young persons
without dependents, many of them being high-school boys. There
had been only one discharge and no lay-offs since the first of the year.
The company considers the benefit fund is adequate to meet all re
quirements and states that when business recovery takes place
it is probable that the operation of the plan will be reviewed and
the terms made more generous.
Procter & Gamble Co.
Full pay for 48 weeks in the year is guaranteed by the Procter &
Gamble Co., Cincinnati, Ohio, to every employee who is a member of
the profit-sharing plan and has subscribed for a stated amount of
stock in the company. The guaranty applies to all such employees
if they have had at least six months* service with the company and
the wage or salary does not exceed $2,000 per year. The employment
guaranty covers all lost time in excess of 200 hours during the year
based on the 50-hour week. The depression has increased the number
of employees participating in the plan. Participation is voluntary,
and while about 80 per cent of the eligibles were participants prior
to the depression, the number now has increased to almost 100 per
cent. There have been no lay-offs for lack of work during this period,
and the company states that no participant in the plan has ever been
in distress on this account.
Brown & Bailey Co.
The accumulation of a fund for the payment of unemployment
benefits on account of slack work was begun by the Brown & Bailey
Co., Philadelphia, Pa., in November, 1927, and the first payments
from the fund were made in April, 1930. All employees except
salaried workers and foremen are eligible for benefits. In a period
of business depression the company retains its entire force and runs
on short time, supplementing the earnings of the employees with
payments from the benefit fund sufficient to bring the weekly wages
up to an amount which was formerly equal to 80 per cent of the
normal earnings, but which was reduced the latter part of June to 75
per cent of the earnings. The original plan did not provide for con
tributions from employees but, through the shop council, the em
ployees asked to be allowed to contribute 1 per cent of their weekly
pay when the fund falls below $5,000. This is now being done, and
the foremen, also at their own request, are contributing $1 per month.
Owing to the heavy demands upon the fund since April on account
of lack of work, the shop council advised the lowering of the percent
age basis on which the payments are made, and it was accordingly
reduced to 75 per cent of normal earnings, to begin with the pay-roil
week ending June 26, 1931.
SUMMARY OF PLANS
11
Consolidated W ater Power & Paper Co.
Compensation for all employees having service of one year or
over for time lost from shutting down machines is provided for in
the plan of the Consolidated Water Power & Paper Co., Wisconsin
Rapids, Wis., which was adopted in February, 1929. The plan pro
vides for a guaranteed monthly income amounting to approximately
one-third of the average monthly wage. From February 7 to June
8, 1929, a total of $2,931 was paid in benefits but since that time no
benefits have been paid, the company having been able to provide
work so that there have been no lay-offs.
General Electric Co.
The General Electric Co., Schenectady, N. Y., has during the past
year put in effect two different plans covering employment condi
tions. The first, an unemployment-pension plan, had been adopted
by all of the 12 plants manufacturing different types of electrical
apparatus on August 1, 1930, and the second, a plan for guaranteed
employment covering all employees having two years’ service with
the firm, was put in effect in the 12 lamp works of the company in
January, 1931. The unemployment-pension plan provides for the
establishment of a fund formed by equal contributions by the com
pany and the employees, amounting to 2 per cent of the actual weekly
or monthly earnings of employees so long as the earnings of the
employees exceed 50 per cent or more of the average weekly or
monthly pav. In times of abnormal unemployment, contributions
are required from salaried employees, engineers and technical em
ployees, and officials, who pay approximately 1 per cent of their
earnings into the fund. The plan provided that no payments should
be made from the fund until an employee had contributed for six
months to the fund. On account of present conditions, however, a
special emergency was declared December 1, 1930. The emergency
plan contains three important modifications because of the fact that
it was put into effect before a substantial fund could be accumulated.
These provisions include the contributions of 1 per cent of earnings
of all employees of the company except those m the lamp depart
ment, payments only to employees in need of funds, and reduction
of maximum weekly payments from $20 to $15. From December 1,
1930, to April 30, 1931, benefits were paid to 10,253 employees
amounting to a total of $549,605.50. This amount covered payments
for complete unemployment, part-time employment, loans, and the
relief of distress. The company stresses the fact that the plan is
experimental as yet and that it is possible it may be changed in the
light of experience.
Fond du Lac Plan
A joint company unemployment plan was established September
1, 1930, by three manufacturing firms of Fond du Lac, Wis. This
plan provides for cooperation between the companies in furnish
ing employment. The plan is financed by contributions from the
employers of $1 per month for every $100 paid in wages and covers
65655°—31----- 2
12
UFEMPLOYMENT-BENEFIT PLANS— UNITED STATES
all employees between the ages of 21 and 60 who have been employed
continuously for two years, with the exception of salesmen and those
in supervisory positions. Prior to the adoption of the plan, turnover
in those companies was as high as 40 per cent per year but since the
plan went into effect and up to the middle of April, 1931, the comanies have succeeded in so stabilizing employment that there have
een no lay-offs and consequently no benefits have been paid.
E
Rochester Plan
The latest plan to be adopted and perhaps the most significant,
since it contemplates the stabilization of employment in an entire
city, is the Rochester unemployment benefit plan which was adopted
in February, 1931, by 14 manufacturing establishments whose em
ployees represent about one-third of the industrial employees of the
city. It is hoped that ultimately all employers in the city will adopt
the plan. The first payments into the funds will be made during the
current year, but no benefits will be paid until January 1, 1933. In
normal periods, the plan will be financed entirely by the companies,
each of which will contribute to the reserve fund up to 2 per cent of
the pay roll, but when an emergency is declared, employees and offi
cials will be assessed an amount equal to 1 per cent of their earnings
which will be matched by the employing company. To be eligible for
benefit the employee must have had one year’s service with nis com
pany and must be earning less than $50 per week. Benefits will
amount to not more than 60 per cent of the average weekly earnings
with a maximum of $22.50 per week, the period during which benefits
are paid ranging from 6 to 13 weeks according to length of service.
Delaware & Hudson Railroad
The plan of the Delaware & Hudson Railroad, adopted in 1922, is
part of the general insurance system covering group life insurance,
sickness, and accident. Coverage is dependent upon the employee
having been in the service of the firm for two years and having
taken out two of the three forms of contributory insurance offered.
The insurance covers unemployment arising through discharge only
and provides for the payment of $10 or $15 a week according as the
average annual wages of the dismissed employee are below or above
$1,000. The dismissal wage is paid for a maximum of 6 weeks.
Firms Having Unemployment-Benefit or Guaranteed-Employment Plans
The following list of firms having unemployment-benefit funds
or guaranteed-employment plans gives the date of establishment,
and the average number of employees in 1931:
13
SUMMARY 03? PLANS
T a b le 1.—Firms having unemployment-benefit or guaranteed-employment plans,
date established,, and average number of employees covered
Name and address of firm and type of plan
Dennison Manufacturing Co., Framingham, Mass:
Unemployment-benefit fund................................
Employment guaranty..
Columbia Conserve Co,, Ind
.
,
________
____
_____
Dutchess Bleachery (Inc.), Wappingers Falls, N. Y.: Unemploymentbenefit fund.
Crocker-McElwain Co. and Chemical Paper Manufacturing Co., Holyoke,
Mass.: Employment guaranty.
United Diamond Works (Inc.), Newark, N. J.: Unemployment-benefit
plan.
John A. Manning Paper Co. (Inc.), Troy, N. Y .: Unemployment-benefit
plan.
Behr-Manning Corporation, Watervliet, N. Y.: Unemployment-benefit
plan.
S. C. Johnson & Son, Racine, Wis.: Unemployment-benefit plan...............
Leeds & Northrup, Philadelphia, Pa.: Unemployment-benefit fund___
Procter & Gamble Co., Cincinnati, Ohio: Employment guaranty.................
Brown & Bailey Co., Philadelphia, Pa.: Unemployment-benefit fund.......
Consolidated Water Power & Paper Co., Wisconsin Bapids, Wis.: Unemployment-benefit plan.
General Electric Co.:
Unemployment-benefit fund (electrical apparatus manufacturing, 12
plants).
Employment guaranty (lamp works, 12 plants)...................................
Fond du Lac, Wis.—Three companies: Unemployment-benefit fund.......
Rochester, N. Y.—Fourteen companies: Unemployment-benefit plan,
Date of establish
ment of plan
Average
number
of em
ployees,
1916.......................
January, 1931........
April, 1917.............
December, 1919...
1,941
162
425
February, 1921l. . .
511
April, 1921.............
(*>
January, 19223___
257
....... do....................
239
November, 1922..,
February, 1923___
August, 1923.........
November, 1927...
February, 1929___
346
1,064
5,691
115
900
August, 1930_____
70,380
January, 1931.......
September, 1930...
February, 1931___
8,000
350
26,000
i Amended February, 1931.
* Plant shut down, only a few employees retained,
a Amended Apr. 1,1931.
Discontinued Plans
The plan established by the Rockland Finishing Co., Garnerville,
N. Y., in January, 1920, for the payment of unemployment benefits
was exhausted by the drain upon it during the depression in the
textile industry m 1920 and 1921. The company first contributed
$100,000 to the fund, with the provision that when the fund reached
$120,000 benefits were to be paid on the basis of 48 hours’ employ
ment per week. On account of the depression, however, payments
were begun on a lower basis and by the end of 1920, benefits had been
paid to the amount of $80,000. After that time, the company was
able to make only very small additional payments into the fund and
by the middle of 1923 the fund was entirely exhausted. No effort
has been made since that time to revive the fund.
The American Cast Iron Pipe Co., Birmingham, Ala., introduced
a plan for the payment of unemployment benefits in 1924 and made
an initial payment into the fund of $15,000 in December of that year.
A similar sum was voted in December, 1925, for the payment of
benefits in 1926; but after that, on account of change in manufac
turing methods and reorganization, no further contributions were
made. The plan had provided for the guaranty of a minimum of
four days’ pay per week during periods of slack work, the supple
mentary payments necessary to make up the guaranteed wage being
taken from the fund. The changes in the industry resulted in a
considerable reduction in the force and changes in operation, and
the company felt that it was not in a position to be bound by a
fixed plan for compensating for unemployment.
14
UNEMPLOTMENT-BENEFIT PLANS— UNITED STATES
Joint-Agreement Plans
In April, 1931, a total of 16 plans were found to be in operation,
provided by joint agreements between employers and trade-unions
to ameliorate the condition of union members during periods of un
employment. Of these plans, 13 provide out-of-work benefits and
the remaining 3 are guaranteed-employment plans. The majority
of the plans (9 out of 16) are in industries manufacturing articles
of wearing apparel. Of the other 7 joint plans, 5 are for the pro
tection of lace and lace-curtain weavers, 1 for specified classes of
workers in the wall-paper industry, and 1 for railway employees
engaged in the maintenance of equipment.
Approximately 65,000 industrial workers are covered by the plans
provided by joint agreement. Of this number 43,000 are operatives
on men’s clothes in Chicago, New York City, and Rochester.
Eight plans were discontinued between 1927 and 1930, owing either
to labor disputes or to depressed business conditions. The plans
which were discontinued during these years were restricted to two
industries, six having been in the cloth hat and cap industry and two
ill the cleaning and dyeing industry. Most of these plans had a
small coverage, the notable exceptions being the two agreements in
the cleaning and dyeing industry.
Table 2 shows the industries covered by the plans now in oper
ation, the cities or jurisdictions where the plans are in operation,
the date of the first agreement, and the approximate number of per
sons now covered:
T a b l e 2 .—
Joint-agreement plans, providing for unemployment benefits or guar
anteed employment, in operation April, 1931
Industry and location
Men’s clothing industry (unemployment benefits):
Chicago, 111...................- ____________ ______ _________________________________
New York, N. Y ___________________ _________ __ ______ ____________________
Rochester, N .Y .................._____................................................................................
Women’s clothing industry (guaranteed employment): Cleveland, Ohio____________
Cloth hat and cap industry (unemployment benefits):
New York, N. Y ...........................................................................................................
Philadelphia, Pa__________________________ ________________________________
Straw-hat industry (unemployment benefits):
New York, N. Y. (Local No. 3, United Hatters)______________________________
New York, N. Y. (Local No. 45, United Hatters).......................................... .........
Hosiery industry (unemployment benefits): All jurisdictions_______________________
Lace and lace-curtain industry (unemployment benefits):
Kingston, N. Y .......................................................................................................
Philadelphia, Pa. (Local No. 1 and Bromley Manufacturing Co.)_______________
Philadelphia, Pa. (Local No. 18 and Bromley Lace Co.)______ _____ ___________
Scranton, Pa..................................................................................................... ...........
Wilkes-Barre, Pa............................................................................. ...... ......................
Wall-paper industry (guaranteed employment): All jurisdictions....... .............. .............
Steam railroads (guaranteed employment): Seaboard Air Line R. R. and maintenanceof-equipment employees_______________ _____ __________________________ _______
Total.......................... ................................................................................................
i Union membership in 1929.
Date of
first
agree
ment
Approxi
mate
number
of persons
covered
1923
1928
1928
1921
12,979
22.000
8,000
2,000
1924
1924
1,700
200
1925
1924
1930
214
40
*15,000
1923
1924
1926
1923
1924
1894
16
68
26
87
84
1660
1928
2,022
65,096
SUMMARY OF PLAITS
15
Men’s Clothing Industry
Chicago.—Of the three plans providing unemployment benefits
for men’s clothing workers, that in force in Chicago was the first
to be adopted (1923). By the terms of the Chicago agreement, the
employers contribute to the unemployment fund 3 per cent of the
pay roll, and the employees, members of the Amalgamated Clothing
Workers of America, contribute 1y2 per cent of their wages. Bene
fits are paid at the rate of 30 per cent of full-time weekly wages,
with a maximum weekly payment of $15. The maximum benefit
period is 3% weeks per season, or 7y2 weeks per year, but in practice
benefits have never been paid for more than 3 weeks per season.
Since the recent depression set in, while no changes have actually
been made in the plan, expenditures per claimant have been reduced
when demands have been heavy by shortening the period of benefit;
thus in shops where benefits had been paid tor 3 weeks per season,
the board of trustees voted to pay only for 2y2weeks, etc.
New York City.—Members of the Amalgamated Clothing Work
ers of America in New York City are provided with an unemploy
ment-benefit system the whole cost of which is borne by the
employers. The manufacturers contribute at the rate of iy2 per
cent of their direct labor pay roll, plus 1.2 per cent of the amount
they pay to contractors. Benefits are authorized at the rate of $30
per season, or $60 per year, the payments to be made in 6 weekly
installments of $10 each. When this plan was placed in operation
in 1928 it was expected that the rules regarding eligibility, amount,
and duration of benefits, etc., would be modeled upon those adopted
in Chicago. However, widespread unemployment followed so closely
upon the establishment of the plan that it was necessary to use the
funds available to give immediate relief in small amounts to union
members in distress and to make the requirements less rigid than
would otherwise have been the case in order that the most nue»iy
might be helped. As unemployment has become increasingly severe,
there has been a tendency to pay benefits of less than the authorized
maximum of $30 per season in order that a larger proportion of the
union membership might be helped. However, in exceptional cases,
benefits greater than those authorized have been paid.
Rochester.—The Rochester plan covering members of the Amalga
mated Clothing Workers was established in 1928. It was stipulated
that the employers should contribute 1y2 per cent of the pay roll to
the fund and tne employees a like percentage of their wages, but the
employees’ contribution has been waived because of the depression.
In the two seasons that benefit has been paid, the payment has been
at the rate of 25 per cent of the full-time weekly wages, with a maxi
mum weekly payment of $12.50, and the benefit period has been 2y2
weeks per season. In order to keep down the costs as unemployment
became increasingly severe, the waiting period was increased from
2 weeks in the first season to 2y2 weeks in the second, and persons
who earned $40 in a given week in the second season (as compared
with $45 in the first season) were not given credit for time lost in
that week. By revisions of this character each season it is possible
16
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
to keep the fund on a solvent basis without reducing the amount or
duration of benefit, and it is likely that this policy will be pursued
in the season ending June 1,1931.
W om en’s Clothing Industry
Cleveland.—By the plan established in 1921, workers in women’s
garment manufacturing establishments in Cleveland, who are mem
bers of the International Ladies’ Garment Workers’ Union, are
guaranteed employment for 38 weeks per year. The employers post
bond, up to 10 per cent of their pay roll, to cover any liability arising
out of the guaranty to inside-shop employees. In addition, they pay
2 per cent of their pay roll for pieceworkers and 1 per cent of their
pay roll for timeworkers into a fund to cover peak workers and outside-shop workers who receive less than 38 weeks of employment.
Contractors also pay into the fund for peak workers and outsideshop workers an amount equal to 2 per cent of their respective pay
rolls. Under the plan guaranteeing employment, employees are
entitled to one-half their usual earnings for the difference between
the number of weeks worked and 38 weeks (the number of weeks of
work guaranteed), but with the provision that the employers shall
not be liable beyond the limit of the funds authorized for this pur
pose. Prior to January, 1931, the number of weeks of work guaran
teed was 40 weeks per year. The amount of benefit has also been
reduced, benefits having been paid at the rate of two-thirds of the
usual earnings in the early years of operation under the plan, i. e.,
until December, 1923. Prior to December, 1922, employers’ liability
for inside-shop employees was 7^ per cent of the pay roll and up to
January, 1931, their contribution for peak and outside-shop employees
was one-half the present rate.
Cloth Hat and Cap Industry
New York City and Philadelphia.—Two joint agreements provid
ing out-of-work benefits for members of the Cloth Hat, Cap and
Millinery Workers’ International Union, both dating back to 1924,
are now in effect, one in New York City and the other in Phila
delphia. Both plans provide for employers’ contributions of 3 per
cent of the pay roll and for benefits of $10 per week for men and $7
for women for a maximum of seven weeks per year. Under both
lans the rates of benefit were temporarily raised during years of
usiness activity to $13 for men and $10 for women in New York
City, and to $15 for men and $10 for women in Philadelphia. How
ever, since the onset of severe unemployment in both cities not only
has the rate of benefit been reduced but it has been necessary to make
further changes. Thus, in New York City it was provided early in
1931 that if a worker had as much as eight hours of work in any
week, the time lost that week (32 hours) should not be counted in
calculating his total number of hours unemployed (formerly, time
lost amounting to 20 hours or more was credited to his unemployed
time). In Philadelphia the waiting period before benefits became
payable was lengthened in January, 1931, so that the worker must
E
SUMMARY 01* PLANS
17
now accumulate two weeks of unemployed time before he is eligible
for benefit for one-half week (formerly he received benefit for onehalf week after losing one week).
Straw-Hat Industry
New York City.—Two joint plans are maintained in New York
City providing unemployment benefits for members of Locals No. 3
and No. 45, respectively, of the United Hatters. The plan for mem
bers of Local No. 45 was established in 1924 and that for Local No. 3
in 1925. Both plans are supported by the employers’ contributions,
equal to 3 per cent of the pay roll. Benefits are paid at the rate of
$10 per week for a maximum of six weeks per year. No changes have
been made in the plan of Local No. 3 since the coming of the present
depression, but the administrators of the Local No. 45 fund have
found it necessary to pay benefits in individual cases beyond the
period of six weeks for which benefit is allowed under the terms of
the joint agreement.
Hosiery Industry
An out-of-work benefit fund was started for members of the Ameri
can Federation of Full-Fashioned Hosiery Workers in 1930. The
plan provides for contributions by the employers of 1 per cent of the
pay roll (beginning August 1, 1930) and contributions by the em
ployees of one-half of 1 per cent of wages (beginning September 1,
1931). As yet it is not known what the rate of benent, duration of
benent, etc., will be or when benefit payments will be made.
Lace and Lace-Curtain Industry
Five unemployment-benefit plans are in operation, covering mem
bers of the Amalgamated Lace Operatives of America. Under all
five plans the benent period is indefinite.
Kingston, N. Y .—The plan in force in Kingston was established
in 1923. By the terms of the agreement, the union members con
tribute 50 cents per week if they earn $18 or over, and the sum so
raised is matched by the employer. Benefits are authorized at the
rate of $15 per week, or a sum sufficient to bring the week’s earnings
up to that amount. The benefit period is indefinite, the aim being
to provide each worker with a minimum wage ox $15 per week
throughout the year. Because the depression has been so acute and
of such long duration, it has been necessary to reduce the $15 weekly
benefit and the amount now paid is prorated according to the rela
tion the hours the mill works bear to the normal working hours.
At present, $13.50 per week is authorized, and the lowest amount
ever guaranteed was $6.90, when the mill was on extremely short time.
Philadelphia.—In Philadelphia there are two joint plans in oper
ation, one for members of Branch No. 1 who are employed by the
Bromley Manufacturing Co., and the other for members of Branch
No. 18 who are employed by the Bromley Lace Co- These plans
were established in 1924 and 1926, respectively. The terms of benefit
under both plans are identical with those provided in Kingston.
However, both of the Philadelphia employers have temporarily dis
18
UNEMPLOYMENT-BENEFIT PLAITS— UNITED STATES
continued their financial support of the plans owing to difficult busi
ness conditions. So far, the money left in the joint fund of Branch
No. 1 has been sufficient to meet all demands for benefit. The mem
bers of both branches have increased their contributions to the funds;
Branch No. 1 has done so in anticipation of the time when the joint
funds will be exhausted, and Branch No. 18 in order to keep up
benefit payments,
Scranton.—The Scranton joint plan between the union and the
Scanton Lace Co. dates back to 1923. The terms of the agreement
provide that any worker earning $15 or more per week shall con
tribute 50 cents a week and that this amount shall be matched by
the employer. The fund has always been adequate to cover the cost
of the benefits of $15 per week or enough to bring the week’s earnings
to that amount for an indefinite period. A considerable balance is
now available for further payments.
Wilkes-Barre.—By the agreement in force in Wilkes-Barre be
tween the union and the Wilkes-Barre Lace Co. it is stipulated that
the union members covered shall contribute $1 per week to the fund
if they earn $17 or more per week, and that this sum shall be matched
by the employer. Benefits are at the rate of $16 per week, or enough
to bring the earnings for the week to that amount for an indefinite
number of weeks. These terms were included in the original agree
ment of 1924, and are still in effect. The fund is in good condition.
Wall-Paper Industry
The United Wall Paper Crafts and employers maintain a guaranteed-employment plan for machine printers, color mixers, and
print cutters. This plan dates back to 1894. Under the terms of
the agreement prior to 1929, the employee was guaranteed 50 weeks
of work—45 weeks of work at full pay and 5 weeks on vacation at
half pay, provided the factory failed to operate. The employers
bore all costs. In 1929 the guaranty is reported to have been reduced
to 40 weeks at full pay. At the time this survey was made, April,
1931, a new agreement was being negotiated, and pending settlement
of terms the union considered it inadvisable to furnish information
regarding current developments under the plan.
Steam Railroads
Railway shop men.—The Seaboard Air Line Railway Co. has
entered into agreements with the Federated Shop Crafts annually
since 1928 to provide a minimum number of positions in the maintenance-of-equipment department of the railroad. In 1928,1929, and
1930 the guaranty was made for the whole year, but in 1931 the
agreement was drawn up to permit changes from month to month
in the minimum number of positions guaranteed.
Discontinued Plans
Cloth hat and cap industry.—Six plans were discontinued in as
many jurisdictions of the cloth hat and cap industry between 1927
and 1930. Under all of these plans contributions to cover the cost
of benefit payments were made by the employers solely. In Balti
SUMMARY OF PLANS
19
more, Boston, Chicago, and Scranton, the employers contributed
3 per cent of the pay roll for this purpose, and benefits to the amount
of $10 per week for men and $7 per week for women were authorized
for periods of 7 or 8 weeks a year. Two of these plans were dis
continued owing to bad business conditions, and the other two
because of labor disputes. The plans that were maintained in Mil
waukee and St. Paul guaranteed employment for 48 weeks and the
employers were liable for from 1 to 5 per cent of the pay roll, the
rate varying according to the period of employment (1 per cent
for 47 weeks’ employment to 5 per cent for 43 weeks’ employment).
Benefits were paid according to the same sliding scale, i. e., ranging
from 1 per cent of annual earnings if the worker had 47 weeks of
employment to 5 per cent if he had 43 weeks’ employment or less.
Bad business conditions led to the discontinuance of the St. Paul
plan in 1929 and although the plan in Milwaukee has not been
definitely abandoned, the employees waived their rights to benefit
in 1930. ^
Cleaning and dyeing industry.—In 1927 a joint agreement plan
for unemployment benefits was provided for members of Local No.
17742 of the Cleaners, Dyers, and Pressers’ Union in Chicago, and
two years later, i. e. in 1929, a plan was established for members of
Local No. 17920 in St. Louis. Both plans were supported entirely
by the employers and made provision for benefits on the basis of
the family responsibility of the unemployed person. These two plans
were abandoned in 1929 as the result of labor disputes.
Trade-Union Plans
In times of business depression practically all trade-unions ren
der assistance to their unemployed members. As a result, many socalled unemployment benefit or relief plans spring up during periods
of severe unemployment and are discontinued when conditions be
come more normal. I f these temporary emergency measures are dis
regarded it appears that unemployment-benefit plans of a more or
less permanent and systematic character are now (April, 1931)
being maintained by 3 international unions and by 45 local unions.
All three of the international union plans were in existence long
before the present depression. Of the 45 local union plans, 8 have
been established since the depression began.
The total membership of the 3 international unions and 45 local
unions having plans at present is slightly less than 45,000, or about
iy2 per cent of the total trade-union membership in the country.
The unions represented by these 48 plans were 14 in number, but
the printing trades dominated, no less than 32 of the 48 plans being
maintained by unions connected with some branch of the printing
trade. As regards membership, the printing trades were still more
dominant.
National Union Plans
The three national unions which maintain unemployment benefit
plans are the Deutsch-Amerikanische Typographia, the Siderographers, and the Diamond Workers. All three are of small mem
bership and of specialized craftsmanship.
20
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
The Deutsch-Amerikanische Typographia is composed of printers
engaged on German publications. The demand for this type of work
has been steadily declining and the decrease in membership from
natural causes has about balanced the decline in demand. The pres
ent membership of all locals is about 541, of whom, however, 120 are
pensioners. The unemployment-benefit plan is rather modest, pay
ing only $6 a week for a total of 16 weeks during each year. The
cost is thus relatively small, and the plan has functioned very suc
cessfully, even during periods of depression.
The siderographers—in a specialized branch of engraving—are
less than 100 in number. There has been very little unemployment,
and the reserve of a few hundred dollars has been sufficient for the
demands made upon it. The benefits are only $5 a week, but are
granted for a 26-week period.
The diamond workers are concentrated in New York City. The
unemployment benefits are $9 per week for 16 weeks in a year. The
trade has been seriously affected by the depression; the former re
serve fund (derived from a 50-cent weekly assessment) was ex
hausted in 1930, and payments have since been made from the gen
eral fund.
Discontinued plains.—Members of the United Wall Paper Crafts
engaged as print cutters in jobbing shops formerly had a trade-union
unemployment-benefit plan, but, according to the general secretary
of the union, this was discontinued in 1929.
The only other national unions which are known to have main
tained unemployment-benefit systems in the past are the cigar
makers and the lithographers. The former discontinued their plan
in 1920 and the latter in 1923.
Local Union Plans
Bookbinders.—Unemployment-benefit plans are maintained by
three locals of bookbinders. Benefits vary from $5.50 to $15 per
week, and the benefit periods range from 8 to 13 weeks per year.
Two of the plans were established after the current business depres
sion set in. All three unions report that a large number of members
are still unemployed at the expiration of the benefit period. In none
of these cases was a special reserve fund in existence. In the early
part of 1931 the cost of unemployment benefits averaged from $3
to $4 per member per month.
Lithographers.—Unemployment-benefit plans are maintained by
five locals of lithographers, all these plans having been established
rior to the present depression. The weekly benefits are as low as
5 in one plan and are only $6 in two other plans. The longest
benefit period is 20 weeks, and the shortest is 50 days in one local. In
case unemployment lasts beyond the benefit period, the union, by
special action, usually grants some help either by gift or loan. The
New York local keeps a reserve fund of at least $10,000, which is
now equal to about one month’s benefits. Another local seeks to keep
a small reserve fund ($500); the other three locals have never
attempted to build up special reserve funds. The monthly cost of
the benefit plan ranges from about $1.80 to $3.50 per month per
jnember.
f
SUMMARY OF PLANS
21
Electrotypers.—Of the two plans maintained by locals of the
electrotypers’ union, one is quite liberal, allowing $20 and $25 for the
first and second weeks of unemployment, respectively, and thereafter
$30 per week for an unlimited period. The cost is heavy, averaging
at present about $9 per month per member. Under this plan, also,
a minimum reserve fund of $5,000 is provided for and the local
contemplates increasing this to $35,000 when conditions are more
normal. The other local pays benefits of $20 for 15 weeks and, dur
ing the present emergency, a supplementary benefit of $10 for 30
additional weeks or more. This local also maintains a substantial
reserve fund. The cost of the plan ranged between $4 and $7 per
member per month during the early months of 1931.
Photo-engravers.—Twelve locals of photo-engravers have unemployment-benefit plans, but three of these were adopted as a result
of the present depression and in one of these three cases discon
tinuance of the plan is contemplated as soon as the present emergency
is over. Several of the older plans, however, are well established
and have been operating for several years with substantial reserve
funds. The reserve fund under one plan amounts to $50,000.
In general these several plans provide liberal benefits and in most
cases the benefit period, during the present emergency at least, has
been made indefinite, either directly or through authorizing the
executive board to allow indefinite payments in urgent cases. The
costs have in some cases also been quite high, amounting at present
in one local to about $14 per month and in three others to $11 per
month. In the case of the San Francisco local the assessment for
unemployment benefits is now 10 per cent of earnings.
Pressmen and press assistants.—Two locals of pressmen and one
of press assistants now maintain unemployment-benefit plans. In
addition, the Boston local, in December, 1930, instituted a purely
emergency plan for 10 weeks (later extended for another 10 weeks)
which is essentially a temporary relief plan.
In all of the three regular plans, the benefits are unlimited, but
in one case are only $7 per week. In none of these plans is a special
reserve fund provided for. The cost has been relatively high, par
ticularly in the case of the New York City local (No. 51), which
is now assessing its members $8 per month for three months.
Typographical wrdon.—Of the five plans now being maintained
by locals of the International Typographical Union, three were
started as a result of the depression in 1930, and at least one of
these will probably be discontinued when the depression passes. In
one of these plans the payments are only $6 per week and in another
the payment for each of the last 8 weeks of the 16-week benefit
period is only $5. The New York local, however, pays $20 per
week. The Cleveland local has a well-organized loan system—lend
ing to members from $5 to $300, to be repaid in small installments.
The total loans in 1930 amounted to about $27,000. In the Chicago
local the current cost in March, 1931, was about $9 per month per
member and in April, $7. The Chicago plan pays additional sums
for married members with dependent children.
Bakery workers.—All of the nine locals of bakery workers now
maintaining unemployment-benefit plans established these plans
prior to the present depression, and three have been in effect more
22
UNEMPLOYMENT-BENEFIT PLANS----UNITED STATES
than 20 years. The bakery trade normally has a dull period in
winter, and the several plans were devised to meet this particular
problem of seasonal unemployment. Usually ’the benefits are rather
low—in one case only $4 a week. With fairly low payments and
limited benefit periods, these plans have stood up quite well during
the present depression. In a number of cases, however, the pressure
is now quite heavy. In only one local, that is, in Spokane, has it
been the policy to establish a reserve fund. In most instances the
expenses are met from the general funds of the respective unions.
Brewery, flour, cereal, and soft drink workers,—Only one local
of this union—that in New York City—is now maintaining an
unemployment-benefit plan. The New York plan allows only $6
a week for 12 weeks, and because of the serious unemployment
recently the cost of benefits is a serious burden. The local expects,
however, to continue the plan.
Wood carvers.—The Wood Carvers’ Association of Boston, an or
ganization with about 120 members, has had a very successful unem
ployment-benefit plan since 1910. A substantial reserve fund was
accumulated in the early days of the association, when unemployment
was not so great. This Reserve fund has been in the neighborhood
of $25,000 for some years. In 1930, although the number of unem
ployed members was large, the total payments amounted to less
than one-fifth of the reserve fund. The plan provides for a $12 a
week benefit for 12 weeks in the year. At present, the assessment
for the fund is 1 per cent of earnings, but has been as high as 8 per
cent. I f the current depression continues, the benefit period may be
extended. At present, no provision is made for members whose
unemployment exceeds the 12-week benefit period.
Lace operatives.—The lace operatives of Scranton, Wilkes-Barre,
and Philadelphia have developed a very interesting system of unem
ployment-benefit svstems. The policy is, wherever possible, to have
a joint system established with the employers. Where this is not pos
sible, local union plans are set up for the particular groups of em
ployees concerned. The Scranton local plan was discontinued in 1923
when a joint-agreement plan was secured. But local plans are in
effect in Wilkes-Barre and Philadelphia, three such plans being
established in the latter city for special groups of members. All
four of these local plans are alike in having an unlimited benefit
period. The weekly benefits are $10 in two cases, $15 in one, and $16
in one. These locals have been able to maintain substantial balances
in past years, but severe unemployment has caused a heavy drain on
resources. However, two of the systems still have balances in ex
cess of the demand of the worst previous years. The locals are of
small membership, the total number of members of the group covered
by these four plans being less than 200.
Tabular Comparison
The following table shows for each of the 48 plans the date of
establishment, the number of union members covered, the maximum
weekly benefits, the maximum period for which benefits are paid, and
the assessments made to cover costs of the plans. The statistics cited
are as of April, 1931, or latest available date. In a number of plans
23
SUMMARY OF PLANS
the benefits vary according to marital condition, length of mem
bership, etc. Only the maximum benefits are shown m the table.
This is also true as regards length of benefit periods. Details regard
ing these as well as other features of the plans are given in subse
quent pages, where a report on each plan is presented.
T a b le
3 .— Trade-union unemployment-benefit plans in operation April, 1981
Trade-union
National unions
Deutsch-Amerikanische Typographia______________________
Siderographers..............................
Diamond workers........................
Local unions
Bookbinders:
San Francisco (No. 31-125)--.
New York City (No. 119)----Chicago (No. 8)___.................
Electrotypers:
Chicago (No. 3)..............
Philadelphia (No. 72)....
Lithographers:
San Francisco (No. 17)..
Philadelphia (No. 14)__
Cincinnati (No. 8) ..........
New York City (No. 1)_.
Seattle (No. 45)..
Photo-engravers:
Chicago (No. 5).
Pres
ent
plan
started
Ap
Present benefits
proxi
mate
union
mem Maximum weekly Maximum
duration
ber
in 1 year
ship
1884
541
16 w k s... $1.85 per mo.1
1910
1912
73
300
26 wks,
16 wks.
$0.50 per wk.
8 w ks..
10 wks.
13 wks .
2 per cent of earnings.
$0.50 per week.
$1 per mo., plus $1 per
wk.
1922
1929
1930
1920
1921
1918
1918
1919
1923
700 $12__
900 $15__
1,070 $5.50..
175
170
190
2,450
1927
1,466
1916
195
Philadelphia (No. 7)............. .
New York City (No. 1) _____
Boston (No. 3)__....................
Cleveland (No. 24)................ .
Minneapolis-St. Paul (No. 6).
San Francisco (No. 8) - - ....... .
Baltimore (No. 2)— *______
1917
1922
1922
1923
1924
1929
1929
2,702
321
243
70
184
102
Milwaukee (No. 19) - Indianapolis (No. 11) .
St. Louis (No. 10)-----
1930
1930
1931
Printing pressmen and assistants:
Printing pressmen—
New York City (No. 51).
St. Louis (No. 6) ............
Printing - press assistants—
New York City (No. 23).
Typographical union:
New York City (No. 6) _____
Cleveland (No. 53).................
(*>.
792 $30......................
No limit. 2 per cent of earnings.
f$20 for 15 wks.8..
315 \$10 for 30 wks.4----- [No limit. $1 per wk.
1914
Cincinnati (No. 13).
Present maximum
10 w ks... $0.85 per wk.
13 w ks...
$6 ($1 per day)----- 50 days...
20 w ks... $1 per mo., plus
$10.......................
ments.
8 w k s ....
$15.....................
$6...........................
$20.............. - ............... 26 w k s... According to need.
for first 12 wks.
)$12
$6 for next 12 wks.,
$14 for 10 wks.4
$20............................
$25.........................
$20............................
$35.........................
$20.................................
$15..
165 $10. . ............... ........
110 $15....................
218 $15.__ . . . . . . . . .
r$0.50 per mo.
|34wks.„. t$2
per wk.
No limit. $14 in March.*
26 wks. . $1 per wk.
.do..
Do.
20 wks__ $2 per wk.
12 wks. . $2 per mo.
indefinite 10 per cent of earnings.
...d o__
$2 plus one-third of
overtime earnings.
—.do____ $2.50 per wk.
No limit. $2 per mo.
26 w ks... $0.25 per day, 5 days
per wk.
1927 3,500 $15........................ .
$8 per mo.
1930«
348 $7........................... No limit, 3 per cent of earnings.
1928 2,550 $15 for 5 wks., $10 — do....... According to need.
thereafter.
1927
10,620
870
$20.................................
$1 first wk.; $8 for
next 7 wks, and
$5 for next 8 wks.
Indefinite 4 per cent of earnings.
16 wks
i Covers all benefits.
* Not reported.
t Regular benefit.
* Emergency benefit; may run for longer period in special cases.
8Emergency benefit; period given is approximate, the benefit being $14 per week with a maximum of
$138 in 1 year.
* Subject to change according to need.
1No limit on period, but amount to be paid is limited.
Operation irregular since 1921.
•An earlier plan was in existence for many years.
24
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
T a b ld
3.—Trade-union unemployment-benefit plans in operation April 1, 1981-
Continued
Pres
ent
plan
started
Trade-union
Present benefits
AP"
proxi
mate
union
mem Maximum weekly Maximum
duration
ber
in 1 year
ship
Present maximum
Local unions—Continued
Typographical union—Contd.
Chicago (No. 10) .............. .
Philadelphia (No. 2)........ .
Boston (No. 13)................ .
Bakery workers:
Buffalo (No. 16)............... .
St. Louis (No. 4).............. .
New York City (No. 22, Bo
hemian).
Washington, D. C. (No. 118).
Tacoma (No. 126).................
San Francisco (No. 24).........
Seattle (No. 9)......................
Spokane (No. 74)..................
Madison (No. 233)................
Brewery, flour, etc., workers:
New York City (No. 1).
Wood carvers: Boston................
Lace operatives:
Wilkes-Barre (No. 2)............
PhiladelphiaNo. 1 (North American
Lace Co.).
No. 1 (Quaker Lace Co.)_.
No. 18 (North American
Lace Co.).
Total......................... .
1930
1930
1931
5,400
1,186
1,971
1896
1902
1,200
174
$15 I®..
$6........
$15— .
No limit. 3 per cent of earnings.
...d o........ 1 per cent of earnings.
Do.
...d o........
18 w k s...
15 wks. $0.40 per mo.u
(subject
to maxi
mum of
$70).
$10......................... 12 w ks.—
1910
152
1914
1916
1917
1920
380 $12................................ 5 mos___
125 $10................................ 7 mos___
700 ....... d o -............... 4 mos___
525 $7.50...................... 7 mos___
1924
1925
1906
201
1910
117
$12..
1924
21
$16-.
No limit. $1 per wk.
40
$ 10-.
...d o____
1928
1925
63
290
$12..
$6 ..
.do..
...d o........ 1 per cent of earnings.
86 ___ d o . . . . . . . . . . . . .
24
(”).
f$l per mo.1*
U day's pay a week.*4
$0.50 per mo.
$3 per mo., plus assess
ments.
5 mos___ 6 per cent of earnings.
16 w k s... $3.25 per mo.
12 w k s...
— do____
$15......................... — do____
Do.
$2 per wk.
$1 per wk.
44,648
10 Extra allowances in case of dependent children.
Plus all fines and receipts from entertainments.
» Costs are met from general treasury, with only occasional assessments.
m Summer rate.
h Winter rate.
Discontinued Trade-Union Plans
Although no attempt has been made to note all trade-union unem
ployment plans that have been set up in periods of business depres
sion and later abandoned when the need for assistance has passed,
a short description is here given of five trade-union plans that were
recently discontinued; i. e., between 1929 and the present. These
five plans provided benefits for print cutters in jobbing shops who
were members of the United Wall Paper Crafts; the pocketbook
workers in New York City; brewers and maltsters, members of
Local No. 6 in St. Louis, Mo.; lithographers, members of Local No.
23 in Indianapolis, Ind.; and members of Columbia Typographical
Union, No. 101, in Washington, D. C. Of these five plans only one,
that oi the pocketbook workers, appears to have been discontinued
because of the depression.
Wall-paper crafts.—The plan of the United Wall Paper Crafts
was in operation from 1926 to 1929 and covered print cutters in
jobbing shops in New York City, Buffalo, Philadelphia, and York
SUMMARY OF PLANS
25
(Pa.). The plan was financed by contributions of $1 per week by
print cutters. Benefits at the rate of $24.25 per week were first paid
in 1927 for a maximum of five weeks per year.
Pocketbook workers.—Pocketbook workers in New York City
placed their unemployment-benefit plan in operation in 1930. It
was provided that benefit payments should be financed by a 5 per
cent assessment on earnings, that benefits should be paid after 10
weeks of unemployment and at the rate of $10 per week for married
men and $6 for single members. Because of the burden brought
about through the unemployment of a large number of members the
assessment for maintenance of the plan was temporarily waived in
the early part of 1931.
Brewers and maltsters.—Brewers and maltsters of St. Louis, Mo.,
had an unemployment-benefit plan from 1915 until about two years
ago. The plan was financed by assessing members at the rate of 1
per cent of weekly wages. Benefits were paid at the rate of $15 per
week and the maximum benefit payment allowable for any one year
was placed at $75. This local’ union, which originally had 1,200 mem
bers, now has about 300. The drop in membership is attributed to
changes in the products manufactured and the introduction of
automatic machinery.
Lithographers.—Lithographers in Indianapolis gave up their un
employment-benefit plan in 1929 after about 16 years of operation.
There is believed to be no critical need for benefit payments among
these workers, but should such need arise, it is stated that a relief
plan would undoubtedly be adopted. Under the plan it was pro
vided that benefits should be paid from the general fund at the rate
of $5 per week for the period of unemployment.
Typographical workers.—Members of Columbia Typographical
Union, No. 101, organized an unemployment-benefit plan on January
5, 1931. This plan was short-lived, having been abandoned on May
20, 1931, by vote of the union because there was no unemployment
problem among members of the local. The plan as worked out pro
vided for benefits of $20 for married men and $15 for single men. It
was financed from the general fund of the local until March and
thereafter by contributions of 70 cents per month from members.
DETAILED REPORTS OF PLANS
Company Plans
Dennison Manufacturing Co., Framingham, Mass.
Outline of Plan
The unemployment-benefit plan of the Dennison Manufacturing
Co., manufacturers of paper novelties, was started in 1916 when a
sum was set aside by the company as the nucleus of a fund for the
payment of unemployment benefits. Varying amounts were added to
the fund in the next three years and the plan was finally put in effect
in March, 1920.
Character of flan.—The plan as first formulated and up to Janu
ary, 1931, provided for the payment of benefits to employees who
were unemployed because of lack of work or whose earnings were
reduced because of transfer to a job paying lower wages than their
own. Under this plan there was a waiting period of 1 day, and if
the lay-off lasted for 14 days 2 days so lost were not compensated.
In January, 1931, the plan was changed to a guaranty of 50 per
cent of the normal weekly pay to employees without dependents and
70 per cent to those having dependents, who had at least six months’
service with the company and who were retained on the pay roll.
Eligibility for benefits.—The employees eligible for unemploy
ment benefit are permanent employees who, to avoid unemployment,
are transferred to jobs paying less than 85 per cent of the normal
pay, and those who are laid off for lack of work to such an extent
that the total pay for any pay-roll week falls below 70 or 50 per
cent, according to whether they have or have not dependents.
Employees, to be rated as permanent employees, are required to
have had at least six months’ service with the company immediately
preceding the transfer or lay-off. It is one of the duties of the
unemployment committee to decide who may be rated as permanent
employees.
During a period of slack work employees are not required to
report regularly at the factory, but they are expected to hold them
selves subject to recall upon reasonable notice. I f they can be
reached personally, “ reasonable notice ” constitutes an hour or two;
if not, notice any time during the day to report the following day is
considered sufficient. Failure to report puts an employee automati
cally on the same status as any employee who is absent for personal
reasons.
Ordinarily, an employee who obtained outside work while laid off
on account oi lack of work would receive a benefit sufficient to bring
his earnings up to an amount equal to his regular earnings. It is
practically impossible at present, however, to get outside work, and
26
COMPANY PLANS
27
no long lay-offs are being given. I f there is only 50 per cent work in
a department, half of the employees work half the week and half the
other. The usual lay-off at present is half a week and it is never
longer than one week without calling back the worker for at least
one day.
Benefits.—Unemployment relief for employees classed as with
out dependents amounts to 50 per cent of the normal’ weekly pay for
a 48-hour week, but may not be more than $18 nor less than $8 for the
week, and for an employee classed as with dependents, 70 per cent
of the normal weekly pay, but not more than $24 nor less than $8
for the week. Holidays are paid for if the pay for the week would
otherwise be below 50 per cent of the normal earnings. There is no
waiting period before an employee is eligible for unemployment
benefits, since the guaranty covers the stated percentage of the
normal earnings of the different classes of employees.
Administration.—The plan is administered by the unemployment
relief committee, consisting of voting members divided equally be
tween management appointees and works-committee appointees. The
number of members, the time and manner of appointment, and the
tenure of office are subject to rules adopted from time to time by
mutual agreement between the management and the works commit
tee. I f at any time there is failure to come to an agreement between
the works committee and the management on any question relative
to unemployment relief, the question, after the lapse of one week, is
submitted to the board of directors, whose decision is final.
The duties of the unemployment relief committee are as follows:
To decide who are permanent employees, except that no person
shall be so classified who has had less than 6 months’ continuous
service with the company immediately preceding the transfer or
lay-off.
To define the normal weekly wage and to make rules, not incon
sistent with the above classification, regarding adjustments of pay
or charges for unemployment relief on account of transfers or
lay-offs for lack of work.
To decide who shall be classed as having dependents.
To reduce or suspend temporarily (but not increase) the amount
of payments whenever the rate of expenditure threatens prematurely
to exhaust the available money.
To make such other rules, not inconsistent with the above, as is
considered reasonable and proper and to study the entire subject of
unemployment and make such suggestions and recommendations as
it can.
The committee is required to report its actions and decisions to the
management and the works committee periodically.
Method of financing flan.—The fund, after the appropriations
made between 1916 and 1919, amounted to approximately $147,000.
No appropriations have been made since that time. The plan,
as first adopted, provided that when the amount in the fund dropped
below $50,000 unemployment benefits should cease or new provisions
should be put in effect. It is now far below that figure, and the
present plan provides that from any reserve the company may have
set up, money will be provided to an amount not exceeding $35,000
65655°—31------ 3
28
UNEIVIPLOYMENT-BENEFIT PLAN’S— UNITED STATES
during any 12 consecutive months, or $50,000 during any 36 con
secutive months. After the reserve is used up further sums will, if
conditions permit, be made available by the directors of the company.
Statistics of Operation
Table 4 gives statistics on operation of the plan from 1927 to
1930 and from January to March, 1931:
T a b le
4.— Operation of the unemployment-benefit plan of the Dennison Manth
factoring Co., 1927 to 1930, and January to March, 1981
Year or month
Total pay roll
Average
number of
employees
covered
by plan
Total benefits
paid
2,938
2,790
2,793
2,377
$3,875,170.05
3,766,061.35
3,780,679.65
3,308,911.10
2,422
2,308
2,272
1,905
$15,465.27
7,725.16
10,646.26
58,325.61
$111,755.28
109,629.72
104,980.06
46,654.45
2,191
1,958
1,941
196.000.00
197.000.00
188.000.00
1,790
1,608
1,600
8,721.88
4,060.63
1,394.01
40,546.51
36,484.8$
35,132.47
Average
number of
employees
192 7
192 8
192 9
193 0
1931:
January......... .....................
February............................
March__________________
Balance in
fund at end
of period
Table 5 shows the labor turnover of the company for the same
period:
T a b le
5.—Labor turnover of Dennison Manufacturing Co., 1927 to 1930, and
January to March, 1931
Discharges
Quits
Year and month
1927....................................................................................
1928....................................................................................
1929....................................................................................
1930....................................................................................
1931:
January_______________________________________
February______________________________________
March________________________________________
Lack of
work
Accessions
Other
causes
376
298
644
286
23
61
60
274
182
167
75
120
516
802
16
19
11
175
30
5
10
3
1
1
2
12
General Experience
The normal working week in the plant is 48 hours, but it is run
ning now on a 44-hour week basis, though with about 40 per cent
of the workers on somewhat shorter time. It has been the custom
of the company during normal times to work overtime in busy
periods rather than to take on many temporary workers. During
the present depression, however, and especially in the last six
months, it has been necessary to discharge many workers. Among
those dismissed have been many lower grade clerks and supervisors,
it having been found necessary to curtail the keeping of records
wherever possible.
COMPANY PLANS
29
The company very definitely does not guarantee permanent em
ployment to any of the workers, but it does guarantee a certain
minimum to those retained on the pay roll. It is the policy of
the company when, as a result of changes in machinery or business
depression, it is impossible to foresee any work for a group of
employees for a period of a year to transfer as many as possible,
and when that can not be carried any further, it is necessary to
discharge. In discharging workers, those having less than six
months’ service are dropped first, and then the less satisfactory
workers among those having longer service. Workers who are
discharged are given sufficient notice and two weeks’ pay.
As no extra payments have been made to the fund, it is rapidly
being exhausted as a result of the demands upon it during the
present depression, and it has been necessary to make every effort
to make the available money go as far as possible. The directors
have agreed, however, that at the earliest possible moment they will
begin to build up the fund.
Columbia Conserve Co., Indianapolis, Ind.
Outline of Plan
The employment-guaranty and profit-sharing plan of the Colum
bia Conserve Co. was started in April, 1917, and at the same time
a works council having considerable authority in the management
of the business was organized. Since June, 1930, this council has
assumed full control of the business, as the workers have acquired
more than 50 per cent of the common stock.
Character of plan.—Regular employees of the company are on
a salary basis, and all office and factory workers are guaranteed
full salary for 52 weeks, including vacations. Employees who are
not placed on a salary basis but remain wage earners are guaranteed
employment for 45 hours a week at a fixed hourly rate during the
period they are employed. These workers belong to two classes;
namely, those who are employed at the peak of a season, being
usually employed for not more than three consecutive months, and
those who have not proved themselves sufficiently satisfactory to
the rest of the organization, regardless of their length of service,
to be placed on the regular salary roll of the company. At times,
however, satisfactory wage workers are not placed on salary if
business prospects do not justify increasing the permanent responsi
bilities of the company.
Eligibility for benefits.—Regular workers are automatically con
sidered for membership in the salaried class in a period varying
from three to six months after employment. The guaranty for
salaried wTorkers covers the entire year regardless of any stoppages
or sickness which may occur, and wage earners who for any reason
beyond their control can not be furnished with a full day’s work
are nevertheless paid a full day’s wage. Workers are transferred
according to departmental needs without change in compensation.
There are 140 salaried workers (increased to 144 in June). The
number of wage workers varies irom none to 75.
30
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Benefits.—The minimum weekly salary for a single worker is $22,
and for a married man or woman whose wife or husband is not
employed and who has no dependent children the wage is $33. A
form of family-wage payment is maintained, $2 per week being paid
for each child under 16 up to a total income of $39. Salaried em
ployees do not receive payment for overtime. Wage workers are on
an hourly basis, single men and women receiving 40 cents an hour.
An additional 10 cents an hour is paid to each married wage worker
whose wife or husband is not gainfully employed, and 2 cents per
hour for each child is paid up to a maximum of 56 cents. Married
women whose husbands are gainfully employed receive 30 cents an
hour if wage workers.
Discharges.—I f a salaried worker leaves the company for any rea
son whatever, he is paid a discharge bonus of two weeks’ salary,
unless the case is an aggravated one? when the dismissal wage may be
paid only after special authorization by the works council. The
council handles all questions relating to discharge, and a salaried
employee may not be dismissed without a vote of this body. A wage
worker dismissed by his foreman has the right of appeal to this body.
Administration.—The works council, which has charge of the aaministration of the employment-guaranty and profit-sharing plans,
was formed in 1917, it being the purpose of the owners, as announced
at that time, to give the workers full control and eventually owner
ship of the firm. The workers came into possession of 51.3 per cent
of the common stock of the company June 30, 1930, so that they now
control all the policies of the company. The council, which is made
up of all the salaried and wage workers, meets every Monday morn
ing for two hours on company time and Friday night after working
hours. The attendance is usually about 110 at the Friday meeting
and 150 at the Monday meeting. The council has complete authority
in the operation of the business and in the formation of policies.
Method of financing plan.—The plan is financed by the earnings of
the company. The employment guaranty is maintained through the
policy of hiring temporary workers on a wage basis for the periods
when the pressure of work is greatest—approximately four months
in the year—and maintaining the regular salaried force at a num
ber which will take care of the work throughout the remainder of
the year.
Statistics of Operation
As the plan is one of guaranteed employment and the company
does not keep an account of the amount paid for slack time, it is
impossible to state just how much the guaranty costs. During the
first three and one-half months of 1931 production was about 15 per
cent below the normal figure for that period of the year, but no one
had actually been laid off on account of lack of work.
Table 6 shows the average number of employees, total pay roll,
the average number covered by the plan, and the total amount paid
the guaranteed workers, by years, 1926 to 1930, and January to
March, 1931:
31
COMPANY PLANS
T a b le
6. — Operation of guaranteed-employment plan of Columbia Conserve Co.,
1926 to 1930, and January to March, 1931
Year or month
Average
Total wages
number
to salaried
of salaried paid
workers under
workers
employment
covered by
guaranty
plan
Average
number of
employees
Total pay roll
133
113
125
168
159
$150,603.38
152,883.24
162,761.13
230,572.31
240,887.95
96
98
101
118
134
$123,742.64
140,001.97
145,364.07
178,377.76
215,415.15
162
55,643.42
140
51,121.90
1026.......................................................................
1927.......................................................................
1928.......................................................................
1929..................................................................... .
1930.......................................................................
1931:
Ja n u a ry __ _____ _____ ____ ___ _____ __ )
February______________________________ >
March_________________________________
Table 7 shows the labor turnover of the company for September to
December, 1927, 1928 to 1930, and January to March, 1931:
T a b le
7.—Labor turnover of Columbia Conserve Co., September to December,
1927,1928 to 1930, and first quarter, 1931
Average
number
of em
ployees
Year or period
September to December, 1927.___ _________________
1928................................................................................
1929...............................................................................
1930................................................................................
Jfl.nna.ry to March, 1931__________________________
Quits
112
125
168
159
162
19
33
69
18
1
Lay-offs
of sea
sonal
Dis
workers charges 1
for lack
of work
61
170
99
4
10
43
29
2
Acces
sions
25
133
268
182
1
* Includes wage workers.
General Experience
The regular hours are 9 per day for 5 days a week. During rush
periods hours may be lengthened when the council so decides, 60
hours being the maximum in 1924, which was a year of exceptionally
heavy output. Salaried workers receive vacations, with pay, of from
3 to 4 weeks, and the plant is closed on 5 holidays.
The company has endeavored to stabilize this highly seasonal
industry, and additional products have been introduced from time
to time in order to extend the period of active work. Only 7 per cent
of the total output was handled during the first six months of 1918,
but since that time new lines have been added and the output during
normally slack periods has increased so that in 1928, 33 per cent of
the total output was handled in the first half of the year.
The company has in general been successful in providing work for
the salaried employees, it being the practice to employ salaried
workers on cleaning, repairing, and maintenance work when there
is no productive work.
In the years for which figures are available (1926 to 1931) the
variation in the number of regular employees has been relatively
small, running from 93 in April, 1926, to 99 in June, from 90 in
32
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
May and June, 1927, to 102 in July and August; from 96 in Novem
ber, 1928, to 105 in May and June; from 108 in January, 1929, to
129 in September; from 128 in February, 1930, to 141 in October,
which was approximately the number during the first quarter of
1931. In the five years 1926 to 1930 the fluctuation among the
salaried force was greatest in 1927 and among the wage workers
in 1926. The present tendency is to keep the number of wage workers
as small as possible.
Since the workers have assumed control of the company 500 manhours per week, or full time for 11 workers, are devoted to educa
tional work, economics, sociology, and industrial history being
studied. These classes were started in October, 1930, and are taught
by qualified members of the working force.
The business of the company has fallen off about 15 per cent
since the first of the year, but there has been no unemployment, as
the educational work has absorbed the slack time. An attempt is
being made to eliminate temporary workers as far as possible, and
the employees plan not to release anyone on account of technological
unemployment. In order to do this it is necessary to avoid taking on
new people unless they can feel certain of a real increase in the
business.
No salaried workers have been discharged on account of the
depression. During the past 14 years, however, a few have been
discharged for reasons wnich would justify dismissal. This year
it is expected that fewer than 12 people will be added during the
peak season.
No changes are contemplated in the plan.
Dutchess Bleachery (Inc.), Wappingers Falls, N. Y.
This establishment is one of the plants of Deering, Miliken & Co.
Since it sells service and is not a manufacturing enterprise, it is de
pendent mainly upon business conditions in the textile industry for
regularity of work, so that little can be done toward the stabilization
of employment.
Outline of Plan
The unemployment-insurance fund of the Dutchess Bleachery
(Inc.) was started in 1919 as part of the profit-sharing and partner
ship plan which had been instituted in 1918.
Character of plan.—The plan provides for the payment of benefits
when the plant or any department of the plant is closed temporarily
on account of business depression or other cause not within the con
trol of the operatives, and for payment for short time based on a
maximum of 35 hours per week.
Eligibility for benefits.—A worker who has been 12 months with
the company is eligible for unemployment benefits when he is out of
work through no fault of his own. This includes the closing of the
plant or any department of the plant on account of business depres
sion, or for any other reason not within the control of the operatives.
No benefit is paid to persons laid off permanently or transferred to a
job paying a lower rate, if the transfer is considered permanent.
COMPANY PLANS
33
In order to participate in any of the benefits of the employees’
sinking fund, an operative must have been in the employ of the com
pany at least 12 consecutive months. A worker is not bound by this
rule, however, if he has been laid off through no fault of his own,
and later returns to work. I f an operative is discharged for crime
or continued neglect of duty, or if he leaves without due notice of
one week, or in lieu of that a satisfactory agreement with his fore
man, the full amount of such an operative’s share of the sinking fund
,is forfeited.
During periods of unemployment a worker who secures work else
where does not forfeit any part of his benefit, but if he refuses to
accept any job assigned to him in the plant he loses both the unem
ployment benefit and his own job.
Benefits.—Workers who are unemployed on account of lack of
work receive half pay for a minimum of 24 hours per week when
working from no hours up to 13 hours per week. I f they are em
ployed more than 13 hours, they receive half the difference between
the time worked and 35 hours. The unemployment benefit is based
on the average weekly wage for hour workers and the average of the
preceding month for pieceworkers. Originally, employees received
benefits from the beginning of unemployment, but the plan provided
that when the balance in the fund dropped below $50,000 the first 13
hours of lost time should not be compensated. Overtime is not
counted in computing the hours worked per week. In any week
which includes a holiday the 48-hour limit is reduced by the number
of hours lost by such holiday, but the 35-hour limit in effect at pres
ent is not affected by such holidays. I f a worker is transferred tem
porarily to a job paying a lower rate, his regular rate is paid.
There is no limit to the benefit period as long as there is any money
,in the fund.
Administration.—The paymaster handles the payment of out-of
work benefits. Originally persons receiving benefits were paid in
cash in their regular pay envelopes, but since 1926 payments have
been made by check. In case of dispute in regard to the benefits,
appeal may be made to the board of management, which is made up
of seven members elected annually by the board of directors of the
company and seven members elected by the board of operatives.
Method of financing plan.—The unemployment fund, as originally
planned, was to be maintained from the net profits of the company.
The plan provided that a sum should be set aside at the end of each
year, which should be sufficient to raise the capital sinking fund to an
amount equal to 6 per cent on the invested capital, after which a
further sum should be set aside to raise the sinking fund, to be drawn
upon by labor in times of unemployment, to $85,000. Both of these
funds were to be so raised before the division of any profits. The
unemployment fund was to bear interest at 6 per cent, and this in
terest was to be paid into a fund for the payment of sick benefits so
long as the fund was in excess of $50,000. The payments into the
unemployment fund between the years 1920 and 1922 amounted to
more than $93,000. Since that time there has been no surplus after
deducting the amount for the capital sinking fund, so that no further
payments have been made, and the fund has gradually been reduced
so that now it amounts to only a little more than $10,000, with no
apparent prospect that the company will be able to add to it.
34
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Statistics of Operation
Table 8 shows the average number of employees, total pay roll, the
number of weekly benefit payments, and total amount paid, by years,
1920 to 1930, and January to March, 1931. The turnover records for
1930 and the first quarter of 1931 show that there were 203 quits and
130 accessions during the 15-month period. In 1930 there were 39
transfers, and in 1931 from January 1 to April 7 there had been 11
transfers to other jobs. The turnover records do not show the cause
of leaving.
T a b l e 8 . — Operation
of unemployment-benefit plan of Dutchess Bleachery (In c.),
1920 to 1930, and January to March, 1931
Average
number
of em
ployees
Year or period
1920.......................................
1921.......................................
1922.......................................
1923.......................................
1924.......................................
1925.......................................
1926.......................................
1927.......................................
1928.......................................
1929.......................................
1930.......................................
1931: January to March___
517
546
543
547
578
536
466
485
480
470
472
425
* Not reported.
Total pay
roll
$549,957.76
578,748.67
539,611.62
633.968.13
666.632.22
615,141.04
540.372.37
591.843.23
559.049.37
501,392.48
460.454.13
0)
Num
Num
ber of
ber of
em
weekly
ployees benefit
covered
pay
by plan ments
0)
m
(1)
m
m
0)
(1)
W
0)
353
354
319
0)
8,388
8,797
2,316
3,447
3,327
1,777
542
1,132
C1)
1,408
191
Total
amount
paid
Average Balance in
weekly
fund at
benefit
end of
paid
period
$13,477.17
0)
$I.~47~
12,337.27
11)
14,128.66
1.61
5,325.51
2.30
(l)
M
6,236.49
1.81
2.79
9,278.57
0)
0)
3,495.44
1.97
2.71
1,467.85
0)
2,175.81
1.84
(l)
3,088.30
$13,452.20
2,951.91 ....... 2."10
10,504.61
1.93 310,136.82
367.79
* Balance Apr. 7,1931.
General Experience
The time is apparently approaching when the plan will be non
existent, as it has been nine years since there have been any contribu
tions made to the fund, and it was stated that there are no indications
at present that the company will be able to add to it. The plant,
however, was working full time at the time it was visited, and it was
stated that the business had not been greatly affected by the present
depression. The number of employees has been somewhat reduced
through some department reorganization. No benefits are being paid
from the health fund, which became inoperative after the unemploy
ment fund fell below $25,000. In special cases of distress, however,
some help has been given.
The normal working week is 48 hours, and when the plant is busy,
a good deal of overtime is worked. Formerly, time and one-quarter
was paid for overtime, but now the regular rate is paid.
Crocker-McElwain Co. and Chemical Paper Manufacturing Co.,
Holyoke, Mass.
Outline of Plan
The employment-guarantv plan of the Crocker-McElwain Co. and
the Chemical Paper Manufacturing Co. was instituted following a
strike in 1920 and at first consisted of a 52-week employment guar
anty. It was amended February, 1931, to cover only 44 weeks of
COMPANY PLANS
35
uaranteed employment. These companies are manufacturers of
ne writing papers, manifolds, index bristols, covers, and box boards.
Character of plan.—The plan guarantees employment for workers
having five years’ service. Employees who are eligible and who
accept the terms of the agreement are given a contract for full-time
work in which the employee pledges “ noninterference ” in case of a
labor dispute. An employee who has completed the required five
years is notified of the fact by the firm. He must then secure the
signatures of two workers who are already enrolled in the plan, after
which the request for enrollment must be signed by the foreman and
department manager. After receiving the approval of his imme
diate superiors the employee is required to secure the signature of the
vice president of the company, which gives the final stamp of ap
proval to his application. Instead of guaranteeing full-time earn
ings for 52 weeks to eligible employees, as was the case during the
10 years the plan was in effect, the employment guaranty now covers
44 weeks’ employment and up to 80 per cent of the earnings instead
of full-time earnings.
Eligibility for benefits.—Employees covered by the guaranty are
considered unemployed only when there is no work of any kind
available which the company considers them able to do. Full-time
workers, unless specifically excused, are expected to report each day
at the plant in case of a shutdown. I f possible, work is provided,
it being the policy to employ as many as possible in cleaning and re
pairing, but if no work is available the men are excused. The nature
of the work in a paper mill is such that if it operates at all it must
be manned for continuous operation, so that it is not possible to pro
vide part-time work or to readjust operations during slack periods.
Men working under the guaranty are not allowed to take outside
jobs. I f they leave to take other jobs under present conditions they
would be reemployed if possible if they return, but each case would
be settled on its merits.
No worker who has had five years’ continuous service with the
company may be discharged until the case has been submitted to the
general superintendent or manager, and workers with less than five
years’ service if discharged may appeal either personally to the
person in charge of industrial relations or through the representa
tive of the worker in the works council.
Benefits.—The pay roll of the companies is divided into 13 periods
of four weeks each and the unemployment benefit is adjusted on the
basis of these pay periods. If an eligible employee is completely
unemployed during any pay period except the periods falling in
July and August he is paid 80 per cent of his regular wage rate.
Any extra earnings for overtime during any pay period are bal
anced against short time in the same period. During the seventh and
eighth pay periods, which fall in July and August, employees will
be paid only for the time actually worked.
Unemployment payments cover 80 per cent of unemployment
within the specified pay periods. Each benefit period is four weeks
and the guaranty covers the working time within that period.
Administration.—The employment-guaranty plan is administered
by the company through the department in charge of industrial
relations.
f
36
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Method of "financing plan.—There is no fund, but the costs of the
plan are paid as part ox operating expenses.
Statistics of Operation
It is difficult to determine exactly the cost of the guaranty plan
and it was found impossible to secure detailed data as to the costs of
operation. Expenditures have been considerably greater during the
present depression, however, than in any preceding period.
The average number of factory employees m the CrockerMcElwain Co. ranged from 236 in 1927 to 220 in 1930, 132 of whom
in the latter year were covered by the plan. The average number on
the pay roll was 202 in March, 1931. The total labor turnover from
all causes varied from 19.06 per cent in 1927 to 12.72 per cent in
1930. In January, 1931, it amounted to 1.47 per cent, in February
there was no change in the force, and in March it was 0.49 per cent.
The average number of mill employees in the Chemical Paper Manu
facturing Co. was 354 in 1927, 349 in 1928 and 1930, and 337 in 1929,
while in March, 1931, the average number of employees had fallen to
309. In 1930, 181 employees were covered by the plan. The labor
turnover in this plant was 17.2 per cent in 1927, 12.03 per cent in
1928, and rose to 28.65 per cent in 1930. In January, February, and
March, 1931, it was 1.57 per cent, 1.20 per cent, and 2.26 per cent,
respectively. The number of office employees and foremen ranges
between 80 and 90 in the two plants.
General Experience
The normal working hours in the mills are 48—6 davs of 8 hours—
for men on the 3-shirt plan. Male day workers work 50 hours per
week and women and minors 48 hours. At the time the plants were
visited different departments were working from 60 to 75 per cent
of their normal time. When the mills are working regularly the
operation is continuous—three shifts—-with a minimum shutdown of
24 hours over Sunday, and in normal times overtime may be worked.
Ordinarily there is relatively little seasonal unemployment, with
the exception of July and August, when the water is likely to be low.
The company has worked toward stabilization through the attempt
to coordinate sales and production, the provision of storage facilities,
etc. It is the practice to take on temporary workers for construction
and repairs.
The change in the guaranty for employees with five years’ service
or over was decided upon in January, 1931, as a result of the excessive
cost of the plan during the depression. The amended plan was made
effective February 1, and the company stated that it is probable that
the present plan will remain in effect for the remainder of the year,
although it could not state positively that the plan would be con
tinued any definite length of time.
The company had drawn up a tentative plan which would provide
for employees having less than five years’ service through the forma
tion of a fund which the company would maintain for the payment
of unemployment benefits. As the plan had not yet been put in
effect the details are not reported.
COMPANY PLANS
37
United Diamond Works (Inc.), Newark, N. J.
The United Diamond Works (Inc.), established in 1914, is one of
the largest diamond-cutting establishments in the United States.
The firm cuts and polishes only gem stones, and as it is purely a
luxury industry, its business very soon reflects any marked change in
business conditions. During the past two years the plant has been
shut down for long periods. In 1930, after a shutdown of several
months, the plant resumed work in October and continued operating
until about the middle of February, 1931. By the third week of that
month all workers were laid off with the exception of the few neces
sary to keep the office running. Although the surplus from which
unemployment benefits have been paid in the past is exhausted so
that no further payments to unemployed workers are possible, the
plan is not abandoned, and it was stated by a member of the firm that
when the plant resumes operations it is probable that the accumula
tion of a reserve fund for the payment of unemployment benefits will
be begun.
Outline of Plan
Unemployment benefits were first paid by the firm in April, 1921,
the plan originating as a result of the depression of that year. There
are two motives which influenced the firm to institute the plan:
First, the feeling that employees who had been with the company
for some years were entitled to some return for their services, and
second, the desire to keep the force, as nearly as possible, intact.
Character of plan.—There was no formal plan, and no fund was
set aside, unemployment benefits having always been paid out of the
surplus xunds of the company.
Eligibility for benefits.—The plan provides for six months’ service
for eligibility for benefits, but this is not rigidly adhered to, and in
reality practically all the employees are covered. During a period
of unemployment the firm does not require employees to report regu
larly, as the force is comparatively small and they are in close touch
with their employees. I f a worker who is out on account of lack of
work secures another job and is earning as much as formerly, no
benefit is paid, nor is it paid if the firm has reason to believe an
employee does not intend to return. In other cases acceptance of
temporary work does not disqualify an employee for compensation.
Benefits.—The men are usually paid 25 per cent of their average
full-time earnings during any shutdown, although those in super
visory positions may be paid from 50 to 100 per cent, according to
the responsibility of the position. Women are paid 20 per cent of
their average weekly pay. The few female office workers are paid
50 per cent.
The benefits are paid for the period of the shutdown or so much
of that time as the finances of the company will permit.
Administration.—There is no special administrative procedure re
quired, as employees who are laid off on account of lack of work
receive their unemployment benefits at their regular pay periods, the
men receiving checks sent to their homes every two weeks, and the
women receiving the benefit in 10 equal weekly payments after re
turning to work. The reason for the delayed payment to women is
38
UNEMPLOYMENT-BEITEFIT PLANS— UNITED STATES
found in the fact that they are more uncertain about returning to
work after a period of unemployment than are the men.
Method of financing plan.—Up to the present the plan has been
financed from the surplus funds of the company, but as a result of
its experience it is convinced of the desirability of setting aside a
certain percentage of the pay roll regularly for the formation of
a fund.
Statistics of Operation
Table 9 shows the total pay roll, the number covered by the plan,
and the number and amount of benefits for the years 1921 to 1930
and up to April 16, 1931. The firm does not keep turnover records,
but it was stated that the turnover is small, and after a shutdown
practically all of the employees return. In the few cases in which
they do not, it is usually because of either marriage or illness.
T a b le
9.— Operation o f the unemployment-benefit plan o f United Diamond
Works {Inc.), 1921 to 1930, and January to April 16, 1931
Number Number
of em
of em
Total pay roll ployees ployees Total bene
fits paid
covered receiving
by plan benefits
Year or month
1921...................................................................
1922...................................................................
1923...................................................................
1924...................................................................
1925...................................................................
1926...................................................................
1927..................................................................
1928...................................................................
1929........................................................... ........
1930...................................................................
1931:
January_____________ __________ ______
February____________________________
March________________ >______________
April 1 to 16__________________________
$106,468.08
127,160.75
118,752.71
133,788.15
156,147.97
169,722.30
212,054.74
140,343.80
63,242.16
12,983.90
10,194.35
3,545.05
1,219.25
75-80
75-80
75-80
75-80
75-80
75-80
80-100
80-100
70-80
79
73
21
9
0)
i $31,148.60
(’)
691.00
>4,625.00
2, 100.00
Average
benefit
paid
11
78
3,848.67
13,325.25
$349.88
170.84
37
4
1
731.10
412.00
200.00
19.78
103.00
200.00
i Entire plant shut down Apr. 8,1921, to Apr. 10,1922.
* Not reported.
•Dec. 18, 1923, to Feb. 29,1924, and Aug. 15 to Sept, 22, 1924.
General Experience
The conditions in this plant are somewhat different from those in
most industries. A comparatively large amount of working capital
is required, as the firm buys the diamonds for cash in the foreign
markets, usually purchasing a consignment costing $500,000 or more,
which requires several months to work up. The jewels are then sold
by the firm, which frequently finds it necessary to extend credit, so
that part of this capital may be tied up for as much as two years.
Ordinarily there is little seasonal fluctuation in the industry, and
from April, 1922, to September, 1929, there was practically continu
ous operation of the plant, with the exception of short periods when
they were unable to get the raw materials.
Many of the men are highly skilled and receive high wages. Most
of the women, who are trained in the plant, work on a diamondpolishing machine for which the company controls the rights to its
use. These workers are considered only semiskilled, although it takes
COMPANY PLANS
39
some months before they reach their maximum output. This fact
and the highly specialized nature of the work makes it important to
maintain a stable working force. In general, the wages are high,
many of the operators making as much as $50 per week, while the
foremen are paid from $150 to $200 per week.
The nature of the work is such that shutdowns are complete,
although to finish a job one department might be kept running for a
few days after the others are dismissed. It has been the policy of
the company to give two weeks’ vacation with one week’s pay to all
employees, the wages or salary being paid in advance. In the case of
pieceworkers the vacation pay is based on the weekly average earned
during the preceding six months of employment. In times of normal
employment workers on a weekly basis are paid for holidays and are
also paid in case of sickness, but pieceworkers do not receive this pay.
The reason for the apparent discrimination against pieceworkers is
based on the idea that pieceworkers have the opportunity to increase
their earnings while workers on a weekly basis have not. In addi
tion, all employees receive a present of cash at Christmas, which
varies according to the importance of the position. No overtime is
worked, as the work requires good light, and the working hours are
adjusted accordingly. The normal working hours are from 7.45
a. m. to 4.45 p. m. and from 7.45 to 11.45 a. m. on Saturday. During
daylight saving a half hour longer is worked on five days and the
plant is closed on Saturday.
In times of depression the firm has made loans without interest and
without security to the more pressing cases. In other cases it gets a
demand note. The manager of the plant stated that not a penny has
ever been lost on loans.
John A. Manning Paper Co. (Inc.), Troy, N. Y.
The unemployment-benefit plan of this company is associated
with a definite stabilization policy. The company at one time guar
anteed 52 weeks’ employment for each man in its employ for more
than one year, but owing to misunderstandings arising from its
application, the guaranty was discontinued at the end of a year. The
stabilization of employment has been so effective in the past that only
rarely, until the present crisis, has the payment of unemployment
benefits been necessary. Two plants, the Green Island Mill and the
Mt. Ida Mill, are included in the plan. The plants are completely
unionized, with the exception of men who are taken on for extra con
struction work involving temporary employment, and who are not
required to join the union.
Outline of Plan
The plan was adopted in 1922 and amended April 1,1931.
Character of plan,—The original plan provided for the payment
of an unemployment benefit when the company was unable to furnish
work of some kind which would yield wages at least equal to the
amount of the benefit, the cost being borne entirely by the company.
The amended plan or April 1, 1931, which has not as yet been put
into full effect, contemplates a system of joint contributions by the
company and the employees.
40
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Eligibility for benefits.—Any unemployment occurring as a result
of a temporary falling off of orders, or as a result of a disaster such
as a fire, when the men can not be employed upon salvage work or
new construction, is compensable. I f the company decides to dis
continue all or part of its productive capacity permanently, however,
the case would be one of discharge and not of unemployment. In
such a case every effort would* be made to place the employees in
volved in other departments or factories of the companies.
Membership in the Manning Welfare Association, which is open to
all employees in the production department after one year’s service
with the firm, is required for eligibility to unemployment benefits.
I f workers who are receiving unemployment benefits secure a steady
job elsewhere payment of benefits is stopped, but if they get a tempo
rary job lasting a few days no account is taken of it. Employees are
required to accept any work, other than their regular jobs, which
the company may offer them. When the transfer is permanent, the
employee is required to accept the regular rate of pay for the new job.
Benefits.—Lnder the former plan benefits up to $9 per week were
paid, with the maximum which an employee could receive in a calen
dar year fixed at $72. When the weekly wages of any employee fell
below $9, either because of lay-off or snort time, or through tempo
rary transfer to a job at lower wages, he was entitled to the difference
between his earnings and the $9, up to the maximum of $72 in any
calendar year. The benefit payments began as soon as an eligible
employee was out of work. Under the new plan the object ot the
fund will be to guarantee a minimum of four days’ pay per week to
each operating employee for a period determined by the amount the
individual has contributed to the fund, plus interest at 4 per cent, or,
in other words, he will be paid until his portion in the total fund has
been exhausted.
Administration.—All matters of administration connected with the
unemployment insurance are handled by a standing committee com
posed o f a chairman, a secretary, and three others elected by the
executive committee of the Manning Welfare Association. This com
mittee has full power to determine the amounts payable to any
member, and to make such rules and regulations as may be necessary.
The executive committee is composed of 5 members appointed by the
company, who have no vote, and 12 elected by the members of the
association.
Method of financing plan.—Prior to April, 1931, there was no
specific reserve fund, the company paying unemployment benefits as
a part of the operating expenses. A tentative unemployment-insurance plan was partially put into effect on that date, however, provid
ing for deductions of 1 per cent of each operating employee’s wages
at all times, to be matched by the contribution of an equal sum by the
company. This fund is to be placed in a separate account and pre
sumably invested to earn a minimum of 4 per cent. When the man
agement declares that an unemployment emergency exists, it will
institute a pay-roll or salary deduction of 1 per cent from the salary
payments to the salaried group, including all the officers of the com
pany. This emergency contribution will be used to supplement the
regular contributions of the wage pay-roll group. I f an employee
is dropped from the company pay roll for any cause other than
41
COMPANY PLANS
temporary lack of work, he or his heirs will receive his contributions
to the fund, plus any interest on his contributions, figured at 4 per
cent, less any previous unemployment payments made to him. A like
sum is repaid to the company.
Statistics of Operation
The turnover figures of the firm for 1930 and the first three and
one-half months of 1931 show that there were 11 quits, 53 discharges
for lack of work, 34 discharges for other causes, and no persons were
hired. All but 10 of the discharges for lack of work occurred in
1931.
The reduction in the average number of employees in 1930 and
1931 was attributed by the company in large measure to the follow
ing causes:
1. In 1929, the personnel of the slitting department was largely in
creased to take care of the projected requirements of a large cus
tomer, but about the time the depression set in he decided to do his
own slitting. The problem of taking care of the men displaced was
then most urgent, but was taken care of for a number of months by
putting the men to work on painting and general' upkeep work.
2. During 1929 almost all the beaters in the paper mill were
replaced, utilizing for this purpose, as much as possible, men dis
placed in the slitting department and also temporary employees.
3. A part of the shrinkage in personnel can be accounted for by
the change-over of part of the paper production from a manila-fiber
basis to a wood-pulp basis, the latter requiring less processing steps
and therefore fewer employees per pound of paper.
The 355 employees reported for 1929, therefore, represent an
abnormally high employment peak.
Table 10 shows the average number of employees, the total pay roll,
the average number covered by the plan, number receiving benefits
and amount of benefits in 1929, 1930, and the first quarter of 1931:
10.— Operation of unemployment-benefit plan of John A. Manning Paper
Go. {Inc.), Green Island and Mount Ida plants, 1929, 1930, and January to
March, 1931
T a b le
Average
number
of em
ployees
Year or month
1929............................................................
1939............................................................
1931:
January__________________________
February________________________
March___________________________
A p ril___________________________
Total^ay
Number Number
of em
of em
ployees ployees
covered receiving
by plan benefits
355 $605,497.00
325 541,360.00
335
305
0)
280
275
287
257
280
275
287
257
<9
31,531
28,798
30,126
(2)
Total
benefits
paid
Average
benefit
paid
11
* (1)
$741.00
$67.38
26
26
C1)
954.00
918.00
36.60
35.31
(2)
1No payments made.
2Not reported.
General Experience
The stabilization policies followed by the company, which until
the present depression were successful in reducing unemployment
to a minimum, included the effort to sell the company products in
42
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
industries having a minimum seasonal fluctuation, and the attempt
to secure forecasts of consumption from the customers of the firm,
and to get whatever guidance was possible from standard indexes.
Manufacturing for stock is practical only on a very small scale, as
a paper mill can turn out enough products in a few days to fill all
of its available warehouse space. However, the speed of paper
machines is flexible within certain limits, and when orders are not
quite sufficient to maintain the normal speed to which all of the
processes of the mill are adapted, it is practicable to reduce the
speed. This procedure is usually preferable to a complete shutdown,
as it maintains the skill of the operatives and keeps the mill routine
unbroken. During such periods experiments are carried on in the
development of new lines, which can not be done satisfactorily
when the mill is pushed to get out regular orders. Periodic over
hauling of machinery is necessary in a paper mill, and as normally
the mill runs 24 hours a day and the process must be carried out in
complete freedom from dust, paint, or any other foreign material,
painting and repairs are postponed until dull times. The entire
working force is used for such overhauling. After exhausting these
expedients, in a period of slack business, the company resorts to a
shorter work week, and the unemployed time is thus distributed over
the entire working force.
It has been the policy, in case it became necessary to discharge any
employees, to let those go who have the least seniority rights. In
putting new machinery into operation which will displace labor,
it has also been the practice to let the normal turnover, which is
about 10 per cent yearly, take care of such displacement. That is,
if any men leave the organization and new machinery is to be put
in operation, their places are not filled, even though the mill has to
et along short handed for a while. When it becomes necessary to
ischarge men, a bonus of two weeks’ wagjes is paid.
The stabilization and employment policies of the firm had been
so successful in the past that up to July, 1930, only $471.96 had
been paid in unemployment benefits, but the plan failed to meet the
needs caused by the present depression, the situation being greatly
aggravated by certain large customers taking over part of the firm’s
operations to help their own unemployment problem.
The Green Island Mill was running only three days a week in
April, but the men were being paid for three and one-half days, the
extra half day’s pay being met by a deduction from the pay of sal
aried employees and a contribution from the company sufficient to
make up the difference between the amount secured through the salary
deductions and the total wage bill for the half day. This deduc
tion was started April 1, 1931, and is expected to be renewed from
month to month. No other special benefits have been paid, but
every effort has been made to give employees temporary jobs around
the homes of the salaried men, as well as to find other work for
them. A mill extension plan was instituted some time ago to create
work for 15 men.
In commenting on the experience of the company in dealing with
the problem of unemployment, the general manager stated that the
plan followed in the past has been found to be entirely adequate in
handling seasonal fluctuations but has proved to be inadequate in
f
43
COMPANY PLANS
taking care of a major business depression. However, it has served
greatly to modify the hardship occasioned by business depression
and it is believed has been most favorably received by the employees.
Behr-Manning Corporation, Watervliet, N. Y.
Outline of Plan
The plan of this company has been identical with that of the
John A. Manning Paper Co., as described in a preceding section.
Although these are two separate companies, the employees of both
companies belong to the Manning Welfare Association and to the
same paper unions and the unemployment benefits of both companies
have been administered under the same rules. The Behr-Manning
Corporation is engaged in the manufacture of coated abrasives.
Statistics of Operation
Turnover figures prior to 1931 could not be secured, but since
January 20 men had been laid off or discharged for lack of work
and 5 had been hired. Eleven of the lay-offs occurred in April.
Table 11 shows the average number of employees, pay-roll totals,
number receiving benefits, and total amount paid in 1929, 1930, and
January to April 15, 1931 :
T a b le
11.— Operation of unemployment-benefit plan of Behr-Manning Corpora*
tiont 1929, 1930, and January to April 15, 1931
Year or month
1929............................................................
1930—.........................................................
1931:
January__________________________
February____ ______________ _____
March___________________________
Apr. 1 to 15____________ ___ _____
i No benefits paid.
Average
number
of em
ployees
Total pay
roll
294
260
$481,686
454,385
274
240
0)
0)
0)
(l)
252
256
259
239
35,762
31,077
33,906
252
253
254
234
(,) 2
7
11
(,)$18
2455
3400
Total
Number Number
covered receiving benefits
by plan benefits
paid
* Includes discharge bonus.
Average
benefit
paid
$9
65
8Approximate for month.
General Experience
The Behr-Manning Corporation has only begun to feel the depres
sion during the past few months. It has been the policy of this
company and the John A. Manning Paper Co. to pay a discharge
bonus equal to two weeks’ salary or wages since earty in 1930. In a
few cases in which unemployment benefits were paid in March, 1931,
the men in this company chose to be paid the discharge bonus instead
of the eight weeks’ unemployment benefit when the latter would have
been less than the bonus.
The company is considering the adoption of the tentative plan of
the John A. Manning Co., and will form an unemployment fund
with pay-roll deductions of 1 per cent, to be matched by an equal
contribution by the company. The hours of work in this plant are
48 per week and one shift per day is worked.
65655°—31------4
14
UNEMPLOYMENT-BENBFIT PLANS— UNITED STATES
S. C. Johnson & Son, Racine, Wis.
In November, 1922, S. C. Johnson & Son, Racine, Wis., set up an
unemployment-benefit plan for office workers, salesmen, and shop
employees. The company manufactures prepared wax for finishing
floors, woodwork, and furniture; varnishes; enamel; and fillers.
While the company has other plants outside the United States,
the unemployment-benefit plan applies only to the workers con
nected with the Racine, Wis., branch. There has been no change
in working hours. Since the plan went into effect 44 hours have
constituted one week’s work.
Outline of Plan
The plan was put into operation in November, 1922.
Character of flan.—By the terms set forth a system of unemploy
ment benefits is provided for. Membership in the plan is not com
pulsory, but is automatic for all members of the mutual benefit asso
ciation of the company. The right to unemployment benefits is only
one of the benefits a member of the mutual benefit association enjoys,
the others being life insurance and disability benefits. Six months’
service is required for membership in the association.
Eligibility for benefits.—A person is regarded as unemployed if he
is involuntarily out of work. To draw benefits, the employee must
be a member of the mutual benefit association, the requirement for
such membership being six months of satisfactory service with the
company. An employee on lay-off is not required to report for work
unless called. Eligibility for benefits is not affected if an employee
on lay-off takes outside work. No ^waiting period is required before
benefits are paid, but the smallest unit of lost time for which benefits
are paid is half a day. Overtime work does not offset time lost for
lack of work.
Benefits.—The scale of benefits is $1 per day for the first 100 days
and 50 cents per day for the second 100 days for members who earn
$75 a month or less; for employees who earn $75 to $200 the benefit
allowances are $2 and $1 for these respective periods; and for
employees earning $200 or more, $4 and $2 for these respective pe
riods. The benefit period begins as soon as a person is laid off, but
only units of one-half day or more are paid for. Benefits are
authorized for a total of 200 days in a working year (exclusive of
any time taken off for vacation and public holidays).
Administration.—Administration of the unemployment-benefit
plan is in the hands of a board of governors composed of 6 members,
4 of whom are elected by the employees and 2 by the management.
No special unemployment fund is maintained, the money for the
payment of claims being taken from the treasury of the mutual
benefit association. The amount withdrawn is returned to the
treasury by the management.
Method of financing flan.—The cost of the plan is borne entirely
by the company. No reserve fund has been set up to provide funds,
and the company uses funds in the treasury for this purpose. A l
though employees pay dues into the mutual benefit association, none
of the money paid in by them is used to pay unemployment benefits.
45
COMPANY PLANS
Statistics of Operation
Table 12 shows the average number of employees, the total pay
roll, the number receiving benefits, and the amounts paid, by years.
1923 to 1930, and January to March, 1931. There has been no lay-off
since taking of inventory in January, 1929.
T a b le
12.—Operation of unemployment-benefit plan of S. G. Johnson & Son9
1923 to 1930, and January to March, 1931
Total pay roll
Number
of em
ployees
receiving
benefits
0)
(*)
363
301
346
364
0)
P>
0)
0)
$534,781.19
565,192.88
564,324.57
588,482.29
51
52
35
93
21
30
30
<*>
345
346
347
47.720.34
49,140.30
47.816.34
(*)
Average
number
of em
ployees
Year or month
1923...................................................................
1924...................................................................
1925...................................................................
1926...................................................................
1927...................................................................
1928...................................................................
1929...................................................................
1930...................................................................
1931:
January_____________________________
February.___ _____________________ __
March__— . . . . _- - ____ __________ _
Total
benefits
paid
$1,874.00
702.50
111.00
354.00
902.00
71.00
227.00
8
Average
benefit
paid
$36.75
13.51
3.17
3.81
42.95
2.37
7.57
,j
i Not reported.
* No lay-offs.
General Experience
During the present depression the plan has remained in force,
but it has been possible to regularize employment for the members
covered by the unemployment-benefit plan so that there has been no
lay-off and consequently no demand for benefits.
In 1923 such unemployment as existed was due to inventory and a
lay-off in the wax room; in 1924 the unemployment was due to these
two causes and to two Saturday morning lay-offs after holidays;
in 1925 and 1926 benefits were paid for time lost owing to inventory;
in 1927 inventory and the 5-day week in the wax room were both
contributing causes; and in 1928 and 1929 the lay-off for which,
benefit was paid was made necessary by inventory taking. Since
then there has been no lay-off of one-half day or more and no benefit
payments have been made.
Leeds & Northrup Co., Philadelphia, Pa.
There is ordinarily little seasonal unemployment in this plant,
and the increasing use of the type of electrical appliances manu
factured by the company, which were formerly used almost entirely
in laboratories, has developed the market and as a result made for
stability of employment. The company also has had a definite
program for the building up of stable employment conditions and
for many years has endeavored to establish sound industrial rela
tions and to maintain a healthy and prosperous working force. It
is particularly important to provide stability of employment as
the business requires an especially skilled force.
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Outline o f Plan
The first appropriations to the unemployment-benefit fund were
made by the company in 1923 when an initial sum of $5,000 was set
aside and the payment of 2 per cent of the total weekly pay roll into
the fund was begun. The first benefits were paid in October, 1924.
Character of plan.—The plan provides for the payment of benefits
in case of lay-offs or part-time employment on account of lack of
work.
Eligibility for benefits.—Unemployment benefits are paid for lay
offs and part time due to lack of work, and for any loss of earnings
through transfer, up to the maximum number of weeks to which
employees are entitled by length of service.
Employees who are earning less than $2,600 per year are eligible
for unemployment benefits if they have been in the employ of the
company for at least three months and have not signed a written
statement that the employment is temporary. The status of tem
porary employees is reviewed each quarter, and if the end of the
temporary work is not in sight, they are put on the regular roll. I f
a worker who is transferred to another job which the committee con
siders suitable refuses to accept it, he forfeits his right to benefit. A
false statement as to the number of dependents also disqualifies him
for benefit.
Employees receiving benefits are required to report three times a
week to a person designated by the committee, as to the efforts which
have been made to secure work. I f the committee believes that a
person is not making any effort to secure work, or if he makes a
false statement in regard to his efforts, or as to any outside employ
ment he may have secured, or as to his dependents, he forfeits all
right to benefits and to reemployment.
If, during a slack period, a worker secures an outside job which
pays as much as, or more, than he would be entitled to as unemploy
ment benefit, the payment of benefit is stopped, but if it pays less ne
is paid from the unemployment fund the difference between his earn
ings and the amount he would be entitled to under the benefit plan.
I f an outside job accepted by an employee proves to be unsatisfactory,
he may have the matter reviewed, and if the decision is favorable
he will be paid the benefits he would have received if he had
remained unemployed.
Benefits.—Employees laid off on account of lack of work are paid
75 per cent of the wages or salary for the normal working week of
44 hours, exclusive of the attendance bonus, if they have dependents,
and 50 per cent if they are without dependents. I f the hours are
reduced below the normal working week, the benefits follow the same
percentage basis as for lay-offs, and reduction of earnings through
transfer on account of lack of work is also compensated on the same
percentage basis.
There is no waiting period and the right to benefits dates from
the time of lay-off, reduction in hours, or transfer. Payments are
made by check on the regular weekly pay day, but as the committee
requires five days for approving applications for benefit, the first
payment is not actually paid until the first pay day after this 5-day
period.
47
COMPANY PLANS
The number of weeks per year for which benefits may be paid
depends upon the length of service as shown in the following table.
In computing length of service lay-offs are not deducted.
Length of service:
3 months
1 year__
2 years—
3 years-:----------4 years------------5 years and oyer.
Number o f weeks
of benefit
3
5
10
15
20
26
Special benefits have been paid in some instances to married men
with dependents after their right to benefits expired.
Administration.—The money contributed to the fund is placed
with the Germantown Trust (Jo., which acts as trustee for the fund
and invests the contributions upon the written approval of the com
pany. The fund is administered by the unemployment fund com
mittee, made up of three members representing the board of coun
cilors and two members representing the company’s executive com
mittee, appointed annually. Rules governing the fund must be aproved by the councilors, and all decisions of the committee must
e approved, and all orders of the committee must be signed by
three members of the committee, of whom at least two must be the
employee representatives. I f the fund is being used for the pay
ment of benefits, a monthly report of the state of the fund must be
made to the board of councilors and the executive committee, but
if the fund is inactive, only a yearly report is required, which is
made at the annual meeting of the cooperative association.
The unemployment fund committee considers all registrations for
benefits, decides on cases relative to dependents, and if necessary
reviews any cases in which benefits are being paid. Special cases not
covered by the rules are also decided upon by the committee.
The trustee makes payment from the fund upon orders issued by
the company upon written instructions from the unemployment
fund committee, signed by three representatives, of whom at least
two must be employee representatives.
Method of financing plan.—The fund was started with an initial
payment of $5,000, followed by deposits of 2 per cent of the pay roll,
starting January 1, 1923, which were continued until the deposits
and accumulated interest brought the fund to an amount equivalent
to twice the maximum weekly pay roll in the preceding 12 months.
The plan provides that the fund shall be maintained at this level
and that payments shall cease whenever this amount is reached, but
shall be resumed as soon as, at the end of any weekly period, the
fund has fallen below the maximum weekly pay roll in the preced
ing 12 months. At the present time the firm is not making the 2
per cent payments into the fund, as it is considered that it will meet
the present needs, and it is thought wiser to build up the fund in
good times rather than in a depression such as the present.
E
Statistics of Operation
Table 13 shows the average number of employees, total pay roll,
the average number covered by the plan, the number receiving bene
fits, and amount of benefits, 1923 to 1930, and January to March, 1931.
48
UNEMPLOYMENT-BENEFIT PLANS----UNITED STATES
In 1930, $3,564.99 was paid to 102 employees on account of lay-off,
while $17,675.82 was paid to 580 employees on account of reduction in
hours. During the first three months of 1931, 20 employees had
received $1,796.91 on account of lay-off, and 288 had been paid
$8,385.60 because of the reduction of hours.
T a b le
13.— Operation of unemployment-benefit plan of Leeds & Northrup Go.,
1923 to 1930, and January to March, 1931
Year or month
Average
number
of em
ployees
Total^pay
374
402
438
536
587
644
986
1,113
(i)
0)
(*)
(i)
$1,063,946
1,258,312
1,795,490
1,888,355
1923......................................
1924.......................................
1925.......................................
1926-....................................
1927.......................................
1928.......................................
1929.......................................
1930...............................- ___
1931:
January______________
February_____________
March_____ ___ ______
Average Number
number
of em
of em
ployees ployees
covered receiving
by plan benefits
148,499 1
140,964 V
164,457
1,057
1,054
1,064
291
337
346
411
479
499
850
920
$163.82
56.31
0)
0)
991
Average inBalance
fund at
benefit
end of
paid
period
Total
benefits
paid
2
267.30
$133.65
682
21,240.81
31.14
308
10,182.51
33.06
(i)
0)
0)
0)
$46,030
56,241
81,402
62,313
0)
1Not reported.
Table 14 shows the labor turnover for the years 1927 to 1930 and
the first quarter of 1931. It is reported that among those laid off
for lack of work during the latter part of 1930, nearly all were young
persons without dependents, many of them being high-school boys.
Approximately 60 per cent of these workers secured other jobs, and
about 25 per cent were able to secure work before the expiration of
the benefit period.
T a b le
14.—Labor turnover of Leeds & Northrup Co., 1927 to 1930, and January
to March, 1931
Labor turnover
Average
number
of em
ployees
Year or period
1927...............................................................
1928...............................................................
1929................................. ............................
1930....................... ......... .............................
1931: January to March________________
587
644
986
1,113
1,058
Discharges
Quits
Lay-offs
88
73
181
97
11
Lack of
work
2
139
i 20
U6
139
1
Other
causes
15
9
40
34
3
Acces
sions
124
283
635
212
29
i Temporary summer workers.
General Experience
The company considers the benefit fund adequate to meet all
requirements, even during the present depression. When business
recovery takes place, it is expected that the whole operation of the
plan will be reviewed, and that the terms will probably be made more
COMPANY PLANS
49
generous. In general, the benefits have been adequate to meet the
problem of unemployment. Special benefits have been allowed in
several instances to married men with dependents after their right to
benefit expires. Loans may be made from the unemployment fund
on the basis of 4 days5 pay per week, 3 days’ work being furnished
and 1 day’s pay loaned. Repayment is arranged for on a 52-week
basis. Only about $400 has been borrowed, however, on this basis.
It is not the practice of the firm to hire temporary workers. The
plant has the 5-day week, and this does away with the necessity for
having temporary workers and assists in keeping down labor turn
over, as overtime, for which time and one-half is paid, is worked
Saturday mornings. The plant normally has little seasonal unem
ployment and it has not suffered as much from the depression as have
many industries. At present the plant is running four and one-half
days, and it was considered probable that through the summer it
would be on a 4-day schedule. The reduction in hours varies in
different departments. Quite a number of transfers have been made
to avoid lay-offs.
Procter & Gamble Co., Cincinnati, Ohio
The employment-guaranty plan of the Procter & Gamble Co. covers
employees in the factories3 at Ivorydale and St. Bernard, Ohio;
Port Ivory, Staten Island, N. Y .; Kansas City, Kans.; St. Louis, Mo.;
Hamilton, Ontario; and certain office employees. The company has
shared profits with the employees since 1886, but in 1903 the profitsharing plan was changed to cover only employees who subscribed
for stock. When the employment-guaranty plan was put into effect
it was made effective for the employees included in the profit-sharing
plan.
Outline of Plan
The employment-guaranty plan was adopted August 1, 1923.
Character of plan.—The plan guarantees employment for all eligi
ble employees at full pay for 48 weeks in each year, or such part of
the year as remains after an employee’s eligibility is established.
The guaranty, however, does not cover the periods in the summer
and in December when the plants shut down for cleaning and repairs,
nor does it cover payment for holidays. The company reserves the
right, under the plan, to transfer an employee to work other than that
at which he is regularly employed, provided he receives his regular
hourly rate of wages. I f an employee refuses to accept such work,
he is not paid for the time he is unemployed. The company also
reserves the right to discharge any employee at any time for any
cause.
Eligibility for benefits.—Any profit-sharing employee, who has
had at least six months’ service with the company and whose wage
or salary does not exceed $2,000 a year, is eligible for the employ
ment guaranty.
Benefits.—The guaranty covers all lost time in excess of 200 hours
during the year, based on the 50-hour week. Hours worked in excess
of 50 in any one week are not charged against the 200 hours not
•The new factory in Baltimore, Md., w ill be included after July 1, 1931.
50
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
covered by the guaranty. In order to receive payment for unem
ployed time, men must report for work and must clear through the
employment office. I f the employment department is unable to place
the men, the lost time is recorded; when it exceeds 200 hours the pay
ment is made at the regular rate of pay.
Administration.—The employees’ service department is in charge
of all matters relating to transfers, lay-offs, discharges, or any other
matters affecting the employment guaranty. This department has
charge of payment of unemployment benefits and of any complaints.
Benefits are distributed on regular pay days. Any matters of dis
pute between the employees and the company are handled by a joint
conference committee, made up of one representative for every 50
workers and the supervisor of personnel. If this committee fails to
settle the question in dispute, it is taken to the committee on appeals,
composed of the plant superintendent, general superintendent, and
president of the company. The ruling of this committee is binding.
Method of financing plan.—The cost of maintaining the employ
ment guaranty is financed by the company, and charged as a direct
cost against manufacture.
Statistics of Operation
Since 1927 there has been a decided increase in the average number
of eligible employees and in the proportionate number of employees
covered by the plan. During this period the company has been able
to furnish steady employment to the profit-sharing employees so that
no benefits have been paid. There have been no discharges for lack
of work among this group.
Table 15 shows the average number of employees in the plants in
which there is guaranteed employment, index of pay-roll totals,
average number of eligible employees, and the number covered by
the plan, by years, 1927 to 1930, and for January to March, 1931:
T a b le
15.— Operation of guaranteed-employment plan of Procter & Gamble Co.,
1927 to 1930, and January to March, 1931
Year or month
1927.....................................................................................
1928.....................................................................................
1939....................................................................................
1930................................................................. ..................
1931:
January_______________________________________
February................... ................................................
March______________ _____________ ____________
Average
number of
employees
Index of
pay-roll
totals
(average,
1926= 100)
5,186
5,894
5,749
5,660
114.3
124.2
127.1
125.4
3,987
4,242
4,350
4,892
3,591
3,884
3,960
4,633
5,854
5,751
5,691
122.9
115.7
125.8
1,857
4,835
4,788
4,718
4,696
4,670
Average Number of
number
employees
of eligible covered by
employees
plan
51
COMPANY PLANS
Table 16 shows the average number of employees and the labor
turnover, by years, 1927 to 1930, and for January to March, 1931:
T a b le
16.— Labor turnover rates of Procter & Gamble C o 1927 to 1930, and
January to March, 1931
Average
number
of em
ployees
Year or month
1927................................................................................
1928................................................................................
1929................................................................................
1930................................................................................
1931:
January_____________________________________
February____________________________________
March_______ .______________________________
Separation rates
Quit
Lay-off1 Discharge
Acces
sion rate
5,186
5,894
5,749
5,660
25.8
20.3
26.3
13.2
9.6
7.3
4.8
7.1
9.0
8.6
9.2
5.7
61.2
41.6
52.5
18,2
5,854
5,751
5,691
.7
.7
.7
1.0
.6
.4
.5
.2
.3
.4
.6
.5
* Includes only nonprofit-sharing employees.
General Experience
The company states that no participant in the plan has eyer been
in distress through lack of work. The depression has increased the
number of employees participating in the plan. Participation is
voluntary ; prior to the depression about 80 per cent of the eligibles
were participating in the profit-sharing plan which gave them the
protection of the employment guaranty, and since the depression the
number of eligibles participating has increased to almost 100 per
cent. Since there have been practically no lay-offs of profits sharers,
the cost of operating the plan from this standpoint has been insig
nificant. While overtime work is sometimes necessary, as a rule it is
rigidly discouraged. The standard working week is 50 hours, and
the maximum that any employee is permitted to work is 65 hours.
Brown & Bailey Co., Philadelphia, Pa.
Outline of Plan
The unemployment-benefit plan of the Brown & Bailey Co., manu
facturers of paper boxes, was established in November, 1927, and
the accumulation of the fund which consisted of a first payment by
the company of $2,500 was begun at that time. In December, 1929,
the fund had reached the amount considered necessary for its opera
tion, but no payments from the fund were made until April 2, 1930.
As a result of the depression a reduction in the amount of benefits
from 80 per cent of normal earnings to 75 per cent was put into effect
beginning with the pay-roll week ending June 26,1931.
Character of plan.—The plan provides for the payment of unem
ployment benefits due to slack business. Unemployment resulting
from strikes, fires, or similar causes, or lost time resulting from ill
ness or any cause other than slack business, is not compensated for
and in computing the normal wage such lost time is deducted from
the time of the full working week.
Eligibility for benefits.—All employees, except salaried workers
and foremen, are eligible for unemployment benefits, without regard
52
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
to length of service. As the company is small and is in close touch
with its employees, they are not required to report regularly in case
of unemployment except at the regular weekly pay period I f an
employee should secure an outside job he would not be entitled to any
part of the benefit, and under present circumstances there would be
little chance of his getting his job back.
Benefits.—Instead of discharging employees in times of business
depression, the company retains its full working force and runs the
factory on short time. When the weekly earnings of any employee
fall below 75 per cent of the normal earnings, a supplementary pay
ment from the benefit fund is made which brings the wages up to
that amount. The company has a group bonus system in effect in
some departments, a bonus being paid to foremen and operatives if
more than a standard amount is produced. In computing the normal
earnings for the payment of unemployment benefits, this bonus is not
included because the company considers that it was earned by extra
skill and effort, and since the purpose of the unemployment insur
ance is to try to stabilize the basic wage the bonus can not properly
be included. Therefore, the normal earnings, upon which unemploy
ment benefits are based are the regular rate for workers on an hourly
basis, and for workers on a piece-rate basis the average earnings for
the last four weeks of full-time employment. The guaranty of 75 per
cent of normal earnings covers each weekly period unless the fund
becomes exhausted.
Administration.—The fund is administered by the Provident Trust
Co., of Philadelphia. The actual operation of the plan is as follows:
Each week the wages of each employee are computed in the usual
way. Those employees whose wages do not come up to 75 per cent
of the normal have added to their wages such amounts as will bring
them up to that level. These supplementary amounts are recorded in
an extra column in*the pay-roll books and totaled for each week. At
the end of each calendar month the trust company reimburses the
Brown & Bailey Co., by check, for the total expenditures for unem
ployment insurance during that month; and at the same time the
Brown & Bailey Co. sends to the trust company two checks covering
the contributions for the company and for the employees to the un
employment fund for that month. The plan is simple and effective
and causes a minimum of clerical work.
Method of financing flan.—Up to the time the fund began to
function the company contributed about $7,500, which was approxi
mately twice the maximum weekly pay roll in normal periods.
As soon as the fund is drawn upon the company agrees to pay
into the fund 2 per cent of each weekly pay roll until the fund
is restored to the total of $7,500. When the scheme was estab
lished there was no provision for employees to contribute to the
unemployment fund, but as a result of the security afforded by
the plan the employees requested, through their elected representa
tives on the shop council, to be allowed to contribute 1 per cent of
their weekly pay when the fund falls below $5,000. The foremen,
although on a salary basis and not benefiting by the plan, also asked
to be allowed to contribute, and each foreman now pays $1 per month
into the fund. The contributions of employees and foremen are
COMPANY PLANS
63
being added to those of the company in an effort to maintain the fund
in a healthy condition as long as possible and eventually to restore
it to its maximum.
Statistics o f Operation
Data on cost of operation of the plan in 1930 and the first quarter
of 1931 are given in Table 17:
T a b le
17.— Operation of unemployment-benefit plan of Brown & Bailey Co.9
1980, and first quarter of 1981
Year or month
Aver
age
num
ber of
employ
ees
1930..........................................
1931:
January____ ___________
February...........................
March.___________ _____
April_____ _____________
Num ber of
emplo yees—
Total^pay
Cov
ered
by
plan
121
$171,443.73
107
116
115
115
12,634.03
13,416.13
16,711.36
102
101
101
in
Average Balance
fund
benefit
at end of
paid
period
Total
benefits
paid
Receiv
ing
benefit
81 i $7,975.28
252
236
241
$98.46
352.22
239.74
382.27
$2,531.14
6.77
6.66
9.32
32,412.00
*April to December.
* Estimated.
* On the company’s books, but the trust company reported approximately $2,900 as some securities had
been sold at a profit.
Figures showing the average number of employees and the number
of separations and accessions in 1930 and for January to March,
1931, are given in Table 18:
T a b le
18.— Labor turnover of Brown & Bailey Co., 1980, and January to March,
1981
Average
number
of em
ployees
Year or month
1930................................................................................
1931:
January______________________ ______________
February____________________________________
March______________________________________
Lay-offs Discharges Accessions
Quits
121
18
116
115
115
1
1
1
2
A
1
i Including 1 death.
General Experience
In general the company has been able to meet the present crisis
through its unemployment fund. During the first four months of
1931 the unemployment benefits had not reduced the fund appreci
ably, and at the end of April the fund was larger than at the close
of 1930, owing to the sale of some securities at a profit by the trust
company- However, since the latter part of April the employment
situation has changed for the firm, and because of lack of work the
fund has been heavily drawn upon and very substantially depleted.
As a result of the heavy demands upon the fund the shop council,
54
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
composed of representatives elected by the workers, suggested the
lowering of the basis of the guaranty from 80 per cent of normal
wages to 75 or even 70 per cent.’ The firm, however, after going very
carefully into the matter, decided to fix the benefits at 75 per cent of
the normal wages beginning with the pay-roll week ending June 26,
m i.
The policy of the firm for a number of years has been to maintain
a stable working force in both slack and busy times, and it has been
the practice when business is good to work overtime rather than to
hire temporary workers. The turnover rate is very low, being 9.2
per cent in 1930, and the number of discharges has averaged about
5y2 for the past few years. An employee has the right to appeal
in case of discharge to the works committee, which reviews the case.
The normal working week is 48 hours, but most of the departments
of the plant have been on short time during the depression. It has
varied, however, for different departments, and the rotary-press crew
of five men, for example, has been on practically full time through
out the year. The plant at present is not running more than 50 per
cent of its normal time.
The firm has attempted for several years to stabilize the industry
through developing a steady demand for their product through
advance orders from customers covered by long-term contracts.
Also, the reduction to a minimum of the hiring of temporary work
ers has been a measure making for stability as have also the various
types of group insurance operated independently of the unemploy
ment-benefit plan.
Special assistance has been given by the company to employees
in distress but none has been necessary during the present crisis on
account of unemployment. It has been the practice of the company
to pay workers who have been laid off on account of the installation
of new machinery or more efficient methods 75 per cent of their pay
until jobs were found, although this does not come under the unem
ployment benefit plan. In 1929 16 employees were discharged for
this reason. Of this number 14 were paid until jobs were secured,
the longest period of payment being about three months. One man,
it was discovered, was not trying to get another job and payments
to him were, therefore, discontinued; and one girl, who had a hus
band in the employ of the company who was receiving good wages,
did not receive the discharge bonus. Altogether, through the various
policies carried out by the company, it appears that the firm has
succeeded in reducing to a minimum among its employees the hard
ships accompanying the present crisis.
Consolidated Water Power & Paper Co., Wisconsin Rapids, Wis.
Outline o f Plan
The plan was instituted in February, 1929.
Character of plan.—The plan provides for compensating all
permanent employees for time lost from shutting down machines
for an indefinite period.
COMPANY PLANS
m
Eligibility for 'plan.—Employees who are on an hourly rate of
pay are included in the plan, if they have been employed by the
company one year or longer. This includes all factory workers.
Benefits.—The plan provides a guaranteed monthly income, the
following scale which is approximately one-third of the average
monthly wage being in effect:
Class, and amount o f guaranteed income per month
Machine tenders--------------------------------------------------------------------------$75
Back tenders___________________________________________________ 65
Third hands____________________________________________________ 50
Fourth hands__________________________________________________ 40
Fifth hands____________________________________________________ 30
Other employees whose hourly rate is over 50 cents__________________ 40
Employees with more than 3 years* service earning less than 50 cents
per hour___________________________________________________ 30
Employees with 1 to 3 years' service earning less than 50 cents per hour— 20
On March 1, a sliding scale of benefits on a percentage basis was
put into effect. This was done to encourage men to take what work
was available. The percentages for earnings falling below the
uaranteed income for each class range from 100 per cent for no
ays worked to no benefit payments for 16 days worked. The per
centages are based on a limit of $100 per month so that benefits cease
when the total earnings reach that figure. There is no limit on the
number or amount of benefits in a year.
Administration.—The plan is administered by the personnel
manager and representatives of the three unions through their
regular grievance committee.
f
Statistics o f Operation
From February 7 to June 8, 1929, a total of $2,931 was paid in
benefits to 43 employees.
Since that time? no benefits have been paid.
In 1929 approximately 700 employees were covered by the plan.
General Experience
During the present depression the company has been able to
provide work so that there have been no lay-offs.
General Electric Co.
The General Electric Co. has adopted two different plans covering
employment conditions in its different plants during the past year.
The first—the unemployment-pension plan—was proposed to the 12
plants in which various types of electrical apparatus are manufac
tured early in 1930, and was accepted by the various plants within a
few months. The second—an unemployment-guaranty plan—was
put into effect in the 12 lamp works of the company, January 1,1931,
after having been voted upon favorably by the employees in these
plants.
56
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Unemployment pension plan, Schenectady, N. Y., and other plants
manufacturing electrical apparatus
Outline o f Plan
The unemployment-pension plan of the General Electric Co. was
proposed to the employees in 1930. It was voted upon by each ap
paratus works as a unit and was accepted by all the plants, the votes
of the employees in favor of the plan in some cases being as high as
100 per cent, and averaging 77 per cent for the 12 apparatus works
covered by the plan. Deductions from the employees’ pay for the
formation of the fund began August 1,1930.
Character of plan.—The plan provides for payment for total or
partial unemployment, for loans to unemployed workers not to exceed
$200, and for relief to any employee or former employee of the com
pany who has been retired on old-age or disability pension or dis
ability relief, after investigation by the administrators, and for such
a period as they may decide. Participation in the plan is voluntary
on the part of the employees. As soon as an employee signifies his
desire to become a member of the plan, 1 per cent is deducted from
his pay if he is receiving 50 per cent or more of his normal earnings.
Three per cent of the normal contributions paid into the trust
by contributing employees and by the company is to be available for
payment to employees or former employees who are in need, and loans
may be made to an amount not to exceed 27 per cent of the normal
contributions.
Eligibility for benefits.—Any employee with continuous service
with the company of one year or more is eligible for participation in
the plan.
In general, unemployment consists of temporary lay-off for lack of
work, but the regulations provide that the administrators of the plan
shall define unemployment.
There is no requirement that an unemployed worker shall report
regularly or telephone to his place of work, but he is required to
report in person for his pay check. I f any doubt arises in connection
with a case, the case is checked up. Interviews covering the status
of an unemployed worker are conducted by a member of the person
nel department, and with him sits one of the administrators elected
by the employees. Work at a regular job elsewhere bars an employee
from unemployment payments, but if he secures work for a day or
two no account is taken of it.
Benefits.—When a contributing employee receives notice of a tem
porary lay-off a notice is also sent to the administrators of the fund,
but no payment is made from the fund to a contributing employee
for the first two weeks of unemployment. At the expiration of this
period, and subject to the approval of the administrators, payment to
a contributing employee will be made. Such payment will continue
to the extent approved by the administrators, but in no case may
payments be for longer than 10 weeks in 12 consecutive months.
Payments to a contributing employee amount to 50 per cent of his
average weekly or monthly earnings for full time, but may in no
case exceed $20 per week.
I f a contributing employee is working part time and receiving
less than 50 per cent of his average full-time weekly or monthly earn
COMPANY PLANS
57
ings, he may be eligible for payments from the unemployment fund,
amounting to the difference between the amount he is receiving as
wages from the company and the maximum payment he might re
ceive if entirely unemployed.
Administration.—The plan is administered in units of each works.
The administration is in the hands of a board of not less than 4 nor
more than 16 members, half of whom are elected by the contributing
employees and the other half appointed by the president of the Gen
eral Electric Co., headed by a chairman elected by the administrators
from among themselves. At the larger works a number of commit
tees may be appointed by the administrators, the number of such
committees depending on the size of the works. The company guar
antees interest at the rate of 5 per cent per annum on all funds and
for two years after the inauguration of the plan will pay the expense
of administration.
Method of financing plan.—The plan provides for the establish
ment of the “ Unemployment-pension plan trust ” formed from equal
contributions by the company and the contributing employees. The
employees’ contributions amount to approximately 1 per cent of the
actual weekly or monthly earnings of the contributing employees to
the plan for three years after beginning participation, but only for
so long, in the case of each employee, as his earnings are 50 per cent
or more of his average weekly or monthly earnings, or for a shorter
or longer period as may be determined from time to time by the
administrators of the plan. The company contributes to the trust
an amount equal to that paid in by the contributing employees.
In times of abnormal unemployment, when contributing employees
are temporarily laid off or are working part time and payments
made from the trust for unemployment amount to 2 per cent or more
of the average weekly earnings of contributing employees, the ad
ministrators will notify the company of this fact and normal collec
tions from contributing employees will cease. Upon such notification
the company agrees to announce that an unemployment emergency
has arisen; the following system of emergency payments to the trust
will be made, and will continue as long as payments from the trust
fund amount to 2 per cent or more of the average weekly earnings
of contributing employees and until the total of the trust is not less
than 75 per cent of the previously attained maximum. All those
employed by the company at the particular works, and receiving 50
per cent and over of their average weekly or monthly full-time earn
ings, will be required to pay approximately 1 per cent of such earn
ings into the fund. This includes all the clerical and supervisory
staff, as well as the highest officers of the company connected with
the particular works. All the general and district commercial, gen
eral manufacturing, engineering, and administrative employees of
the company at all offices in the United States not on a particular
pay roll shall contribute their proportion of the 1 per cent, deter
mined by the ratio of the average earnings of the contributing
employees of the particular works to the total pay roll of the eligible
employees of all works of the company. For example, if the average
earnings of the contributing employees in a particular plant should
be 20 per cent of the total pay roll of the eligible employees of all
works of the company, then 20 per cent of 1 per cent would be
58
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
deducted from the pay of the general administrative and engineering
forces of the company. The company’s contribution will be equal
to the total of the emergency contributions from all employees.
After an emergency is over, the administrators will decide upon the
renewal of normal payments into the trust and the length of time
they shall continue.
Emergency plan.—The plan adopted August 1,1930, provided that
no payments would be made to an employee until he had made nor
mal contributions for at least six months. In the fall of 1930 it be
came evident that employees would need assistance before these
preliminary payments were completed. A special emergency was
therefore declared December 1, 1930. In general, this plan is being
operated as described above, except for three important modifica
tions adopted because payments were started before a substantial
fund could be accumulated:
1. All employees of the company (except those in the lamp
department) to contribute 1 per cent;
2. Payments to be made only after the administrators are con
vinced the employee is in need of funds; and
3. The maximum weekly payment to be $15 instead of $20.
At most of the plants, the collections from employees plus the
company’s equal contributions has been adequate tor the disburse
ments authorized by the administrators. At four of the plants,
the local collections have been inadequate, and the deficit has been
made up by drawing upon the amounts collected from the general
administrative and district sales group.
Statistics of Operation
The following statement shows the average number of employees
and the total pay roll for 1930, and the nunSer of employees receiv
ing payments, the amount of such payments, and additional data
for the first five months (December 1,1930, to April 30,1931), during
which the emergency plan has been in operation:
Operation of unemployment emergency plan of the General Electric Co.,
December 1 , 1980 , to April 80, 1981
1930:
Average number of employees___________________________
4 78, 380
Total pay roll------ ----------------------------------------------------------$140, 905, 000
December 1, 1930, to April 30, 1930:
Number of employees receiving payments—
Complete unemployment____________________________
Part-time unemployment____________________________
Loans____________________________________ _________
Employees in need__________________________________
2, 775
6, 172
776
530
T otal..________________ _________________________
Total amount of payments—
Complete unemployment____________________________
Part-time unemployment____________________________
Loans_____________________________________________
Employees in need__________________________________
Total__________________________ ________________ _
* Includes about 8,COOemployees in the in can dos cent plants.
10, 253
$253,
209,
65,
20,
633.
524.
741.
705.
42
66
82
60
549, 605. 50
COMPANY PLANS
59
December 1, 1930, to April 30, 1930—Continued.
Payments to 9,721 contributing employees_____________ ___$516, 251. 80
Payments to 532 noncontributing employees______________
33, 353. 70
Average payment, amount of____________________________
53. 60
Balance in fund, April 30, 1931__________________________
288, 313. 61
Sex and conjugal condition of employees receiving pay
ments—
Married men_______________________________________
Single men_________________________________________
Married women____________________________________
Single women_________________________________ ______
5, 928
2, 718
569
1, 038
Total____________________________________________
10,253
General Experience
In the present emergency even workers who had not subscribed to
the unemployment-pension plan, although they had one year of serv
ice with the company, have received assistance in the form of loans.
Loans have also been made to contributing employees who had re
ceived unemployment payments for the maximum period (10 weeks).
Application for a loan is in the form of a note, but no security is
required. Loans up to $300 are made, generally in the form of small
weekly payments, with the understanding that such loans will be
repaid in installments when the employee returns to work with the
company or obtains work elsewhere.
The General Electric Co. has a very definite and elaborate stabili
zation policy which includes overtime at rush periods; shortening
the hours in dull periods; manufacturing for stock in those depart
ments in which it is possible; increasing the force as slowly as pos
sible; transferring workers to especially busy departments; and,
when it becomes necessary to dismiss workers, dropping new em
ployees, single persons with no dependents, and those who are most
easily spared, first—always with at least one week’s notice. The
normal working week is five and one-half days, but at the present
time practically all the factories are on a 5-day schedule, with many
departments working much less.
The other welfare plans of the company affect the economic situa
tion of the employees. Thus, approximately 36,500 employees hold
bonds of the General Electric Employees Securities Corporation,
paid for in whole or in part, to a value of $40,430,080 and yielding
8 per cent return. At the end of 1930 approximately 67,000 carried
life insurance obtained through the company, totaling $177,000,000,
$75,000,000 of which is free insurance. In the past two and one-half
years 44,855 employees set aside for additional pensions $2,646,299
through payments of 1y2 per cent of earnings.
During the present emergency, the company states, the unemploy
ment payments have been of material assistance in helping the em
ployees meet the employment situation. Among the 10,253 employees
who have been aided while laid off or on short time during the pres
ent emergency, many hold the bonds previously described, or are
buying their own homes with company assistance, and help from the
60
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
unemployment fund has made it possible for many to get along
without sacrificing these assets.
The General Electric Co. wishes to emphasize the fact that the
plan is experimental as yet, and that it may be changed in the light
of experience, although no change is contemplated at the present
time.
Ghmranteed-employment plan covering plants of 12 lamp works
A study of the possibilities of stabilization of work and guaranty
of employment in the incandescent-lamp department was made by
the company in 1930. As a result a plan guaranteeing 50 weeks’ work
of not less than 30 hours each was put into effect for the year 1931.
All employees on an hourly or piecework basis, with two or more
years of service, are eligible. Participation is optional, and the
individual application of the employee requests the company to
withhold 1 per cent of his or her weekly earnings and to credit the
amount so deducted to the employee. The company guarantees 5
per cent interest, and the savings, including interest, always belong
to the employees; the accumulated principal and interest is paid to
them upon leaving the employ of the company, to their beneficiaries
upon death, or in the form of additional pensions upon retiring.
Many of the factories adopted the plan unanimously, and 97.3 per
cent of the eligible employees of all factories accepted it.
No expenditures have been made under the plan to this date.
There are about 8,000 employees in all the incandescent-lamp
plants, and approximately 4,500 are covered by the plan.
Joint Company Plan, Fond du Lac, Wis.
A cooperative plan for guaranteeing employment and paying
unemployment benefits was put into effect September 1, 1930, by
three manufacturing firms of Fond du Lac, Wis. The employing
organizations concluding this agreement are the Sanitary Refrig
erator Co., the Northern Casket Co., and the Demountable Type
writer Co., including two subsidiary enterprises of the latter com
pany—the Standard Refrigerator Co. and the American Lock &
Hinge Co. Since the inauguration of the plan the companies have
succeeded in so stabilizing employment that there have been no
lay-offs; consequently, no benefits have been paid.
Outline o f Plan
The plan was placed in effect on September 1,1930.
Character of plan.—The rules laid down make provision for a
guaranty of steady employment, and if employment can not be
furnished benefit payments are authorized up to a fixed limit.
Steady employment is construed under the plan to mean employ
ment for all regular working-days throughout the year, with the
exception of holidays or vacations allowed by the company or when
all or any part of the factory is shut down on account of breakdown
or for repairs.
COMPANY PLANS
61
All employees meeting certain requirements as to age, etc., are
automatically covered.
Eligibility for benefits.—The plan covers all factory and office
employees of the five companies, between the ages of 21 and 60,
who have been employed continuously for two years, with the excep
tion of managers, assistant managers, superintendents, and sales
men. At present about 70 per cent of the employees have the required
length of service, and within a year about 85 per cent will become
eligible for unemployment benefits. Employees, wTho quit work for
any reason or are discharged for causes which are generally con
sidered as justifying dismissal, are not entitled to the benefits under
the plan; nor will such benefits be paid to employees receiving
benefits under the workmen’s compensation act.
Benefits.—Eligible employees will be entitled to receive steady
employment by any one or more of the companies included in the
agreement or elsewhere when it can be secured, or, when employ
ment can not be provided, to participate in the cash unemployment
benefits for the period of unemployment, but not to exceed 100
working-days in the aggregate in any one year. Cash unemploy
ment benefits are paid at the rate of 65 per cent of the average earn
ings during the year preceding the beginning of unemployment, but
no unemployment payments will be made for the first 15 days of
unemployment. Unemployment payments will be discontinued from
the time the employee is offered employment by one of the com
panies which are parties to the agreement or by any other company,
or when he declines to accept some other worth-while employment.
While employees temporarily or permanently laid off are not guar
anteed the same work or the same amount of wages they formerly
received, an effort will always be made to furnish employment at
least as good as the previous employment.
Administration.—The plan is administered by each of the sub
scribing companies for their respective employees. It is stipulated
in the contracts, which all companies hold, that any company has the
right to withdraw from the plan at the end of any year if there are
indications that the plan does not operate in the interest of steady
and permanent employment; that is, if the employing companies are
called upon to pay out so large an amount of cash benefits that its
continuation may cause the company to become financially embar
rassed or to sustain a loss of financial credit or may lead to a pos
sible trade crisis or failure. As drawn up, however, the contracts
provide for the operation of the plan for five years.
The State industrial commission will act as referee, and will have
the final decision in any dispute between the employees and the em
ployer arising from the operation of the plan, the costs to be paid
by the employing company or by the employee, whichever made
application for a referee’s decision.
Method of financing plan.—The plan is financed by employer con
tributions equal to $1 for every $100 paid in wages each month. The
sum so set up is administered as a special fund out of which benefit
payments may be made when due.
62
UNEMPLOYMENT-BENEFIT PLANS----UNITED STATES
Statistics o f Operation
Table 19 shows statistics of operation under the plan since its
adoption by the participating companies:
T a b le
19.— Operation of Joint Company Plan, Fond du Lac, Wis., September
1, 1930, to March 31, 1931
Month or period
Average
number
of em
ployees
Total
amcunt
of pay
roll
110
$57,000
65
$570
115
115
115
15.000
15.000
15.000
75
76
77
720
870
1,020
120
56.000
72
560
125
130
130
15.000
16.000
16,000
79
83
85
710
870
1,030
100
50,000
65
500
105
105
105
14.700
14.700
14.700
71
72
74
647
794
941
Sanitary Refrigerator Co.:
Sept. 1 to Dec. 30, 1930____ ___ __ ______________________
1931—
January____________ ______________________________
February__ _______ - ______________________________
March_______________ - ___________________________
Northern Casket Co.:
Sept. 1 to Dec. 30, 1930_________________________________
1931—
January___________________________________________
February _______________________________________
March_______ _____________ ______________________
Demountable Typewriter Co.:
Sept. 1 to Dec. 30,1930_________________________________
1931—
January___________________________________________
February____________ l____________________________
March____________________________________________
Number Balance
of em
in fund
ployees at end of
covered
period
General Experience
The firms are considering liberalizing the plan by reducing the
required length of service from two years to one year. It is custom
ary for the companies subscribing to the plan to employ extra work
ers in rush times and to discourage overtime. Each new employee
taken on for extra work is apprised of the steady-work plan and
the rules governing eligibility.
The working week has been and still is 54 hours, but the possi
bility of lowering it to 44 hours is under consideration.
It is reported that prior to the adoption of this plan turnover
ran as high as 40 per cent per year. Since the plan went into effect,
no lay-offs have been made.
Investigation has shown that the financing of the plan can be
handled through an insurance company. By requiring that em
ployees undergo a two weeks’ waiting period after unemployment
starts, and with the company held responsible for the payment of
benefits for the following two weeks of unemployment, it is thought
that unemployment insurance could be secured at a low rate. Com
mercial insurance against unemployment is therefore considered as
a possibility in Fond du Lac.
Rochester (N. Y.) Unemployment-Benefit Plan
The plan known as the Rochester Unemployment-Benefit Plan
was adopted in February, 1931, by 14 manufacturing establishments
in Rochester, N. Y., wThich employ a total of 26,000 persons, approxi
mately one-third of the industrial employees of that city. Since
that time two additional employers have signified their intention of
COMPANY PLANS
63
joining in the movement to protect their employees by an out-ofwork benefit system. It is likely that additional employers will
join the movement and it is hoped by the interested parties that
ultimately practically all employers in Rochester will set up machin
ery such as is provided under the plan to protect workers in times
of unemployment.
As worked out, the terms of the plan allow considerable latitude
to individual employers, as to the amount to be set aside, method
of administration, etc., the aim in having a city-wide plan being to
give to employers subscribing to it a working basis upon which
they may build systems suited to the peculiar conditions of their
respective establishments and to the degree of stabilization they
have achieved. The companies vary in size from one of 45
employees to the Eastman Kodak Co., which has 13,000 employees
in Rochester. The companies represented are: Eastman Kodak
Co.; Bausch & Lomb~ Optical Co.; Stromberg Carlson Telephone
Manufacturing Co.; Rochester Telephone Corporation; the Gleason
Works; Taylor Instrument Cos.; Consolidated Machine Tool Corpo
ration; the Todd Co.; the Pfaudler Co.; Vogt Manufacturing Co.;
Yawman & Erbe Manufacturing Co.; Sargent & Greenleaf (In c.);
Davenport Machine Tool Co.; and Cochrane Bly Co.
Of the companies coming under the plan one is a public utility
and the others are manufacturing concerns, their principal products
being photographic goods, optical goods and instruments, telephones,
radios, thermometers and other recording instruments, machinery,
check protectors and signers, gear-cutting machines, auto trimmings,
office furniture and filing systems, and locks.
Outline of Plan
In February, 1931, a total of 14 firms agreed to set up separate
unemployment-benefit plans and adopted identical rules for the
operation of these plans. The first payments into the unemployment
funds will be made in the current year. Benefit payments will not
be made until January 1, 1933.
Character of 'plan.—The plan makes provision for the payment of
unemployment benefits. Employees in the concerns covered by the
plan are automatically covered by the terms set forth.
Eligibility fo7* benefits.—Unemployment for the purposes of this
plan is involuntary unemployment. A person employed for tem
porary work and so notified when taken on does not fall in the class
of unemployed persons, nor is a person covered who is laid off on
account of iorce majeure, who is on strike or lockout, who fails to
take the required steps to secure work, who fails to accept transfer,
or who is receiving or is entitled to receive sick benefits, accident
compensation etc.
To be eligible for benefits an employee must have been in the
continuous service of the company for at least one year and must be
earning less than $50 a week.
Provision is made that an unemployed person shall report to the
company as frequently as the company may require when on lay
off. He must fill in a blank showing wnat steps he has taken to find
employment and must register at the Public Employment Center of
Rochester.
64
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
I f a person who is receiving benefits secures permanent work with
another organization, benefits shall cease. I f he secures temporary
work outside, he is entitled to receive benefits with the proviso that
in no instance shall the amount of benefit paid to him exceed the
difference between his earnings on the temporary work and his
weekly earnings prior to lay-off. It is further provided that, if his
earnings equal or exceed his earnings prior to lay-off, benefit shall
cease. If an employee is receiving reduced pay with the company,
either because o f short time or because of transfer caused by slack
work, he is entitled to an amount equal to the difference between his
actual earnings and the amount to which he would be entitled in
benefits if wholly unemployed.
Benefits.—Under the plan an amount of benefit is authorized equal
to 60 per cent of the average weekly earnings, with a maximum
benefit payment of $22.50 per week. The average weekly earnings
figure used as a basis of calculation is the average for the last three
months of normal employment, exclusive of overtime.
As has been mentioned, an employee is barred from receiving bene
fits if he secures permanent work with another organization. I f he
has part-time work with his regular employer, he only receives that
part of the benefit allowable which will bring his total weekly earn
ings to the amount of the benefit allowed; if he has part-time work
with an outside concern, he receives that part of the benefit allow
able which will bring his total earnings to the amount of his earn
ings prior to the lay-off.
No payment will be made under the plan before January 1, 1933.
After that time, an eligible unemployed person will receive benefits
after two weeks of continuous unemployment.
The period during which benefits shall be paid varies with length
of service, as follows:
Length of service and period of benefit
Weeks
1 year to 1% years-----------------------------------------------------------6
8
IV2 to 2 years---------------------------------------------- -------------------2 to 3 years________________________________ ______________
10
3 to 4 years_______ _________ ______________________________ 11
4 to 5 years___________ -------------------------------------------------- 12
5 years and over_______ »:----------------------------------- ------- ;____
13
The benefit periods provided are the maximum number for which
an eligible person may receive benefits in any 12 consecutive months
or for any continuous period of lay-off.
Administration.—Each of the concerns which subscribe to the plan
will set up its own administrative machinery. It is provided that
a committee shall be appointed by the management in each estab
lishment to administer the plan. Decisions made by such committee
will be subject only to the general control and direction of the board
of directors of the respective companies.
In at least several of the largest establishments, and probably in
all, both the management and employees will have representation
on the committee set up to administer the plan. The handling of
reserve funds will be done by the management in some instances and
by trustees appointed for the purpose in others.
COMPANY PLANS
65
Method of financing plan.—During normal periods the plan will
be financed entirely by the employers. It is provided that each em
ployer who subscribes to the plan shall contribute to a reserve fund
annually a sum up to 2 per cent of his pay roll, the amount contrib
uted depending upon how much it is estimated will be needed to
meet the requirements of the particular establishment, taking into
account experience in that establishment and the degree of stabiliza
tion which has been attained. Payments into the reserve fund will
be continued until the amount in the fund is equal to five annual
appropriations at the rate of payment decided upon. Any payment
made from the fund after the maximum is reached will be replaced
by additional appropriations at the regular annual rate.
In addition to the payments made to the reserve fund, each com
pany reserves the right, after January 1,1933, and when a prolonged
period of unemployment sets in, to declare that an emergency exists
and to assess all officials and employees of the company an amount
equal to 1 per cent of their earnings. The sums so raised will be
matched by the company and paid into the reserve fund. These
extra payments will be continued until the management declares that
the emergency is over.
Statistics o f Operation
As yet there is no statistical information relative to this plan.
General Experience
It is not yet known what percentage of total pay roll the various
signatory concerns will lay aside in reserve funds to cover any lia
bility for unemployment benefits arising under the plan. The
concerns covered are now engaged in an examination of their records
for previous years to form a basis for estimate as to what per
centage of pay roll will be sufficient. Since the first allotments into
the respective reserve funds may be made any time within the
current year, decisions as to the amount to be set aside will not
necessarily be made soon. However, in this connection the Eastman
Kodak Co. finds, on the basis of examination of its records for the
past 30 years, that annual payments into the reserve fund of not
more than 1 per cent of the pay roll should be adequate to cover the
cost of the plan for this company.
Delaware & Hudson Railroad
The plan of the Delaware & Hudson Railroad differs from the
unemployment-benefit plans of other companies in that the insur
ance covers unemployment arising through discharge only and it is,
therefore, in some measure analogous to the so-called dismissal wage.
However, it goes somewhat farther than the ordinary dismissal
wage, since the payment of unemployment benefits for the specified
period is a matter of right to which the employee is definitely en
titled as shown by the unemployment insurance policy issued to
employees so insured.
66
TJKEMPLOYMENT-BENEFIT PLANS----UNITED STATES
Outline o f Plan
The unemployment-insurance plan of the Delaware & Hudson
Railroad was started in 1922 as part of the general insurance plan
covering group life insurance, sickness, and accident.
Character of plan.—The plan provides for the payment of insur
ance in case of dismissal from any cause. It is closely linked with
a definite stabilization policy whereby maintenance and repair work
are increased in dull periods. It is also the policy of the company
to shorten hours and keep the force intact in times of depression
rather than to dismiss employees. Insurance is voluntary on the
part of employees who are eligible.
Eligibility for benefits.—Employees are not eligible for unemploy
ment insurance unless they have had at least two years’ service with
the firm and have subscribed for and contributed to at least two
of the four forms of insurance covered in the group-insurance plan.
An unemployment-insurance policy is issued to each employee fulfill
ing these requirements. I f other work is secured before the expira
tion of the benefit period, a dismissed employee is not entitled to
further payment.
Benefits.—The plan provides for a payment of $10 a week to
employees whose average annual wages auring the preceding two
years did not exceed $1,000 and $15 for those whose wages were in
excess of that amount. The unemployment benefit is paid for six
weeks or so much of that time as the employee is unable to find
employment.
Administration.—There is no machinery for administering the
insurance as payments are made automatically to employees who are
dismissed.
Method of financing plan,—No special fund is maintained, but em
ployees who are dismissed are paid from the general operating fund
of the company.
Statistics o f Operation
In Table 20 are shown the average number of employees and total
pay roll in addition to data giving operations under the unemploy
ment-benefit plan of the Delaware & Hudson Railroad:
T able
20.— Operations under unemployment-benefit plan of the Delaware &
Hudson Railroad, 1927 to 1980 , and January to March, 1931
Year or month
1927............................................................
1928-........................................................
1929_..........................................................
1930-........................................................
1931:
January............................................. .
February................................ ..........
March...............................................
Average
number
of em
ployees
Num Num
ber of ber of
Aver
em
em
Total amount ployees
ben
age
ployees Total
of pay roll
efits
paid
benefit
covered receiv
paid
by
ing ben
plan
efits
13,107 $23,249,757.00
11,752 21,094,320.00
11,274 21,150,379.00
11,105
20, 353,084.00
9,031
9,084
8,940
8,922
33
57
60
39
$2,586.00
4,646.00
4,765.00
3,124.00
$78.36
81.52
79.42
80.11
10,964
10,871
10,850
8,916
8,924
8,938
1
2
4
90.00
135.00
225.00
90.00
67.50
56.25
1,646,949.00
1,555,088.00
1,619,997.00
67
JOINT-AGREEMENT PLANS
Labor turnover figures are given in Table 21 for the years 1927 to
1930 and for the months of January to March, 1931:
T a b l e 21*— Labor turnover of Delaware & Hudson Railroad, 1927 to 1980 , and
January to March, 1931
Number of employees
furloughed 2
Number of employees leaving service
Year or month
Dismissed
Died
1927-.........................
1928...........................
1929...........................
1930................. .........
1931:
January_______
February______
March............ .
Pen
Re
sioned signed Lack of For
work cause
Num
ber of
em Engineployees men
All
Total hired 1 and
train others
men
Total
190
176
193
183
36
48
29
34
1,200
952
9C0
484
5
15
26
24
150
96
97
75
1,581
1,287
1, 305
800
1,022
585
847
525
353
621
265
411
302
451
96
82
655
1,072
361
493
12
19
13
1
1
25
22
21
1
1
4
6
10
42
48
46
80
77
4
86
59
62
6
14
8
92
73
70
i Does not include furloughed employees returning to active service.
* Furloughed employees represent employees laid of! due to lack of work, etc., but whose seniority and
continuity of service is maintained and are returned to active service as conditions warrant. Furloughs in
engine and train service are required by labor organizations and provided for in labor agreements.
General Experience
The purpose of the company in maintaining the unemployment
insurance for its employees is to make employment conditions attrac
tive so that it can maintain a stable force. There are approximately
7,000 employees who are eligible for unemployment insurance.
So closely is the unemployment insurance connected with the
stabilization policies and group-insurance plan that it can hardly be
considered apart from these. One of the principal policies of the
company is to lengthen or shorten hours in accordance with require
ments instead of taking on extra employees or discharging them. It
was said that there have been few dismissals and that payments
under the plan in 1930 amounted to only a little over $3,000. The
company has not suffered greatly from the depression but has under
taken a considerable amount of repair and maintenance work which
is not charged against the costs of the plan as it improves the value
of the company’s property and equipment.
Joint-Agreement Plans
Men’s Clothing Industry, Chicago, 111.
A joint agreement between employers and the Amalgamated
Clothing Workers’ Union in the Chicago market provides an unemployment-insurance plan for union employees engaged in the pro
duction of men’s clothing in union shops. The number covered by
the provisions of the plan was 19,000 in December, 1926, but by
April, 1931, employment having fallen off and a number of the firms
which had formerly employed union labor having gone out of busi-
68
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
ness, the number under the plan had dropped to 12,979. Extensive
introduction of machinery was also a factor leading to reduction in
number of employees. Since the introduction of the unemploymentinsurance plan, greater stability has been apparent in the men’s
clothing trade of Chicago. This is due in part to the operation of
the plan, and in part to the operation of the union employment office.
Outline o f Plan
The plan was started in 1923, when the agreement providing for
unemployment insurance was signed. Payments into the fund were
first made in that year.
Character of plan.—Under the provisions of the plan unemploy
ment benefits are paid to union members who meet specific require
ments. For members of the union who are employed in shops
covered by the agreement, participation in the plan is compulsory;
that is, they are required to pay certain sums into the fund, and in
turn are entitled to receive benefits.
Eligibility for benefits.—In order to be eligible to receive benefits
a union member covered by the plan must be unemployed involun
tarily, he must not have refused suitable employment, must not have
exhausted his right to benefit, and must not be on strike nor in
volved in a lockout. Membership in the union in good standing,
registration in the union employment office, and regular contribu
tions up to 10 payments for each week to each week and a half of
benefit payable (depending upon the number of weeks of benefit
granted in the particular shop where the person is employed) are
also required.
Eligibility for benefit of a worker leaving one shop to go to an
other is provided for from the fund of the shop to which the person
goes, and all rights to benefits from the fund of the shop the worker
leaves are renounced.
A person laid off from his regular work is not disqualified from
drawing benefits if he takes an outside job, provided he does not
fail to report for work when called. I f a person leaves his job
voluntarily in the middle of a season only that part of the benefit
earned before (juitting is payable.
I f a person is temporarily laid off, proof of unemployment is fur
nished by the employer on his weekly pay-roll record, or if this
record is not sent in, it is secured by the central office. The employee
on lay-off is notified by the employer when to report for duty. The
procedure is different for the union member who is permanently
laid off, it being provided that such a worker must register at the
union employment office and bring his union book with him.
Benefits.—From May 1, 1925, to date, the benefits paid have been
30 per cent of full-time wages, with a maximum payment of $15
per week. Full-time wages are defined as the earnings in a full
44-hour week, computed from the actual earnings in the four busiest
weeks in the previous season. Prior to May 1, 1925, benefits equal to
40 per cent of full-time wages were paid, and the maximum allow
able was placed at $20 per week.
A waiting period of 44 hours is required before persons can re
ceive benefits. This applies to persons on lay-off as well as those
on short time. In calculating time lost every hour lost in a given
JOINT-AGREEMENT PLANS
69
week is counted unless the worker earns $50 or more, or unless he is
out of work voluntarily. Overtime hours cancel the same number
of hours lost, the calculation being made for the whole season.
The first agreement provided that the first 4 hours lost by a parttime worker in any week should not be counted in calculating the
hours lost. For the year May, 1925, to May, 1926, the number of
hours of lost time not to be counted was raised to 8. Beginning in
May, 1926, it was provided that every hour of lay-off should be
counted in the total number of hours lost.
Since May 1, 1928, the maximum benefit period allowable in any
season has been 3% weeks (before that time the benefit period was
2y2 weeks, except in one season when it was 2 weeks). In practice,
benefit has never been paid for more than 3 weeks in any one season.
The duration of the benefit period is fixed by the respective boards
of trustees and the impartial chairman, and at present benefits are
paid approximately as follows: For 3 weeks in the smaller inside
shops, for 2 to 2 ^ weeks in the majority of shops, and for 1 to iy2
weeks in a small number of shops. A person may receive benefits for
only 1 week for every 10 contributions to the fund in a given season
if he works in a shop where benefits are granted for 2 to 2y2 weeks,
and for 1 and iy2weeks for every 10 contributions if he works for a
firm which grants 3 weeks of benefit.
In all cases eligibility to receive benefits is restored with the com
ing of a new season, and the benefit is paid for a given number of
weeks according to the decisions of the various boards of trustees and
the impartial chairman, and on the basis of the number of contri
butions made by the union member.
Administration.—Contributions of contractors and their employees
are pooled and administered for the benefit of the employees o f all
the contractors, or as a single contractor’s fund. The contributions
of each inside-shop employer and his employees are handled as a
separate fund for the benefit of the employees of that particular
shop, or as a separate shop fund.
There are six funds, all handled by trustees. The same union rep
resentatives and the same chairman (the impartial chairman of the
industry) sit on all the boards of trustees.
The clerical work and accounting incident to the collection and
disbursement of the funds are carried on in a central office, under
the direction of an office manager. In this office a complete record
of the work history of each union member covered by the plan is
kept, based on the weekly pay-roll reports of the respective em
ployers. When the time arrives for distribution of the benefit pay
ment (on April 30 and October 30 of each year) the office manager
estimates for how many weeks benefits can be paid out of each fund,
and the respective boards of trustees and the impartial chairman of
the industry make final decisions as to the period, in weeks, for
which benefits shall be paid. Checks are then made out in the
central office. Persons receiving benefits are paid in the shop by the
union business agent. If they are unemployed at the time of distri
bution of benefits, they may call at the office of the business agent
for their checks. I f a person does not have steady employment dur
ing the season but works in various shops for short periods, he may
'enter his claim for benefits with the employment office. His claim
is then sent to the central office where it is handled in the same way
70
UNEMPLOYMENT-BENEFIT PLANS----UNITED STATES
as other claims, and the benefit check is turned over to the employ
ment office for payment.
I f a person is dissatisfied with the settlement of his claim for
benefits or believes he is entitled to benefits, he majr make a complaint
to the business agent. After the matter is adjusted, the business
agent either makes the necessary payment to the worker or explains
why no such payment should be made.
Method of financing plan.—Since May 1,1928, contributions of the
employer to the unemployment fund have been authorized at the
rate oi 3 per cent of the pay roll and those of union members at the
rate of 1% per cent of their earnings. Prior to that time the em
ployers’ contributions were placed at iy2 per cent of the pay roll,
or a sum equal to that paid in by the employees. In fixing the
amount of the contribution it is stipulated that if, and when, the
balance in favor of any firm rises to an amount equal to the maximum
benefits which it is estimated will be needed during a 2-year period,
payments into the fund shall cease until the fund falls below the
equivalent of one year’s maximum benefit payment, at which time
contribution shall be resumed at the regular rate.
The original agreement providing for unemployment insurance also
provided that although payments into the fund should begin at
once, no benefit payments should be made for eight months. The
time limit was later extended to one year. In this way it was possi
ble to build up a reserve fund which has subsequently been used in
part and has been added to only from interest payments. As matters
stand, there is no provision tor maintenance of a reserve in each
fund, but it is the practice to keep an amount equal to one season’s
benent payment in each fund after paying benefits in any current
season.
Statistics o f Operation
Table 22 gives data regarding operations under the system from
May, 1924, to May, 1931:
T a b le
22.— Operation of unemployment-benefit plan of Amalgamated Clothing
Workers9 Union, Chicago, Ill.y May, 1924, to May, 1981
Number Number
Number
Average Balance in
of firms of union of claims Total bene benefit fund at end
fits paid
covered members
paid
paid
of period
covered
May, 1924, to November, 1924..
November* 1924, to May, 1925..
May, 1925, to November, 1925..
November, 1925, to May, 1926..
May, 1926, to November, 1928..
November, 1926, to May, 1927May, 1927, to November, 1927..
November, 1927, to May, 1928..
May, 1928, to November, 1928..
November, 1928, to May, 1929..
May, 1929, to November, 1929..
November, 1929, to May, 1930..
May, 1930, to November, 1930..
November, 1930, to May, 1931..
2206
* 19,000
3168
3 14,025
4142
•12,979
26,426 $942,501.52
23,165 665,536.17
16,791 381,127.70
16,197 330,940.34
16,270 372,537.02
15,747 358,490.80
15,383 352,021.58
15,412 359,560.67
14,998 377,086.99
14,444 369,438.45
13,980 470,143.93
13,803 464,529.01
13,441 378,529.51
* 14,000 •335,000.00
$35.67 1 $666,284.47
28.73
398,476.57
20.28
367,804.50
20.43
404,882.88
22.90
370,454.79
375,788.67
22.77
22.88
387.218.78
23.33
378,858.31
495,431.05
25.14
25.58
630,660.23
33.63
638,704.43
33.65
579,147.66
554.857.79
28.16
23.93 •832,709.75
* Reserve before benefits were paid amounted to $1,167,753.67.
* December, 1926.
* May, 1929.
* April, 1931.
* Estimated.
* Not all contributions are included, and benefits for payment have not been deducted.
JOINT-AGREEMENT PLANS
71
General Experience
Distress among union members who had exhausted their rights to
benefit and were still without employment led to the payment of spe
cial benefits in 1930 from funds to the credit of shops that had gone
out of business. Benefits were paid for a maximum of four weeks
at the rate of $10 per week, the persons to receive benefits being desig
nated by the secretary-treasurer of the union.
Again, late in 1930 and in 1931 special benefits were authorized to
be paid out of funds raised by assessing union members who were
working a total of $8 per person, to be paid in 16 weekly install
ments. The employers have made the pay-roll deductions for the
assessment and forwarded the total amounts raised to the union office
weekly. The funds so raised have been handled as a special fund
and distributed to unemployed union members out of work for three
months or longer, at the rate of $5 for single persons and $7.50 for
married men. The last of these payments is to be made at the end of
April. At that time the balance in the fund will be used for special
cases. The union has designated the persons to receive benefit, and
the money has been handled at union headquarters. When the bene
fit period ends, some persons will have received special benefits each
week between December 1, 1930, and April 30, 1931.
While it is obvious from the fact that extra benefits have been
paid in both 1930 and 1931 that the unemployment fund has not
been adequate to take care of unemployed union members for the
whole period of unemployment, it has been and will be possible, by
paying benefits for a shorter period per season than has been the
practice in better seasons, to aid a greater number of members than
would otherwise have been possible. Because of the elasticity of the
provisions which allow the various boards of trustees, in agreement
with the impartial chairman, to pay benefits for any number of days
o r ; weeks up to three and three-fourths weeks in a season, it has been
feasible to use the funds on hand to help the greatest possible number
of persons without making any change in the agreement set up to
provide benefits (i. e., payments for 2y2 weeks instead of 3, etc.).
In spite of the slackness of business, a number of small-shop em
ployers and their employees have been able to suspend payments into
the insurance funds under the provision that when the reserve of any
shop reaches a total equal to the maximum sum needed to meet bene
fits in two years, further payments shall be temporarily suspended.
Perhaps 40 persons are employed in the shops exempted from pay
ments. In one of these shops contributions stopped in 1926 and will
be resumed in May, 1931. In the other shops, contributions in one
stopped in 1928, in two in 1929, and in eight in 1930, and in none has
it been necessary to resume the payment of contributions.
It is stated that nearly a quarter of a million dollars has been dis
tributed in the form of dismissal wages in the Chicago industry
during the last few years. Most of this money has been taken from
the unemployment funds of the particular firms and a portion from
special contributions made for the purpose by employers.
72
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Throughout the period during which the plan here described has
been in operation there has been a 44-hour week in the industry.
Men’s Clothing Industry, New York City
In 1928, by joint agreement, employers manufacturing men’s cloth
ing in New York City and the Amalgamated Clothing Workers of
America adopted a system of unemployment benefits. Membership
in the union is at present about 22,000 persons; it was 25,000 in 1929.
The New York market is characterized by a large number of small
clothing shops, 400 being covered by the unemployment-benefit plan
the first quarter of 1931.
Outline of Plan
The unemployment-benefit plan was provided for by agreement on
June 30, 1928, and the first contributions to the fund were made on
September 1, 1928.
Character of plan.—In the plan provision is made for the payment
of unemployment benefits to union members. Participation is auto
matic for union members provided they are on the pay rolls of
employers who are parties to the agreement.
Eligibility for benefits.—For the purposes of this plan a person is
eligible for benefits if he is involuntarily unemployed owing either to
lay-off or to short time, and provided he is a member of the union in
good standing at the time he claims benefits. Owing to the severity
of unemployment since the plan came into operation, members have
been considered in good standing even though far in arrears in their
dues to the union.
When a person applies for unemployment benefits the local union
and then the unemployment office investigates as to whether he is a
bona fide unemployed person. On the basis of the knowledge so
obtained, the committees dealing with unemployment matters in the
various locals decide which of the unemployed members are neediest,
and payments are authorized accordingly.
A member is not disqualified from receiving benefits if he picks up
a little work during his benefit period, but if he gets a regular job
outside his trade, he is disqualified for further benefits, his action
being construed as meaning that he has left the men’s clothing
industry.
Benefits.—The maximum benefit allowable under the plan is $30
each benefit period (payable in April and November), or a total of
$60 a year for the two benefit periods in the year. Payments of $10
are made weekly, and are continued for three weeks per season or six
weeks per year it the member receives the maximum benefit allowable
in any one year. There is no provision in the plan stating how soon
benefits may begin after unemployment starts, nor is anything said
as to how many successive seasons a member may receive benefits.
Administration.—Administration is in the hands of a board of
trustees composed of three representatives of the union? three of the
employers, and the impartial chairman acting as chairman of the
board, and also in part by a director, associate director, manager, and
counsel of the fund.
73
JOINT-AGREEMENT PLANS
All contributions paid into the unemployment-benefit fund are used
as one fund for the union membership as a whole. Some employers
send their contributions to the unemployment office, while collectors
are sent to others for their contributions. The board of trustees
decides on the amount of each appropriation for unemployment
benefits. A committee of three members appointed from the two
administrative groups mentioned above arranges for the payment of
the benefits. The amount thereof is allotted to the various local
unions on the basis of their respective memberships, and special
committees appointed by the executive boards of the locals then
decide which applicants within the respective locals shall receive
benefits.
All payments of benefits are made at the unemployment office, and
the applicant must appear in person to receive the benefits to which
he is entitled.
Method of financing plan.—The plan is financed entirely by insideshop employers’ contributions equal to 1y2 per cent of the total union
pay roll in their particular establishments. As it was deemed advis
able that manufacturers (i. e., inside shops) should be made respon
sible for payments to the fund on all, union labor employed in the
manufacture of their garments, both in their own shops and in out
side contract shops, it was provided that in addition to the iy2 Ver
cent of their direct weekly pay rolls, the manufacturers should make
a contribution equal to 1.2 per cent of the amounts paid to con
tractors. The figure of 1.2 was agreed upon after considerable study,
the theory being that 1.2 per cent of the amount that the manufac
turers pay to the contractors is (for the purposes of this fund) equal
to iy2per cent of the contractors’ union labor cost.
As the unemployment-benefit plan was started so shortly before the
depression set in, there was little time to build up a reserve, and no
reserve fund has been set aside as such, although a balance has been
maintained in the unemployment-benefit fund.
Statistics o f Operation
Table 23 shows statistics of operation of the unemployment-benefit
fund for men’s clothing workers in New York between 1928 and 1931:
T a b le
23.— Operation of unemployment-benefit plan of the Amalgamated Clothing
Workers of America, New York City, 1928 to 1931
Year or month
1928
............ ...............
1929:
April
__ ______________
November................................
1930:
April
___________
November................................
1931: April (special Easter benefit)
Average Number of Number
number union mem receiving
of firms
bers cov benefits
ered
covered
Total bene
fits paid
Average
benefit
paid
Balance in
fund at
end of
period1
$49,737.09
400
25,000
0
430
430
25.000
25.000
2,300
6,400
$75,000.00
130,000.00
$32.61
20.31
187,468.16
420
420
400
22,000
22,000
22,000
8,700
9,000
1,000
150.000.00
125.000.00
15,000.00
17.24
13.89
15.00
136, 266.78
158,010.17
1 Available for distribution in benefits. Administrative expense is about 10 per cent and the funds for
this purpose are in a separate account.
74
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
General Experience
When the unemployment-benefit plan was established in the New
York market it was expected that the rules governing eligibility,
amount, and duration of benefit, etc., would be worked out in this
market much as has been done under the Amalgamated Clothing
Workers’ Union plans in Chicago and Rochester. However, severe
unemployment came so soon after the machinery for the fund was
set up that it was impossible to build up a reserve fund before begin
ning to pay benefits. The fund had to be used to give immediate
relief, and accordingly requirements of applicants for benefit were
made less rigid than would otherwise have been the case, and a
good deal of flexibility was permitted in granting relief, in order that
aid might be given where most needed. Since a large number of
union members have been unemployed for long periods, the amount
of money in the fund has been insufficient to pay the maximum bene
fit to all, and the tendency has been toward giving a smaller payment
than the maximum amount authorized so that a larger number
of persons might be helped. This does not mean that there are not
some persons who have received the maximum benefit. In fact, there
have been persons in great distress who have received benefits in
amounts larger than the $60 maximum allowable in a year*
No other money than the authorized contribution by employers
has been paid into the fund, nor have any formal changes been made
in the provisions covering amount and duration of benefit, etc.
The agreement providing unemployment benefits expires June 30,
1931, at which time both parties may offer suggestions for changes,
but the agreement will probably be renewed at that time.
Throughout the period, the unemployment benefit plan has been
in operation, the working time has been 44 hours per week. It is
the policy in the organized clothing shops to reduce the use of over
time to a minimum and to divide work, as far as possible, among
union workers.
Men’s Clothing Industry, Rochester, N. Y.
By joint agreement, signed in 1928, a group of men’s clothing
manufacturers, members of the Clothiers’ Exchange of Rochester,
N. Y., and the Amalgamated Clothing Workers of America, provided
for an unemployment-benefit plan.
Outline o f Plan
The agreement providing unemployment benefits was signed May
i, 1928, contributions were first made July 1, 1928, and the first
regular benefits under the plan were paid May 1, 1930. Special
benefits were paid early in 1929 by mutual consent of both parties
to the agreement.
Character of plan.— Under this plan a system of unemployment
benefits is provided for. Inasmuch as up to the present time all
contributions have been made by employers, the union members on
JOINT-AGREEMENT PLANS
75
the pay rolls of the participating employers have been automatically
covered. When, in the future, the provision requiring employees to
contribute to the fund is enforced, participation of union members
will become compulsory.
Eligibility for benefits.—To be eligible for benefits a person must
be involuntarily unemployed, must be registered for employment at
the union’s employment office, must not have declined suitable em
ployment, must not have exhausted his right to benefits, and, in case
of complaint, must have submitted his claim not less than one month
after the end of the season. (The seasons are November 1 to April
30, and May 1 to October 31.) He must also have been a member of
the union in good standing for one year immediately prior to apply
ing for benefits. I f a union member leaves one establishment for
another, he becomes eligible for benefits from the funds of the second
employer, and his name is stricken from the list of his former
employer.
It is not necessary for unemployed union workers to give proof of
unemployment, because every firm sends to the unemployment insur
ance office weekly a copy of the pay roll, showing hours and pay
and whether time lost was involuntarily lost. When persons are
needed for work they are sent for, and there is no provision for hav
ing unemployed workers report at their place of employment in
person at regular intervals when out of work.
If an unemployed member finds outside work during periods of
unemployment, he does not lose his right to benefit.
Benefits.—The benefit rate and period are subject to revision each
season, depending on the amount ox money available in the fund. At
the end of the past season (December 1, 1930) an employed person
received benefits in an amount equal to 25 per cent of average full
time weekly wages in the four weeks when full-time earnings were
the highest, but not to exceed $12.50 per week. As the benefit period
was placed at two and one-half weeks, the maximum amount of
benefits a person might receive was $31.25.
For that season also the board of trustees ruled that the waiting
period should be two and one-half weeks, or 110 hours, and that
hours lost during the weeks when a worker earned $40 or more
should not be credited to the accumulated hours of time lost.
In computing the time lost for any given week one hour of over
time cancels one hour of unemployment for that particular week.
Administration.—A board of trustees, consisting of one representa
tive of the employers and one of the union, has been charged with
setting up and maintaining machinery for administering the plan.
This board of trustees has final authority in all matters pertaining
to the plan, but may not use the funds paid in for any purpose other
than the payment of benefits and the cost of administration. Neither
the employers nor the union may interfere in the management of the
funds collected. All complaints and grievances must be submitted
to the board of trustees.
An office is maintained where a secretary and a group of clerical
assistants carry on the necessary secretarial and clerical work. In
65655°
76
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
this office records are made from the copies of pay rolls submitted
by the employers weekly. Benefit checks are turned over to the
union for distribution, which sees that the checks are placed in the
hands of the proper persons; receipts are supplied by stamping the
union-dues books of the persons receiving benefit.
The fund of each manufacturer is administered separately for the
benefit of the union members employed by him. I f a person leaves
one employer to accept employment with another, his name is imme
diately removed from the roll of the first employer and placed on
that of the second.
The benefit paid, the waiting period, etc., are subject to revision in
any season by the board of trustees.
Method of financing plan.—Employers’ contributions of V/2 per
cent of the weekly earnings of each of their union employees have
been the only source of xunds up to the present. The agreement
provides that employees shall contribute iy2 per cent of their weekly
earnings as well. This payment by employees was to have started
one year after the agreement went into effect, i. e., May 1, 1929, but
by mutual consent of the employers and the union the employees’
contributions have been waived up to the present, and deductions
from employees’ wages will’ not be made until further notice. How
ever, whenever economic conditions warrant it, this part of the
agreement will be put into effect.
As has been stated, in the two seasons for which benefits have been
paid, the benefit period has been 2y2 weeks per season. A perma
nent ruling provides that a union member may not receive more
than one week of benefit for every 20 weeks on the pay roll. Eights
to benefit are restored with the coming of each new season.
Statistics o f Operation
Table 24 shows the available statistics of operation for 1929
and 1930:
T a b le
2 4 . — Operation
of unemployment-benefit plan of the Amalgamated Cloth
ing Workers TJnfon, Rochester, N. Y., 1929 and 1930
Date
1929-30 (special benefits)__ ______
Apr. 30,1930 ................................
June 1,1930_____________________
Dec. 1,1930......................................
Number
Number of union
of firms members
covered covered
Number
receiving
benefits
Amount
paid in
benefits
in
Average Balance
fund at
benefit
end
of
paid
period
$15,000.00
12
10
9,000
8,000
7,600
7,000
125,000.00
115,000.00
$16.67
16.43
$250,000.00
0)
(0
1 N ot available.
General Experience
In both seasons that benefits have been paid it has been necessary
to make payments to a very large proportion of the union member
ship covered by this plan. In order to do this, and at the same time
JOHSTT-AGREEMENT PLANS
77
keep the fund on a solvent basis, the waiting period was lengthened
in the second season from two to two and one-half weeks, and persons
were barred from receiving credit for hours lost in a week when
earnings reached $40 instead of $45. It is intimated that the basic
benefit payment may be kept unchanged at the end of the present
season, June 1, 1931, and that the duration of the benefit period
may also be kept the same as in earlier seasons, by ruling that a
person who earns $30 or $35 in a given week shall not receive credit
for time lost in that week.
On the occasions when special benefits have been paid, informa
tion concerning the payment has been kept confidential. As illus
trative of the cases in which special benefits are paid, in the case
of an aged clothing worker who was unfit to find or hold a job be
cause of failing health, it was decided to set him up in a small store
so that he might be independent and cease to be a liability to the
union and employers.
During the period of operation of the plan the working week
has remained at 44 hours.
W om en’s Garment Industry, Cleveland, Ohio
By joint agreement, employers (both proprietors of inside and
contract (outside) shops) and the International Ladies’ Garment
Workers’ Union in Cleveland, Ohio, maintain a system under which
a certain amount of employment is guaranteed and unemployment
benefits are paid if the guaranteed amount of employment can not
be furnished. More than two-thirds of the union members are
said to be employed in inside shops in Cleveland.
Outline o f Plan
This plan was placed in operation in 1921, and the first benefits
paid covered the second half of that year.
Character of plan.—Under the provisions of the plan employ
ment is guaranteed for a fixed number of weeks per year, and if the
employee is not employed for the number of weeks guaranteed he
is entitled to unemployment benefits up to the limit of the funds
available. A union member is automatically covered by the terms
of agreement if he works in a shop the owner of which is a sub
scriber to the plan.
Eligibility for benefits.—Under the terms originally adopted, it
was not specifically stated what kind of unemployment was com
pensable, except that a worker would not be compensated if he left his
job voluntarily or was discharged for good reasons. Decisions in
controversial cases have brought out certain basic principles. For
example, decisions have authorized the granting of claims for benefit:
(1) When a fire took place in a dull season when the worker would
in any case be unemployed, and therefore on benefit; (2) when a firm
was liquidated in the middle of the year, the worker being granted
a pro rata share of benefit ; that is, for the number of weeks he had
78
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
earned; and (3) when a man was asked to do work outside his regu
lar occupation and refused.
It is not necessary for union members to give any special proof of
unemployment other than the presentation of lay-off slips, which are
furnished to them by their employers when they are laid off. When
workers are needed in the shop the employer notifies them of that
fact. A union member who takes outside work while on lay-off is not
disqualified for benefit; he is obligated only to be ready for work
when called.
Benefits.—Benefits to inside-shop employees amount to one-half
of the guaranteed minimum scale in each craft, for a number of weeks
equal to the difference between 1,600 hours, or approximately 38
weeks (the number of weeks of work guaranteed), and the number
of weeks worked, provided the total benefits paid do not exceed the
amount paid in by the employer.
In theory, payments to peak workers and workers in outside shops
are authorized on the same basis, but the funds have never been suf
ficient to make this possible. Hence, a peak or outside-shop worker
may receive the full amount due him in benefits when the first dis
tribution in a given year is made, and only 15 per cent of the au
thorized amount when the second distribution is made, and even less
when the third and last payment of the year is made. No worker
is entitled to benefits until he has been unemployed for 14 weeks,
the guaranteed employment being for 38 weeks.
Overtime hours cancel the same number of unemployed hours.
For a union member who has not been in the industry during the
whole year, the benefit period is prorated according to the number of
weeks he has been on the pay roll of the shop where he is employed.
Benefits are paid to regular inside-shop employees weekly when
due, the first payment being made for the week following the four
teenth week of unemployment. Peak workers and outside-shop
workers receive benefits three times a year, i. e., the first week in
July, the first week in October, and the last week in December.
Administration.—Administration of the plan is intrusted to a
board of referees as a part of its work under the general agreement
in the industry in Cleveland. An impartial chairman, who repre
sents the board of referees, is responsible for carrying out the details
of the plan. The impartial chairman’s office holds the bonds of
employers given in lieu of money to cover the amount of the insideshop employers’ liability to regular inside-shop employees, and also
the cash which inside and outside-shop employers are required to
deposit to cover the benefit payments authorized for temporary
workers (known as peak workers) and employees of outside shops.
The account of an inside-shop owner is administered for the benefit
of the workers regularly employed by him, and such owner makes
the disbursements when due. The contributions made to cover the
cost of benefits to peak workers and employees in outside shops are
administered as a single fund and distributed pro rata to those per
sons entitled to benefit. The impartial chairman’s office fixes the
amount of payments and turns the money over to the union for
distribution.
JOINT-AGREEMENT PLANS
79
Lay-off slips are furnished to workers by employers in inside shops
each time they are laid off. The impartial chairman’s agent visits
the outside shops each week to obtain employment and pay-roll
records. The inside shops keep their own records, and in case of
dispute these records are sometimes checked by the impartial chair
man’s office.
Any unexpended balance in the fund for the protection of insideshop workers is returned to the employers at the end of the year.
It is provided that any unexpended balance remaining in the "fund
for peak workers and employees in outside shops shall be returned
to the employers in proportion to the amounts they paid in, but so
far there has been no balance. None of the money paid into the
fund is use.d for administrative expense, the union and the em
ployers dividing the cost of administration.
Grievances between employers and the union are settled by the
impartial chairman. A grievance of a union member goes first
to the shop steward and management, then to a representative of
the union and employer, and then to the impartial chairman
whose decision is binding unless appeal is made to the board of
referees.
Method of financing plan.—All money used to pay unemployment
benefits is supplied by employers. To cover the cost of benefits
to inside-shop employees, the employers are liable for a sum equal
to 10 per cent of their direct labor pay roll. Theoretically, this
contribution was also required in the case of outside shops, but
this requirement was difficult to enforce, and employees in contract
(outside) shops did not share in the benefits very extensively.
Therefore, in 1928, a separate fund was set up to take care of em
ployees in contract (outside) shops and peak workers whom the
employers had been authorized to employ in busy seasons. For this
purpose, inside-shop employers were assessed 1 per cent of the pay
roll for pieceworkers and one-half of 1 per cent for week workers,
and the contractors (outside-shop employers) were assessed 1 per
cent of their total pay rolls. In January, 1931, when the agree
ment came up before the board of referees and the union asked for
more liberal provisions covering peak and contract (outside shop)
employees, the rate of contribution of inside-shop employers was
raised from 1 to 2 per cent of the pay roll of pieceworkers and
from one-half of 1, to 1 per cent of the pay roll of week workers,
and the rate of contribution of contractors (outside-shop employers)
was raised from 1 to 2 per cent.
All inside workers, union and nonunion, are entitled to unem
ployment pay from the “ 10 per cent funds ” of their respective
employers; the “ 2 per cent fund ” is used only for union peak and
outside-shop workers.
No reserve fund has been built up, as unused contributions of
inside-shop employers for the protection of regular workers in
inside shops (10 per cent fund) are returned to the employers if
not required in a given year, and the fund built up to pay benefits
to peak workers and employees in contract (outside) shops has
80
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
never shown a balance after disbursements for the year have been
made, and in fact has never been sufficient to pay for all the unem
ployed time of the workers involved.
Statistics o f Operation
Table 25 shows the financial position of the funds between 1921
and 1930, and information relative to employers contributing and
number of persons receiving benefit.
T able
25.— Operation of guaranty funds of the Women’s Garment Industry,
Cleveland, Ohio, 1921 to 1930
Fund for inside-shop employees!
Number of
Per cent of Amount
employers Total con Total ben total con credited to
making
tributions efits paid tributions employers
contribu
to fund
paid in
at end of
tions
benefits
period
Year
19212.............................................................
1922..............................................................
1923...............................................................
1924..............................................................
1925................................................................
1926..............................................................
1927-............................................................
1928-............................................................
1929...............................................................
1930.........................................................
34 $86,574.18 $28,181.91
36 277,174.72
34,611.10
34 190.863.27
28,347.77
25 157,878.62
17,039.28
26 157.885.37
24,510.60
23 167.908.38
14.557.01
14 133.917.27
14.705.02
14 119,100. 58 19,395.92
11 102,741.17
5,698.13
12 94,893.29
7,752.05
32.6
12.5
14.9
10.8
15.5
8.7
11.0
16.3
5.5
8.2
$58,392.27
242,563.62
162,515.50
140,839.34
133,374.77
153,351.37
119,212.25
99,704.66
97,043.04
87,141.24
Fund for peak workers and contract-shop employees
Number of Number of
employers
persons Total bene Balance in
making
at end
fits paid fund
contribu receiving
of period
benefits
tions
Year
1928....................................................................................
1929....................................................................................
1930................................ ...................................................
31
26
31
#200
*241
282
$9,234.65
9,753.41
8,477.10
Nothing.
Do.
Do.
1 Prior to 1928 contract-shop employees were theoretically paid out of this fund, but in practice it was
difficult to collect from contractors, and their employees were therefore not provided for.
2 Six months.
* Approximate number.
General Experience
It is thought by persons affected by the plan that the operation
of the plan tor guaranteed employment has served to aid in stabili
zation of the industry. But since the guaranty of employment is
for only 38 weeks during the year, a need has been felt for supply
ing extra help to union members who have been unemployed for
especially long periods. In order to give help where most needed,
in 1930 special benefits were paid for a time from a fund raised
by employed union members (men only). The fund was made up
from contributions by members at the rate of 25 cents a day on the
JOINT-AGREEMENT PLANS
81
days they were employed, and the money was paid out to those per
sons whom the union felt were most deserving of extra assistance.
Prior to December, 1923, the amount of benefit payable was twothirds of the usual earnings. That certain of the employers have felt
the financial strain of the system is indicated by the fact that the
period for which employment is guaranteed is now 38 weeks a year in
stead of the 40 weeks formerly guaranteed, while the waiting period
has been increased from 12 to 14 weeks. This change was made by a
decision of the board of referees, when the employers expressed their
desire to have the guaranty waived in inside shops, at least for the
duration of the present depression. The need for greater protection
of peak and contract-shop workers was recognized when the board of
referees increased the employers’ contribution to provide benefits for
this class of workers. It is stated that the fund to provide benefits for
peak and contract-shop employees has been so inadequate that bene
ficiaries have sometimes received as little as 15 per cent of what
was due them when the second payment of the year was made and
even less when the third payment was due, the payment of the
amounts due in the first pay period of the year having absorbed a
large part of the money contributed.
The working time in the industry was reduced from 44 to 42
hours a week, in January, 1930.
Cloth Hat and Cap Industry, New York City
In 1924 a joint agreement was signed by employers and the Cloth
Hat, Cap, and Millinery Workers’ International Union to provide
unemployment benefits for the union members engaged in the hat
and cap industry in New York City. Millinery workers have never
been covered by the plan.
Outline o f Plan
The agreement was signed in July, 1924, and the first contributions
into the fund were made in September, 1924.
Character of plan.—Under the terms agreed upon, an unemployment-benefit fund is provided for. Union members working in shops
of employers who are parties to the agreement are automatically
covered by the plan.
Eligibility for benefits.—In order to be considered unemployed, a
worker must be involuntarily out of work, i. e., he must be willing to
work but unable to find employment. He must also have been a
member of a local union affiliated with the joint council for six
months immediately before he applies for benefits and must not be
more than four weeks in arrears in his dues (the latter provision has
not been enforced). A man on strike or lockout or who leaves a
job voluntarily is not considered as unemployed.
The administrative office obtains proof of unemployment of mem
bers by checking the lists submitted by shop chairmen, showing time
worked and wages earned by union members, and by visiting shops
and making inquiry as to these matters.
I f an unemployed hat or cap worker gets regular work in his
own trade or another trade, he loses his right to benefit. I f he gets
82
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
part-time work, the difference between the hours he works and the
xull-time working week is credited to his hours of unemployment.
Benefits.—The benefit payment provided for is $10 per week for
men and $7 for women. These amounts have been paid from the in
ception of the plan, with the exception of the period from December,
1926, to early 1930, when the benefit payment was $13 for men and
$10 fcr women.
Benefits begin at the end of the second full week of unemployment
and cover the second week.
At the beginning of 1931, in order that the benefits might be paid
to the most needy, it was ruled that only if a man worked one day
or less in a given week would he receive credit for the number of
hours lost, i. e., 32 hours or more. In other words, any time lost in
a week when a person works more than 8 hours is not credited
toward the number of hours of unemployment. After accumulating
80 hours of lost time the member receives benefits for 40 hours, or
one week.
A union member is required to serve only one waiting period of
80 hours in a given year (July 1 to June 30). The benent period
has always been limited to seven weeks in any one year. Payment
for seven weeks in 1931, however, is contingent upon whether or not
there is enough money available in the fund.
Administration.—Contributions authorized under the plan are de
posited as an unemployment fund of the New York joint council
of the union and are administered solely for the purpose of granting
unemployment benefits. A committee of five members of the union,
who are elected annually by a majority vote of the membership,
administers the fund. The agreement or 1924 provided that an ad
visory board, composed of the president and secretary of the em
ployers’ association, the general secretary of the union, and the im
partial chairman of the industry, should have access to the records
at any time so that they might keep themselves informed as to the
exact purposes for which funds were being used, but that the funds
deposited in the unemployment fund should be the property of the
union.
Either the shop chairman in a given shop or the employer him
self sends the employers’ contributions to the administrative office.
The shop chairman also sends a weekly statement showing the pay
drawn by the members of the union, time worked, etc.
Grievances of members are heard by the joint council. Any
grievances which may arise between employers and the union come
before the board of adjustment provided for in the general agree
ment affecting wages, hours, etc.
The fund is administered as a general fund, all contributions
going into a single account.
Method of financing plan.—The unemployment-benefit system is
supported entirely by the employers, who contribute 3 per cent of
their union pay roll for this purpose.
The reserve fund which had been built up was used in 1928 and
there has been no reserve fund since then.
JOINT-AGREEMENT PLANS
83
Statistics o f Operation
Statistics of operation of the unemployment-benefit fund are
shown in Table 26 for 1926 to 1930 and January 1 to April 15, 1931:
T a b le
2 6 . — Operation
of unemployment-benefit fund of Cloth Hat and Cap
Workers, Neiv York, N. Y., 1926 to April 15, 1931
Year ending June 30—
1926...........................................
1928...........................................
1929...........................................
1930............................................
1931...........................................
Average
number of
firms
covered
Average
number
of union
members
covered
Number
receiving
benefits
200
2.300
1,495
1927............................................
2.300
1,628
200
1,609
175
2,000
150
1,800
970
150
825
1,700
2150
3600
21,700
Total
benefits
paid
$65,383
101,575
110,424
37,253
31,295
326,000
Average
benefit
paid
$43.73
62.39
68.63
38.41
37.93
243.33
Balance
in fund
at end of
year1
$96,825.43
84,217.42
19,800.41
12,280.34
12,241.71
2 5,000.00
* Reserve for benefits plus surplus. No surplus after 1927.
* To April 15,1931.
« Estimated figure.
General Experience
Working hours for the persons covered by the plan were reduced
from 44 to 40 hours per week in 1928. Originally, and under the
44-hour week, a union member became eligible for benefits as follows:
In any week when he lost 22 hours or more of employment the
number of hours lost was credited to his unemployed time. When
the hours so accumulated reached a total of 88, he received benefits
for the second 44 hours or the second week. In 1928, when the
40-hour week replaced the 44-hour week, the requirements were
changed so that a man who lost 20 hours or more in a week was
credited with the time and was paid benefits for 40 hours, or one
week after he had accumulated 80 hours of lost time.
The rate of weekly benefits was reduced to the original level of
$10 for men and $7 for women in 1930, after having been $13 for
men and $10 for women for a period oi some three years. It was
provided early in 1931 that a person should receive credit for time
lost in a given week only if he worked one day or less. By this
means it has been possible to help the most needy members and at
the same time to keep the unemployment-benefit plan on a solvent
basis thus far, but it is possible that it will be necessary to make
further changes in the provisions before the end of the current year.
Up to the middle o f April, 1931, payments of benefits had been
made for a total of six weeks. The fiscal year ends June 30, 1931,
and whether there will be a sufficient sum paid into the fund before
that date to make benefit payments for seven weeks to union mem
bers entitled to payments is uncertain. It is stated that the general
shutdown of plants has resulted in curtailed pay rolls and lowered
contributions to the fund by employers. In calling attention to the
small balance in the fund the administrators of the plan stated that
it was felt to be wiser to pay benefits up to the limit possible rather
than to maintain a reserve.
84
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
At the present time many members of the union are left unem
ployed after their rights to benefit expire. The union has paid
special benefits to some needy persons. The money used for this
purpose has not been taken from the unemployment-benefit fund,
but has been raised from some kind of benefit entertainment or has
been taken from the union treasury. During the Easter holidays of
1931 about $1,000 was distributed in special benefits.
The union makes a practice of seeing that available work is pro
rated among its members if there is room for extra machines or if
there are idle machines in the shops which are operating under joint
agreement.
Cloth Hat and Gap Industry, Philadelphia, Pa.
Local Union No. 6, Cloth Hat, Cap, and Millinery Workers’ Inter
national Union, of Philadelphia, has for some time made provision
for unemployment benefits in agreements with manufacturers em
ploying union members.
Outline o f Plan
The plan was started in 1924.
Character of flan.—The plan provides for an unemployment
benefit, guaranteeing a minimum wage for a limited number of
weeks.
All members who are employed by manufacturers who have en
tered the agreement with Local No. 6 are covered by the plan.
Eligibility for benefits—-.Any member of Local No. 6 employed by
a manufacturer with whom an agreement providing for unemploy
ment benefits has been made is eligible for unemployment benefits,
provided he has been a member of the union for one year and has
been employed in the factory under agreement for at least six months.
A member is not eligible if he is more than four weeks in arrears in
his union dues.
In order to receive benefits a member must have lost at least 20
hours of work in a week.
The chairman of the shop committee must attach his signature to
the member’s application for payment before unemployment benefits
can be paid. I f there is any doubt, an investigation is made.
In periods of much unemployment, members are not required to
report every day, but are notified if there is work. I f a man does
not report when there is work he is not eligible, nor is he if he refuses
to take the work offered. In such cases he must start again to ac
cumulate his 20 hours for the week.
Benefits.—The weekly benefits are $10 to men and $7 to women.
The number of women employed is small—about 5 per cent.
When the plan was started it was necessary for a member to have
accumulated 40 hours’ loss of work before being paid for the first 20
hours. Since January, 1931, this waiting period has been extended,
a member now being obligated to accumulate 80 hours’ loss of work
before he is paid for his first 20 hours.
Benefit payments are limited to seven weeks in the fiscal year.
85
J OINT-AGREEMENT PLANS
Administration.—The plan is administered by a special board of
four members of the union, chosen annually by the executive board.
Manufacturers who are parties to the agreement send in their checks
weekly to the secretary-treasurer of the fund who deposits all money
in the bank. The union supplies all employers with printed forms
on which they make out a list of all members of the union who have
been employed during the week and the amount of wages each has
earned. These forms are sent to the secretary of the unemployment
board. Payment of unemployment benefits is made by check on
Wednesday or Saturday, as convenient. New agreements are made
each year.
Method of financing flan.—By the agreement each manufacturer
sends to the secretary-treasurer of the unemployment fund each week
a sum equal to 3 per cent of the pay roll for union members employed
in his shop for that week.
Rules or the fund provide that if at any time the amount in the
fund falls below $1,000, payment of benefits shall be stopped until the
fund reaches $2,000.
Statistics of Operation
The unemployment-benefit plan of Local No. 6, Cloth Hat and
Cap Workers, of Philadelphia, was started in 1924. Figures are not
available at present for the years 1924, 1925, and 1926, as the records
are scattered, and due to the depression in the trade some former
secretaries have left the trade and can not easily be reached.
Table 27 gives the statistics of operation of the plan from the
beginning of 1927 to April 30,1931:
T a b le
27.— Operation of unemployment-benefit plan of Cloth Hat and Cap
Workers, Philadelphia, 1927 to 1930, and January to April, 1931
Number Number
Number
of union receiving
of firms members
covered covered benefits
Year or month
1928....... -..............................................
1930........................................................
1931:
January________ - ______________
February __ __________________
March
______________________
April................................................
Total
benefits
paid
Average Balance in
benefits fund at end
paid
of period
15
13
12
10
325
275
250
210
176
205
195
180
$4,564.00
6,402.00
3,752.00
5,695.00
$25.93
31.23
19.24
31.64
$10,892.90
7,964.50
7,759.23
6,940.85
8
8
8
8
200
200
200
200
125
50
40
60
1,175.00
500.00
400.00
585.00
9.40
10.00
10.00
9.75
1 3,000.00
i Approximate.
General Experience
The cloth hat and cap industry has been passing through an un
usually depressed period. Not only has it felt the general depres
sion along with all other industries but it has to a large extent been
the victim of fashion, and unemployment has been extended over a
longer period than in some other industries.
The unemployment-benefit plan has proved of great assistance
during the past few years. The number of firms contributing has
86
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
dropped from 15 in 1927 to 8 at the present time. Many of these
have been the smaller shops, however, so that the drop in the num
ber of members covered by the plan has not been quite so great as
the drop in the number of firms. With so few manufacturers con
tributing, and the pay rolls so small, there is not much coming into
the fund. There has been a steady decrease in the balance each
year since 1927. At the present time there is approximately $3,000
in the fund. By the rules of the fund, benefits can not be paid when
the fund drops below $1,000. Payments must then be suspended
until the fund accumulates $2,000. Conditions apparently have im
proved since the beginning of this year. While more persons re
ceived benefits in April than in March or February, the number was
only half as large in April as in January.
At the beginning of 1927 there was a good balance in the fund
and times were good, and union members voted to raise the amount
of benefits to $15 for men and $10 for women, and it was also de
cided to establish a 20-hour waiting period in place of the 40-hour
waiting period. Before six months had passed the fund was nearly
exhausted, and payments had to be suspended. By the beginning
of 1928 the fund had again reached $2,000 and payments were re
sumed, but the union had learned that in apparent prosperity a con
servative use must be made of the funds, and the benefits, as noted
above, were again set at the original amounts of $10 and $7.
Attempts are made to distribute work as evenly as possible
throughout the firms. A 40-hour week is provided by agreement
but owing to the depression there is much short time. Whenever
there is rush work the employment of new workers is favored rather
than overtime.
There has been much unemployment among the members after
they have exhausted the amount of unemployment benefits allowed,
but conditions would have been much worse had there been no
benefits, and the intention is to carry on the plan. No change in
the plan is contemplated.
Straw Hat Industry, New York City
Two locals of the United Hatters of North America, i. e., Local
No. 3 and Local No. 45, made up of straw and Panama hat operatives
of New York City, maintain joint agreements with their respective
employers providing unemployment-benefit systems. Descriptions of
the plans of both Local No. 3 and Local No. 45 are given below.
Local No. 3 and certain manufacturers
Outline of Plan
The agreement providing for benefit payments was signed in No
vember, 1925, the first payments being maae about six months later.
Character of 'plan.—Under the plan, a system of unemployment
benefits is provided for. Every union member employed in a shop
which is under agreement to provide benefits is covered by the plan.
Members of the union working in shops that are not parties to the
agreement have the privilege of contributing to the fund, but partici
JOINT-AGREEMENT PLANS
87
pation is not compulsory for them and they have not availed them
selves of this privilege.
Eligibility for benefits.—For the purpose of this fund, unemploy
ment signifies involuntary unemployment only.
Every member of the union employed in a union shop under agree
ment who has been in continuous good standing for six months imme
diately prior to his application for benefits is eligible. A union
member who is not employed in a union shop but has contributed
$1.50 a week for 40 weeks prior to making claim is entitled to unem
ployment benefits.
Any member violating any of the by-laws is subject to a fine at the
discretion of the executive board.
Members who are out of work must report Monday and Friday
of each week between 10 and 12 a. m.
A person is not considered unemployed if working at all, and does
not draw benefits if employed outside his regular occupation. It is
expected that union members will find outside work if possible when
on lay-off.
Benefits.—The plan provides for benefit payments of $10 a week.
I f a person secures any work in a given week, he becomes ineligible
for benefit covering that week.
Any member claiming unemployment benefit must have been out
of work two weeks before he is entitled to one week’s benefit. One
waiting period is sufficient for a year. No member may receive more
than six weeks’ benefit in any one calendar year.
Administration.—A special unemployment committee, consisting
of six members, is appointed each year, by vote of the executive
council of the union, to administer the fund. Contributions to the
fund are collected each pay day by the shop steward in each factory
and turned over to the treasurer of the fund. The fund can be used
only for unemployment benefits, and such expenses as are necessary
to c a r r y on the work.
Applicants for unemployment benefits must apply at the local
union office on Monday or Thursday. Benefits are paid on the fol
lowing Monday or Thursday. Unemployment benefits are paid by
check to members in person only.
No right or interest of any member in this unemployment fund
can be assigned, transferred, or bartered away directly or indirectly,
nor is it subject to attachment, execution, seizure, or other process.
The committee may pay any benefit to which a deceased member
would have been entitled, at its discretion. No heir, next of kin,
legal representative, creditor, or claimant of any such descendant,
shall have any right or claim to any such benefit.
Appeals from the decision of the unemployment-fund committee
may be taken to the executive board. In such case a special hearing
is held. At least a majority of all members of the executive board
must be present in such cases, and a two-thirds vote of all members
present is necessary to overrule the decision of the unemploymentfund committee. No member of the unemployment-fund committee
shall act on the executive board when an appeal is made. A full
report of the income and expenditures, together with recommenda
tions, is submitted every year by the unemployment-fund committee
to the executive board.
88
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Means of financing.—Every employer having an agreement with
Local No. 3 pays 3 per cent of his pay roll each week to the local
union as an unemployment-benefit fund. No employer making pay
ments to the fund through an agreement shall acquire any right,
property, or interest in the fund.
Any member of the union not working in a union shop under
agreement may contribute $1.50 per week for 40 weeks a year and
draw benefits from the fund. (No member has ever taken advantage
of this.)
Before beginning payments a fund of about $10,000 was accumu
lated. There is no requirement providing for maintenance of a
reserve fund at a certain amount.
Statistics o f Operation
Table 28 shows statistics of operation under the plan from 1926
through the first quarter of 1931:
T a b le
28.— Operation of unemployment-benefit plan of United Hatters, Local
No. 3, New York City, 1926 to 1930 and first quarter of 1931
Number Number
of union Number
bene
of firms members receiving Total
fits paid
covered covered benefits
Year
10
12
12
10
9
9
1926.....................................................
1927.....................................................
1928.....................................................
1929.....................................................
1930
...................... ....................
1931 (first quarter)________________
i Last half of year.
250
275
291
216
214
214
1163
275
195
171
210
0
$5,525.00
16.380.00
10.580.00
8,580.00
12. 120.00
0
Average
benefit
paid
$33.90
59.56
54.26
50.18
57.71
0
Balance in
fund at
end of
period
$10,328.06
9,170.37
9,412.57
(2)
(2)
(a)
2Not reported.
General Experience
The fund has been sufficient to meet all benefit claims throughout
the period that this plan has been in operation. It is stated that
the fund of $10,000 built up before benefit payments were made has
been an influential factor in making this possible. However, de
mands upon the fund have become so heavy that of late expenditures
from the fund have been exceeding contributions to the fund, with
the result that the balance in the fund has dwindled. Even in the
face of the depletion of the fund, the union feels that it will be
possible to continue the plan without interruption if industrial condi
tions do not grow worse.
Unemployment beyond the six weeks for which benefits are allowed
exists among a considerable number of the members of the union
covered by the unemployment-benefit plan. Nevertheless, there has
been no move to use the fund to give special relief, and such relief
as is furnished is given by the union from union funds.
It is felt that the plan has been very helpful. No changes have
been made in the terms of the agreement to furnish benefits, and no
changes are contemplated at this time.
JOINT-AGREEMENT PLANS
89
Local No. 1±5 and certain manufacturers
Outline o f Plan
The first agreement was signed in August, 1924, with benefits
beginning July 15, 1925.
Character of plan.—The plan provides an unemployment benefit,
guaranteeing a minimum wage for a limited period.
All union members employed by manufacturers who enter into an
agreement are covered by the plan. The plan is open to members in
nonunion shops if they so desire and contribute to the fund. A new
agreement is made each year.
Eligibility for benefits.—Every member of Local No. 45 who has
been in continuous good standing for six months immediately prior
to his application for benefits, either by working in a shop that is
contributing under agreement or by contributing 3 per cent of his
wages to the fund, is eligible for unemployment benefits. His union
dues must be kept up to date in order to be in good standing.
For the purposes of the fund, unemployment means involuntary
unemployment. I f a man is ready and willing to work and there
is no work for him, he is considered unemployed. No payments
are made while on strike or lockout.
Any member claiming unemployment benefits while out of town
is not deprived of his benefits, but receives whatever is due him when
he returns.
No right or interest of any member in the unemployment fund
can be assigned, transferred, or bartered away directly or indirectly,
or be subject to attachment, execution, seizure, or other process. The
committee may, at its discretion, pay any benefit to which a deceased
member might have been entitled to such person or persons as it
determines, but no one has any right to such a claim.
Any member who violates the rules of the unemployment fund is
deprived of the benefits of the fund. There are no rules as to out
side work.
Any member claiming benefits must report by mail to the secretary
with return address on the envelope. No proof of unemployment
is required, this being a small local where members are well known.
Members do not have to report regularly.
Benefits.—Benefits are paid at the rate of $10 a week, or an amount
sufficient to bring a member’s wages up to that amount.
A member must be out of work at least two weeks before he is
entitled to benefits.
The fund provides for payment of benefits for six weeks per year,
but at present, benefit may be drawn for an unlimited time in the
discretion of the board.
Administration.—The fund is administered by an unemploymentfund committee composed of one member from each factory, chosen
by majority vote of the executive board of the union. They serve
one year.
Each manufacturer under the agreement makes his contribution
to the shop steward in his factorv each week. This money is turned
over to the financial secretary ox the fund. At the same time a list
is submitted showing the workers covered and the amount of wages
each received. Contributions of members in nonunion shops where
90
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
there is no agreement are made direct to the union office and are
then turned over to the treasurer of the fund.
Every claim for benefit is considered by the committee and pay
ment of benefits is made by check at the union office each week.
Any appeals from the decisions of the unemployment-fund com
mittee may be taken to the executive board. A special hearing is
held in such cases, at which at least a majority of members must be
present. A two-thirds vote is necessary to overrule the decision of
the committee.
Every year the committee submits to the executive board a full
report of the fund, together with recommendations as to increasing
or decreasing the amount of benefit, or any other changes in con
nection with the plan. In case the board shall find it advisable
to make any changes, such changes shall be subject to the approval
of the membership at a regular or special meeting.
No employer, by making payments to the fund, acquires any right,
property, or interest whatever in the fund. His responsibility
ceases when he has made his contribution.
Method of financing plan.—Every manufacturer who has an agree
ment with Local No. 45, providing for an unemployment benefit,
contributes to the fund each week a sum equal to 3 per cent of the
pay roll paid to the union members of Local No. 45 in his factory.
Any members not employed in a factory with which there is an
agreement may be covered by the plan by contributing 3 per cent of
their wages into the fund.
Statistics o f Operation
The following table shows statistics of operation under the plan
from 1925 through the first quarter of 1931:
T a b le
plan of United Hatters, Local
No. 4&, New York Cityf 1925 to 1980 and first quarter of 1931
2 9 , — Operation of unemployment-benefit
Year
1925...................................
1926...................................
1927. .................................
1928. .................... ............
1929__................................
1930................................1931 (first quarter)______
Number Number
Number Number
of mem of union receiving
Total ben
of firms
bers
in
members
efits paid
covered
union
covered benefits
5
5
5
5
4
3
3
130
130
130
no
75
45
45
106
106
106
102
70
40
40
37
72
84
62
37
29
$1,558.00
2.898.50
5,000.00
4,130.25
5.086.50
4,374.70
Average
benefit
payment
$42.11
40.26
59.52
66.62
137.47
150.85
Balance in
fund at
end of
period
$4,533.83
8,887.47
9,879.93
9,635.39
7,359.92
4,723.97
4,870.02
General Experience
The straw-hat industry is a seasonal one, and there is always a
great deal of unemployment at certain times during the year. Dur
ing the last few years the industry has been at a very low ebb, and
many members have been forced to leave the trade. In 1925, when
benefits under the agreement providing for unemployment benefits
were first paid, there were 130 members in Local No. 45. The mem
bership has constantly decreased until at present there are but 45
JOINT-AGREEMENT PLANS
91
members. There has always been a small number of members em
ployed in open shops, but few of these members have contributed to
the unemployment fund. At present there are no members covered
by the plan who are not employed in factories with which there is
an agreement.
The unemployment-benefit plan has always been able to provide
for the benefits claimed under the rules of the fund, and, as already
noted, from time to time the number of weeks during which members
could draw benefits has been increased. Thus when the plan was
first started a member could draw but four weeks’ unemployment
benefits in one year. Soon afterwards this time was extended to
six weeks. Since 1928 the benefit period has been extended at the
discretion of the executive board, due to the depressed conditions of
business and the need for unemployment benefits. There is no limit
to the period at present. During the last half of 1930, 12 members
received benefits for a period of 10 weeks and 15 members for a
period of 6 weeks.
The ratio of members to whom benefits have been paid to the total
membership has steadily grown, and the average benefits paid have
also increased. The balance in the fund at the end of each year
has grown smaller every year. At the present time (April, 1931)
there is a balance of $4,870.02 in the fund, which is somewhat more
than there was in the fund at the beginning of the year, but this is
due to the fact that so far this year, this being the busy season, there
has been no unemployment sufficient to make any benefit payments
necessary. The season ends in July and for the last two years has
not started until the latter part of October, and the union looks
forward to heavy demands upon the fund later in the season.
The plan has been successfully carried on and has been a great help
in meeting the unemployment problem. In recent seasons there have
been many members unemployed after their right to benefit has been
exhausted. In cases of necessity the period has been extended, but
even then there have been members in need for want of work. The
fund is used for no other purpose than unemployment benefits. Any
distress in the union is taken care of by a separate fund or individual
assistance from the members through the union.
The union members feel that an unemployment plan is necessary
and hope to be able to continue their present plan. There are no
changes contemplated. There are sufficient funds at present to carry
on for some time to come, and the hatters are hopeful that con
ditions will improve.
Full-Fashioned Hosiery Industry
On August 1,1930, an agreement was made between the Full Fash
ioned Hosiery Manufacturers of America (Inc.) and the American
Federation of Full Fashioned Hosiery Workers, providing for the
creation of an unemployment fund, but no benefits have as yet been
paid.
Outline o f Plan
The agreement provided that beginning August 1, 1930, each
member of the association should contribute to an unemployment
65655°—31----- 7
92
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
fund a sum equal to 1 per cent of the weekly wages paid to such
workers in the member’s factory as are covered by the agreement.
These contributions are made coincident with the wage payments.
Administration.—By the agreement the fund is to be placed in the
hands of a committee or board for administration, use, and disposi
tion such as will be provided in a supplementary agreement to be
made between the association and the union. Until such a committee
was appointed payments were to be made to the impartial chairman,
as trustee.
. The board of administration (consisting of 7 members, 3 represent
ing the members of the association and 3 representing the union, and
the impartial chairman as chairman of the board) has been ap
pointed and on January 5, 1931, held its initial meeting in Philadel
phia for the purpose oi formulating a definite plan for the adminis
tration of the fund.
Method of financing plan.—By the agreement, beginning Septem
ber 1, 1931, the union is to contribute to the fund an amount equal
to one-half the sum contributed each and every week by all the mem
bers of the association, by permitting each member of the association
to deduct from the wage of each employee who is subject to this
agreement one-half of the amount which was contributed to the fund
by the member of the association in respect to the wage of the
employee.
The committee or board of administration is to study the question
during the year and make recommendations as to what the assesments should be for the ensuing year to provide adequate protection
for the workers against unemployment, but such recommendations
are to be subject to adoption or rejection in whole or in part.
No definite method of carrying on the plan has been made. This
will not be done until a much more complete study of the problem
and methods has been made. It is generally agreed that both em
ployers and employees should contribute to the fund, but in what
proportion each is to contribute is in no way settled. It is also gen
erally agreed that at least 3 per cent of the workers’ wages will be
necessary, but whether the proportion will be iy2 per cent and iy2
per cent or 2 per cent and 1 per cent has not been decided.
Members of the association will not have any right, property, or
interest in the funds accumulated under this agreement and "will
incur no other responsibility in connection with the disbursement
of the fund beyond the obligation to make the contributions.
Neither shall any employee or the union in any way acquire specific
rights, property, or interest in the fund.
General Experience
Employers have been contributing to the fund, though in some
cases difficulty had been met in collecting the contributions. It
was decided at a recent meeting of the board of administration that
for the term of the present contract this fund will be used for the
purchase of United States Government bonds and deposited with
the Harriman National Bank and Trust Co. of New York City as
custodian of such securities. Contributions are to be made, as
JOINT-AGREEMENT PLAN'S
93
formerly, to the impartial chairman, who is now chairman of the
board.
Thirty-one firms, about 25 per cent of the industry, are contribut
ing to the fund at the present time. When the agreement was made
it was estimated that with these members contributing 1 per cent
of the wages paid to workers covered by the agreement it would
be possible in a year to build up a reserve fund of $250,000. With
business conditions as they have been during the past year, the
amount actually collected has fallen far short of the estimate, so
far short that officials are not willing to make any statement as to
the amount collected. They have said that if 20 per cent of the
amount estimated, or $50,000, is collected during the year, they will
be doing well.
The board of administration contemplates favorably the desir
ability of consulting expert economists in the formulation of an
unemployment-benefit plan.
Recommendations will be influenced greatly by conditions which
prevail. It may not be possible to carry out such a plan as was
originally proposed, the reserve fund falling so far below the
estimate. It will probably be necessary to provide for a higher
rate of contributions than first established, in order to make the
plan effective. However, there is felt to be a very great need for
such a plan as unemployment has been extremely serious among
the hosiery workers during the past year.
The membership of the union was reported as 15,000 in 1929.
Lace-Curtain Industry, Kingston, N. Y.
Joint agreement between the United States Lace Curtain Mills, of
Kingston, N. Y., and the Amalgamated Lace Operatives of America,
Branch No. 8, has provided the unemployment-benefit system here de
scribed. Normally this company employs 100 to 110 persons but at
present about 80 are employed. The unemployment-benefit plan
covers only the weavers employed in the mill who are also members
of Branch No. 8. The membership of the local is at present, and has
been since the agreement was signed, 16 persons, all of whom are
employed in this one mill. The normal working week is 48y2 hours.
Outline o f Plan
An agreement was signed in 1923 to provide for this plan, con
tributions were first made on April 1, 1923, and the first benefits
were paid in November, 1923.
Character of plan.—Provision is made for an unemployment bene
fit which is the difference between earnings and the minimum wage
guaranteed. Since the plan is subscribed to by the union for its
membership, support of the plan by union members is obligatory.
Eligibility for benefits.—The plan provides for payment of the
unemployment benefit when a member, because of waiting for orders
or machine repairs, loses so much time that his earnings are reduced
to less than $15 a week. Complete shutdown of the factory is not
paid for, nor are vacations or time lost on strike or lockout.
Every member of the local union, in good standing, who is em
ployed by the United States Lace Curtain Mills is eligible.
94
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Members who are unemployed must report at the mill every day
up to Friday noon of each week. A man who has had some work
during the week must report when notified.
If a member is unemployed at the mill and secures outside work,
he is not eligible for compensation during the time he is employed
outside.
Benefits.—According to the agreement, each weaver in the mill
who is a member of the local union (and all are) is to receive a
minimum wage of not less than $15 a week. I f a weaver has not
had sufficient work to bring his pay up to this amount, the differ
ence is. paid him from the unemployment fund.
If there are orders for the men and they do not work their full
scheduled hours, the difference for the time lost will be deducted
from their benefit, if any is due, at the rate of 30 cents per hour or
fraction thereof.
In June, 1930, because of continued short-time operation, the
guaranteed minimum wage of $15 a week was given up and there
was introduced a system of prorating the guaranteed minimum ac
cording to the actual time the mill worked. This resulted in a
decrease of the guaranteed minimum to $8.25 a week. Since then
the lowest guaranteed minimum has been $6.90 per week and the
minimum in April, 1931, was $13.50.
There is no waiting period. The eligible member is paid his mini
mum wage every week.
There is no limit to the amount of benefit a member shall receive
nor to the time during which he shall receive it. The object of the
plan is to provide every member with the minimum wage every week
throughout the year.
Administration.—The fund is administered by a board of four
managers, two of whom represent the local union and two represent
the mill. This board of managers is elected annually.
One of the mill representatives acts as treasurer of the fund. Each
week the secretary of the local union collects the members’ contribu
tions and turns them over to the treasurer of the fund. The treasurer
of the fund collects the contributions of the employer weekly. The
funds must be deposited in a bank each week, and no funds can be
paid out without the signature of two members of the board of man
agers, one representing the union and one the mill. The funds may
be placed in a savings bank at the discretion of the board of man
agers. Each yekr a statement is presented showing the exact condi
tion of the fund.
Every Wednesday the secretary of the local union and the treasurer
of the fund go over the pay roll for the previous week and ascertain
who is entitled to benefits. The names and amounts due are given to
the board of managers, who order payment to be made. Benefits are
paid by check on Friday, the regular pay day.
Any disputes are referred to the board of managers, and in case
they can not come to an agreement the shop foreman makes the final
decision.
The plan may be discontinued at the option of either party to the
agreement on a six months’ written notice. I f the plan should be
discontinued, the funds would be equally divided between the union
and the company.
95
JOINT-AGREEMENT PLANS
Method of financing plan.—The fund was started with a contribu
tion of $50 by the company and $50 by the local union. Subsequently
every union member whose earnings for a week have been $18 or
more has contributed 50 cents to the fund, and an amount equal to
that paid by the union members in a week has also been paid by the
company. In all contributions of any nature the union and the mill
share equally. No reserve fund has been set up.
Statistics o f Operation
Table 30 shows statistics of operation under the unemploymentbenefit plan provided for weavers in the United States Lace Curtain
Mills between 1923 and 1931:
T a b l e 3 0 . — Operation of unemployment-benefit plan of Branch No. 8, Amalgamated
Lace Operatives of America , and United States Lace Curtain M ills , Kingston ,
N . Y., 1923 to March , 1931
Year and month
November, 1923, to November, 1924..
November, 1924, to November, 1925__
November, 1925, to November, 1926. _
November, 1926, to November, 1927..
November, 1927, to November, 1928..
November, 1928, to November, 1929..
November, 1929, to December, 1930 __
1931:
January.........................................
February........................ ..............
March________________________
Num 1Num
Balance Loans
ber of ber reto
in fund fund
Actual
union
Average
end
balance
mem ceivat at
benefit at of
ing
end of
bers bene paid month end
period
of
cov
fits
or
year
year
ered
16
16
16
16
16
16
16
16
16
16
16
16
16
16
16
16
16
0)
(l)
0)
$34.58 $248.30
85.80
78.47
59.16 202.89
28.51 291.19
31.92 194.46
11.54 613.87
107. 91 125.33
(0
0)
0)
0)
0)
0)
+$248.30
-421.53
-697.11
-408.81
-5.54
+613.87
700 -574.67
$500
400
700
200
0)
0)
0)
8
0)
Total Cash re
benefits ceived
paid
in dues
$553.29
1,372.83
946.58
456.09
510. 73
184.59
1, 726.52
63.75
33.64
71.70
$801.59
703.00
671.0)
744.39
714.00
804.00
535.00
0)
0)
0
1Not yet available.
General Experience
Operation of the plan has served to keep the members of Local No.
8 in Kingston and has thus afforded the United States Lace Curtain
Mills a labor supply of skilled weavers which might not otherwise
have been available.
At present some workers have only part-time employment, and a
year ago all workers were on part time because the mill shut down
daily at noon. The amount of short time worked has resulted in
such heavy demands being made on the fund that it has been neces
sary to make loans to the fund and to lower the benefit payments
from time to time.
During 1925 and 1926 many loans were made to the fund by the
mill employers and the union. Then in 1927, 1928, and 1929 condi
tions improved and the fund showed a balance of $613.87 in Novem
ber, 1929. Since that time benefit payments have been exceedingly
heavy and a substantial loan to the fund is now outstanding. The
union has worked out a plan whereby funds are raised from the mem
bership which may be used to increase unemployment benefits to
members at times when the regular benefits are reduced because
members are working shorter hours per day than normal. Under
this plan every weaver who earns $18 to $20 in a week contributes
96
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
50 cents; those earning $20 to $25 contribute $1; those earning $25
to $30 contribute $1.50, etc.
In order to keep the benefit system actively in force it has been
necessary, as already explained, to reduce the amount of the weekly
guaranty at times.
No further changes in the terms of the agreement are contem
plated at this time, and both the mill employers and the union are
desirous of having the unemployment provisions continued as long as
possible. Should it become necessary to abandon the plan, which is
not contemplated, it would probably be brought back into active
operation as soon as conditions made it possible.
Lace Industry, Philadelphia, Pa.
In the lace industry of Philadelphia five separate unemploymentbenefit plans are maintained. Three of these are maintained solely
by trade-union members and are described in the section on tradeunion plans. The other two plans are established by joint agree
ments—one between the Bromley Manufacturing Co. and its lace
weavers who are members of Branch No. 1 of the Amalgamated Lace
Operatives, and the other between the Bromley Lace Co. and its
Levers machine weavers who are members of Branch No. 18 of the
union. These two joint-agreement plans are described below.
Lace curtain weavers and the Bromley Manufacturing Go.
Outline o f Plan
The agreement providing a benefit system was signed in January,
1924.
Character of plan.—The plan provides for an unemployment fund
jointly supported by the Bromley Manufacturing Co. and the mem
bers of Branch No. 1 who are employed by that company. All
members are lace-curtain weavers. The plan guarantees a minimum
wage to eligible members. The plan is compulsory for all weavers
employed at this mill.
Eligibility for benefits.—All members of Branch No. 1 employed
by the Bromley Manufacturing Co. are eligible for benefits.
Unenlployment covers involuntary unemployment such as waiting
for orders, repairs on machines, etc. Benefits were not to be paid
for shutdowns or stock taking, although if the funds permit stock
taking vacation is paid for.
By the rules of the agreement members must report for work
daily and must begin work at once if there is work. In periods of
depression this rule is not strictly adhered to but left to the discretion
of the foreman. Members usually report twice a week.
I f there is work and the member does not report, or if he refuses
to do the work offered, he is not eligible for benefit payments.
Members drawing sick benefits are not eligible for the unemploy
ment benefits.
There are no rules as to outside work.
JOINT-AGREEMENT PLANS
97
Benefits.—The benefits paid are $15 a week, or an amount suffi
cient to bring each members wage in a given week up to that amount.
There is no waiting period and no limit to the amount a member
may draw. The object of the plan is to provide an income of at
least $15 every week.
Administration.—The fund is administered by a board of managers,
4 in number, 2 of whom represent the company and 2 the shop.
This board of managers is elected annually.
The shop collector collects all dues and turns them over to the
board of managers. The company contributes a sum equal to that
contributed each week by the members of Branch No. 1 employed
at that mill, and the money is deposited in a bank or in reliable in
vestments at the discretion of the board.
The board of managers decides by Wednesday of each week the
amount of benefits due each member. Money for this is drawn
from the bank by check, which requires the signature of one repre
sentative of the company and one of the union. Payment of benefits
is made in cash
A statement
rendered annually
to the company and to the operatives.
Amendments may be made to the rules of the fund at any time if
mutually satisfactory to the union and to the company. The fund
may be discontinued altogether at the option of either the company
or the operatives, on six months’ written notice of such intention.
In such case, the money would be equally divided between the com
pany and the union.
Method of financing plan.—*When the fund was started every
weaver of Branch No. 1 who was employed by the Bromley Manu
facturing Co. and earned $18 or more contributed 50 cents each week.
Members earning less than $18 per week were exempt. The com
pany contributed an amount equal to that contributed by the em
ployees each week. At the end of 1929, owing to bad business con
ditions, the company suspended further payments to the fund. The
shop members also suspended payments for the first six months of
1930, so that nothing was coming into the fund during that period.
In 1927 there was a donation of $500 from the president of the
Bromley Manufacturing Co. and another of $200 from the same
source in 1929. These donations were not made because the balance
in the fund was low, but because similar donations were being made
to the unemployment-benefit funds supported by the employees
alone in other plants of the company. In 1929 the fund received
$1,626.36 from Branch No. 1, as its pro rata share of $5,000 which
Branch No. 1 distributed among its three shops.
In July, 1930, the members oi Branch No. 1 again began to make
payments into the fund at the same rate as formerly. At the begin
ning of 1931 a change was made in the system of contributions to
the unemployment-benefit fund, these being placed on a sliding
scale basis, ranging from no payment by workers receiving less than
$16 per week to $2 per week for those receiving $76 or over per
week.
98
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Statistics o f Operation
Table 31 gives statistics of operation under the plan for the years
1925 to 1930 and for the first quarter of 1931 :
31.— Operation of unemployment-benefit plan of Amalgamated Lace
Operatives, Branch No. 1 and Bromley Manufacturing Co., Philadelphia, January 31, 1925, to March, 1931
T a b le
Number Number
of union
members receiving
covered benefits
Year ending January 31—
1925................................................................
1926................................................................
1927................................................................
1928................................................................
1929................................................................
1930................................................................
1931................................................................
February and March, 1931_______________
66
65
60
65
67
70
68
68
Total bene
fits paid
10
47
42
65
67
70
68
27
$38.79
686.26
610.13
980.50
3,014.38
2,959.66
7,991.20
148.96
Average
benefit
paid
$3.88
14.60
14.53
15.08
44.99
42.28
117.52
21.28
Balance in
fund at end
of period
$2,963.29
5,407.02
8,599.63
11,268.93
13,755.84
112,885.72
1 5.406.49
15,257.53
i This does not include the contributions made by the union members alone since July, 1930. On Apr.
1,1931, these contributions amounted to $2,000. No payments have been made from this separate fund.
* Claims, not persons.
General Experience
The unemployment-benefit plan carried on jointly by Branch No. 1
and the Bromley Manufacturing Co. has been very successful. At all
times benefits have been taken care of and at times the funds have
been sufficient to allow for the payment of a vacation period to all
members during stock taking.
In December, 1929, the company suspended payments to the fund
due to the condition of business. There has been no official with
drawal from the agreement, however, so that the plan is still con
sidered a joint plan, and the company has stated that if business
regains its normal condition it will resume payments to the fund.
The company also indicated that in case it does resume payments it
will contribute to the fund an amount equal to the amount the union
members have put into the fund since the company suspended pay
ments.
Since the company ceased its payments all benefits have been paid
from the joint fund but no income has been paid into it; this pro
cedure will be followed until the fund is wiped out. At present there
is a balance of $5,257.53 in this joint fund. No payments have been
made from the fund to which the employees alone are contributing;
this fund now amounts to $2,000.
The two funds are kept separately but are still administered under
the joint plan by a board of managers representing the company and
the union. Members of the union who are employed by the company
feel that it is a wise policy to continue in the same manner as when
the company was contributing, feeling that the members will fare
better in the matter of employment if the company still has an inter
est in the plan.
^At the beginning of this year members increased their contribu
tions and hope to be able to carry the plan through at all times. No
changes are contemplated.
JOINT-AGREEMENT PLANS
99
Levers Machine Operators and Bromley Lace Co.
Outline o f Plan
The Levers section unemployment fund was started on January 15,
1926, the first benefits to be paid, if needed, on July 16, 1926.
Character of plan.—The plan provides for an unemployment
benefit, guaranteeing a minimum wage.
Eligibility for benefits.—Any members of Branch No. 18 employed
by the Bromley Lace Co. who desire to contribute to the fund are
eligible for benefits after contributing for six months.
Unemployment covers involuntary unemployment such as waiting
for orders, repairs on machines, etc. Benefits are not to be paid for
shutdowns or stock taking, although if the funds permit stock-taking
vacation is paid for.
By the rules of the agreement members must report for work daily,
but this rule is not adhered to in periods when there is a great deal or
unemployment. Members are notified if needed. I f a man is notified
and does not report, or if he refuses to do the work offered, he is not
eligible. There are no rules as to outside work.
Benefits.—Benefits paid are $15 a week or an amount sufficient to
bring each member’s wage for the week up to that amount. There
is no waiting period and no limit to the amount a member may
draw. The object of the plan is to provide a wage of at least $15
every week.
Administration.—The fund is administered by a board of man
agers, four in number, two representing the company and two the
union. The funds are collected by the secretary of the board of
managers and deposited in a bank within 24 hours.
The board of managers decides on or before Wednesday of each
week what members are entitled to benefits and payment is made in
cash on Friday. The check drawing the amount needed from the
bank must be signed by two members of the board of managers, one
representing the company and the other the union. The board of
managers renders a statement annually showing the exact state of the
fund.
The rules as to the unemployment fund may be amended if
mutually satisfactory to both the company and the union. The plan
may be discontinued entirely at the option of either side on six
months’ written notice.
Method of financing plan.—Originally the unemployment fund
was maintained by equal contributions of the union employees and the
company, but at the end of 1929 the company suspended its con
tributions and the employees now maintain the fund by their own
contributions, which in January were fixed at $1 for all members
earning over $20 a week.
Statistics o f Operation
Complete statistics are not available for the joint unemploymentbenefit plan of Branch No. 18, Amalgamated Lace Operatives of
America and the Bromley Lace Co., as part of the records covering
the fund were destroyed by fire.
100
UNEMPLOYMENT-BENEFIT PLANS--UNITED STATES
The available figures are for the years 1926 to April 15,1931, which
are given in Table 32 :
T a b le
32.— Operation of unemployment-benefit plan of Levers machine oper
ators and Bromley Lace Co., 1926 to April 15, 1931
Number
of em
Number Number
of em
of union ployees
ployees
receiving
members covered
benefits
Year
1926.........................................................
1927.........................................................
1928........................................................
1929.........................................................
1930.........................................................
1931, to Apr. 15......................................
0)
0)
20
27
41
41
9
<9
0)
16
26
26
0)
0)
9
16
26
26
Total
benefits
paid
0)
0)
$89.25
2183.80
1,442.56
* 40.00
Average Balance in
benefits fund at end
of period
paid
0)
0)
<*)
(3)
$55.48
1.54
!fc652.42
1,507.77
2,112.29
1,363.38
< 1,587.00
1 Not available.
2 Last six months only.
3 Since the amount in beenfits is not available for the first six months of the year an average can not be
given.
4 Approximate.
General Experience
The joint plan of Branch No. 18 and the Bromley Lace Co. has
been a successful one. It has been possible to pay benefits at all
times.
Benefit contributions were made from January 15 to July 15,
1926, before any benefits were paid. The rate of contribution was
placed at 50 cents per week for all members covered by the plan
who earned $18 or more and the company contributed a like amount
each week. At the end of 1929 the company suspended payments
to the fund until business conditions should improve. Shop mem
bers continued payments as usual and have carried on the plan alone
since the beginning of 1930. In January, 1931, the union agreed
to raise the contributions to $1 a week for all members earning
over $20.
In 1930 funds were seriously depleted. At the present time,
however, the fund amounts to $1,587, a larger amount than there has
been since 1927, with the exception of 1929 when the fund reached
$2,112.29.
The fund is still administered as it was when the Bromley Lace
Co. was contributing. The employer has stated that when business
conditions allow he will resume payments, and has indicated that
in such case he will donate a sum equal to what the members of the
union have contributed since the company suspended payments.
The benefit has been of great assistance to members and to the
company as well. The employees covered have been assured of jobs
and a steady, if small, income. The employer has been sure of the
services of skilled workers.
No changes in the plan are contemplated.
Lace Industry, *Scranton, Pa.
In 1923 the Amalgamated Lace Operatives of America, Branch
No. 3, entered a joint agreement with the Scranton Lace Co. to pro
vide unemployment benefits for the members of the union, all of
JOINT-AGREEMENT PLANS
101
whom are in the service of this company. This plan superseded a
trade-union plan maintained by Branch No. 3.
The Scranton Lace Co. manufactures curtains, colored draperies,
and bedspreads. Normally, about 1,200 persons are employed by the
company. On September 30, 1930, there were 876 persons in the
employ of the company.
Outline o f Plan
The agreement providing the unemployment-benefit plan was
signed in July, 1923.
Character of plan.—The plan provides for an unemploymentbenefit payment sufficient to bring the earnings of a person eligible
to benefits up to the guaranteed minimum weekly wage. Participa
tion in the plan is compulsory for members of the union employed
by the Scranton Lace Co.
Eligibility for benefits.—Benefit is paid for time lost waiting
for orders and waiting for repair of machines. No benefits are
paid for shutdown or vacations, under the agreement. In cases when
the mill has closed down for a day or two benefit has been paid.
No long period of shutdown has ever occurred. All members of
Branch No. 3 who are employed by the company are eligible for
benefits.
The original agreement provided that in case two operatives were
working as a team, and either person was placed on another machine,
their joint earnings totaling $29 for one week, neither could claim
benefits. It was recommended that all work and earnings be divided.
In July, 1927, this article was amended to read that in case two
operatives were working as a team and one person was placed on
another machine, the other person left without work should receive
the unemployment benefit of $15 for the week and the work should
be divided equally, the members alternating.
Members can not draw unemployment and sick benefits at the
same time.
Members do not have to report every day when out of work; if
unemployed, they are notified if needed for work. Unemployed
members are not required to report outside employment, and unless
they do so they are paid their benefits. I f a man asks for leave of
absence to perform outside work for some time, he is not paid the
benefit. Men are always on call if needed, and outside work is not
objected to unless it interferes with their regular work.
Benefits.—A minimum wage of $15 is guaranteed. I f a member
does not earn that amount in a week, the difference between $15 and
the amount earned is made up from the unemployment fund. There
is no waiting period and no limit to the amount a member may draw.
The plan provides for the minimum wage every week.
Administration.—The fund is administered by a board of managers,
four in number, two of whom represent the local union and two the
company. The representatives are chosen annually. The company
submits the names of its representatives to the union before they are
appointed to make sure the men chosen will be satisfactory to the
union.
102
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
The secretary collects the contributions from the union members
weekly and pays them monthly to the unemployment fund. The
amount of the employees’ contributions, with an equal contribution
from the company, is deposited by the treasurer of the fund in a
checking account on which 3 per cent interest is earned. The fund
can be invested in short-term certificates at the option of the board
of managers, but this has never been done.
The shop committee decides, on or before Tuesday of each week,
the amount of benefit due each member. The names and amounts
are filed with the board of managers on a printed form and checks
signed by a representative of the union and of the company are paid
on the regular pay day by the secretary-treasurer or superintendent.
In case of a dispute Between the shop committee and any member
of the fund the matter is referred to the board of managers, whose
decision is final.
Amendments to the by-laws of the unemployment fund may be
adopted at any time if mutually satisfactory. The fund may be dis
continued at the option of either party to the agreement on six
months’ notice. In such a case the fund is to be evenly divided
between the company and the local union. Statements are rendered
annually by the board of managers showing the exact condition of the
fund.
Method of financing plan.—Funds for the maintenance of the plan
are raised by assessing every union weaver employed by the company
who earns $15 or more in a week 50 cents for that week. The sum so
raised is matched by a contribution from the company.
Statistics o f Operation
Table 33 shows statistics of operation under the plan from July 1,
1923, to April 10, 1931:
T a b l e 3 3 . — Operation
of unemployment-benefit plan of Branch No. 8, Amal
gamated Lace Operatives of America, and the Scranton Lace C o 1923 to
1930, and January 1 to April 10, 1931
Year
1923 (last 6 months)_______
1924....... ...............................
1925
1926......................................
1927
..............
1928
..............
1929 .....................................
1930.......................................
1931:
Jan. _______________ _
Feb
........................
Mar____ ____ ________
April 1 to 10___ __ ___
Number
of union
members
covered
67
67
72
78
83
85
187
187
i 87
i 87
i 87
187
Total
benefits
paid
Number
Number Average of mem
bers re
of claims benefit
per claim ceiving
paid
benefits
Average
benefit
paid
$164.25
854.75
13
65
$12.63
13.15
12
16
$13.69
53.42
1,328.20
107
12.41
38
34.95
2,296.81
10,52a 74
166
1,071
13.84
9.83
53
87
43.34
121.02
972.72
1,016.42
712.86
298.45
75
83
57
28
12.97
12.25
12.51
10.66
39
55
35
18
$5,757.69
8,489 02
12,416.35
14,947.96
19,311.53
23,910.26
23,361.13
13,488.59
24.94
18.48
2a 37
16.58 ’ "‘ i4,_552.‘ 09
11 union member ill and receiving sick benefits, so not eligible for unemployment benefit.
Balance
in fund
at end of
period
JOINT-AGREEMENT PLANS
103
General Experience
At the time the unemployment-benefit plan of Local No. 3 was
discontinued in order to enter the joint agreement with the Scranton
Lace Co. there was left in the unemployment fund of the local the
sum of $2,050.23. This was matched by the company, making a fund
of $4,100.46. This sum was not set aside as a reserve fund, but it
has been possible to keep an amount greater than the original con
tribution in the fund at all times.
Great satisfaction with the plan is expressed both by the employer
and members of the union. The provision for a guaranteed weeldy
wage of $15 incorporated in the original joint agreement providing
unemployment benefits is still in force. The fund has always been
adequate to meet the demands made upon it for benefit payment and
has shown a considerable balance as well. No changes in the terms
are contemplated.
Such special benefits as are paid are taken from the union treasury,
as, for example, when a $30 weekly benefit is paid to members of
the union who have been discharged This payment is made if it is
felt a person has been unjustly dismissed and until his case can be
investigated. The payment may be made for a period not to exceed
12 weeks.
For three years—1925,1927, and 1928—it was unnecessary to make
any unemployment-benefit payments.
The union rules forbid the use of overtime in busy seasons. The
regular working week is 50 hours, and two shifts are worked. At
present the hours are 40 per week.
Lace Industry, Wilkes-Barre, Pa.
In 1924 the Wilkes-Barre Lace Co. and Branch No. 2 of the Amal
gamated Lace Operatives of America entered a joint agreement pro
viding unemployment benefits for union employees of the company.
This plan replaced a trade-union benefit plan that had been main
tained by the local union since 1910.
Outline o f Plan
The plan was started in May, 1924.
Character of plan.—The plan provides for an unemployment bene
fit, guaranteeing a minimum wage throughout the year.
Eligibility for benefits.—Members of the union in good standing
employed by the Wilkes-Barre Lace Co. are eligible for unemploy
ment benefits.
By unemployment is meant waiting for orders and machine repair
ing. No benefits are paid for general shutdown or for strikes and
lockouts.
The foreman’s clerk goes around each morning and checks every
machine to see who is at work. In this way any unemployment is
ascertained. It is not necessary for members waiting for orders to
report every day. The company notifies them when they are needed.
Notice must be given the night before if a man is wanted for the
next day and by 12 o’clock at noon if a man is to report for the night
104
UNEMPLOYMENT-BENEFIT PLANS--UNITED STATES
shift. I f a man has work and does not report he is not eligible for
benefits.
There are no rules to prohibit a man from working outside when
he is unemployed. As long as he reports for work when called he is
•eligible for the benefits. I f he earns over $17 in an outside job he
is supposed to contribute $1 to the unemployment fund. This pro
vision is not enforceable and payment depends upon the personal
integrity of the individual.
There are no rules covering apprentices. At present there are no
apprentices employed, and as long as business conditions remain as at
present there is no likelihood that any will be needed.
The plan is compulsory; all members working at the Wilkes-Barre
Lace Co. are covered.
Benefits.—Benefits are paid at the rate of $16 a week or a sum
sufficient to make each member’s wage equal that amount every week.
There is no waiting period and no limit to the amount of money a
member may draw.
I f a man is called for work and does not report, 75 cents an hour
for eight hours is deducted from his unemployment benefit. I f he
does not report for the second shift and there is work, he loses the
entire benent.
Administration.—The fund is administered by a board of man
agers, 4 in number, 2 representing the company and 2 the local
branch of the union, elected annually about May 1.
The contributions of union members are collected by the shop col
lector and turned over to the board of managers. For his services
the shop collector receives $10 a year from the union treasury, plus
1 per cent of the total amount he collects from the union members.
The comjDany makes its contributions direct to the board of managers.
The funds are deposited in a national bank and checks paid out
must be signed by two members of the board, one representing the
company and the other the union.
On or before Wednesday the shop committee decides who is entitled
to benefits and the amount thereof, and a report on a printed form is
given to the board of managers. Payment is made by check on
Thursday.
Any disputes between the shop committee and any member of the
fund are settled by the board of managers, whose decision is final.
The rules of the fund may be amended if mutually satisfactory,
and the fund may be discontinued entirely at the option of either tne
company or the union on six months’ notice. In such a case the fund
is to be divided equally between the company and the union.
Method of financing plan.—The fund was started with a contribu
tion of $5,000 each from the company and the union. Since then
each member earning at least $17 a week has paid $1 a week into the
fund, and the company contributes an amount equal to that collected
from the union members each week.
Statistics o f Operation
Data on the operation of the plan from 1924 to March, 1931, are
given in Table 34:
105
TRADE-UNION PLANS
34.-— Operation of unemployment-benefit plan of Branch No. 2, Amal
gamated Lace Operatives of America and Wilkes-Barre Lace Co., 1924 to
1930, and January to March, 1931
T a b le
Number Number Total bene
of union receiving
fits paid
members benefits
Year
1924...............................................................
1925...............................................................
1926...............................................................
1927....... .......................................................
1928...............................................................
1929...............................................................
1930...............................................................
1931:
January__________________________
February______ ___________ ____ ___
M arch..____ ____________________ _
96
96
96
96
89
84
84
1
84
93
98
93
93
89
84
83
$2,260.00
5,594.00
11,964.00
5,405.00
6,436.58
2,387.30
8,574.00
44
646.31
Average
benefit
paid
Balance in
fund at end
of period
$23.54
59.31
124.83
56.30
72.32
28.42
103.30
(
* 14.69 \
I
$12,577.90
16,140.65
11,161. 29
13,887.70
15,362.74
21,199.66
20,277.92
20,191.48
20,711.34
21,039.03
i Per claim, not per member.
General Experience
The joint unemployment fund of Branch No. 2, Amalgamated
Lace Operatives of America, and the Wilkes-Barre Lace Co. has been
carried on successfully for seven years and is to-day in very good
financial condition, having a fund of over $20,000 on hand. The
plan has been carried through as originally planned, with no changes
whatever. The company has willingly paid its contribution and has
done all in its power to stabilize the industry and to distribute the
work equally among the employees. The company has made the
statement that it is willing and glad to carry on the work as it is
started, but that it could not consider another contribution such as
was originally made. There is no present prospect that the fund will
be insufficient to meet demands, however. The workers have been
tided over a period of depression with assurance of some wage and
permanent work. No overtime is allowable, there are no discharges
without sufficient cause, and the man who works the lowest number
of hours is the first man recalled.
The depression has, of course, had its effects on the industry. In
1928,154,179hours were worked; in 1929,151,956 hours were worked;
and in 1930 only 116,396 hours were worked. The shifts were origi
nally 9 hours, but an 8-hour day has been in force for nearly five
years. Time worked at present is very irregular, some persons work
ing full time and some part time or not at all, according to the kind
of orders at hand.
The unemployment fund is not used for any other purpose than
unemployment benefits, according to the rules of the fund.
Trade-Union Plans
Deutsch-Amerikanische Typographia
The Deutsch-Amerikanische Typographia, an organization of Ger
man text printers, was the first trade-union in this country to pay un
employment benefits on an international scale. In addition, its plan
provides benefits for sickness, old age,7invalidity, strikes, death, and
7Now
paid by Internationa] Typographical Union.
106
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
funeral of member, and death of wife of member. The unemploy
ment-benefit plan was adopted in 1884.
At the present time the Typographia has 15 locals located in the
following cities: Philadelphia, Cincinnati, St. Louis, Buffalo, De
troit, Cleveland, New York, Newark, Chicago, Milwaukee, Baltimore,
Rochester, Louisville, St. Paul, and Pittsburgh.
Eligibility for benefits.—To be eligible a member must have been
a member of the union, in good standing, for two years prior to
unemployment.
An unemployed member must sign the out-of-work register each
day to receive benefit payment. Any day that he fails to do so he is
deemed to have had employment, and he will not be paid benefit for
that day. Benefits are not payable for any day that work is per
formed either as a printer or on any other job. Three days’ work
in any week at any kind of a job bars a member from receiving
benefit for that week.
Benefits.—Benefit begins at once and is payable at the rate of $6
per week, subject to a maximum of 4 weeks ($24) per quarter. The
maximum amount of benefit in any year is $96.
Though the beneficiaries are frequently still out of work at the
expiration of the regular benefit period, there is no provision for
special benefits after the right to regular benefit has been exhausted.
Administration.—The local-union officers administer the funds.
For administrative purposes the general secretary of the Typo
graphia has supervisory control of the fund.
Method of financing flam,.—The benefit plan, of which the unem
ployment benefit is only a small part, is financed by regular dues of
$1.85 per month (members not eligible for sick benefit pay only 80
cents.) Members also pay an assessment of 25 cents for each death
and such local taxes as may be required. These dues and assessments
are in addition to their regular dues to the International Typograph
ical Union, with which organization the Typographia amalgamated
in 1894. Once each year the funds of all locals are equalized by
payments from one local to another so that all funds are equal in
amount per capita. I f the fund falls below an amount equal to $20
per member, the general executive council may levy an assessment
until the amount is restored. Thus far funds have been adequate to
meet the cost of benefits and maintain this required reserve.
Statistics of operation.—Table 35 shows the total number of mem
bers of the Deutsch-Amerikanische Typographia and the total
amount paid in unemployment benefits ior the years 1920 to 1930.
The number receiving benefits during this period was not reported.
T a b le
35.—Operation of unemployment-benefit plan of Deutsch-Amerikanische
Typographia, 1920 to 1930
Year
1920........................................
1921........................................
1922........................................
1923............... —.....................
1924........................................
1925........................................
Member
ship of
union
700
688
660
655
694
682
Amount
paid in
benefits
$1,959.00
1.781.00
1.598.00
715.00
535.00
1,380.45
Year
1926......................................
1927......................................
1928......................................
1929......................................
1930......................................
Member
ship of
uniosi
652
638
636
553
1541
Amount
paid in
benefits
$923.00
1,032.00
727.00
659.00
604.00
»120 of these are pensioners of the International Typographical Union and are not eligible to receive the
Typographia unemployment benefit.
107
TRADE-UNION PLANS
Statistics of operation of Typographical Union, Local No. 7 (the
largest local of the Deutsch-Amerikanische Typographia), from
1927 through April, 1931, are shown in Table 36:
T a b le
26.— Operation of unemployment-benefit plan of Typographical Union No. 7
(German-American) by months, January, 1927, to April, 1931
Year and month
Num
Mem ber
ber re
Total Aver
age
ship ceiv amount pay
paid
ing
of
ment
union bene
fits
1927
January____ ________
___ __ ___
March
_
April_______________
M ay... ..
June_______________
July________________
August_____________
September__________
October____________
November__________
December__________
150
151
153
152
149
148
148
148
149
151
150
150
1
1
5
4.00
5.00
33.00
4.00
5.00
6.60
4
31.00
7.75
1928
January____________
February.__________
March______ ___ ___
April...........................
. ..
M ay...... ........
Jiinfl
___
July
......................
August_____________
September__________
October____________
November__________
December__________
150
151
151
150
152
152
152
149
148
145
142
141
6
7
7
3
1
3
6
7
7
1
1
4
41.00
81.00
58.00
14.00
4.00
20.00
39.00
47.00
40.00
7.00
4.00
30.00
6.83
11.57
8.29
4.67
4.00
6.67
6.50
6.71
5.71
7.00
4.00
7.50
1929
January____________
February_____- _____
141
144
4
5
18.00
22.00
4.50
4.40
9 $153.00 $17.00
8February
105.00
13.13
9 75.00
8.33
a 25.00
4.17
8 81.00
10.13
9 51.00
5.67
Year and month
Num
Mem ber
ber re
Total Aver
ship ceiv amount age
pay
ing
of
paid ment
union bene
fits
1929—Continued
Mareh__ __________
April...........................
May ____ _ ___ __
.Tiinfi ...
July____ ___________
A ugust...__________
September____ ____ _
October____________
November______ _
December_____ _____
143
141
142
142
141
141
141
142
140
139
9
7
7
5
6
$S0.00
26.00
52.00
54.00
22.00
$8.89
3.71
7.43
10.80
3.67
2
1
8
12
8.00
6.00
43.00
71.00
4.00
6.00
5.38
5.92
1930
January____________
February___________
Mftrrth.....
,
April_______________
M ay.......................
June_______________
July__________ _____
August_____________
September________
October____________
November—....... ........
December. ...............
140
137
137
137
136
139
139
139
137
138
139
138
12
4
1
2
9
5
6
6
8
5
8
8
122.00
16.00
9.00
8.00
65.00
27.00
44.00
38.00
41.00
26.00
54.00
52.00
10.17
4.00
9.00
4.00
7.22
5.40
7.33
6.33
5.13
5.20
6.75
6.50
1931
January____________
February___________
March_____________
April...........................
138
137
137
137
10
11
14
12
137.00
132.00
82.00
71.00
13.70
12.00
5.86
5.92
General experience.—The regular benefits are too small to meet the
problem of unemployment, being little more than sufficient to pay
the members’ dues during the period of unemployment. However,
no changes in amount or duration of benefit payments have been made
since 1908, and no changes are contemplated.
There has been very little overtime work in the trade, and where
it does occur extra men are used whenever possible. The usual hours
of work range from 37^ to 48 hours per week.
International Association of Siderographers
The unemployment-benefit plan of the International Association
of Siderographers was adopted in 1910.
Eligibility for benefits.—Any member in good standing is eligible
to benefits.
The union, being small, has a record of each member and where
employed. When a member reports he is out of employment this is
checked and is considered sufficient proof of unemployment.
65655°—31----- 8
108
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
A member who secures work of any kind thereby forfeits his right
to the union benefit.
Benefits.—Benefits are paid at the rate of $5 per week, beginning
with the third week of unemployment and continuing for 26 weeks in
any 12-month period.
No provision is made for special benefits after the expiration of the
regular benefit period, but special' subscriptions are sometimes taken
up for deserving members in distress.
Administration,.—The plan is administered by the international
executive board of five members elected at the biennial convention
of the union.
Method of financing plan.—The fund is financed by a per capita
tax on the local associations, which has thus far been sufficient to meet
all the costs.
When the funds in the reserve reach the sum of $800 the per capita
tax is dropped until the fund falls below this amount.
Statistics of operation.—Table 37 shows the operation of fund since
1924:
T a b le
3 7 . — Operation of unemployment-benefit plan of International Association
of Siderographers, 1927 to 1980 and January to March , 1981
Year
Balance
Member Number
Total
Average in fund
ship of receiving amount payment
at
end of
benefits
union
paid
period
69
0
1927................................................................................
68
0
1928................................................................................
76
0
1929................................................................................
1 $130.00
73
$130.00
1930................................................................................
3
115.00
1931 (January to March)_________________________
1 73
38.33
$394.38
515.73
652. 53
635.18
i Estimated.
General experience.—The unemployment benefit is considered
helpful, but the payments are too small to meet the problem of
unemployment. However, thus far, none of the members have
remained unemployed at the expiration of the benefit period.
No changes have been made or are contemplated either in the
amount or duration of payments.
Some effort has been made to do away with overtime work when
members are out of work and some progress in that direction has
been made. Generally the working week is 44 hours. One establish
ment employing a few members works a 48-hour week. As a result
of the present depression, some members have been working only
8 days a month.
Diamond W orkers’ Protective Union of America
The Diamond Workers’ Protective Union is composed of men
and women who cut and polish diamonds from the rough. Their
work is highly skilled, and training in this industry is of no use
to them in any other. The industry itself is concentrated in and
around New York City, and while the union is national in
its jurisdiction, it maintains no locals. In 1929, 360 out of 375
members were employed in the New York market.
109
TRADE-UNION PLANS
The unemployment-benefit fund of the union was started August
24,1912.
Eligibility for benefits.—A member, to be eligible to the plan,
must have been a member of the union for six months.
Unemployed members, in order to receive unemployment bene
fits, must register at the union office every Tuesday and Friday.
I f an unemployed member secures work at some other trade he
does not forfeit his right to benefit as long as he signs the register
twice a week.
Benefits.—Benefits are payable at the rate of $9 per week and
begin with the fourth week of unemployment. Originally, benefit
payments were made for 13 weeks in any year. In 1929, the 13-week
limit was abolished when the so-called emergency benefit was started.
Each member then received 10 weeks’ benefit at $9 per week. This
was increased by 6 weeks in 1930 and members who had not received
10 weeks’ benefits in 1929 were entitled to 16 weeks in 1930. This
same regulation is still in force.
Additional benefits are sometimes paid to members in great
distress.
Administration.—The fund is administered by a committee of
three, consisting of the president, secretary, and treasurer of the
union.
Method of financing flan.—The plan is financed by the setting
aside of 50 cents per week from the regular union dues. At the
present time, however, the fund is depleted and payments are being
made from the general fund of the union.
Statistics of operation.—The working of the plan is shown in
Table 38:
T
able
38.— Operation of unemployment-benefit plan of Diamond Workers 9 Pro*
tective Union, 1927 to 1930, and January to March, 1931
Year and month
1927........... ..........................................................
1928_....................................................................
1929.....................................................................
1930.....................................................................
1931 (January to March)____________________
Number
Member of em
ship of
ployees
union receiving
benefits
400
400
350
300
300
48
39
108
115
35
Total
benefits
paid
$1,742.00
2,038.00
9.717.00
16,531. 50
1.794.00
Average
benefit
paid
$36.29
52.25
89.97
143. 75
51.26
Balance
in fund at
end of
period
$4,052.00
3,357.70
5,266.75
18,387.75
1 1,388.00
i Deficit.
General experience.—Benefits were originally fixed in 1912 at $6
per week, but were increased to $7.50 per week in 1913. In 1924 the
amount was again increased to $12 per week, but in 1929 the benefit
was decreased to $9 per week. The extent to which an unemployed
member is helped by the unemployment-benefit payments depends
largely on the individual member. At present conditions are such
that nearly all unemployed members are still unemployed at the
expiration of the benefit period.
Prior to 1919 the working week in the trade was 48 hours. Since
that time the regular working week has been one of 44 hours. No
overtime work is allowed.
H O
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Bookbinders’ Local No, 31-125, San Francisco, Calif.
The unemployment-benefit plan of the San Francisco Bookbinders’
Local No. 31-125 was started in January, 1922.
Eligibility for benefits.—In order to continue to receive benefits
the member must report to the office of the union at stated intervals;
if he secures work at another trade, he forfeits his right to unem
ployment benefits.
Benefits.—Benefits begin with the third week of unemployment
and are limited to eight weeks in a period of six months.
Prior to February 1, 1931, men with dependents were paid $15
per week; those without dependents, $10 per week. Women with
dependents were paid $12 per week; those without dependents, $8 per
week. For the period February 1,1931 to June 30, 1931, the benefits
have been set at $12 per week for men and women with dependents
and $6 for those without dependents. /
No special benefits are paid to members in distress after they have
exhausted their rights under the plan. Any relief after that must
come from donations or from the general treasury.
Administration—The fund is administered by the executive com
mittee of the union.
Method of financing plan.—The plan is financed by assessments
of 2 per cent of the members’ weekly earnings. There is no special
reserve fund.
Statistics of operation.—Table 39 shows the operation of the plan
of this local since 1927:
T able
39.— Operation of unemployment-benefit plan of Bookbinders, Local
No. 81-125, San Francisco, 1927 to 1981
Year
1927....................................................................................
1928....................................................................................
1929................................ ...................................................
1930....................................................................................
1931....................................................................................
Member
ship of
union
Number of
members
receiving
benefits
700
700
700
700
0)
355
350
275
476
0)
Total
benefits
paid
$4,396.00
4.698.00
3.195.00
5.526.00
0)
Average
benefit
paid
$12.95
13.42
11.62
11.60
. 0)
* Complete data not available. Benefits in excess of $600 a week Were paid during February, March,
and April.
General experience.—The funds derived from the dues of 2 per
cent of weekly earnings have not been adequate for the payment of
benefits. In the first four months of 1931 approximately $4,000 was
drawn from the general treasury to meet the deficit. To offset this
heavy withdrawal of funds and make the plan self-supporting the
decrease in benefits, already noted, was resorted to, but this change
in the amount of benefit is only temporary; it was thought that by
July 1 the fund would be sufficiently replenished to make possible
the restoration of the regular rate of benefit.
The year 1931 showed a great number of unemployed and a large
amount of benefits paid. The unemployed periods were of short
duration, but two out of every three members drew unemployment
benefits.
TRADE-UNION PLANS
111
These workers have a regular working week of 44 hours and there
has been no permanent change in this. With so many members con
tinually unemployed it is not necessary to employ temporary workers,
even in busy seasons. This would be the policy, though, if condi
tions warranted, as overtime work is discouraged by the union.
Bookbinders’ Local No. 119, New York City
There are four locals of bookbinders in New York City, but only
Local No. 119, made up of paper cutters, has an unemploymentbenefit plan. Previous to 1928 this local had a relief fund for the
purpose of loaning money, without interest, to members who were
unemployed or in distress. In 1928 the local made an effort to pay
unemployment benefits to members out of work during the months
from March to August. The benefit fund was financed by voluntary
contributions. During this period $20,360 was paid out in unem
ployment benefits, which was $2,915 more than the contributions to
the fund. This experience with the voluntary contribution benefit
plan led the local to establish unemployment and retirement
benefits as a permanent feature of the organization, and the plan
described below was adopted.
Dues for support of the plan began January 1, 1929. The first
payment of benefits was made in June, 1929.
Eligibility for benefits.—Any member in good standing for at
least one year, with all obligations met at least 30 days before appli
cation, is eligible for benefits.
An unemployed member must report daily at local headquarters
and sign the roll book each day, except Saturday, between 10.30 a. m.
and 1 p. m. during the period he is unemployed and claiming benefit.
A member who fails to sign the roll one day out of the five days
forfeits one-fifth of his weekly benefit; in case of two lapses, he for
feits the full amount of the benefit.
A member may secure a part-time job without forfeiture of his
unemployment benefit. The benefit is not large and even when com
bined with the amount earned on a part-time job would probably not
equal the amount the member could earn if regularly employed at
his own trade. I f employed at his own trade for one day a week, the
member is paid a benefit of $5 a week.
Benefits.—The amount of benefit depends upon the length of
continuous good-standing membership in the union, it being held
that the older men in the craft, because of increased responsibilities,
are entitled to a larger amount of benefit. The benefits are as fol
lows: For membership of 1 to 5 years, $10 per week; for membership
of 5 to 10 years; $12 j and for membership of more than 10 years, $15.
Benefits begin with the third week of unemployment, and are
limited to 10 weeks in one year. After 2 weeks’ unemployment the
member may receive benefits for 4 consecutive weeks; if still unem
ployed at the end of that time, he must wait 2 weeks before draw
ing benefit again.
Administration.—The fund is administered by a benefit board of
five members—the secretary-treasurer, business agent, and three
members elected by the union. All applications for benefits are made
to the benefit board, which investigates each case. The board’s de
112
UNEMPLOYMENT-BENEFIT PLANS--UNITED STATES
cisions are final, unless reversed by a two-thirds vote of the members
present at any regular meeting.
Method of fin<inci7ig plan.—The unemployment-benefit fund is
supported by special dues of 50 cents weekly for journeymen and for
third and fourth year apprentices, and 25 cents weekly for the first
and second year apprentices.
Statistics of operation.—Table 40 shows the number of members,
the number of claims paid, the amounts paid, and the condition of
the fund of this local each year since 1927:
T
able
4 0 . — Operation of unemployment-benefit plan of Bookbinders’ Local
119, New York City, 1928 to 1330 and January 1 to Map 29, 19S1
Year or period
1927............................................................................
1928 1— .................................................. ..................
1929_..........................................................................
1930.......................................... .................................
1931:
7-week period ending Mar. 13............................
Mar. 13 to May 29_________________________
1In 1928 the benefit period was 30 weeks.
Mem Num
bership ber of
claims
of
union
paid
Total
benefits
paid
Average
benefit
paid
982
927
917
904
832
200
1,499
$20,460.00
8.792.00
16,062.00
$24.59
43.96
10.72
900
882
0)
579
6.405.00
6.496.00
11.22
* Deficit.
iVo.
Balance in
fund at
end of
period
«$2,915.00
8,826.00
10,005.00
1,499.00
* Not reported.
General experience.—The benefits do not meet the problem of
unemployment, but are of assistance to members who would other
wise be in serious need. Many members are unemployed beyond the
benefit period. In emergencies, special assessments may be made, and
members in distress may borrow from the benefit fund.
The present depression has created such distress through unem
ployment that larger assessments, or special assessments, are con
templated to meet the emergency.
No general changes are contemplated for the present in the amount
or duration of benefit.
The number of working hours per week has not been changed for
several years. The present agreement, effective to 1932, provides for
the 44-hour week. In the past it has been the custom to call on regu
lar employees to work overtime during rush periods^ but at present
the union has an agreement with the employers to discontinue over
time work and employ additional workers.
Bookbinders* Local No. 8, Chicago, 111.
The Chicago Bookbinders’ Local No. 8 had no permanent unem
ployment plan prior to September^ 1930. Worthy unemployed mem
bers who were in distress were given relief by voluntary contribu
tions. A benefit plan was started after the strike for the 44-hour
week in 1921, and benefits were paid to a large number of members
in 1921 and 1922 for long periods, usually 12 weeks. After 1922 the
plan was terminated. In September, 1930, a new plan was set in
motion, but due to unusually severe unemployment the fund had to
suspend operation late in the spring of 1931.
TKADE-UNIOIT PLANS
113
Eligibility for benefits.—Only those members are eligible to bene
fits who have been members of the local for one year prior to unem
ployment.
A member who is out of work and claiming benefit is required to
report for roll call three times weekly—on Monday, Wednesday, and
Friday.
I f he secures employment outside the trade his benefit is forfeited
and he is required to pay the assessment and the unemployment por
tion of the dues. I f a member under the job system works two days
or over, he is paid no benefit for that week.
Benefits.—The rate of benefit is $5.50 per week, beginning four
weeks after the date of loss of employment.
The length of the benefit period is 13 weeks.
Administration.—The fund is administered by a special unemploy
ment committee appointed by the president and approved by the
membership of the local.
Method of financing plan.—Five thousand dollars was voted from
the general treasury oi the local at the time the plan was started,
as a nucleus for the unemployment-benefit fund, and the regular dues
were increased $1 per month to meet current costs of benefits. In
addition, an assessment of 50 cents per week was levied for 20 weeks
in order to build up a permanent fund. At the end of 20 weeks the
50-cent assessment was increased to $1 per week, until such time as
the special fund is considered large enough to care for present needs.
Statistics of operation.—During the period while the local was
paying benefits—September, 1930, to April 18, 1931—the average
membership of the local was 1,070. Of these, 400 received benefits
during the period, about $26,000 being so paid, making an average
payment per beneficiary of $65.
General experience.—The benefits met the problem of unemploy
ment very meagerly. Especially needy cases were heard by the
committee and donations were asked of the working members. An
unemployed member can borrow $50 from the general fund.
There has been quite a large percentage of members unemployed
at the end of the benefit period, but many found employment during
the busy season from April to September.
In 1921-22 benefits were paid to all unemployed at any time dur
ing the period, many having received benefits for a year or more.
This was a temporary measure and the cost was met from weekly
assessments on the members.
The duration of benefits when the present scheme was started was
10 weeks, but the time was extended to 13 weeks, and the union has
contemplated action to extend the benefit period. However, this
action did not materialize, for while, ordinarily, a seasonal improve
ment occurs in the spring, this year there was a recession in em
ployment, with the result that it has become necessary to suspend
the payment of benefits altogether.
Electrotypers’ Local No. 3, Chicago, 111.
The unemployment-benefit plan of the Chicago Electrotypers*
Local No. 3 has been functioning since 1920, and has remained
essentially the same, with but few changes made as a result of the
current depression.
114
UNEMPLOYMENT-BENEFIT PLANS--UNITED STATES
Eligibility for benefits.—To be eligible to the plan a man must
have been a member of the union for one year prior to date of un
employment; and if he is a member coming into the Chicago juris
diction 011 a traveling card, he must have been a member of the
Chicago local for two years. Apprentices, upon becoming journey
men, immediately become eligible for benefits if unemployed.
The unemployed member must report to the union daily, either
in person or by telephone. Work at another occupation does not
necessarily cause forfeiture of the unemployment benefits; the re
muneration received from the other work and the member’s needs are
taken into consideration before discontinuance of benefits.
Benefits.—The rate of benefit is as follows: $20 for the first week
of unemployment, $25 for the second week, and $30 a week there
after for as long as the member is unemployed. Apprentices are
paid benefits at the rate of $15 per week.
Benefit begins with the first day of unemployment, but the first
payment is not made until the end of the first week of unemploy
ment.
Members who are habitually out of work are not paid benefits
under this plan but are taken care of under the head of welfare.
Such members must be unemployed one month before receiving aid
and are then paid $15 weekly.
Administration.—The fund is administered by the executive board
of the local union.
Method of financing plan.—Since February, 1931, the fund has
been financed by a 5 per cent assessment on earnings.
Statistics of operation.—Table 41 shows the benefits paid by the
local each year since 1926:
T able
41.— Operation of unemployment-benefit plan of Electrotypers’ Local No.
8 , Chicago, 1926 to 1980 , and January to March , 1981
Year or month
1926....................................................................................
1927....................................................................................
1928....................................................................................
1929....................................................................................
1980....................................................................................
1931:
January_______________________________________
February______________________________________
March________________________________________
of
Total mem Number
members Total bene
bers of
receiving
fits paid
union
benefits
Average
benefit
paid
680
703
730
745
765
60
80
53
55
88
$3,367.50
5,366.25
3.417.00
3.520.00
15,512.50
$56.12
67.08
64.47
64.00
176.28
790
792
792
65
70
68
4.062.50
8.022.50
6.997.50
62.50
114.61
102.90
General experience.—The benefit plan has been a great help to the
unemployed members. Even under the plan, however, the bene
ficiaries have had to curtail expenses considerably, as the benefit
amounts to less than half of the usual weekly wage.
When the fund was started, an assessment of 25 cents per week
was levied against each member and this was kept in force until
the fund reached $10,000. The assessment was then discontinued
until the fund had fallen to $5,000, when the assessment automatically
came into force again. In October, 1930, it was found that 25 cents
per week was insufficient to maintain the fund at its proper size
TRADE-UNION' PLANS
115
and the assessment was changed to 2 per cent of each member’s
weekly earnings. This produced sufficient revenue at first, but as
unemployment increased it was found necessary, in February, 1931,
to increase the assessment to 5 per cent of the earnings.
It is contemplated, when conditions have approached normal again,
to increase the reserve fund to between $35,000 and $75,000, and it is
hoped that an assessment of 75 cents per week will be sufficient to
maintain the fund at this level.
The regular working hours are 44 per week; there has been no
change since the onset of the depression. The local agreement
limits the amount of overtime to six hours per week per man, and
if more overtime work is necessary additional workers are employed.
Electrotypers* Local No. 72, Philadelphia, Pa.
The unemployment-benefit plan of Philadelphia Electrotypers’
Local No. 72 is combined with relief for sickness and disability. It
was started in 1921.
Eligibility for benefits.—All members must have belonged to the
union for one year and be in good standing, to be eligible to the outof-work benefits. I f a member comes into the local on a traveling
card, he must wait one year before becoming eligible to benefits. A
member leaving the local on a traveling card and later returning on
a traveling card becomes eligible to benefit immediately, provided
he has not been absent for a period exceeding six months.
An unemployed member claiming benefits must notify the secre
tary and chairman of the relief committee in writing when unem
ployment begins.
Originally, if a member secured work in some other than his own
trade at $20 or more per week, or worked two days at his trade, his
unemployment benefit ceased. Now, a member securing work out
side does not forfeit his benefit unless what he earns, plus the benefit,
amounts to more than $35 per week, in which case he receives in
benefit only the difference between the amount earned and $35 per
week.
Benefits.—Benefits begin after two weeks’ unemployment, pay
ment being made for the second week. The regular benefits are $20
per week, and ordinarily run for 15 weeks in any 52 weeks. During
the present emergency, however, payments of $10 a week are made
for an additional 30 weeks or more. In several cases, also, old
members have been paid what amounts to an old-age pension.
Administration.—The fund is administered by a committee of six,
appointed by the president, and at present consists of the financial
secretary, treasurer, secretary of committee, and three members
appointed annually. The committee elects its own secretary.
Method of financing plan.—Funds are raised by assessments on
the members. The present rate is as follows: $2 per week for mem
bers earning $50 or more per week; $1.50 for those earning $40 to
$50; and $1 for those earning less than $40. Members working any
overtime are assessed an additional 50 cents for the week. All sums
so raised are matched from the union’s 66defense fund.”
Statistics of operation.—The operations under the plan since 1926
are shown in Table 42:
116
T
able
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
4 3 . — Operation o f unemployment-beneflt plan of Electrotypers' Local 'No.
72, Philadelphia, 1926 to 1930, and January to June, 1931
Year or month
1926.................................................................... .
1927.....................................................................
1928......................................................................
1929......................................................................
1930.................................................................... .
1931:
January.......................................................
February......................................................
March.................................................... ......
April.............................................................
May..............................................................
June__________________________________
Number
Member of mem
ship of
bers re
union
ceiving
benefits
Total
benefits
paid
Average
benefit
paid
Balance in
fund at
end of
period
305
307
311
299
310
33
45
41
52
58
$5,720.00
5,182.00
4,024.55
7,453.71
8,724.75
$170.30
115.16
98.16
143.34
150.43
$692.76
845.46
1,925.96
3,520.45
3,694.20
315
315
315
313
313
315
28
36
34
36
38
55
1,240.00
1,688.50
1,591.90
1,524.75
2,104.00
* 2,450.00
44.29
46.90
46.82
42.35
55.37
44.55
3,042.20
1,802.20
1,213.70
388.95
684.95
i Estimated.
General experience.—An assessment of 50 cents a week was levied
from 1921 till September, 1930, when the assessment was increased
to $1 a week as an emergency measure. As already explained, the
assessment was still further increased early in June, 1931.
The fund was formerly kept between a maximum of $2,000 and a
minimum of $500. In September^ 1930, it was decided to place the
maximum at $10,000 and the minimum at $2,000. When the maxi
mum of the fund was reached the assessments were to cease until
the fund decreased to the minimum of $2,000.
No further changes are contemplated.
Since the depression many members have found themselves still
unemployed at the end of the benefit period.
Lithographers’ Local No. 17, San Francisco, Calif.
The unemployment-benefit plan of the San Francisco Litho
graphers’ Local, No. 17, was started about 1918.
Eligibility for benefits.—To be eligible to the plan a member must
have been a member of the local for two years. When a member
loses his job the fact is reported to the union by the shop stewartl
of the plant where he has been working. A member who secures
work at other jobs during the benefit period is entitled only to a
benefit equal to the difference between the regular benefit and his
earnings.
Benefits.—Benefits are now being paid at the rate of $12 a week
for single men and $15 a week for married men and others with
dependents. Benefits begin with the second week of unemployment
and continue for 10 weeks in any 12 months; in no case, however,
may the total amount of benefits exceed $150.
Administration.—The fund is administered by the president, re
cording secretary, financial secretary, and finance committee of the
local.
Method of financing plan.—The plan is financed from the regular
dues, and payments are made from the general fund, there being no
special reserve fund.
f£7f
•TRADE-UNION PLANS
Statistics of operation.—As Table 43 shows, from 1927 to 1930,
the average of unemployed members has ranged from 33 in 1927
to 43 in 1930. During the first four months of 1931 the average
was 11, with total benefits of $610 paid.
T able
43.— Operation of unemployment-benefit plan of Lithographers’ Local No,
17, San Francisco, 1927 to 1980 and January to April , 1931
Year
1927....................................................................................
1928..................................................... ..............................
1929...................................... ...................... ......................
1930............ ............... - .....................................................
1931: January to April_____________________________
Member
ship of
union
175
175
175
175
175
Number of
members Total ben
receiving
efits paid
benefits
33
40
42
43
111
$1,027.00
1.291.00
1.638.00
1.685.00
610.00
Average
benefit
paid
$31.12
32.27
37.57
39.19
55.45
1Average.
General experience.—The depression has made necessary several
changes in the plan. Until the depression the plan was financed from
the regular dues of 65 cents per week. Conditions made it necessary
to raise the dues to 85 cents for members regularly employed, while
for those working part time or wholly unemployed they were lowered
to 40 cents a week. At the same time the amount of benefit was
raised from $9 to $12 a week for single men and from $12 to $15 a
week for married men and others having dependents. Since these
adjustments were made the fund has been adequate to meet the cost
of benefits. No other changes are contemplated at present.
Comparatively few members have been left unemployed at the
expiration of the benefit period. Members who have been in need
after exhausting their rights under the plan may have their case
brought before the local body, and if found worthy, further assist
ance is given them.
Temporary workers are taken on in busy seasons. The policy of
the union is to discourage overtime work. The depression has made
no change in the normal number of hours of the working week.
Lithographers5 Local No. 14, Philadelphia, Pa.
The unemployment-benefit plan of the Philadelphia Lithographers’
Union, Local No. 14, was started in 1918.
Eligibility for benefits.—To be eligible for benefit a member must
have been a member m good standing for at least six months prior
to the claim for benefit.
As soon as unemployment begins this fact is reported to the presi
dent of the local by the shop steward of the plant where the member
was last employed or by the unemployed member himself.
Work at other than the member’s trade previously caused forfeit
ure of the unemployment benefit, but during the depression this
provision has been set aside and the benefit paid.
Benefits.—The present rate of benefit is $6 per week.
Benefit begins after one week’s unemployment, the first payment
being made at the end of the second week of unemployment, and may
118
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
be paid only for 13 weeks in any one year. However, special benefits
have been paid in a few cases by action of the local in extending the
benefit period to members who were in distress.
Administration.—The fund is administered by the executive com
mittee of the local, which consists of the president, treasurer, and an
appointed member.
Method of financing plan.—Benefits are paid from the general
fund of the local, and there have been no special assessments for the
unemployment fund. The local endeavors to maintain a reserve of
$500.
Statistics of operation.—The working of the plan since 1927 is
shown in Table 44:
T able
44.— Operation of unemployment-benefit plan of Lithographers’ Local No.
14, Philadelphia, 1927 to 1980 and January to April , 1981
Year or month
1927............................................................................
1928............................................................................
1929............................................................................
1930............................................................................
1931:
January _________________________________
February__________________________________
March____________________________________
A p r il____________________________ ________
Mem
bership
of union
Num
ber re
ceiving
benefits
165
170
171
170
22
37
30
35
$316.00
625.00
659.00
725.00
$14.36
16.89
21.97
20.71
$554.28
238.28
216.81
593.01
170
169
169
170
4
5
17
20
66.00
48.00
306.00
16.50
9.60
18.00
527.01
479.01
173.01
Total
amount
paid
Average
payment
Balance in
fund at end
of period
General experience.—The plan was started to help members who
were out of employment in ordinary times, and has not been de
veloped to meet the present emergency in an adequate way, although
in March, 1931, the rate of benefits was increased from $3 to $6 per
week. On Christmas, 1930, 24 members out of work were given $10
each.
Many members are unemployed for a longer time than the benefit
period.
The usual custom in the trade has been to give overtime work to
regular members rather than to employ temporary workers, but this
policy was changed to some extent with the beginning of the depres
sion. There is very little overtime work at present, but a few shops
still prefer overtime work to employing temporary workers. There
has been no change in the basic working hours, although many shops
are working short time due to lack of work.
Lithographers’ Local No. 8, Cincinnati, Ohio
The Cincinnati Lithographers’ Local No. 8 has had an unemploy
ment-benefit plan for about 12 years. The plan was established in
1919, but until 1930 unemployment was so slight that few, if any,
benefit payments had been made.
Eligibility for benefits.—To be eligible for benefits a member must
have been a member in good standing for at least six months. The
shop delegate reports members who are out of work, and the idle
members must themselves report to the president of the local. An
unemployed member is required to attend the meetings of the local.
ERADE-UNION PLAN’S
An unemployed lithographer who secures work at another trade
and earns less than $15 per week is entitled to the unemployment
benefit.
Benefits.—Unemployed members are paid $1 per day or $6 per
week, but the maximum amount allowed in any year is $50. Benefit
begins after one week of unemployment, the first payment being
made at the end of the second week of unemployment. Benefits are
paid only for 50 days in any year.
Administration.—The benefit fund is administered by the financial
secretary, the recording secretary, and the treasurer of the local.
Methoa of fmancing flan.—Payments are made from the general
treasury of the local and there have been no special assessments for
the benefit fund.
Statistics of oferdtion.—The record of payments made to unem
ployed members is not available, but the president of the local re
ports that no unemployment benefits were paid from 1919 until
September, 1930. Since then 30 to 35 members have received benefit,
and from 20 to 25 of these have received the full amount of $50.
The membership of the local at the present time is 190. In 1927
the membership was 275.
General exf&rience.—The benefits are small and do not meet the
problem of unemployment. Since September, 1930, from 20 to 25
members have received the maximum benefit of $50 and are now
without relief. Special benefits have been paid to a few responsible
members in the way of loans, but this is not often done.
No extra assessments have been made. With such a large per
centage of members unemployed, it is doubtful if the benefits can be
continued. No changes in the amount or duration of the benefits
have been made or are contemplated.
Regular working hours remain the same as before the depression
began. Some shops work 45 hours in 5 days; others work 48 hours
in 5y2 days. There is not much overtime work in the trade, and
the regular members usually work the necessary overtime. There is
a greater tendency now to allow the unemployed members to fill the
places of regular men whenever it is possible.
Lithographers’ Local No. 1, New York City
Lithographers’ Local Union No. 1, New York City, having been
a beneficial and protective organization since its formation in 1882,
has always provided some sort of relief for its members. In 1895
a plan was set forth in the constitution which provided that a
member in good standing for six months, who did not lose his job
because of intoxication and was not out of work because of illness,
might, after a waiting period of three weeks, receive a benefit of $3
per week. A maximum benefit of $75 was allowed in any one year.
During the depression of 1920 and 1921, while there was no definite
plan For unemployment benefits, the local assisted the members,
levying assessments upon the working members to finance the pay
ments. The present plan was started July 1, 1923.
Eligibility for benefits.—Both journeymen and apprentices are
entitled to unemployment benefits if they have been members of the
local for one year and in good standing for the previous 30 days.
120
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
An unemployed member must report at least twice a week to the
employment official of the local and at such other periods as may
be decided by the president of the local. Outside employment does
not bar a member from receiving benefit, but no benefit is paid to
a member who obtains work for part of a week at his own trade,
unless the amount earned by him is less than one week’s benefit.
Benefits.—Benefits are payable at the rate of $10 per week for
journeymen and $5 per week for apprentices. Payment is not made
until after two weeks’ unemployment, but the second week of unem
ployment is paid for.
After one year’s membership the unemployed member receives
benefits for 3 weeks; after two years’ membership, for 5 weeks;
after three years’ membership, for 8 weeks; and after four years’
membership, for 10 weeks. For the year 1931, however, the benefit
period has been doubled.
Administration.—The fund is administered by the president and
financial secretary of the local.
Method of financing plan.—At the time the plan was adopted the
local had in its treasury an $18,000 surplus from its earlier assess
ments, and this was used as the nucleus for its relief fund. Provi
sion was made that the fund should be maintained by setting aside
for the purpose $1 a month from the regular dues of journeymen and
25 cents from those of apprentices, and by special assessments of 1
per cent per week on weekly earnings of both journeymen and ap
prentices, when the fund fell below $10,000, until it reached $20,000.
In 1929 the same limits of solvency were retained and provision was
made for assessments, but the amounts were not specified.
Statistics of operation.—Table 45 shows the benefits paid each year
since 1927:
T able
45.— Operation of unemployment-benefit plan of Lithographers1 Local No.
1 , New York City , 1927 to 1930 and January to April , 1931
Year
...... ................................................ ..........
1927
1928 ................. .................................................................
1929
.................... ......... ......... ......... ........................
1930
.......................................- ........................
1931; January to April..__________________ __________
Member
ship of
union
2,429
2,383
2,434
2,461
2,450
Number of Total bene
claims
fits paid
paid
433
518
570
716
879
$30,450.00
30.045.00
28.135.00
47.810.00
29,000.00
Average
benefit
paid
$70.83
68.00
49.3$
66.77
32.99
General experience.—The extent to which benefits meet the prob
lem of unemployment is speculative. Where the member’s responsi
bilities are not heavy the amount paid may be considered sufficient,
but where there are responsibilities the amount is wholly inadequate.
The number of members who are still unemployed at the end of
the benefit period is quite large, but the local is making every effort
to assist these.
In 1930 there were 300 unemployed; in the middle of April, 1931,
there were 399 unemployed. While the demands on the unemploy
ment fund have been heavy the union has managed, up to this time,
to keep up the benefits. In addition to the regular benefits, special
and deserving cases have been taken care of.
121
TRADE-UNION PLANS
No changes are contemplated in the amount of benefit, but should
the present emergency continue there may be an extension of the
benefit period.
The working hours since 1927 have been 46 per week. Attempts
have been made to bring employers over to the 40-hour week basis,
but thus far without success. No arrangement has been made to
abolish overtime work.
Lithographers’ Local No. 45, Seattle, Wash.
The unemployment-benefit plan of the Seattle Lithographers’
Local No. 45 was started October 1, 1927.
Eligibility for benefits.—Journeymen who have been members of
the local in good standing for one year are eligible to benefits. A
member is considered unemployed when he has no work at his trade,
regardless of the cause. The shop stewards report the unemploy
ment of members. A member who secures work outside the trade
does not sacrifice his benefit thereby.
Benefits.—Benefits are paid at the rate of $5 per week; they begin
after two weeks of unemployment and were originally limited to
8 weeks in any one year, but the benefit period has very recently
been increased from 8 to 16 weeks, for 1931 only.
Loans up to $60 are made to worthy members in distress. These
loans are paid back in easy installments without interest.
Administration.—The fund is administered by a committee of
the union and the local treasurer.
Methods of financing plan.—The plan is financed from the general
fund, with special assessments when needed.
Statistics of operation.—Table 46 shows the operation of the plan
since 1928. There is no special reserve fund.
T able
46.— Operation of unemployment-benefit plan of Lithographers1 Local No.
45, Seattle, 1928 to 1980
Year
1928....................................................................................
1929....................................................................................
1930....................................................................................
Member
ship of
union
23
23
23
Number
receiving
benefits
4
5
6
Total
amount
paid
$160.00
200.00
240.00
Average
payment
$40.00
40.00
40.00
General experience.—During 1927-28 approximately one member
in every six was unemployed and received benefits; in 1929 one
member in every five; in 1930 one member in every four; and for
the first three months of 1931 one member in every four. The num
ber of members left unemployed after the expiration of the benefit
period was not reported.
No extra assessments have thus far been made to finance the plan
but such a move is contemplated in the near future.
The weekly working hours have been reduced from 48 to 44, and
wages have been cut, on an average, 8 per cent. Temporary workers
are employed in busy seasons. There has been no change in this
respect.
122
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Photo-Engravers’ Local No. 5, Chicago, 111.
The unemployment-benefit plan of the Chicago Photo-Engravers’
Local No. 5 includes benefits to members who are sick.
Eligibility for benefits.—One year’s membership and payment of
out-of-work assessments are required for eligibility to benefits under
the plan.
To be eligible to benefits the unemployed member must report to
the secretary of the local in person on Tuesday between 9 a. m.
and 4 p. m., and on Saturday before noon. I f a member secures
work at a job outside the trade, the unemployment committee is re
quired to investigate and determine whether he shall be entitled to
the unemployment benefit; in no case may the combined salary and
benefits exceed the minimum scale. I f a member works at his trade
for four days in a week he forfeits his benefits for that week; if for
less than that time, one-fourth of the week’s benefit is deducted for
each day he works at his trade.
Benefits.—Under the original plan benefits were fixed at $30 per
week for all members complying with the rules governing the fund,
but the benefit was reduced to $25 recently. However, conditions
have permitted the payment of only $20 per week.
Benefits begin at the end of second week of unemployment, the
second week being paid for. The normal period of benefit is 26
weeks in any 52 consecutive weeks for two successive years; a mem
ber who has received the maximum benefit is not again eligible un
less he has wTorked at photo-engraving for a period of six months
thereafter. Due to the present emergency, however, the benefit pe
riod has been extended indefinitely.
Administration.—The fund is administered by a committee of five
members appointed annually by the president and including in their
number the business agent of the local.
Method of financing flan.—The fund is financed by assessments
made on the oasis of need, as recommended by the unemployment
committee. The fund has always had a surplus, with no particular
amount stipulated.
Statistics of operation.—Statistics of operation under the plan are
shown for 1922 to 1930 and January to May, 1931, in Table 47:
T
able
4 7 . — Operation of unemployment and sick benefit plan of Photo-Engravers’
Union No. 5, Chicago, 1922 to 1930 and January to M a y , 1931
Year
19221.
1923 i
19241.
19251.
1926 i.
19271.
1928..
1929..
Num
ber of
pay
ments
2,698
2,126
2,911
3,360
2,945
2,803
2,447
4,014
Total
benefits
paid
$36,766.50
19.012.00
29,260.35
52,716.11
47,348.80
39,013.50
63.849.00
107,624.40
Average
benefits
paid
Year
$13.63
8.94
10.05
15.69
16.08
13.92
26.09
26.81
1930.........................
1931:
January______
February_____
March_______
April_________
M ay____ _____
Aver
age
bene
fits
paid
Num
ber of
pay
ments
Total
benefits
paid
9,742
$276,450.67
$28.38
1,393
1,346
1,416
1,363
1,630
40,570.00
36,170.50
26,248.80
24,862.55
27,847.85
29.12
26.87
18.54
18.24
17.08
1 Data from American Federation of Labor, Unions Provide Against Unemployment, Washington, 192%
TRADE-UNION' PLANS
123
General experience.—The benefit plan is believed by union officials
to have had a good moral effect upon the membership, in that it has
strengthened its resistance to the tendency to upset existing wage
standards.
When the fund was first established it was financed by assessment
of 50 cents per week per member, but this was found insufficient and
extra assessments have been levied from time to time.
The union feels that the amount of the benefit has been too large
and action has been taken toward a permanent reduction in amount
of benefit to $25 weekly.
Ordinarily there are very few members unemployed at the end of
benefit period, but during the present depression the list of unem
ployed members has remained fairly constant.
The standard hours of the industry are 40 per week for the re
mainder of the period during which the agreement will remain in
force, i. e., until 1934. The 40-hour week has only recently been
adopted8 as an aid in absorbing into the industry the unemployed
members.
Under normal conditions there is no limit to overtime, but at
present no overtime is being worked. About 60 per cent of the
members are working short time, some working as few as 30 hours
per week.
Photo-Engravers’ Local No. 13, Cincinnati, Ohio
The permanent unemployment-benefit plan of the Cincinnati
Photo-Engravers’ Local Union, started in 1916, was supplemented by
an emergency plan in November, 1930, for the purpose of meeting
the increasing demands of unemployed members.
Permanent Unemployment Fund
Eligibility for benefits.—To be eligible to the plan a journeyman
member must have been a member of the local for six months and in
good standing for that period.
The unemployed member must report to the corresponding secre
tary, through whom all vacancies are filled, and as the secretary has
charge of employment, no regular reporting is necessary. I f a mem
ber works at a trade other than his own, he does not ordinarily for
feit his unemployment benefits; however, this provision is subject to
some modification if a member obtains regular and remunerative
work in some other line.
Benefits.—Benefits are payable at the rate of $12 per week for the
first 12 weeks and $6 per week for the next 12 weeks. Benefit pay
ments begin at the end of the second week of unemployment, at which
time payment is made for the two weeks. After having received
benefit for the maximum of 24 weeks, 12 months must elapse before a
member again becomes eligible for benefit. The member must also
have worked six months between the last benefit payment and time of
application for benefit.
8 Reduced from 44 hours.
65655°—31------9
124
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Administration.—The fund is administered by the secretary-treasurer of the local under the supervision of the executive board.
Method of financing flan.—The fund is financed by an assessment
of 50 cents per month on the employed members. For the purpose of
levying this assessment a member is considered employed it he works
two days per week. If a member works less than six days a month,
he is relieved from paying local dues and assessment for that month
and remains in good standing.
Statistics of operation.—Table 48 shows the operation of the plan
since 1923 :
T able
48.— Operation of unemployment-benefit plan of Photo-Engravers1 Local
No. 13 , Cincinnati, 1923 to 1980 , and January to March , 1981
Number
Member of mem Total bene
ship of
bers re
fits paid
ceiving
union
benefits
Year
1923 i....................................................................
1924 1....................................................................
1925 i....................................................................
1926 1....................................................................
1927—..................................................................
1928.....................................................................
1929_........................... ........................................
1930........................ .............................................
1931 (January to March)____________________
160
161
180
192
195
18
16
8
12
15
8
6
236
17
$854.00
1,145.00
635.00
724.00
1,400.00
559.00
309.00
3.693.00
1.372.00
Average
benefit
paid
$47.44
71. 56
79.38
60.33
93.33
69.88
51.50
102. 58
80.71
Balance in
fund at end
of period
$3,891.00
4.651.00
1.909.00
312.00
i Data from the American Federation of Labor, Unions Provide Against Unemployment, Washington,
1929.
a Approximate.
General experience.—Until the past year few members were still
unemployed at the end of the benefit period, even though until
November, 1930, benefits were payable for only 12 weeks in any year.
At that time the benefit period was extended 12 weeks, and an
emergency plan (described in the section following) was adopted.
Notwithstanding this, some of the members are still unemployed at
the end of the benefit period.
In 1916, when the plan started, each journeyman member was as
sessed $1 per week until the fund reached $5,000, when the assess
ment was reduced to $1 per month. After a few years the assessment
was reduced to 50 cents per month. The depression has placed quite
a burden on the fund. The assessment has been increased, and also
the sum of $1,000 was added to the fund instead of using it for the
customary annual banquet.
No further changes are contemplated in amount or duration of
benefits.
No change has been made in the normal full-time week, as this is
fixed in the international union’s agreement which is effective until
the end of 1934. Not much change has been made in respect to over
time work. When necessary the regular men work overtime. How
ever, there is a tendency to call in extra men whenever possible rather
than work overtime.
Emergency Benefit Plan
In addition to the permanent unemployment-benefit plan of the
local, a temporary emergency plan was adopted in November, 1930,
TRADE-TJNION PLANS
125
for the purpose of meeting the increasing demands of unemployed,
members.
Eligibility for benefits.—A member eligible for benefits under the
permanent plan is also entitled to benefits under the emergency plan.
Benefits.—The benefits are paid at the rate of $14 per week, subject
to a maximum of $138 during a 12-month period. These payments
are in addition to benefit payments under the permanent plan and
unemployed members may draw benefits from both plans to the
amount and for the period established.
Administration.—This emergency fund is administered by the
Welfare Association of the Cincinnati photo-engravers’ local through
its treasurer.
Method of financing flan.—The plan is financed by a voluntary
contribution of $2 per week from each employed member. During
November and up to December 13,1930, the contribution was 50 cents
per week per member. The $2 per week contribution began December
13,1930. Any member working 32 hours or less per week contributes
$1 per week.
Statistics of operation.^-In December, 1930, 21 members received
$398 in benefits. In January, 1931, 18 members received $1,274; in
February, 25 members received $896; and in March, 12 members
received $610.
There was a balance of $900 in the fund at the end of March, 1931.
Photo-Engravers* Local No. 7, Philadelphia, Pa.
The Philadelphia Photo-Engravers’ Local No. 7 pays a sick and
an unemployment benefit from the same fund.
The unemployment plan was established in 1917.
Eligibilityj for benefits.—To be eligible for unemployment benefits
a member must be in good standing in the local and must have
worked under its jurisdiction for a period of not less than six
months. Any unemployed member making application for benefit
must appear in person at the first regular executive board meeting
following the loss of employment.
A check is kept on unemployment, as all jobs are given out through
the employment bureau of the union. I f a member secures work out
side his own trade, it does not affect his unemployment benefit. I f
he gets one day’s work at his trade, he loses one-fourth of his benefit;
if two days’ work, he loses one-half the amount of benefit; if three
days’ work, he loses three-fourths of the benefit; and if he works four
days at his trade, he receives no unemployment benefit.
Benefits.—Benefits are paid at the rate of $20 per week after a
waiting period of one week. The first benefit payment is made at
the end of the second week of unemployment. The normal maximum
period of benefit is 20 weeks, and a member who has received benefits
for that period is ineligible for further benefits until he has been
employed for 26 weeks. The executive board, however, has authority
to extend the benefit period indefinitely.
Administration.—The benefit fund is administered by the execu
tive board of the local.
Method of finmicing plan.—The fund is derived from special as
sessments, the amount depending upon the amount expended in
126
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
benefits. The assessment for March, 1931, was $14 for members
working full time.
Statistics of operation.—Table 49 shows the operation of this
local’s plan since 1923:
T able
49.— Operation of unemployment-benefit plan of Photo-Engravers’ Local No. 7,
Philadelphia, 1923 to 1930 , and January to March,, 1931
Year or month
192 3
.
192 4
.
192 5
............ .
1928.............................
192 7
.
192 8
.
192 9
.
193 0
1931:
January (5 weeks)..
February (4 weeks)
March (3 weeks)...
i Monthly average.
Mem
bership
of
union
Num
ber of
mem
bers re
ceiving
bene
fits
469
484
518
565
600
613
617
633
61
92
140
130
206
208
367
J 55
$3,000.00
4.385.00
6.502.50
5.840.00
10,082.00
8.657.50
19,520.00
41,804.40
$49.18
47.66
46.45
44.92
48.94
41.62
53.02
163.15
$2,563.71
2,367.88
3,955.29
5,338.73
5,461.17
5,767.11
8,241.91
8.232.19
632
634
630
87
82
7.767.50
5.895.00
4.487.50
89.20
71.89
54.73
6.890.19
7,834.69
9,376.44
Total
benefits
paid
Average
benefit
paid
Balance in
fund at end
of period
Figures are kept on monthly basis and would not agree with figures on yearly basis»
General experience.—Many members are still unemployed at the
end of the 20-week period.
The effect of the depression on the benefit plan has been to increase
the assessments upon the employed members. Up to and including
the year 1924, it was the policy of the local to maintain a reserve
fund of $2,500. In 1925, the amount to be maintained in the reserve
fund was raised to $3,500. No changes in the plan are contemplated
at the present time.
Forty-four hours is generally considered a regular week, but
through a graduated plan all commercial plants are changing from
the 44-hour week to the 40-hour week. Many plants are working
fewer than the regular hours due to lack oi work. The custom
has been to employ the regular workers on overtime work unless
a large amount of overtime was required when temporary workers
would be employed. There has been no change in this custom since
the beginning of the depression period.
Photo-Engravers’ Local No. 1, New York City
The Photo-Engravers’ Union, Local No. 1, of New York City,
amended its constitution in 1922 to provide unemployment benefits,
but unemployment benefits had been paid before this date by spe
cial action of the union. The benefit plan was adopted in August,
1922.
Eligibility for benefits.—The provision that a member was entitled
to unemployment benefits after one year’s membership in the local
was amended October 31, 1930, to provide that a member having
continuous membership in the local for two years is entitled to
unemployment benefits. This, however, does not apply to appren
tices who may receive benefits in the first year of their apprentice
127
TRADE-UNION' PLANS
ship. The amendment affects only those who may come into the
New York jurisdiction after October 31, 1930. Unemployed mem
bers are required to report to the union at least three times during
the week between the hours of 10 a. m. and 1 p. m. Employment
at another occupation does not disqualify a member for receipt of
benefits.
Benefits.—-Unemployment benefits of $15 per week are paid to
members of two and less than three years’ membership; $20 per
week to those having three and less than five years’ membership;
and $25 per week for members of five years’ standing. Advanced
apprentices receive benefits of $18 per week; fourth-year appren
tices, $12 per week; third-year apprentices, $10 per week; secondyear apprentices, $8 per week; and first-year apprentices, $6 per
week.
Benefits begin after two week’s unemployment, the member being
paid for the second week. The benefit plan provides that unem
ployment benefits shall be paid for a period not to exceed 16 weeks
m any continuous 12 months. An emergency measure was adopted,
effective the first pay day in November, 1930, extending the benefit
to not more than 26 weeks in any continuous 12 months. The ex
tension of or additional unemployment benefits, however, are to be
paid to members only upon recommendation of the executive board
and approval by the members at a regular meeting of the union.
Administration.—The benefit fund is administered by three officers
of the local—treasurer, secretary, and business agent.
Method of financing plan.—The unemployment fund is maintained
by assessments levied for that purpose. The plan calls for a reserve
fund of . $50,000. Should the fund fall below $35,000, a general
assessment of $1 per member per week is to become immediately
effective and is to remain in effect until the reserve fund reaches
$50,000. Members are now assessing themselves $6 per week to make
possible the payments of benefits at the rate of $25 per week.
Statistics of operation.—Statistics as to the number of members
of the union and the number receiving benefits, the total and average
benefits paid, and the balance in the fund at the end of the year or
month from 1927 to March, 1931, are shown in Table 50:
T able
50.— Operation of unemployment-benefit plan of Photo-Engravers1 Local
No. l t New York City , 1927 to 1980 , and January to March , 1931
Year or month
1927............................. ........................................
1928......................................................................
1929_______________________________________
1930......................................................................
1931:
January._________ ___________ ____ ____
February__
_____________________
March________________________________
Total
Number
number of mem
of mem bers re
bers in
ceiving
union benefits1
Total
benefits
paid
2,427
2,520
2,614
2,687
272 $54,614.50
298 44.069.25
241 36,934.50
398 176,008.25
2,693
2,698
2,702
402
528
462
40.644.25
35.803.25
36,914.00
Average
benefit
paid
Balance in
fund at end
of period
$200.79
147.88
153.26
442.23
$36,583.44
33,499.69
30,200.44
33,265.05
101.11
67.81
79.80
85,239.21
i During 1927, 1928, and 1929 unemployed members received benefits from 1 to 16 weeks each; during
1930 and the first four months of 1931, they received benefits from 1 to 40 weeks each.
128
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
General experience.—It is generally admitted that the unemploy
ment benefits are a great help, although they are not sufficient to
take the place of earnings through regular employment. In cases
of serious need the local extends its relief, paying even larger amounts
than the regular weekly benefit. Extra assessments have been neces
sary to maintain the fund during the period of increasing unemploy
ment. A total of 521 members are reported to have been unemployed
on June 1,1931.
No method so far has been devised for the elimination of overtime,
because of the nature of the work. Up to 1930 the working hours
per week were 44; in that year an agreement was reached whereby
the hours were reduced to 40 for three months in the year, and in
1931 for four months in the year.
Photo-Engravers’ Local No. 3, Boston, Mass.
The unemployment-benefit plan of the Photo-Engravers’ Union,
Local No. 3, of Boston, Mass., was started in the year 1922.
Eligibility for benefits.—To be eligible for the benefits of the plan
an applicant must have been a member in good standing for six
months preceding date of unemployment, and unemployment must
not be due to the fault of the member. An unemployed member
must report at the office of the local and sign the roll twice a week,
but not on two consecutive days. I f he works at a job other than his
own trade, his case is brought before the executive committee and the
committee decides if a member shall lose his unemployment benefit.
I f he gets extra work at his trade, he loses one-fourth of his benefit
for each day he works.
Benefits.—Unemployed journeyman members receive an unemploy
ment benefit of $20 per week. The benefit begins after two weeks
of unemployment, but the member is paid for the second and succeed
ing weeks. Benefits are paid for 26 weeks in any year. In some
cases this period has been extended by vote of the members. Unem
ployed apprentices are sometimes paid benefits, the length of ap
prenticeship and conditions governing.
Administration.—The fund is administered by the executive of the
local. The committee passes upon the applications and payments are
made by the business manager.
Method of financing plan.—Under the agreed plan an assessment
of $1 a week was levied upon each member. This was temporarily
increased to $2 per week in January, 1931. The plan is to have a
minimum of $5,000 in the relief fund, with a maximum of $10,000.
I f the fund reaches the maximum, assessments are to cease until the
fund drops to the minimum of $5,000.
Statistics of operation.—Data as to membership of the union, bene
ficiaries under the unemployment-benefit plan, total and average
benefits paid, and balance in fund each year from 1927 to 1930 and
the first three months of 1931 are shown in Table 51:
129
TBADE-UNION PLANS
T able
51.— Operation of unemployment-benefit plan of Photo-Engravers’ Local No.
8, Boston,, Mass., 1927 to 1930, and January to March, 1931
Year or month
1927......................................................................
1928......................................................................
1929........... i .........................................................
1930
__
__
_ __
1931:
January (5 weeks)___ . . . . . . . . . __ ______
February (4 weeks)__________________
March (5 weeks)______________________
Total
Number
number of mem
of mem
bers
bers in receiving
union
benefits
Total
benefits
paid
Average
benefit
paid
292
302
321
325
12
13
15
47
$1,105.00
1.287.00
2.080.00
11,024.00
$92.83
99.00
138.67
234.55
320
322
321
40
43
43
3.712.00
3.280.00
3.519.00
92.80
76.28
61.84
Balance in
fund at end
of period
$8,219.43
7,156.55
5,374.94
6,653.06
(l)
(i)
0)
i Not available.
General experience.—The benefit plan formerly met the unemploy
ment situation fairly well. Since the beginning of the depression,
however, many members are unemployed at the expiration of the
benefit period, and the benefit period has been extended in some
instances. Each case is taken up at the meeting of the local and
passed upon by the members.
The depression caused an increase in the weekly assessment, but the
plan will be continued. There has been no change in the amount or
period of benefits paid except for the extension of the period in
special cases, as noted above, and no changes in the plan are
contemplated at present.
The handling of overtime work depends on the individual shop.
Due to the character of the work, some shops prefer having regular
employees perform any necessary overtime work, while other shops
put on extra help rather than have the regular crew work overtime,
and have made no change since the depression. The hours of labor
are now 44 hours a week, with a 40-hour week during July, 1931,
June, July, and August, 1932, May to October, 1933, and January to
December, 1934. Thus the 40-hour week is to be gradually extended
until in 1934 it will cover the whole year.
Photo-Engravers’ Local No. 24, Cleveland, Ohio
The unemployment-benefit plan of Photo-Engravers’ Union, Local
No. 24, of Cleveland, Ohio, was started in January, 1923.
Eligibility for benefits.—To be eligible to receive unemployment
benefits a member must have been affiliated with the local for one
year. His unemployment must be due to business depression or
reasonable causes not due to incompetencv or misconduct. A mem
ber who leaves the jurisdiction of the local for more than three
months and returns within six months from the time of leaving is
not entitled to unemployment benefits until three months after he
deposits his traveling card and is employed for at least five weeks.
I f a member returns after 6 months and in less than 12 months, he
is not entitled to benefits until he has been a member again for 6
months and has been employed for at least 13 weeks.
An unemployed member must file an application with the unem
ployment committee for .investigation and recommendation. I f the
130
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
application is refused by the committee, the member may appeal to
the general membership at a regular or special meeting. While un
employed the member must report to or keep in communication with
the special secretary. There is no specific provision about a member
receiving benefits if working at other than his own trade, but if the
member had a substantial job outside the trade the special secretary
would withhold benefits. I f a member works on a whelp-out job,
one-fourth of the week’s benefits are deducted for each day so
working.
Benefits.—At the present time journeymen are paid $35 per week
unemployment benefits and apprentices are paid $10 per week. The
benefit payment begins at the end of the second week of unemploy
ment, but the member is paid for the second week, no benefit being
paid for the first week out of work. Benefits are paid for 16 weeks,
and upon application a member may receive payments for an addi
tional 4 weeks, or a total of 20 weeks during a 12-month period. The
20 weeks’ maximum benefit need not be consecutive weeks.
Administration.—The fund is administered by a special secretary
appointed for that purpose.
Method of financing plan.—At present each member working 32
hours or more a week is assessed $2 per week.
Statistics of operation.—Table 52 shows the total membership of
the union, the number of beneficiaries under the plan, the total and
average benefits, and the balance in the fund, 1927 to 1930, and
January to April, 1931:
T a b le
52.— Operation of unemployment-benefit plan of Photo-Engravers1 Local No.
24, Cleveland, Ohio, 1927 to 1930, and January to April, 1931
Year or month
1927......................................................................
1928.....................................................................
1929......................................................................
1930-....................................................................
1931:
January____________ . . . . _______________
February_________ _____________________
M arch________________________________
April (2 payments)_____________________
Number
of mem
Total
number of bers re
members ceiving
benefits
Total
benefits
paid
Average
benefit
paid
Balance in
fund at end
period
227
243
240
243
5
7
11
30
$216.00
360.00
852.00
11,761.00
$43.20
51.43
77.45
392.03
$4,525.20
4,405.26
3,639.92
3,868.33
243
243
243
243
13
17
14
8
1,424.50
1,486.25
950.00
417.50
109.58
87.43
67.86
52.19
9,054.03
9,416.31
10.302.64
11.086.64
General experience.—When the plan was started, each member of
the local was assessed $1 per month until a fund of $5,000 was
created. This was accomplished in about three years, when the
assessments ceased. The plan of financing provided that when the
fund dropped to $2,000 the assessments would be renewed and con
tinued until the fund again reached $5,000. This plan operated
successfully until the beginning of 1930, when there was consider
ably more unemployment and an increase in benefits paid, and to
meet this emergency $5,000 was taken from the “ defense fund ” of
the union. This amount was soon exhausted, and the local levied
an assessment of $2 per week on each member working 32 hours or
more a week. For a short time the assessment was increased to
TRADE-UNION PLANS
131
$3 per week, but later was reduced to $2 per week, which amount is
still being assessed and will be continued to meet any emergency,
although the fund is now double the required amount of $5,000.
While members of the local have not remained unemployed be
yond the benefit period, some such cases are anticipated soon and
arrangements are now being made to provide additional relief if
needed. So far, no special benefits have been paid, but should they
be needed it would be met by voluntary contributions.
The depression has made the calls for relief more numerous, and
this has been met by increasing the amount of the benefit and ex
tending the benefit period. Benefits were increased from $12 to $20
per week in November, 1930, and as an emergency measure the
benefits were increased from $20 to $35 per week on March 16, 1931.
It is contemplated extending the benefit period with the same rate of
benefit or perhaps a lower rate.
Overtime is worked when necessary by the regular men and no
change has been made in this respect. The nature of the work is
such that an extra man for overtime work would not be feasible.
There has been no recent change in working hours per week except
as provided in a 5-year agreement in job offices, that the number of
months when no Saturday work will be required shall be gradually
increased until 1934, when no Saturday work will be required and
the working week will be 40 hours during all 12 months of the year
instead of 44. In newspaper offices, the working hours are 7Ys
per day or 44 hours per week, which includes 30 minutes for lunch
each day.
Photo-Engravers* Local No. 6, Minneapolis-St. Paul, Minn.
The unemployment-benefit plan of Local No. 6, Photo-Engravers’
Union, was started in 1924, not so much on account of unemployment
at that time, but to establish a definite plan of relief for members
who might become unemployed.
Eligibility for benefits.—To be eligible for unemployment benefits
the member must have been a member of the local, in good standing,
for one year and must have worked at his trade continuously for six
months preceding his application for benefit. A member must make
application immediately upon becoming unemployed. Such appli
cation and acceptance, in person, of check each week is considered
sufficient proof of unemployment. I f members work at other jobs
during the benefit period, the question as to whether they will lose
their rights to benefits is left to the executive board.
Benefits.—Unemployment benefits are $20 per week. The benefit
payments begin two weeks after date of application and are limited
to 12 weeks in any one year. Special benefits have been paid to
members in distress after having exhausted their right under the
regular benefit plan, but only after the matter was passed upon by a
vote of the local body.
Administration.—The fund is administered by an executive board
elected by a vote of the members of the local.
Method of financing plan.—The plan is financed by an assessment
of $2 per month per member of the local.
132
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Statistics of operation.—Table 53 gives statistical data as to the
operation of the unemployment benefit plan from 1925-26 to 1929-30:
T able
53*— Operation of unemployment-benefit plan of Photo-Engraversf Local No. 64
Minneapolis-St. Pauly 1925-26 to 1 9 2 9 -8 0 .
Year
1925-26...............................................................................
1926-27...............................................................................
1927-28................. - ...................... ..................... ..............
1928-29 ...................................... ..........................- ...........
1929-301.............................................................................
Total num Number of
ber of mem members Total bene Average
receiving
bers of
fits paid benefit paid
benefits
union
58
70
75
86
70
3
9
(0
0)
10
$564.00
634.00
0)
0)
1,415
$188.00
70.44
14.50
1 Not reported.
a Data are from Proceedings of Thirty-first Annual Convention of the International Photo-Engravers^
Union.
*
General experience.—The average number of members still un
employed after the expiration of the benefit period has been 15 dur
ing the period of depression.
Until about November 1,1930, the fund created under the existing
plan was adequate to meet the demands upon it without serious
consideration of an extra assessment. Owing to the drain upon the
fund brought about by the depression the executive board contem
plates making an extra assessment at an early date, but the amount
thereof has not been determined.
Temporary workers are employed during the busy season. No
change in this respect has been made since the depression. The
weekly working hours are the same as before the depression—44
per week.
Photo-Engravers* Local No. 8, San Francisco, Calif.
The San Francisco Photo-Engravers’ Union, Local No. 8, adopted
a temporary unemployment-benefit plan in May, 1929. Measures
are being formulated whereby it is hoped to make the plan per
manent.
Eligibility for benefits.—All members who held membership in
the local prior to May 1,1929, are eligible for benefits. Unemployed
members must report to union office three times a week. I f a mem
ber secures work at other than his own trade and earns less than
the amount of the unemployment benefit he receives the difference
between the amount of his weekly earnings and the benefit.
Benefits.—From May 1, 1929 to June 17,1930, the amount of the
unemployment benefit was $35 a week, but since the latter date it
has been $25 a week. Benefit payments begin after two weeks of
unemployment.
Administration.—The plan is administered by the executive com
mittee of the local.
Method of financing plan.—The plan is financed by an assessment
of 10 per cent of the earnings of all employed members.
Statistics of operation.—The large benefit payments shown in
Table 54 were reported as being due to the fact that after the
133
TRADE-UNION PLANS
strike many of the older members were not only unable to get work
at their trade but could not find employment of any kind.
T a b l e 5 4 . — Operation of unemployment-benefit plan of Photo-Engravers’ Local
Sy San
Francisco,
1929 and 1930,
Year or month
1929....................................................................................
1930............... ........... ................................. ......................
1931:
January__ - __ — — _— __ —— ______ _________
February_____ - _______________________________
March_____________________________ - _________
and January to March ,
1931
No.
Total num Number of
ber of mem members Total bene Average
bers in
receiving
fits paid benefit paid
union
benefits
184
184
184
50 $35,155.70
40 31,274.85
0)
0)
0)
$703.11
781.87
2,217.65
2,178.95
1,864.50
i Not available.
General experience.—This temporary plan was adopted because of
conditions brought about by a strike. Measures are being formulated
to make a permanent plan, and changes are contemplated with respect
to financing, eligibility of members to participate in benefits, and
the benefit period.
The working week remains the same as for some years past—44
hours—but many shops furnish work for much shorter periods, some
shops now working as few as 30 hours a week.
Photo-Engravers’ Local No. 2, Baltimore, Md.
The Baltimore Photo-Engravers’ Union, Local No. 2, had no defi
nite plan for the payment of unemployment benefits in operation
before the present depression. The one now in effect is being oper
ated as an emergency measure to give relief where most needed.
The first payment for unemployment benefits was made in 1929.
Eligibility for benefits.—All members in good standing are eligible
for benefits. Members out of work must report to the executive board
of the local once a week in person, and continue to report once a week
as long as unemployed. An unemployed member does not forfeit
unemployment benefits if he works at other than his own trade.
I f he obtains work at his trade for one day a week he loses one-fourth
of the benefit; if he gets two days’ work he forfeits one-half of the
benefit; if he gets three days’ work he forfeits three-fourths of the
benefit; and if he has four days’ work he forfeits the full benefit for
that week.
Benefits.—Unemployed members receive $15 a week benefit. The
executive board determines when benefit payments begin, each case
being considered on its merits. In some cases the benefit begins as
soon as unemployment is reported, but those most able to stand un
employment are required to wait a longer time. It was originally
intended that benefits would be paid for a period of 10 weeks, but
this plan has not been strictly followed. Each individual case is
considered at the meetings of the local, and decided on its merits.
134
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Administration.—The fund is administered by the local executive
committee. This committee passes on all cases and payments are
made by the financial secretary.
Method of financing flan.—The fund is financed by general assess
ment on working members, varying according to the needs of the
members out of work. At present the assessment averages about $2
per week plus one-third of all overtime. No effort has been made to
establish a reserve fund.
Statistics of operation.—Data as to the operation of the plan during
the time it has been in effect are shown in Table 55.
T able
55.— Operation of unemployment-benefit plan of Photo-Engravers* Local No.
2 y Baltimore, M d., 1929 and 1930, and January to April , 1931
Year
1929 ______________________________________________
19301 _______ _____________ _____________________
1931 a
_ ___ _______________________________ ___
Total num Number of
ber of mem members Total bene Average
receiving
fits paid benefit paid
bers of
union
benefits
104
102
102
17
14
17
$1,490.00
1.510.00
2.231.00
$87.65
107.80
131.24
* Plan was not in operation full year.
1January, February, March, and 2 weeks in April, figures by months not being available.
General experience.—The effect of the depression has been in
creased assessments to meet benefit payments to the unemployed
members. No definite changes are contemplated, and the local will
if possible, continue the present plan.
The custom in regard to overtime has been to work the regular
crew rather than put on temporary workers. This is due chiefly to
the character of the work and the familiarity of the regular em
ployees with the type of work required. No marked change in this
respect has occurred since the depression, nor has there been any
change in the regular working hours, which are 44 per week.
Photo-Engravers, Local No. 19, Milwaukee, Wis.
The unemployment-benefit plan of Milwaukee Photo-Engravers’
Union Local No. 19, has been in effect less than a year. The plan
was started on April 1, 1930, when the first contribution was made.
Payment of benefits began on October 1, 1930.
Eligibility for benefits.—The plan provides that a member of the
union shall have contributed to the fund for six months before be
coming eligible for benefits. The executive board was given the
power to waive this requirement, and on November 15, 1930, did
waive it in order to take care oi a larger number of unemployed
members. In one instance a member who had paid into the fund for
five and one-half months became unemployed and was paid benefits,
while in another case a member who had just finished his apprentice
ship, and had not paid anything into the fund, was paid benefits
when he became unemployed. Thus in practice all members are eli
gible except the employer-worker members who have their own
TRADE-TJNION PLANS
135
cooperative shops and neither pay into the fund nor expect benefits
from the fund.
Any member in good standing for one year who leaves the juris
diction and returns within six months is eligible for benefit. Mem
bers unemployed through sickness or accident are covered as well as
those unemployed by reason of lack of work. Members unemployed
through negligence or personal fault are not eligible for benefit.
An unemployed member reports to the business agent of the local
as soon as he is laid off. The shop chairman in the shop from which
the member was laid off also reports to the business agent. Each
case, where an employed member gets other work during the benefit
period, is decided on its own merits, but if the member goes to work
in an open shop he is barred from receiving benefit payments. I f a
member receives substitute jobs in his own trade, he loses one-fourth
of his weekly benefit for each day or night he works during a given
week.
Benefits.—The benefit paid is $10 a week; advanced apprentices
are paid $5 a week. Benefit payments begin at the end of the second
week of unemployment, the second week being paid for. I f a mem
ber is employed on a regular, permanent job, he must observe this
waiting period each time he becomes unemployed; if he has a tempo
rary job, the one waiting period suffices. An unemployed member
is entitled to benefits for 15 weeks each year. Because ox the serious
ness of unemployment and by virtue of the discretionary power given
the executive board, payments to some unemployed members have
been continued beyond the 15 weeks provided for in the plan.
Administration.—The fund is administered by the executive board
of Local No. 19,‘which board is elected annually. Any member who is
refused benefit by the executive board may appeal to the union at
the next regular meeting. Members seeking benefits must make ap
plication to the business agent immediately and deposit dues books.
Payments are made weekly by the treasurer of the local—by mail if
member is out of town, and to the unemployed member direct if he
is in town. In all cases a voucher must be signed and given to the
treasurer by recipient of benefit. This voucher must be signed also
by the business agent.
Method of financing flam..—The plan is financed by assessments on
the members; those working 35 hours or more are assessed $2.50 per
week, while those working less than 35 hours a week are assessed
$1 per week. Unemployed members and members who are employers
and workers operating their own cooperative shops are not assessed.
The plan provides for a reserve fund of $5,000, which it has not
been possible to build up in the short time that the plan has been
in operation.
Statistics of operation.—The number of members receiving benefits
under the unemployment-benefit plan, the total and average benefits
paid, and the balance in the fund each month from October, 1930, to
May, 1931, are shown in Table 56:
136
T
able
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
5 6 . — Operation of the unemployment-benefit plan of Photo-Engravers' Local
No. 191 Milwaukee
Year and month
1930:
October _____________________________
November.— _________________________
December_____________________________
1931:
January_____ *_________________________
February______________________________
M arch________________________________
April ________________________________
May
___ __ _____ _________._______
Total
Number
number of mem
bene
of mem bers re Total
fits paid
ceiving
bers of
union
benefits
1165
1165
1165
5
19
25
$225.00
601.00
810.00
1165
1165
*165
165
165
26
20
18
18
18
905.00
677.00
610.00
455.00
455.00
Average
benefits
paid
Balance in
fund at end
of period
$45.00
31.63
32.40
32.50
33.85
33.88
25.28
25.28 "”
$1,436.00
1,967.00
2.430.00
2.075.00
2.607.00
3.556.00
"5," m i l
i Of this number about 28 are employer-workers owning and operating their own shops and neither con
tributing to nor receiving benefits.
General experience.—During the first three weeks that unemploy
ment benefits were paid the payment was $20 a week; it was then
reduced to $10 a week as a temporary measure in order that more
members might be helped and has remained at $10 since then. Some
members hare been unemployed for the whole period since the
benefit plan was put into operation, and some have been paid benefits
for as long as seven months instead of the 15 weeks provided for
in the plan.
Origmallv the plan called for an assessment on all employed
members ox $1 a week and an assessment of 50 cents a week upon
advanced apprentices until the fund on hand amotfnted to $5,000,
at which time assessments would be discontinued until the fund fell
below $2,500, when the assessments would be renewed. In November,
1930, because of the heavy demands made upon the fund, the union
voted to assess employed members an additional $1.50 a week, thus
making a total assessment of $2.50 a week. In April. 1931, the plan
was again revised to provide that only those members who were
working 35 hours or more a week should be requited to pay the extra
assessment of $1.50 weekly. At the present time 20 members are
working less than 35 hours a week and therefore pay only $1 per
week into the fund; 17 are unemployed and not assessed; 100 are
working 35 hours or more a week and pay $2.50 per week; and the
remaining 28 fall in the class of employers and workers operating
their own cooperative shops and neither pay into the fund nor receive
benefits when unemployed. Since the increase in the assessment the
fund has been sufficiently large to meet demands.
There are no changes contemplated in the benefit amount or
period.
In some shops regular employees perform the overtime work,
while in others temporary workers are employed on overtime work.
The union favors the employment of temporary workers so that
such workers may have employment. The employers do not favor
taking on extra help as they are inexperienced in the particular work
at hand and regular employees are more efficient.
^The working week has remained 44 hours in commercial shops
since the plan has been in operation. Under a 6-year agreement now
TRADE-UNION PLANS
137
in force it has been provided that there shall be a 40-hour (5-day)
week for 3 months in the summer of the second year, 4 months in
the third year, 5 months in the fourth year, 6 months in the fifth
year, and for all 12 months in the sixth year. There is a possibility
that the 40-hour (5-day) week all the year round will be adopted
before the expiration oi the agreed-on period, the union taking a
proportionate wage loss and thereby securing work for a larger part
of the membership. In newspaper shops the working week has
remained at 44 hours for day workers and 40 hours for night workers.
Photo-Engravers’ Local No. 11, Indianapolis, Ind.
The Indianapolis Photo-Engravers’ Union, Local No. 11, estab
lished an unemployment-benefit plan about September or October,
1930, but it is still m a formative state.
Eligibility for benefits.—To be eligible for unemployment bene
fits a member must have been a dues-paying member for at least
six months. An unemployed member must report his unemployment
to the officers of the local. The officers investigate, and if they ap
prove, benefits are paid. I f the member works at another job dur
ing the benefit period and earns more than $15 per week, he is barred
from receiving benefits for such week.
Benefits.—From the adoption of the plan to March 1, 1931, unem
ployment benefits were $10 per week. Since March 1 payments have
been at the rate of $15 per week. The benefit begins after four weeks
of unemployment. Wnen the plan was adopted benefits were limited
to 20 weeks, but they are now made for an indefinite period.
Adrrdnistration.—The fund is administered by the two secretaries
and the president of the local.
Method of financing plan.—The plan is financed by assessments
levied on all employed members. The amount of the assessment has
not been definitely decided upon, but has been fixed to meet the imme
diate needs of the plan. To date the amount of the assessment has
averaged about $2 per month per employed member. No reserve
fund has been built up.
Statistics of operation.—No statistics are available, the plan being
still in a formative state. The local has a membership of 110, with
8 members out of work and receiving regular benefits.
General experience.—Previous to the depression no serious unem
ployment had been felt by the local. Although the plan does not
fully meet the needs of tne unemployed members, it is considered
the maximum of which the local is capable at the present time. Sev
eral members were unemployed at the expiration of the contemplated
20-week period and are receiving benefits beyond that period. In
addition to the unemployed, many of the employed members are
working on short-time work, and an increase in assessments would
be very burdensome to many of them.
No change in the amount of the benefit is contemplated, but some
definite action will probably be taken soon regarding the period
benefits may be paid.
The custom as to overtime work has not been changed since the
depression. When much overtime work is necessary extra men are
138
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
used if available; otherwise the regular men do the overtime work.
There has been no change in the number of hours of the regular
working week, but some shops are not working full time.
Photo-Engravers* Local No. 10, St. Louis, Mo.
The St. Louis Photo-Engravers’ Union, Local No. 10, established
an unemployment-benefit plan in March, 1931.
Eligibility for benefits.—To be eligible for benefits a member must
have been in good standing for at least one year. An unemployed
member must apply to the committee or to the secretary. The com
mittee after investigation recommends or disapproves payment of
benefits, such payments being made at the discretion of the com
mittee. It is the policy of the committee that if a member works at
small outside jobs his unemployment benefits are not jeopardized.
If, however, he earned a substantial amount during a week, he would
lose the benefit for that week.
Benefits.—Benefit paid is $15 a week. An unemployed member
applies at the end of two weeks’ unemployment and receives payment
for the third week and thereafter during the unemployment period.
Benefits may be paid for 26 weeks in any 12-month period.
Administration.—The plan is administered by a committee of
three members of the local, one of whom shall be the secretary.
Method of financing plan.—As a nucleus for the unemployment
fund, $1,000 was transferred to it from the local’s defense fund. The
fund is to be maintained by an assessment of 25 cents per day (not
exceeding five days per week) on all employed members. The defense
fund may be called upon to provide further funds in an emergency.
Statistics of operation.—The total membership of the PhotoEngravers’ Local No. 10 is 218, with about 17 members out of work,
which is the largest number of unemployed members the local has
experienced so far. Of the members of the local, 49 are employed
in newspapers offices and the balance in job offices. Since the adop
tion of the unemployment-benefit fund, about $420 has been paid to
about eight unemployed members, but not all the members entitled to
benefits have applied for relief.
General experience.—Because of the newness of the plan the experi
ence has been slight, but it is expected that the present unemploy
ment-benefit plan will be made permanent.
No changes have been made in overtime work since the depression.
When a shop is rushed extra men are used, if it is possible to secure
them ; otherwise the regular men must work overtime. Very little
overtime is worked, however, as the shops are not working full time,
many of them losing from one and a half to two days a week.
Printing Pressmen’s Local No. 51, New York City
The unemployment-benefit plan of the New York Printing Press
men’s Union, Local No. 51, was started in 1927.
Eligibility for benefits.—To be eligible for benefits a member must
have been in good standing for one year. To be in good standing
a member can not be in arrears for dues for more than two months.
An unemployed member must report for roll call at 9 a. m., and must
139
TRADE-TTNION PLANS
sign an unemployment card before noon daily. I f a member works
at any job for two days or more in a week he is not entitled to re
ceive the benefit for that week.
Benefits.—Beginning May 7, 1931, $5,500 will be paid out each
week in benefits, distributed equally among the unemployed mem
bers, the maximum to be paid to any one member for one week,
however, being $15. At present regular unemployed members re
ceive $7 per week, sick unemployed members $5 per week, and pen
sioned members $3 per week.
Benefits begin as soon as unemployment occurs. Originally
the benefit period was for the months of June, July, and August,
during which period an unemployed member was entitled to benefits
for seven weeks. After being paid benefits for four weeks there was
a waiting period of two weeks, and a member was then eligible to
benefit payments for three weeks. Beginning with December 11,
1930, the benefit period was made continuous.
Administration.—The fund is administered by a committee of five
members appointed by the president of the union.
Method of financing plan.—The plan is financed by assessments.
In April, 1931, unemployment conditions showing no signs of im
proving, the union voted to assess each member $24, payable $8 per
'month for three months.
Statistics of operation.—Statistics of operation, as far as avail
able, are given in Table 57:
T
able
57.— Operation of unemployment-benefit plan of Printing Pressmen's Local
No. 51, New York City , 1927 to 1980 , and January to M a y 6 , 1981
Year or month
1927........................................—.....................................
1928............................................ ; .................................
1929—__________ : .........................................................
1930................................................ - ...............................
1931:
J a n u a ry .....__ ____________ ______ ____ . . . . . _
February____________________________________
March.. . . . . ______________________________ - _
April________________________________________
May 1-6 ........................... ....................... ............
Total
members
of union
Number of
benefits
paid
Total
amount
paid
Balance in
fund at end
of period1
3.400
3.400
3.500
3.500
72
2,058
1,451
8,366
$864
24,696
17,412
91,804
$2,000.00
5,800.00
11,500.00
* 6,162.00
3.500
3.500
3.500
3.500
3.500
1,767
1,762
1,727
2,250
488
11,955
11,818
11,505
15,042
3,254
*4,545.04
i Balance in fund after the beginning of 1930 does not always represent the exact amount in the unemploy
ment fund. When necessary, money has been taken from other relief funds.
* Nothing has been paid on the $30,000 borrowed from the defense fund with the exception of about $100
paid by families of deceased members.
General experience.—When the plan was started in 1927, 50 cents
each month was set aside from the union dues of every member for
the maintenance of the fund. This created a fund sufficient to pay
benefits for the years 1927,1928, and 1929.
In February, 1930, unemployment conditions became more serious
and an assessment of $10 per member was voted by the union, to be
paid at the rate of $1 per week for 10 weeks. This assessment
created a fund of $30,000, which was exhausted by August 6, and
$30,000 was borrowed from the defense fund. Benefits were paid
65655°—31----- 10
140
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
for the balance of August and for September, 1930, when the fund
was depleted.
Benefits of $12 per week were paid during June, July, and August
of 1927, 1928, 1929, and through September, 1930, with the excep
tion of two weeks in March, 1930, and the last week in September,
1930 (when the benefit was decreased to $10 per week).
In August, 1930, the membership of the local voted that members
who were receiving old-age pensions, being over 60 years of age and
having been members of the international union for 20 years, should
participate to some extent in the unemployment-benefit plan. It was
voted to pay these members the difference between the $4 per week
old-age pension and the $12 per week unemployment benefit. As a
result of this vote 66 payments of $8 each were made during August,
1930. For the first three weeks in September 714 benefit payments
of $12 each were made to unemployed members and 49 payments of
$8 each to members on old-age pension list. For the last week of
September 277 benefit payments of $10 each were made to unem
ployed members and 24 payments of $7 each to members on old-age
pension list. No benefit payments were made from October 1 to
December 11,1930, as the fund was depleted.
In October a referendum vote further to assess the members was
defeated. Conditions became more acute and, on November 13, 1930,
a vote to assess each member at the rate of $4 per month for five
months was carried. Benefit payments were resumed on December
11, 1930, with the stipulation that not more than $3,000 would be
paid in benefits each week, this amount to be distributed equally
among the unemployed members, provided that no member should
receive more than $15 in any one week.
When benefit payments were resumed on December 11, 1930, it
was decided to add another group to those eligible for unemployment
benefits. Sick members had been receiving $12 per week for 10
weeks and $7 per week for the following 10 weeks. It was decided
that at the end of the 20-week period the sick member should be
considered unemployed and be paid a benefit of $5 every week. Dur
ing December, 1930, 24 payments of $5 each were made to sick mem
bers, 1,419 payments of $8 each to regular unemployed members, and
92 payments of $4 a week to pensioned members.
Beginning January, 1931, the benefits paid have been $7 each to the
regular unemployed members, $3 each to pensioned members, and $5
each to sick unemployed members. The number of payments to
beneficiaries of each class has been as follows:
Regu7av unemployed members:
Payments
January, 1931_______________________________________1,651
February, 1931--------------------------------------------------------- 1,617
March, 1931________________________________________1, 553
April, 1931_________________________________________ 2, 062
May 1-6, 1931______________________________________
452
Pensioned members:
January, 1931_______________________________________
91
February, 1931______________________________________
113
March, 1931_____________________ - __________________ 118
April, 1931____________________ ____________________
151
May 1-6, 1931_______________________________________
30
TRADE-UNION PLANS
141
Sick unemployed members:
Payments
January, 1931______________________________________
25
February, 1931-____________________________________
32
March, 1931_______________________________________
56
April, 1931________________________________________
37
6
May 1-6, 1931_____________________________________
Overtime is not worked by regular men where it is practical to
employ unemployed members, but this is not always possible. The
hours of work have remained the same since 1921—44 per week.
There are a few shops where the 40-hour week, with a corresponding
reduction in wages, has been adopted.
Printing Pressmen’s Local No. 6, St. Louis, Mo.
The St. Louis Printing Pressmen’s Union, Local No. 6, started an
unemployment-benefit plan in 1921. The plan was originally created
to meet the emergency needs resulting from an industrial dispute,
but was continued as an unemployment plan. In 1926 the plan was
discontinued by a vote of the local. During a dull period in 1927
it was revived to afford relief. Unemployment benefits were paid
from November 5 to December 31, 1927, when the plan was again
discontinued until July, 1930, since which time benefit payments
have been continuously made.
Eligibility for benefits.—All members in good standing are eligible
for benefits. No definite rule has been made regarding period of
membership.
The unemployed member must sign the unemployed list, and if he
obtains work he must report it immediately. The local does not re
quire regular reporting, but the member must keep in touch with
tne local office in order that he may be placed at work when possible.
I f a member secures regular work at other than his own trade he
loses his unemployment benefit, but if he works at odd jobs irregu
larly he does not jeopardize his benefit. If an unemployed member
gets one day’s work at the trade and does not earn the amount of the
weekly benefit, he will be paid the difference between the amount
earned and the weekly benefit. I f a member works two days at his
trade he does not receive benefits for that week.
Benefits.—Originally, the plan provided for $5 a week as an unem
ployment benefit, but beginning with February 16, 1931, the benefit
was increased to $7 a week. Benefits begin when a member becomes
unemployed, and continue as long as he is unemployed. The plan
is used during periods of depression, and suspended when work is
available for all members.
Administration.—The fund is administered by the secretary-treasurer, subject to the approval of the executive council.
Method of financing plan.—The method of financing the fund has
been by assessments, the amount depending upon the needs of the
local. Beginning in April, 1931, an assessment of 3 per cent of the
earnings has been levied on all members earning over $10 per week.
Statistics of operation.—Statistics of operation prior to November,
1927, are not available. During the nine weeks, from November 1 to
December 31, 1927, 136 weekly benefit payments were made totaling
$680, or $5 a week to each of the unemployed members. No benefits
142
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
were paid from January 1, 1928, to July, 1930. There is no special
reserve fund.
Table 58 shows the number of members receiving benefits and the
total amount paid, by weeks, from July 26, 1930, to April 18, 1931:
T able
58.— Operation of unemployment-benefit plan of Printing Pressmen’s Local
No.
Year, month, and
week
1930
July 26....... .
Aug. 2_____
Aug. 9.........
Aug. 16-----Aug. 23____
Aug. 30____
Sept. 6.......
Sept. 13___
Sept. 20___
Sept. 27___
Oct. 4.........
Oct. 11.......
Oct. 18....... .
Oct. 25....... .
Nov. 1....... .
Nov. 8....... .
Nov. 15_-__
Nov. 22___
Nov. 29___
Dec. 6........ .
Dec. 13____
6,
St. Louis, July 26, 1930, to April 18, 1931
Number
Total
number of mem
of mem bers re
ceiving
bers in
union
benefits
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
Total
benefits
paid
$75
95
85
105
95
95
100
100
95
105
100
100
90
100
75
140
120
150
180
150
135
Year, month, and
Total
Number
number of mem
of mem bers re
bers in
ceiving
union
benefits
Total
benefits
paid
1930
Dec. 20........
Dec. 27____
348
348
30
27
$150
135
1931
Jan. 3......... .
Jan. 10....... .
Jan. 17....... .
Jan. 24....... .
Jan. 31....... .
Feb. 7_____
Feb. 14.......
Feb. 21........
Feb. 28......
Mar. 7........
Mar. 14___
Mar. 21___
Mar. 28___
Apr. 4_____
Apr. 11____
Apr. 18____
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
348
33
33
31
34
36
41
39
39
39
43
46
45
40
36
41
43
165
165
155
170
180
205
195
307
297
322
365
315
280
252
287
301
General experience.—The plan is used only during emergencies.
When additional funds are required an assessment is levied to
care for the needs. At the plan’s inception an assessment of 25
per cent of the earnings of all employed members was levied. After
11 months the assessment was decreased to 20 per cent of the earnings
and after 6 months to 15 per cent for a 6-month period. The assess
ment was then decreased to 3 per cent of the earnings and continued
at that rate until 1926, when the plan and assessments were discon
tinued. During the depression of November and December, 192Tr
and from July to November, 1930, the plan was financed from the
general treasury. From November, 1930, to February, 1931, an
assessment of 50 cents a week was levied on each employed member.
For February and March, 1931, the assessment was increased to $1
a week per member. The assessment of 3 per cent of the earnings
of all employed members being levied since April, 1931, is sufficient
to take care of all unemployed members of the local. The rate of
benefit paid is so moderate as to discourage any abuse of the plan.
No change in benefit payments is contemplated.
No change has taken place regarding overtime work. During the
busy season when night forces are needed, extra men are employed.
The regular working week is 44 hours, but the shops average four
to four and a half days per week at present.
143
TRADE-UNION PLANS
Printing Press Assistants* Local No. 23, New York City
The unemployment-benefit plan of the New York Printing Press
Assistants’ Union, Local No. 23, was started in 1928.
Eligibility for benefits.—Members are eligible for unemployment
benefits after a membership of six months. An unemployed mem
ber must report to the unemployment headquarters, answer the
roll call at 9 a. m., and sign a card between the hours of 9.30 a. m.
and 11 a. m. on four days of the week. Members may work at such
small jobs as might not be construed as steady employment, or
work that would not interfere with their registration on four days
of the week as out of work, without loss of benefits.
Benefits.—Since July, 1930, the benefit paid has been $15 for five
weeks, followed by $10 a week for the term of unemployment.
Benefits begin immediately upon proof of unemployment, and
the period for which they may be paid is unlimited.
Administration.—The plan is administered by the executive board
of the union.
Method of financing plan.—The fund is financed by assessments,
the amount being determined by a referendum vote of the local.
Since April 27,1931, the assessment has been $2.50 a week for senior
branch members and $2 a week for junior branch members.
Statistics of operation.—Table 59 gives the statistics of operation
for 1928 and 1929 and for six months of 1930:
59.— Operation of unemployment-benefit plan of Printing Press Assist
ants* Local No. 23, New York City, 1928 , 1929, and six months of 1930
T able
Year
1928............................................................
1929............................................................
1930 (6 months)___________ ______ _____
Total
Number
number of of members
receiving
memoers
benefits
in union
2,700
2,600
2,550
443
351
968
Total
benefits
paid
$11,592
10,792
134,475
Average
benefit
paid
$26.17
30.75
128.92
Balance in
fund at end
of period
$4,000.00
2,200.00
996.70
General experience.—Unemployed members received benefits of
$8 a week during 1928 and 1929. The situation became so acute in
1930 that the benefit paid was increased to $15 a week for 13 weeks
and $10 for the fourteenth week.
The benefit period was for 9 weeks in 1928 and 1929, in 1930 it
was changed to 14 weeks, and in July was made unlimited.
As a result of the depression the assessments proved inadequate
and in 1930 a loan of $30,000 was made from the general union
fund to meet unemployment benefit payments. On April 27, 1931,
a meeting was called for the purpose of increasing the assessment
from $1.50 to $2.50 a week for senior branch members and from $1
to $2 per week for junior branch members.
No change is contemplated at present in the rate of benefits paid.
There is not much overtime work done at present. The working
hours are 44 per week for daywork, and 40 tor nightwork. There
has been no change since 1921.
144
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Typographical Union, Local No. 6, New York City
Typographical Union, Local No. 6, of New York City, has for
many years carried on some sort of an unemployment-benefit fund.
Usually this fund was financed by a vote of the union, and the
necessary provision was made for administration of the plan. The
present plan was started in 1924.
Eligibility for benefits.—Any unemployed member in good stand
ing in the union previous to unemployment is eligible for benefit
payments. The unemployed member must register at the employ
ment bureau of the union for five consecutive days between the
hours of 9 a. m. and 12 noon. The member is exempt from signing
on Saturday. Substitutes must apply to the chairman, who shall
certify that they have not worked more than two days during the
fiscal week, beginning on Thursday and ending on Wednesday.
There is no provision in the original plan as to the effect on unem
ployment benefits if a member works at other than his own trade.
A rule adopted March 13, 1931, provides that any member earning
one or two days’ pay during the fiscal week established by the benefit
board shall be entitled to benefit payments according to his length
of membership, as follows:
T a b le
60.—Benefits in case of only 1 day18 or 2 days9 work
Benefit if earning —
Membership of—
4 years and over__________________________________________________________
________________________________
3 years and under 4 years ;______________ _
2 years and under 3 years__________________________________________________
1 year and under 2 years___ ______________________________________________
1 day’s
pay in
week
$14
12
10
8
2 day’s
pay in
week
$7
5
3
1
Benefits.—On March 13; 1931, a rule was adopted fixing the amount
of benefits for members with 1 and under 2 years’ standing at $14 per
week; for members with 2 and under 3 years’ standing, at $16 per
week; with 3 and under 4 years’ standing, at $18 per week; and
members with 4 years’ standing or more, at $20 per week. The
benefit begins immediately. Originally benefits were paid for not
more than 7 weeks out of the 13 within the compensable period,
June 15 to September 15, and for not more than 4 weeks consecu
tively, after which there was an interval of 2 weeks before addi
tional payments were made. The benefit period has been extended
to meet unemployment conditions.
Administration.—The fund is administered by a benefit board of
five members appointed by the president of the union for a term of
two years.
Method of financing plan.—The plan is financed by a regular
assessment of one-half of 1 per cent of the weekly earnings of each
member for 26 weeks, during April, May, June, July, August, and
September, and special assessments when necessary. During Febru
ary, 1931, a special assessment of 3 per cent of the earnings of the
145
TKADE-UNION PLANS
members was levied, which at the beginning of March was increased
to 4 per cent for a period of 12 weeks. From June, 1930, to April,
1931, it was necessary to take $148,105.20 from the reserve fund.
Statistics of operation.—Table 61 gives the statistics of operation,
from the beginning of the present plan in June, 1924, through April,
1931:
T able
61.— Operation of unemployment-benefit plan of Typographical Union,
Local No. 6 , New York City , June 1, 1924, to April, 1931
Fiscal year or month
1924-2 5
1925-2 6
1926-2 7
1927-2 8
......................
1928-2 9
1929-3 0
1930, June to December..................
1931:
January.....................................
February...................................
March.......................................
April.........................................
Total num Number of
ber of mem members
bers in
receiving
union
benefits
9,265
(2)
(2)
(2)
(2)
10,825
(2)
810,631
10,620
(2)
(2)
(2)
(2)
1
(2)
(2)
(2)
4,639
Total bene
fits paid
$29,790
21,154
21,140
28.644
41,400
25.644
155,506
33,672
52,452
61,335
72,264
Average
benefit
paid
(2)
1
(2)
(2)
(2)
?
$15.58
Balance in
fund at end
of period
1
$18,093.52
29,345.08
20,630.18
21,132.49
22,734.33
21,981.41
0)
(2)
<*>
4,427.19
10.76
i Figures are those shown by monthly statement in June of each year. Funds have been interchanged
from various relief funds to some degree, due to acuteness of industrial conditions. According to the rules,
all money in fund at the end of the 6 months’ period of unemployment benefits should be returned to the
general fund, leaving no balance whatever.
Not reported.
General experience.—When this plan was started in 1924 there
were 9,265 members in the local. There was a gradual increase in
membership through 1929. Beginning with 1930, due to business
conditions, a ban was placed on the acceptance of traveling cards,
and the increase in membership was halted, an exception being made
in accepting traveling cards from members returning who had a
record of 5 years’ membership in Local No. 6 in the past 10 years.
In June, 1930, approximately 200 members a week were being paid
unemployment benefits. At present (May, 1931) there are about
1,000 members drawing benefits each week.
In June, 1925, the benefit paid was $12 per week. In July, 1927,
the amount was increased to $14 per week. On October 21, 1928, a
rule was adopted whereby weekly benefits were graded on the basis
of length of membership as follows: Membership of one year, $8;
two years, $10; three years, $12; and four years and over, $14 per
week. The present rates of benefits were adopted March 13, 1931.
While the present depression has been a severe test of the plan
there has been no thought of abandoning it. Special assessments
have been made in addition to the regular assessment of one-half of
1 per cent of the weekly earnings of each member for 26 weeks of
the year. No further changes in amount or period of benefit is con
templated at the present time.
The custom of overtime work has been curtailed as much as pos
sible, but in cases where it still prevails the union urges the employ
ment of temporary or substitute members wherever possible.
146
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
There has been no change in the number of hours per week for a
number of years. In job offices, 44 hours daywork and 40 hours
nightwork, and in newspaper offices 45 hours constitute a week’s
work.
Typographical Union, Local No. 53, Cleveland, Ohio
The unemployment-benefit plan of the Typographical Union, Local
No. 53, Cleveland, has been in operation since May, 1927. The local
has also established a loan fund which is of additional help to mem
bers during periods of unemployment.
Eligibility for benefits.—Any member who has been a contributing
member of the local for a period of six months continuously and who
is otherwise in good standing is eligible for unemployment benefits.
The member must fill out and file an application for benefits on
Monday following a full week of unemployment. The member is
required to report at headquarters of the local on Monday and
Wednesday of each week and must conscientiously look for work.
I f a member secures work for any portion of the week, he does not
receive an unemployment benefit for that week.
Benefits.—Unemployment benefits are paid as follows: $1 for the
first week, $8 a week for the next 7 weeks, and $5 a week for the
next 8 weeks of unemployment. The benefit begins at once, the first
payment being made for the first week of unemployment. Benefits
may be paid for a total of 16 weeks in any 12-month period. The
12-month period begins with the member’s first week of unemploy
ment. I f the member is unemployed at the end of the 12-month
period^ a new 12-month period is open to him. No special benefits
are paid members beyond the period provided for in the unemploy
ment-benefit plan. Responsible members may borrow from the
loan fund.
Administration.—The benefit fund is administered by the sick and
benefit committee and under direct supervision of the chairman of
the loan and relief fund.
Method of financing plan.—No special assessment is made for the
benefit fund. Payments are made from the general treasury and m
provision has been made for a reserve fund.
Statistics of operation.—Table 62 gives the statistics of operation
for 1927 to 1930 and for January to April, 1931:
T a b l e 6 2 . — Operation of unemployment-benefit plan of Typographical Union, Local
No. 53, Cleveland, Ohio, 1927 to 1980 and January to April
Year or month
1927........................... ........................................................
1928.....................................................................................
1929.................................................................. .................
1930...................................................................................
1931:
January_______________________________________
February________________ ______ _______________
March___________ _______ _____ _____ ______ ____
Apr. 1-4..... .................................................................
Total
Number of
number of members
receiving
members
in union
benefits
4,
1931
Total
benefits
paid
Average
benefit
paid
860
860
860
870
21
29
10
26
$983.00
888.00
368.00
794.00
$42.05
30.62
36.80
30.54
873
871
870
870
14
16
15
8
256.00
129.00
277.00
47.00
18.29
8.06
18.47
5.83
TRADE-UNION PLANS
147
General experience.—The experience with the plan indicates that
although the heaviest season of unemployment is in the summer1
months, quite a number of the members are out of work in the winter
months, and that therefore the benefit system is needed the year
round. The benefit payments are small and would not take care of
the members during an extended period of unemployment. How
ever, members are seldom unemployed during the entire benefit
period. The union conducts an employment bureau and in this way
secures occasional work for members.
The depression has had no serious effect on the benefit plan, which
is functioning fully and with no serious drain on the treasury. A l
though the members working in newspaper offices and in the book
and job offices are alike eligible for unemployment benefits, practi
cally none of the members in newspaper offices apply for these
benefits. Regular newspaper men, by voluntary agreement, are lay
ing off one day each week, thereby allowing substitutes to work for
one or more days a week.
There has been no extra assessment made as the fund has been
adequate to take care of the unemployed members. No changes have
been made in the benefit amount or period and none are contemplated.
There has been no change in regard to overtime work—extras are
employed in busy seasons, and in newspaper offices extra work is
given to the substitutes. Neither has there been any change in the
regular working hours.
Supplementary aid through loan fwnd.—The loan fund of the
Cleveland Typographical Union No. 53 was established about Au
gust 1, 1925, for the purpose of accommodating members with loans
and to create a fund for the payment of sick, mortuary, and old-age
pension benefits from the interest charged on loans made to the
members. Loans are not restricted to any specified purposes, al
though loans are made in many instances as extra relief during un
employment periods. The fund is administered by the executive
committee of the union and the chairman of the sick and benefit
committee. The general treasury of the union advanced the sum of
$7,500 with which to operate the loan fund.
Loans are made only to members who have held continuous mem
bership in Local No. 53 for six months or more. Members wishing
to borrow money must secure the signature of two bona fide members
of Local No. 53, who will sign a note jointly with the borrower and
be equally responsible with the latter for repayment of the loan. No
member may sign a note either as a borrower or a guarantor who is
not clear on the books of the union, either for union dues or for
money borrowed. No loan may be granted for less than $5 nor for
more than $300. Loans of less than $50 are to be repaid in 25 weeks
or less. Loans of $50 or more are to be repaid in 50 weeks.
The financial report of the sick and benefit fund from August 1,
1925, to March 31, 1931, shows a net profit of $10,066.65 from the
operation of the loan fund.
148
T
able
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
6 3 . — Operation of the loan fund of Typographical Union, Local No. 53,
Cleveland; Ohio, 1926 to 1930, and January to April 13, 1931
Year or month
1926........................................................................................................
1927.................................. .................................................................... .
1928.........................................................................................................
1929.........................................................................................................
1930.....................................................................................................
1931:
January__________________________________________________
February_________________________________________________
March____________________________________________________
Apr. 1-13.........................................................................................
Number
of loans
made
Total
amount
loaned
Average
loan
209
172
186
199
211
$20,257.50
20.825.00
24.010.00
25.985.00
27.224.00
$96.93
121.08
129.09
130.58
129.02
24
14
15
9
2.516.00
1.685.00
2.555.00
915.00
104.83
120.36
170.33
101.78
Typographical Union, Local No. 16, Chicago, 111.
The Chicago Typographical Union, Local No. 16, adopted an unemployment-benent plan during the summer of 1930 to meet the
problem of unemployment, which had become serious among its
members. The first unemployment-benefit payments under this plan
were made for August, 1930.
Eligibility for benefits.—One year's membership prior to the date
of unemployment is required of a member to be eligible for benefits.
Unemployed members must register at the employment bureau five
days each week during the period of unemployment. If a member
obtains employment outside the trade, or if he works two days or
more at his trade, he automatically forfeits his right to unemploy
ment benefits for the week in which the work was performed.
Benefits.—The unemployment benefit paid single men is $10 a
week and that paid married men is $15 a week. Higher benefits are
paid to married men with dependent children. Benefits are paid
for the first week of unemployment if the member registers imme
diately upon dismissal. There is no limit to the benefit period, the
assessment being continued as long as the emergency lasts, if ap
proved by referendum vote.
Administration.—A special full-time chairman was appointed to
sit with two members of the executive committee as administrators
of the fund.
Method of financing plan.—The plan is financed by assessments on
the employed members. The present assessment, which by refer
endum vote was continued until August 29, is 3 per cent of the
weekly earnings.
Statistics of operation.—The statistics of operation for August,
1930, to April, 1931, are given in Table 64:
149
TRADE-UNION PLANS
T
able
6 4 . — Operation of unemployment-benefit plan of Typographical Union , Local
No. 16, Chicago, III., August, 1980, to April, 1981
Year and month
1930:
August______________________________________
__________ _ _______________________
September
October__________________________ ___________
November___________________________________
December___________________________________
1931:
January_____________________________________
February____________________________________
March______________________________________
April........................................................................
Total num Number of
ber of mem members Total benefits
receiving
paid
bers in
union
benefits
Average
benefit
paid
5.500
5.500
5.500
5.575
5.575
300
425
500
550
575
$6,189.00
3,853.00
11.184.00
16.466.00
30.572.00
$20.63
9.07
22.37
29.94
53.17
5.400
5.400
5.400
5,400
675
625
650
560
32.786.00
38.450.00
47.151.00
35.950.00
48.57
61.52
72.54
64.20
General experience.—An assessment of 1 per cent of the weekly
earnings o f employed members was levied m-August, 1930. This
amount did not prove adequate and the assessment was increased
from 1 to 3 per cent in November. In January, 1931, the assessment
was again increased from 3 to 5 per cent o f the weekly earnings.
The 5 per cent assessment continued until April 4, 1931, when it was
decreased to 3 per cent, the present assessment which was by refer
endum vote continued until August 29.
When unemployment benefits were first paid, single men were paid
$6 per week and married men $12 per week. In November, 1930,
the amount for single men was increased to $8. In January, 1931,
benefits were increased to the present rates.
The benefit plan does not adequately meet the problem of unem
ployment, as there are usually from 150 to 200 members of this
local unemployed at all times. The peak was reached in January,
1931, when 675 members were out of work.
During the busy season there is some overtime worked but not to
any great extent. The by-laws of the local provide that when a
member has worked overtime equivalent to one day in a month he
shall lay off one day and allow an extra man to work in his place.
The hours in the job offices have remained at 44 per week, but be
ginning June 1,1931, the 40-hour week will prevail for three months
during the summer. The hours in the newspaper offices remain
the same.
Typographical Union, Local No. 2, Philadelphia, Pa.
The unemployment-benefit plan of the Philadelphia Typographical
Union, Local No. 2, was adopted in 1930 to meet the emergency caused
by the depression and is an experiment as yet. It was adopted for a
period of three months and was later extended to the end of June,
1931. It is not known at present whether it will be renewed in the
present form, or whether some other method may be adopted. It is
stated by the officials of the local that it does not give adequate
relief and is being carried on solely as an emergency measure. As
sessments began December 1, 1930, and the first payment was made
for the week ending December 25,1930.
150
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Eligibility for benefits.—To be eligible for the benefits of the plan
the applicant must have been a member of the local prior to Decem
ber 1, 1930. Members who are out of work must report to the
secretary-treasurer of the local on Tuesday and Thursday of each
week. Benefits are paid on Friday of each week. I f a member does
work outside the trade, his unemployment benefit ceases. I f he
works one day a week at the trade, his benefit continues; but if he
works two days at the trade during the week, he forfeits benefits for
that week.
Benefits.—An unemployed married member receives $6 a week un
employment benefit; a single unemployed member receives $4 a week.
The benefit begins with the first week of unemployment and there is
no limit as to the benefit period. Benefits are paid as long as the
member is out of work and funds are available for such payments.
Administration.—The benefit fund is administered by the presi
dent, vice president, secretary-treasurer, and the chairmen of the
five largest chapels.
Method of financing plan.—The fund is financed by assessments;
for April, May, and June, 1931, the assessment is 1 per cent of the
earnings of members. Nonactive members are assessed $1 per month.
Statistics of operation.—The statistics of operation are shown in
Table 65 for December, 1930, to March, 1931:
T able
65.— Operation of unemployment-benefit plan of Typographical Union ,
Local N o . 2 , Philadelphia, December, 1980, to March, 1981
Year and month
1930: December (2 w e e k s)....___________
1931:
January______________ . . . . _____ —___
February___________________________
March_____________________________
Total num Number of
ber of mem members
receiving
bers in
benefits
union
Total
benefits
paid
Average
benefit
paid
Balance in
fund at end
of period
1,214
60
$548.00
$9.13
$970.13
1,205
1,198
1,186
103
98
81
2,116.00
1.778.00
1,306.00
20.54
18.14
16.12
505.19
300.54
542.97
General experience.—The benefit payments are too small to meet,
in any adequate way, the problem of unemployment.
For the first three months (December, 1930, and January and
February, 1931) the plan was financed by an assessment of 1 per
cent of weekly earnings; for the month of March it was financed by
voluntary contributions of 1 per cent of earnings; and for the
3-month period of April, May, and June it will be financed by an
assessment of the same amount. The assessment of 1 per cent of the
earnings has been adequate to meet the payments to date. No
changes have been made in the plan and none are contemplated at
present.
The custom of overtime work depends to some degree on the indi
vidual shops. The majority of the shops having a small amount of
overtime work prefer that it be done by the regular employees who
are familiar with the work. I f there is much overtime work to be
done, it is the practice in most cases to take on extra workers. The
same practice has been followed since the depression. There has
151
TRADE-UNION PLANS
been no change in the hours of the regular working week. Some
commercial shops work 44 hours and other 48 hours. Newspaper
offices work 48 hours a week, with the lunch time included.
Typographical Union, Local No. 13, Boston, Mass.
The Boston Typographical Union, Local No. 13, started the fol
lowing plan for payment of unemployment benefits in 1931 as an
emergency measure to meet the conditions caused by the depression.
I f conditions improve enough to warrant its discontinuance, it will
likely be dropped. The first payment of benefits was for the week
ending February 4, 1931.
Eligibility for benefits.—A member to be eligible for benefits must
have continuous membership in the Boston Typographical Local
No. 13 for six months prior to unemployment and must be unem
ployed through no fault of his own. I f he refuses a position, he
receives no benefit. At first, one year’s membership was required for
eligibility, but this was changed to six months by vote of the
membership.
Unemployed members must report for work six days a week in
newspaper chapel or sign the roll at union headquarters the first
five days of the week. I f outside work is performed, no unem
ployment benefit is paid. If a married member gets one day’s work
at the trade, he receives $8 benefit that week; if he works two days,
no benefit is paid for that week. I f a single man works one day at
the trade, he receives no benefits for that week.
Benefits.—Married men unemployed a full week receive $15 a
week. Single men unemployed a full week receive $8 a week. The
benefit is paid for the first financial week of unemployment, which
begins Thursday and ends Wednesday. Payment is made on Friday
following the end of the financial week. No limit has been set on
the benefit period. Fourteen members have been paid benefits ever
since the plan started.
Administration.—The fund is administered by the executive com
mittee of Local No. 13.
Method of financing plan.—The fund is financed by an assessment
of 1 per cent of the earnings of employed members. The assess
ments began on the first pay day after January 19, 1931.
Statistics of operation.—The statistics of operation are shown
in Table 66:
T able
66.— Operation of unemployment-benefit plan of Typographical Union , Local
No. 13, Boston, M ass., February to April, 1981
Month
1931:
Jan. 30_____________________________
February (5 weeks)_________________
March
____________________
(4 weeks)
April (2 weeks)_____________________
Total num Number of
ber of mem members Total bene
bers in
receiving
fits paid
union
benefits
1,974
1.971
1.971
84
87
78
$3,575.00
3.170.00
1.554.00
Average
benefit
paid
$42.56
36.44
Balance in
fund at end
of period
$1,089.99
1,615.57
992.79
152
UKEMPLOYMEKT-BENEFIT PLANS— UNITED STATES
General experience.—The plan has been in effect such a short time
that no definite conclusions can be drawn as to its success. The
depression caused the present plan to be adopted. It is the purpose
of the membership to discontinue the plan as soon as working condi
tions warrant its discontinuance.
As no limit has been set on benefit periods, no special benefits have
been paid. The fund- created by the assessment of 1 per cent of the
total earnings has been sufficient to meet benefit payments to date.
No loans or extra assessments have been necessary. No change has
been made in amount of benefit and no changes are contemplated
under the present conditions.
In job offices the usual custom has been for regular employees to
perform necessary overtime rather than to take on other employees.
There is not much overtime work needed since the depression. In
newspaper offices there is not much overtime work. I f a member
works overtime to the amount of one day he must lay off and give a
substitute a day’s work if a substitute is available. There has been
no change in weekly hours—44 hours per week. Some shops are
working short time due to the depression.
Bakery and Confectionery Workers’ Local No. 16, Buffalo, N. Y.
The unemployment-benefit plan of the Buffalo Bakery and Con
fectionery Workers’ Local No. 16 was established in 1896.
Eligibility for benefits.—To be eligible for benefits under this plan
the unemployed member must have been a member for six months
prior to date of unemployment. Such member is required to report
tor roll call at least three times each week. I f he accepts work at
some other trade, his unemployment benefits cease.
Benefits.—Each unemployed member receives $4 per week. He is
subject to call for work under the job system, and for each day so
worked $1 is deducted from the weekly benefit. Benefits are paid
after two full weeks of unemployment, for a maximum of 18 weeks
during the period beginning the first Saturday in December and
ending the first Saturday in April.
Administration.—The benefit fund is administered by the presi
dent, treasurer, or either secretary of the union.
Method of financing plan.—The benefits are paid from the general
treasury. There is no special reserve fund.
Statistics of operation.—The statistics of operation of the fund are
given in Table 67:
153
TRADE-UNION PLANS
T able
67.— Operation of unemployment-benefit plan of Bakery and Confectionery
Workers1 Local No. 16, Buffalo, November, 1922, to March, 1981
Year * or month
1922-23...............................................................................
1923-24.................... ..........................................................
1924-25............ ..................................................................
1925-26............................................................................ .
1926-27.................... ..........................................................
1927-28.................. ...........................................................
1928-29-......................................................... ...................
1929-30...............................................................................
December. 1930 (month)
1931:
Januarv
February____________ _____ _____ ______________
March________________________________________
Total num Number of
ber of mem members Total bene
bers in
receiving
fits paid
union
benefits
Average
benefit
paid
182
189
184
176
22
27
36
32
28
25
28
25
27
$800. 70
1,200.00
1,800.00
1,700.00
1,400.90
1.038.00
1.101.00
913.00
259.00
$36.40
44.44
50.00
53.13
50.03
41.52
39.32
36.52
9.59
175
174
174
25
27
28
365.00
279.00
343.00
14.60
10.33
12.25
i The fiscal year ends November 30.
General experience.—From 1924 to 1927 the benefits paid averaged
over $50 per unemployed member. While a large number are unem
ployed after the end of the benefit period, no special benefits are
paid. After April work in the trade usually increases and the
majority of the unemployed find work.
The depression has had no appreciable effect on the existing benefit
plan. Bakery work remains fairly steady over the years with the
usual lay-offs in the winter months. The fund has at all times been
adequate to meet the needs and it has not been necessary to call for
special assessments. There has been no change in the benefit amount
or period and no change is contemplated during the next year.
Regular workers are forbidden to contract with the employing
bakers to work more than two hours’ overtime per week, if more
overtime work is necessary it must be given to an extra man. There
has been no change in the regular working hours, which are 8 per day
or 48 per week.
Bakery and Confectionery W orkers’ Local No. 4, St. Louis, Mo.
The Bakery and Confectionery Workers’ Local No. 4 of St. Louis
has had an unemployment-benefit plan for almost 30 years, the plan
being started in 1902.
Eligibility for benefits.—Three years’ membership in the local is
required for eligibility for benefits. Should a member withdraw
from the local for more than three months, he would have to reestab
lish membership for three years before being eligible. An unem
ployed member must report to the office of the local and answer roll
call every Monday and Thursday to receive benefit. A member
forfeits unemployment benefit if employed at a trade other than his
own. I f he works at the bakery trade one day a week he receives
the full benefit; if two days are worked during the week he is paid
$3.50 for that week; and if he works three days in the week he
receives no benefit for that week.
Benefits.—The benefit paid is $7 per week. A member can draw
only $70 in one year. Benefits are paid after two full weeks of un
employment, when payment is made for the second week of unem
154
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
ployment. In computing the time of unemployment the calendar
week is used—the weeks are counted from the first Monday unem
ployed. Benefits are payable only during the period from the Mon
day before Christmas to the last Monday in March, or 15 weeks, and
to receive benefits the members must be out of work during this
period.
Administration.—The fund is administered by the treasurer of the
local under the supervision of the executive board.
Method of financing plan.—The fund is financed by special dues
of 40 cents per member per month and all fines collected are placed
in this fund. All profits from entertainments given by the local are
also placed in the unemployment fund. I f the fund is low a special
assessment of $1 to $2 per year is levied.
Statistics of operation.—The records of operation prior to 1911
are not available. The statistics of operation since 1911 are shown
in Table 68:
T a b l e 6 8 .— Operation of unemployment-benefit plan of Bakery and Confectionery
Workers’ Local No. 4) St. Louis , 1911 to 1980 and January to March, 1931
Year1
19111.............................................................
1 9 1 2 ...........1...............................................
19131........................... - ................................
19141.............................................................
1915*.............................................................
1916 i__.............................. ................... ........
1917 1.............................................................
1918 1.............................................................
1919 i......... ...................................................
1920».............................................................
19211.............................................................
19221..............................................................
1923 l.............................................................
1924 i............................................................
1925 i.............................................................
1926 1.............................................................
1927................................................................
1928................................................................
1929................................................................
1930................... ...........................................
1931 (1st quarter)_______________________
Total num Number of
ber of
members Total bene
receiving
fits paid
members
benefits
in union
300
350
350
375
400
750
800
900
950
1,000
1,100
1,100
1.150
1.150
1.150
1.150
1.190
1.190
1.190
1.190
1,200
37
21
29
25
49
43
34
13
43
27
60
no
125
122
114
156
149
136
140
154
184
$362.50
175.00
232.00
251.00
651.00
543.00
393.00
210.00
595.00
402.00
2.983.00
5.942.00
5.270.00
5,631.50
5,124.00
7.567.00
8.459.50
7.423.50
7,000.00
9.121.00
11,144.00
Average
benefit
paid
$9.78
8.33
8.00
10.04
13.29
12.63
11.56
16.15
13.84
14.89
49.72
54.02
42.16
46.16
44.95
48.51
56.78
54.59
50.00
59.23
60.57
Balance in
fund at end
of period
$604.44
805.44
1,087.93
1,119.56
1,959.20
1,547.33
1 Data from the American Federation of Labor, Unions Provide Against Unemployment, Washington,
im
General experience.—Since 1911 the benefit payments have been
increased from $3 to $7 per week, and the benefit period has been
extended from 12 to 15 weeks.
The benefits paid are restricted to the seasonal dull period during
the year. For the past dull period more calls were made for relief
than at any time since the plan was started. Many of the members
were unemployed at the expiration of the benefit period. No special
benefits are provided for such members, although in a few instances
of extreme distress they have been aided by voluntary contributions
of the members.
The depression has made it necessary to pay benefits to a larger
number of members. The fund has been adequate, although it was
found necessary to levy a special assessment of $1 on all employed
TRADE-UNION PLANS
155
members in December, 1930, and January, 1931. The special assess
ment is provided for in the plan but has rarely been called for.
No changes in benefit amount or period are contemplated.
This local has always discouraged overtime work and insists on
employment of extra men, except in emergencies. This policy is
continued. No change has been made in the full-time working week.
In machine shops 48 hours are worked per week; in hand shops,
54 hours per week.
Bakery and Confectionery Workers* Local No. 22, New York
City
The New York Local No. 22 of the Bakery and Confectionery
Workers’ Union is composed of Bohemian workers, who are employed
in small shops throughout the city. The unemployment-benefit plan
was started in 1910 and embodies both work and cash benefits.
Eligibility for benefits.—To be eligible for benefits the applicant
must have been a member in good standing for six months prior to
unemployment and he must report at a meeting of the local that he
is unemployed. There are no rigid rules in regard to reporting at
regular times. A member who works at any other trade forfeits
his right to benefit. If he works at his tra&e and earns less than $15
a week, he is paid as an unemployment benefit the difference between
what he earns and $15 a week.
Benefits.—The amount of benefit to be paid is set each year by
the local. Benefits were paid at the rate of $15 a week until 1930,
when, due to the increased demand, the rate per week was set at $10,
which is still the rate. Benefit begins with the second week of
unemployment. Formerly benefits were paid from November 1 to
May 1, if a member was in need, but during the past winter benefits
were limited to 12 weeks. Eligibility is restored at the beginning of
the next benefit season.
The plan has no rigid rules for administration, being adjusted from
year to year to meet the existing conditions. The amount to be paid
per week is determined at regular meetings of the local and is based
upon conditions of the trade and the prospects for the winter season.
Administration.—The fund is administered by the executive board
of the local.
Method of financing plan.—The plan is financed by the general
treasury fund, which is maintained by the regular dues. There is no
special reserve fund.
Statistics of operation.—Table 69 gives statistics of operation of
the plan from 1927 to 1930. No benefit was paid for January, Febru
ary, or March, 1931, as steady-working members divided the work
with unemployed members.
65655°— 31---- 11
156
T able
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
69.— Operation of unemployment-benefit plan of Bakery and Confectionery
Workers’ Local No. 22, New York City, 1927 to 1930
Year
1927....................................................................................
1928....................................................................................
1929.............................. ......................................................
1930....................................................................................
Total num Number of
ber of
members
receiving
members
in union
benefits
165
167
158
152
51
57
45
48
Total
benefits
paid
$543
748
950
330
Average
benefit
paid
$10.65
13.13
21.11
6.88
General experience.—The benefit system meets the unemployment
problem satisfactorily when conditions are normal, but during the
present depression it has not been entirely satisfactory. The local
has a system of regular men laying off one day in two weeks in
order to give work to unemployed members, and in this way, the
number of members without any work is decreased. Employed
members are now laying off one day per week instead of one day
every two weeks in order to give more work to the unemployed mem
bers. From 20 to 25 per cent of the members remain unemployed
at the expiration of the benefit period.
No change is contemplated at present in the benefit amount or
period. The conditions at the beginning of the next season may
necessitate changes in the plan.
Bakery and Confectionery Workers’ Local 118, Washington, D. C.
The unemployment cash-benefit plan of the Washington (D. C.)
Bakery Workers’ Union, Local No. 118, is supplementary to an
arrangement which requires members to lay off in rotation during
the winter months, or to work only five days a week. In this way
the demand for cash benefits is reduced to a minimum. The benefit
fund was started in 1914.
Eligibility for benefits.—In order to be eligible for benefit pay
ments the unemployed member must have been a member of the local
for two years. He must sign roll at the office of local six days a
week. I f he works at other than his own trade he loses his unem
ployment benefit. I f he works one day per week at his trade, he
is paid $4 benefit for that week.
Benefits.—The benefit is $12 a week if no work is performed during
the week, and is paid after two weeks of unemployment. Prior to
1931 thfe benefit period was from the last Saturday in November to
the first Saturday in April; beginning in 1931 the period was ex
tended to the last Saturday of April. Special benefits have been
paid to members in distress. These cases are taken up by the local
and each case is decided upon its merits.
Administration—The plan is administered by the financial secre
tary of the local, with supervision of the executive board.
Method of fmaneing plan.—The benefit fund is financed from the
general fund by regular dues, with occasional assessments if needed
to meet payments of benefit. No reserve fund is kept for this
purpose.
157
TRADE-UNION PLANS
Statistics of operation.—Table 70 gives statistical data as to the
operation of the plan from 1923 to 1930 and from J anuary to April,
1931:
T
70.— Operation o f unemployment-benefit plan of Bakery Workers* Local
No. 118 , Washington, D. C 1923 to 1930, and January to April, 1931
able
Year or month
1923....................................................................................
192 4
192 5
1926................................... ................................................
1927....................................................................................
1928....................................................................................
1929....................................................................................
1930....................................................................................
1931:
January__________________________ ______ ___ __
February.-—__________________ - ________- _____
March_____________________ ___ ______ __ ______
April____ . . . . . . ________________ —_____________
Total num Number of
ber of
members Total bene
members
receiving
fits paid
in union
benefits
Average
benefit
paid
395
396
395
390
390
388
385
380
23
22
19
10
11
25
28
26
$375
1,761
1,926
1,224
666
1,308
2,054
1,658
$16.30
80.05
101.37
122.40
60.55
52.32
73.36
63.77
380
380
380
380
19
21
24
17
464
372
444
264
24.42
17.71
18.50
15.53
General experience.—The unemployment-benefit plan meets the
problem of unemployment to some extent. A member can not very
well live on $12 a week during the unemployed period, but the benefit
is a help toward meeting expenses. The system of regular men lay
ing off one day a week is in practice during the dull season to help
take care of unemployed members. Not a great many members are
left without at least some work at the end of the benefit period.
The depression has had little effect upon the benefit plan of this
local, and the fund has been adequate to meet all payments to date.
There may be some minor changes made as occasion demands, but
no radical changes are contemplated.
It has been the custom to put on temporary workers in the busy
season rather than work the regular crew overtime. There has been
no change in this custom since the depression. There has been no
change m the hours per full-time week, the hours remaining at 48
per week. A large number of members work only 40 hours per week
at this time.
Bakery and Confectionery Workers’ Local No. 126, Tacoma,
Wash.
The unemployment-benefit plan of the Tacoma Bakery and Con
fectionery Workers’ Local No. 126 was started in 1916.
Eligibility for benefits.—Members become eligible to the plan when
they have been members of the local in good standing for six months.
A member who is unable to secure work at his craft is considered
unemployed, whether on account of shutdown, breakdown, or stop
page of machinery for repair. All men are hired through the union
office, and this serves as proof of unemployment. A member steadily
employed outside the trade during the period of unemployment is
not entitled to benefits.
Benefits.—The amount of benefit varies from $6 to $10 a week
according to the merits of the case. Members receiving benefits do
158
TTNEMPLOY’
M ENT-BENEFIT PI/ANS— UNITED STATES
not pay dues. Benefits begin after 30 days of unemployment, pro
vided the member is not working over two days per week. The bene
fit period is usually from December to April, but during the past two
years it has started October 1 and continued through April. Mem
bers who have regular positions are encouraged to take a vacation
during this period in order to make a place temporarily for those
without regular positions. Special benefits are seldom paid. Loans
in amounts up to $25 per month are made to deserving members.
Administration.—The plan is administered by a special committee
in conjunction with the business agent.
Method of fincmeing plan.—The plan is financed by contributions
varying from 50 cents to $1 per month during the summer and one
day’s pay a week for as long as is necessary during the winter. There
is no fixed reserve fund.
Statistics of operation.—Table 71 gives statistics of operations of
the plan from 1916 to 1930 and for the first three months of 1931:
T
7 1 . — Operation of unemployment-benefit plan of the Bakery and
Confectionery W orkers1 Local No. 126 , Tacoma, W ash.? 1916 to 1930 and
January to March , 1981
able
Year or month
191 6
.
191 7
191 8
191 9
1920— ...................
192 1
192 2
_____
192 3
192 4
1926--------------------
Number
of mem
bers re
ceiving
benefits
Total
benefits
paid
Average
benefit
paid
10
10
2
2
8
12
12
10
12
8
$300.00
800.00
40.00
40.00
320.00
680.00
700.00
580.00
660.00
475.00
$30.00
30.00
20.00
20.00
40.00
56.67
58.33
58.00
55.00
59.38
Year or month
192 6
192 7
192 8
192 9
193 0
1931:
January..
February
M arch...
Number
of mem
bers re
ceiving
benefits
30
Total
benefits
paid
Average
benefit
paid
$600.00
800.00
980.00
*1,675.75
2,160.45
$60.00
37.14
32.67
67.03
72.02
221.00
7.37
16.05
13.70
481.50
411.00
* The approximate membership of the union at present is 125.
1 $100 of this amount represents loans.
General experience.—During the depression an average of 16 mem
bers remain unemployed after exhausting their rights under the
plan. A majority of these are old persons, who can not readily
adjust themselves to the use of improved machinery. No change
has been made in amount of weekly benefits, but the period has been
extended since 1928.
Temporary workers are employed in busy seasons. No overtime
work is permitted, except in emergencies. There has been no change
in this respect. The working week remains the same as it has been
for the past two years—48 hours for day work and 42 hours for
night work.
Bakery and Confectionery Workers’ Local No. 24, San Fran
cisco, Calif.
The unemployment-benefit plan of the San Francisco Bakery
Workers’ Local No. 24, San Francisco, Calif., was started in 1917.
The benefit plan is compulsory and every member who is employed
piust pay his assessment.
159
TRADE-UNION PLiANS
Eligibility for benefits.—Members who are entitled to a weekly
benefit must have held membership in this local for a period of at
least two successive years, previous to applying for an unemployment
benefit. Members who leave the local after two years’ membership
on a retiring or traveling card, and who return within a year, are
eligible to benefit after three months’ membership.
Members who are entitled to benefit must answer roll call on
Thursday and Friday at 2 p. m. for the purpose of receiving a work
order, should any work be on hand. They must also be present on
Monday at 2 p. m., when the committee will meet and roll will be
called for the purpose of paying benefits. Any member failing to
answer his name shall forfeit all claims for that week. Any member
refusing to go to work when it is offered shall forfeit his claim for
benefit for a period of time to be decided by the committee.
Members who are employed at any other occupation or trade shall
not be entitled to any jobbing place or to any benefit. Any member
working one day per week at nis trade shall receive $2.50 for that
week. I f a member works two days and less than five days in any
one week he shall not receive any benefit for that week.
Benefits.—Weekly benefit payments shall be $10 if the member
receives no jobbing place for that week. I f a member has worked
six months he is entitled to benefits after five weeks of unemploy
ment. I f he has worked from one to five months he is entitled to
benefits after two weeks of unemployment. The benefit period ex
tends from December to March, inclusive, during which period
benefits are payable if needed. No special benefits are paid from the
unemployment benefit fund to members in distress after they have
exhausted their rights under the plan. Loans up to $25 are made to
unemployed members upon recommendation of the committee.
Administration.—The plan is administered by officers of the union
and an unemployment committee of three trustees.
Method of financing plan.—The plan is financed by an assessment
of 50 cents per month per member and funds from the general
treasury. There is no special reserve fund.
Statistics of operation.—Data on operations of the unemploymentbenefit plan of the Bakery and Confectionery Workers’ Local, No. 24,
San Francisco, for the years 1924 to 1930 and for January to March,
1931, are given in Table 72 :
T a b l e 72.— Operation of unemployment-benefit plan of Bakery and Confectionery
Workers* Local No. 24, San Francisco, 1924 to 1980. and January to March,
1981
Year or month
1924....................................................................................
1925....................................................................................
1926....................................................................................
1927....................................................................................
1928................. ..................................................................
1929....................................................................................
1930....................................................................................
1931:
January__________________________ ____________
February_____________________. ________________
March_____ . . . ____________ ____________ _______
1 Approximate number.
Total
Number of
number of members
members receiving
in union1
benefits
Total
benefits
paid
Average
benefit
paid
700
700
700
700
700
700
700
62
71
85
96
100
133
161
$3,620.00
3.800.00
4.121.00
4.300.00
4.500.00
4.907.00
10,840.00
$58.39
53.52
48.48
44.79
45.00
36.89
67.03
700
700
700
68
88
84
2.505.00
2,554.20
2,702.50
36.84
29.25
32.17
160
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
General experience.—In 1917 there were approximately 45 job
bing places in operation which practically assured the members as
much as two days’ work a week. The jobbing places have decreased
since 1917 until now there are only three or four operating, conse
quently fewer men are able to get the two days’ work a week and
many of them have no work at all for long periods.
The present plan of financing the fund has been inadequate to
meet the demands made upon it for several years. The maximum
sum derived from the assessment is not in excess of $3,400 per year,
while the demands have exceeded that sum each year since 1924. It
was necessary to raise the assessment levied on the members who are
employed from $4 for the year 1930 to $6 for the year 1931.
No changes have been made in the benefit amount or period, but
a change is contemplated. It is proposed to decrease the amount of
benefits so that no member can draw, more than $160 in three years:
to require a member who has been out of the local on a retiring card
to be back in the local for two successive years before being eligible to
apply for benefits; and to refuse to pay benefits to members who are
found to have independent means of support.
Temporary workers are employed in busy seasons, and no overtime
work is permitted except in emergencies. There has been no change
in this respect since the depression. Nor has there been any change
in the weekly working hours—48 hours a week for both day and
night workers.
Bakery and Confectionery Workers* Local No. 9, Seattle, Wash.
The unemployment-benefit plan of the Seattle Bakery Workers’
Local No. 9 was established in 1920, and benefits have been paid to a
large percentage of the membership during the dull season, October
1 to May 1.
Eligibility for benefits.—A member is eligible to receive unem
ployment benefits after a continuous membership in the local in
good standing of one and one-half years. An unemployed member
must report m person or by telephone every Friday at the union
office, where all replacements are made. I f a member works at
other jobs during the unemployment period he forfeits his right
to benefits.
Benefits.—The rate of benefit is $7.50 a week. Benefits start
immediately on the member reporting himself unemployed at his
trade. The benefit period extends from October 1 to May 1, and
is renewed on October 1 of each year. Benefits are payable during
the entire period if necessary. Special benefits have been paid after
members have exhausted their rights under the plan, but only on
vote of the members in open meeting.
Administration.—The xund is administered by the secretary of the
local.
Method of finmwing plan.—The fund is financed from the dues of
$3 per month and from special assessments. There is no special re
serve fund.
Statistics of operation.—Table 73 gives data on operation of the
unemployment-benefit plan of the bakery workers’ local in Seattle
for the years 1928 to 1930 and for the first three months in 19311
161
TRADE-UNION PLANS
73.— Operation of unemployment-benefit plan of Bakery and Confectionery
W orkers ’ Local No. 9, Seattle , 1928 to 1930, and January to March, 1931
T able
Year or month
1928....................................................................................
1929....................................................................................
1930....................................................................................
1931:
January_______________________________________
February______________________________________
March________________________________________
Total
Number of
number of members
members receiving
in union
benefits
Total
benefits
paid
Average
benefit
paid
i 525
525
525
128
139
129
$14,820
15,856
15,390
$115.78
109.86
118.90
525
525
525
96
99
102
1,100
1,100
1,000
11.46
11.11
9.80
1Approximate number.
General experience.—The cost of the plan was heaviest in 1929
when $15,856 was paid to a total of 139 members whose unemploy
ment ranged from one to seven months. In 1928, 33 members drew
benefits tor the entire benefit period—seven months; in 1929, 28
members, and in 1930, 32 members drew benefits for the entire period.
Approximately 70 members have been left unemployed at the
expiration of the benefit period, and special benefits have been paid
in some cases on vote of the members in open meeting. In the
majority of the cases where members draw benefits during most or
all of the period, the member was past the active working age and was
not able readily to find work. No changes have been made in the
benefit amount or period since 1920.
Temporary employees are taken on in busy seasons; but no change
in this respect has been made during the depression.
Bakery and Confectionery W orkers’ Local No. 74, Spokane,
Wash.
The unemployment-benefit plan of the Bakery and Confectionery
Workers’ Union, Local No. 74, of Spokane, Wash., also provides
relief for aged members. The plan was begun in 1924.
Eligibility for benefits.—A member must have been in the local
two years in good standing to be eligible to participate in the bene
fits. Unemployed members are required to report at the office of the
union on three separate days each week. A member who obtains
work at other jobs loses his right to benefits, but not to the help of
the union in securing employment at his trade.
Benefits.—Unemployed members receive $12 a week benefit. The
benefit period is normally from November 1 to April 1. Special
benefits are paid in extreme cases, but only after each case is favor
ably passed on by the members.
The amount collected through special dues of 50 cents per month
per member is used for the relief of aged members. Two such mem
bers are now receiving benefit payments; one is paid $8 and the other
$8.50 per week.
Administration.—The plan is administered by the secretary of
the local.
Method of financing plan.—The plan is financed by assessments,
the assessment now being 6 per cent of the weekly wages of the
162
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
members. A recipient of benefits is relieved from paying the assess
ment.
Statistics of operation.—Data on the operations of the unemploy
ment-benefit plan of the bakery and confectionery workers’ local in
Spokane, Wash., are given in Table 74 for the years 1924 to 1930
and for January to March, 1931;
T
7 4 . — Operation of unemployment-benefit plan of Bakery and Confectionery
Workers1 Local No. 74, Spokane, 1924 to 1980 and January to March , 1981
able
Year or month
1924 *_____________________________________________
1925 1..................................................................................
1926 1..................................................................................
1927 l..................................................................................
1928 K.................................................................................
1929 >..................................................................................
1930______________________ ________________________
1931:
January_______________ . ____________ . . . _______
February______________________ _______________
March___________________ __________ __________
Total
Number of
number of members
members receiving
in union
benefits
Total
benefits
paid
Average
benefit
paid
207
3200
200
200
47
12
17
21
<54
«47
412
$1,481.90
960.35
905.75
1,202.40
31.104.00
24.752.00
3.024.00
$31.53
80.03
53.28
48.59
576.00
526.64
252.00
200
200
>201
19
14
8
1.140.00
648.00
384.00
60.00
46.28
48.00
i Data from American Federation of Labor, Unions Provide Against Unemployment, Washington, 1929.
* Data for this year include benefits paid for unemployment resulting from industrial disputes.
* 1928 membership, 139 bakers and 61 auxilary workers; March, 1931,139 bakers and 62 auxiliary workers.
4Average for month.
General experience.—Prior to November, 1929, unemployed mem
bers were guaranteed $21 a week, which was reduced to $18 a week
in November, 1929, and to $12 a week in November, 1930, and has
since remained at that amount.
Prior to May 1, 1928, the fund was financed by special dues of
50 cents per month from each member. It was also augmented by
receipts from benefit entertainments given by the local. The funds
thus obtained were ample for the relief provided and for keeping
the reserve fund at $500 and over.
A series of disputes took place in the bakeries of Spokane in May,
1928, resulting in considerable unemployment. This caused heavy
demands to be made on the fund, ana other means of financing had
to be made. About May 1,1928, an extra assessment was made, and
15 per cent of the weekly wages of each member was collected from
May 1 to December 31, 1928. From January 1 to July 31,1929. the
assessment was decreased to 12 per cent of the weekly wages; xrom
August 1,1929, to April 30,1930, the assessment was 8 per cent; and
from May 1 to the present time, 6 per cent of the weekly wages of
every member.
Under normal conditions when there are no lockouts or other labor
troubles affecting the local, the benefit plan practically solves the
unemployment problem. Only a few members are left unemployed
at the expiration of the benefit period. No changes are contemplated
in the benefit amount or period.
Temporary help is employed in busv seasons. Little, if any change
has been made in this respect since the depression. No change has
been made in the normal working week, but there is an agreement
163
TRADE-UNION PLANS
between the union and the employers whereby the working week
may be reduced to four days during the months of November,
December, January, and February of any year if conditions warrant
such reduction.
Bakery and Confectionery W orkers’ Local No. 233, Madison, Wis.
The present unemployment-benefit plan of Bakery Workers’ Local
No. 233, Madison, Wis., was started in 1925.
Eligibility for benefits.—To be eligible for benefits a member must
have been in good standing for three years prior to the date of
unemployment. An unemployed member must report once each
week at the local office to draw benefits. I f work outside the trade
is secured by such a member, he forfeits his benefit. If he works
only one day at his trade, he receives the entire benefit, but if he
works two or more days a week he receives no benefit for that week.
Benefits.—The rate of benefit at present is $6 per week. No benefit
is paid until a member has been unemployed for a period of four
weeks. A member may receive benefits for a period of 16 weeks
between the second week in December and the second week in April.
Special benefits have been paid in cases of urgent need. A donation
of $25 was voted to a member during the past year.
Administration.—The fund is administered by the financial sec
retary of the local, and benefits are paid from the general treasury.
There is no special reserve fund.
Method of financing plan.—When the plan was started the monthly
dues were raised from $2 to $4, but at the present time the dues have
been reduced to $3.25 per month.
Statistics of operation.—Data are given in Table 75 covering oper
ations of the unemployment-benefit plan of Bakery and Confec
tionery Workers’ Local No. 233 in Madison, Wis., for 1925 to 1930
and for January to March, 1931:
T able
75.— Operation of unemployment-benefit plan of Bakery and Confectionery
Workers’ Local No. 288, Madison, W is., 1925 to March, 1981
Year or month
J925....................................................................................
1926....................................................................................
1927............ .......................................................................
1928....................................................................................
1929
____________________ ____________________
1930___________ _____________ _____________________
1931:
Januaiy_____-_. . . . . . . __ . . . . . _- ____ - ____ - ___
February____________________________ ________ _
March _______________________________________
Total
Number of
number of members
members receiving
in union
benefits
(i)
Total
benefits
paid
Average
benefit
paid
(i)
m
0)
(l)
6
5
6
2
2
5
$90.00
195.00
95.00
36.00
24.00
94.00
$15.00
39.00
15.83
18.00
12.00
18.80
0)
Q)
0)
5
5
4
90.00
66.00
54.00
18.00
13.20
13.50
i Membership of local has varied from 60 to 63 during past 5 years.
General experience.—Although the benefit payments are not large,
they help to relieve the situation to some extent. There are always
a few members unemployed at the expiration of the benefit period.
164
UNEMPLOYMENT-BENEFIT PLANS--UNITED STATES
The depression has had very little effect on the existing plan, as
employment is fairly regular at all times. During the winter and
spring the University of Wisconsin and the State legislature are in
session, which means about 10,000 to 12,000 additional residents with
a resulting stimulus to business. The fund has been adequate at all
times and no extra assessments have been needed to care for the
unemployed.
The amount of the benefit payment was increased from $5 to $6 per
week about two years ago. No changes are contemplated in the
benefit amount or period.
The custom of Local No. 233 is to discourage overtime work and
employ temporary workers when needed. There has been no change
in working hours. Day workers are paid for 51 hours but work 48
hours per week. Forty-five hours are worked at night with pay for
48 hours per week.
Brewery, Flour, Cereal, and Soft Drink W orkers’ Local No.
New York City
1,
The unemployment-benefit plan of the New York United Brewery,
Flour, Cereal, and Soft Drink Workers’ Union, Local No. 1, was
started in 1906.
Eligibility for benefits.—To be eligible to benefit a member must
have paid dues for 12 months prior to unemployment. An unem
ployed member must report twice a week at the office of the union.
A member is considered unemployed if working less than 6 days a
month. I f an unemployed member obtains work at other than his
own trade, his benefit ceases.
Benefits.—An unemployed member receives a benefit of $6 a week.
The benefits begin the third week of unemployment and are paid for
12 weeks. A member must, however, pay dues for 12 months before
he is again eligible to unemployment benefits. Special benefits have
been paid where cases were considered worthy. These cases are taken
up and decided at regular meetings of the local. The usual plan is
to extend the time for which benefits are paid.
Administration.—The plan is administered by the financial secre
tary, approved by the executive board.
Method of financing plan.—The unemployment-benefit fund is
financed from the general fund. There is no reserve fund.
Statistics of operation.—Table 76 gives data on the unemployment
plan from 1927 to 1930 and through April, 1931:
T
7 6 .— Operation of unemployment-benefit plan of Brewery , Floury Cereal,
and Soft Drink Workers1 Local No. 1, New York City , 1927 to 1980 and January
to April, 1981
able
Year or month
1927....................................................................................
1928______________________________________________
1929_________ ____________________________________
1930______________________________________________
1931....................................................................................
January___________ ____ ____ . _________ ____ ___
February_________________ ________________ ____
March______________________ _____________ ____
April.......... ......... ........................ ..............................
Total
Number of
number of members
members receiving
in union
benefits
420
400
350
290
290
Total
benefits
paid
Average
benefit
paid
12
16
18
25
$486.00
612.00
444.00
936.00
$40.50
38.25
24.67
37.44
5
9
12
3
66.00
162.00
240.00
96.00
13.20
18.00
20.00
32.00
TRADE-UNION PIiANS
165
General experience.—The benefits paid do not meet the problem of
unemployment to any great extent. The amount is too small to
meet the needs of a member who is out of work. Prior to 1920 the*e
were not many members left unemployed at the expiration of the
benefit period, but of recent years a large number of members have
been left unemployed at the expiration of the benefit period.
The depression has resulted in a great burden on the plan,
more members being out of work for a long period of time, but the
local expects to continue the plan. The general fund has been suffi
cient to take care of benefit payments to date. No special assess
ments have been made for this purpose.
No change in the benefit amount or period has been made and no
change is contemplated at present.
The custom has been for regular workers to perform overtime work
during ordinary business conditions. Some plants made it a prac
tice to give overtime work to additional workers. There has been
some change in this policy since the beginning of the depression and
at present there is practically no overtime work. There has been
no change in the regular 48-hour working week.
W ood Carvers, Boston, Mass.
The unemployment-benefit plan of the Boston Wood Carvers’ Asso
ciation has been in operation about 20 years. The exact date of the
adoption of the unemployment-benefit fund is not known, but it was
about the year 1910.
Eligibility for benefits.—To be eligible for benefits a member must
have been a member for 104 weeks previous to the time of unemploy
ment. A member must report to the secretary-treasurer of the asso
ciation as soon as he is out of work, either by letter or telephone. He
must also report when he returns to work. The shop stewards make
weekly reports to the secretary-treasurer showing the number of
men at work and the men sign on the back of the shop steward’s
report. I f an unemployed member secures work at another trade,
he does not forfeit his benefits.
Benefits.—The benefit is $12 a week. Benefit payments begin the
second week of unemployment and are made for not exceeding 12
weeks in a year.
A system is in effect in the association whereby an unemployed
member in need of funds is able to borrow from the unemployment
and loan fund. At first a member was loaned up to $50, but since
the depression the amount has been increased to $100. The member
does not pay interest on the loan and is allowed to pay it back at
$3 a week when he begins working.
Administration.—The fund is administered by the executive com
mittee, with the approval of the membership at meetings of asso
ciation.
Method of financing plan.—The fund is financed by assessments,
the present rate being 1 per cent of the earnings of the members. A
substantial reserve fund was created during the early days of the plan
when unemployment was not so great. It is the purpose of the asso
ciation to keep the reserve fund at not less than $25,000. When the
fund falls to $25.000,1 per cent in addition to the regular assessment
166
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
of 1 per cent will be levied until the fund reaches $30,000, when
the additional assessment will cease.
Statistics of operation.—Table 77 gives statistics of operation of
the unemployment-benefit plan from 1919 to 1930 and January to
May, 1931:
T
able
7 7 . — Operation of unemployment-benefit plan of Wood Carvers1 Association
Boston, 1919 to 1980 and January to M a y, 1981
Year or month
19191............ ..............................................
19201 ................................... ........................
19211 ............................................................
19221 ......... - ................................................
1923 1.............................................................
1924 1.............................................................
1925 1 ............................................................
1926 1 ............... .........................................
1927-..............................................................
1928-.............................................................
1929-..............................................................
1930...............................................................
1931:
January___ - _____________ _________
February_______ - __________________
March____ . __________ ____________
A p r il________ _________- __________
May____ . . . . . . . . . . . . . . . . . . . . . . . __ __
Total
Number of
number of members
receiving
members
in union
benefits
104
100
90
80
81
83
85
103
105
115
117
125
125
124
122
118
117
Total
benefits
paid
Average
benefit
paid
43
39
29
28
16
17
36
43
57
$5,101.50
6,894.00
8.543.00
3.364.00
2.293.50
1.324.50
1.076.50
628.00
530.00
1.854.00
3.018.00
4.512.00
$78.23
58.81
45.67
38.45
42.63
31.18
51.50
70.19
79.16
39
37
37
43
45
1.206.00
1,078.00
778.00
1.486.00
1.692.00
30.92
29.14
21.03
34.56
37.60
Balance in
fund at
end of
period
$4,704.74
5,309.42
4,096.15
5,255.91
8,692.68
14,435.38
21,137.37
26,839.58
28.950.25
29,987.15
29.675.25
28.401.17
27.195.17
26.117.17
25.339.17
23.853.17
* Data for year are from American Federation of Labor, Unions Provide Against Unemployment, Wash
ington, 1929.
General experience.—The fund was financed in the early years by
an assessment of 2 per cent of the earnings of the members. As a
larger fund became necessary, the assessment was increased unt(il
at one time it amounted to 8 per cent of earnings. When conditions
became better the assessment was decreased to 2 per cent, and about
two years ago was decreased to 1 per cent of earnings, where it
remains at present.
During ordinary business conditions not many members are left
unemployed at the end of the benefit period, but during the depres
sion many are unemployed beyond such period. No special benefits
have been paid after members have exhausted their rights under the
benefit plan.
The depression has not materially affected the benefit plan. The
fund has been adequate to meet the benefits without undue hardship
on the members. Due to the high average earnings of the trade, the
1 per cent assessment has kept the fund in good condition.
No change is contemplated in the amount or period of benefits, but
if the depression continues as at present the period may be extended.
It is a rule of the association that no overtime shall be worked so
long as extra men are available to perform the work which might
require overtime work by the regular force. The working week was
changed from 44 hours to 40 hours about April 1,1929. The depres
sion has made no change in the hours, and they remain 40 a week.
TRADE-UNION PLANS
167
Lace Operatives, Branch No. 2, Wilkes-Barre, Pa. (Employees
of Wyoming Valley Lace Mills)
Prior to 1924 the Amalgamated Lace Operatives of America,
Branch No. 2, of Wilkes-Barre, Pa., maintained a general trade -union
plan of unemployment benefits. This was given up in 1924, when
the union entered into an agreement with the Wilkes-Barre Lace Co.
to provide a joine unemployment-benefit plan. (See p. 103.) At the
same time an effort was made to secure a similar agreement with the
Wyoming Valley Lace Mills, but this was unsuccessful, and the mem
bers of Branch No. 2 employed by the latter company thereupon set
up a benefit plan for their own protection. This plan was started in
August, 1924, immediately after Branch No. 2 discontinued its gen
eral plan, and provides an unemployment benefit guaranteeing a
minimum wage throughout the year.
Eligibility for benefits.—All members of Branch No. 2 who are
employed at the Wyoming Valley Lace Mills are covered by the plan,
it being a rule that all members shall contribute to the fund if their
earnings are more than the amount of the benefit. I f a new member
comes into this branch from some other branch in another city, he is
immediately eligible. I f a new member has never been a member in
any branch of the Amalgamated Lace Operatives of America, or is
an apprentice in the trade, he must serve six months before bting
eligible, when he will receive half the benefit; after one year he is
eligible for two-thirds of the benefit; and in 18 months he is eligible
for full benefits.
Unemployment is taken to mean involuntary unemployment. I f
a member is willing and ready to work and there are no orders, he
is regarded as unemployed. I f a member is sent for he must do the
work required or he will not be eligible for benefits. He must be
notified that he is needed a given number of hours in advance of the
time when needed, however; otherwise he does not lose his right to
benefit. A member need not report daily but must be ready to work
when sent for. A member may do outside work and still draw
benefits but he must pay union dues according to the amount he
earns. As long as the member is on call and reports when needed,
the union does not care what he does in outside work when unem
ployed at the trade.
Benefits.—In January, 1930, the unemployment benefit was fixed
at $16 per week.
Administration.—The fund is administered by the shop commit
tee consisting of four members, a secretary-treasurer, two trustees,
and “ responsible member ” of the shop. The dues are collected
by a collector chosen by the union, who is paid $10 a year for his
services, plus 1 per cent of each dollar collected. The money col
lected is turned over to the secretary-treasurer. On good security
the committee has allowed loans to be made to members. The re
sponsible member checks all claims for benefits and approves them
before they can be paid. The shop committee has the final deci
sion in all matters of dispute, unless the member asks for a decision
by vote of all weavers in the shop. The books are audited each year.
Method of financing plan.—When the plan was started the group
of workers who were employed by the Wyoming Valley Lace Mills
168
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
claimed its pro rata share of the balance in the unemployment fund
which had been abandoned. This amounted to $1,200. Members
of Branch No. 2 contribute $1 per week if they earn as much as the
amount of the benefit.
Statistics of operation.—Table 78 gives statistics of operation of
the unemployment-benefit plan of Branch No. 2, Amalgamated Lace
Operatives of Wilkes-Barre, from July, 1924, to April, 1931:
T able
78.— Operation of unemployment-benefit plan of Branch No. Amalgamated
Lace Operatives, Wilkes-Barre, July , 1924, to April, 1931
Year or period
1924 (July to December)____________ - ___
1925-.............................................................
1926-..............................................................
1927-.............................................................
1928-..............................................................
1929_..............................................................
1930-.............................................................
1931 (January to April)_________________
Total of
members
covered
27
27
22
21
22
21
21
21
Number
of claims
paid
45
43
31
29
71
43
138
35
Total
benefits
paid
$520.00
576.00
338.00
298.40
1,042.87
860.00
2,053.83
549.18
Average Balance in
benefit fund at end
per claim
of period
$11.56
12.00
10.90
10.29
14.69
20.00
14.88
15.69
$1,623.74
2,255.57
3,132.56
3,931.77
4,000.41
4,329.88
3,095.83
1 2,919.13
i On April 22,1931.
An interesting feature of this table is the fact that the highest
average payment ($20) occurred in a year of prosperity (1929),
rather than of depression. In this year the members decided to pay
$20 for the enforced vacation which all members had during stock
taking period.
General experience.—When the plan started, benefit payments were
$12 per week. On August 14, 1926, by a vote of the members it was
decided to pay each member $10 for unemployment during the annual
stock taking, which lasted at least a week in the year. On October 29,
1927, unemployment benefits were increased to $15 per week, and in
that year it was voted to pay $15 for the stock-taking period. In
January, 1929, the members voted to pay $20 for the stock-taking
period for that year. In January, 1930, the unemployment benefit
was increased to $16 per week.
The local has been able to carry through its unemployment-benefit
plan successfully. No additional assessments have been made. The
iund has been sufficient to pay for stock-taking periods in addition
to regular unemployment caused by lack of orders. The depression
made serious inroads on the fund, but as yet all payments have been
met and no loans have been necessary. At the present time there is
nearly $3,000 in the fund. No changes are contemplated in the plan
at present.
The company does all it can to equalize work. The man who works
the smallest number of hours is always the first called back. Dis
charge never takes place unless on thorough investigation the member
is found to be incompetent. The union rules allow no overtime.
When there has been an unusual rush at this mill, workers on short
time have been brought in from other lace mills in Wilkes-Barre.
These employees are required to pay into the unemployment fund
while working at this mill. The lace industry is now working a
40-hour week, but all workers are not working full time.
TRADE-UNION PLANS
169
Lace Operatives, Philadelphia, Pa.
The Amalgamated Lace Operatives of America have two local
branches in Philadelphia—Branch No. 1, made up of lace-curtain
weavers, and Branch No. 18, composed of Levers machine weavers.
Five separate unemployment-benefit plans are in operation for the
benefit of the members of these two branches. Two of these plans
are established through joint agreements with manufacturers and
are described in the section on “ Joint agreement plans ” (see pp. 96
and 99). The other three are maintained by three groups of union
members, as follows: Members of Branch No. 1, employed by the
North American Lace Co.; members of Branch No. 1, employed by
the Quaker Lace Co.; and members of Branch No. 18, employed
by the North American Lace Co. These three plans are described
below.
Members of Branch No. 1 Employed by North American Lace Go.
Members of Branch No. 1 employed by the North American Lace
Co. began their unemployment-benefit fund in February, 1928, The
plan provided for an unemployment-benefit fund known as the North
American Lace Curtain Weavers’ Out-of-Work Fund. It guarantees
a minimum wage to eligible members. When the plan was started
it was voluntary, but beginning January 1, 1931, it became com
pulsory for members employed at this shop.
Eligibility for benefits.—All members of Branch No. 1 who are
employed by the North American Lace Co. are eligible for unemploy
ment benefits. By unemployment is meant involuntary unemploy
ment, waiting for orders, machine repairs, etc. Shutdowns and
stoppages for stock taking are not paid for. I f the funds permit,
the union votes to pay for stock taking. Holidays are paid for if
the wage falls below the minimum. Members drawing sick benefits,
members in arrears to the fund more than three weeks, and members
obtaining work outside are not eligible for benefits. I f a member
fails to report when there is work or refuses to take the work offered,
he is not eligible. Members must report for work as directed by the
shop committee; as a rule they report twice a week.
Benefits.—Benefits paid are $10 a week or an amount sufficient
to bring the weekly wage up to that amount. Arrears to the fund
are collected before benefits are paid. There is no waiting period
and no limit to the amount of benefits a member may draw.
Administration.—The fund is administered by a committee of
three and the responsible member of the local union. This com
mittee is chosen by the shop.
The shop collector collects all dues and turns them over to the
committee. The money is deposited in a bank. Members claiming
benefits must deposit their pay cards with the responsible member
who turns them over to the secretary of the unemployment-benefit
fund. All lists of members entitled to payment of benefits must
have the approval of the responsible member and at least one mem
ber of the shop committee. Payments are made by the committee
each pay day. The committee renders a statement of the fund semi
annually to the members of the shop and the trade committee.
170
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
Method of financing plan.—All members who earn up to $45 a
week contribute 50 cents a week to the fund and those who earn
$45 and over contribute $1 a week.
Statistics of operation.—Data covering the operation of the
unemployment-benefit plan of the lace operatives of the North
American Lace Co. belonging to Branch No. 1 are given in Table 79:
79.— Operation of unemployment-benefit plan of lace curtain weavers of
North American Lace Co., Philadelphia, 1928 to 1930 and January to April ,
1931
T able
Year
Number
of union
members
covered
1928................................................................
1929................................................................
1930................................................................
1931 (to April 25).........................................
1 $1,000 loan, real balance $527.50.
* $300 loan, real balance $1,564.60.
48
48
40
40
Number of
members
receiving
benefits
48
48
40
38
Total
benefits
paid
$2,025.89
1,113.05
2,386.21
912.30
Average
benetit
paid
$42.21
23.19
59.66
24.01
Balance in
fund at end
of period
i $1,527.50
*1,864.60
3 1,389.39
<477.09
3 $1,300 loan, real balance $89.39.
* $1,300 loan, deficit $822.91.
General experience.—The fund was started with a donation of
$1,090.94 from the general funds of Branch No. 1, a pro rata share
of $5,000 which was divided between the three shops in the union.
In August, 1928, the fund was very low and a donation of $500 was
made by the company. In September of that year it was necessary
to make a loan of $1,000 from the union, and in September, 1930, it
was necessary to make another loan of $1,000.
Members of Branch No. 1 who are employed at the North
American Lace Co. feel that the unemployment-benefit plan has
been a great help to them during the entire period of its operation.
They have had considerable difficulty in keeping the plan going. So
far they have been able to meet all claims for benefits, but the fund
is very low at present. The members feel that such a plan is a
necessity and will do all in their power to keep the plan running.
No changes are contemplated in the plan.
Employment has been very irregular during the entire period
of the plan and the hours are seldom over 15 in a week. Every
thing possible is done to distribute the work evenly among the
employees, and the first man to wait for orders is the first to receive
work when there is an opportunity.
Members of Branch No. 1 Employed by Quaker Lace Co.
Members of Branch No. 1, Amalgamated Lace Operatives of
America, employed by the Quaker Lace Co., began their unemploy
ment-benefit fund in March, 1928. The plan provides for an un
employment-benefit fund, known as the Quaker Lace Out-of-Work
Fund. It guarantees a minimum wage to eligible members. The
plan is compulsory for all members of Branch No. 1 employed at
the Quaker Lace mills.
Eligibility for benefits.—Members of Branch No. 1 who are em
ployed by the Quaker Lace Co., have worked in the shop for one
171
TRADE-UNION FLANS
month, and are not more than two weeks in arrears for dues are
eligible for unemployment benefits. By unemployment is meant
involuntary unemployment, waiting for orders, machine repair, etc.
Shutdowns and stoppages for stoclc taking are not to be paid for,
although if the funds permit stock taking is usually paid for by
vote of the union. Holidays are paid for if the wage falls below
the minimum. I f the fund falls below $1,800, stock-taking vacation
is not paid for.
I f a member fails to report when there is work or if he refuses to
take the work offered, he is not eligible for benefits. Requirements
as to reporting for work are left to the foreman and the shop
committee, but as a rule members report once a week. There are
no rules as to outside work.
Members drawing sick benefits are not eligible. All lists of those
eligible for benefits in a week must have the approval of the re
sponsible member and at least one member of the shop committee.
No further proof of unemployment is needed.
Benefits.—The benefits paid are $10 a week, or an amount sufficient
to bring the weekly wage up to that amount. Arrears for dues are
collected from the fund in case the member is not more than two
weeks behind. There is no waiting period and no limit to the
amount of benefits a member may draw.
Administration.—The fund is administered by a committee of
three and the responsible member of the local union. This committee
is chosen by the shop.
The shop collector collects all dues and turns them over to the com
mittee. This money is deposited in a bank. By Thursday each week
the shop committee gives to the secretary of the unemployment-beneefit fund a list of members entitled to benefits. All lists must be
approved by the responsible member and at least one member of the
shop committee. Payments are made in cash by the committee each
pay day. The committee settles any matters of dispute. The com
mittee renders a statement annually to the shop and to the trade
committee, showing the state of the fund.
Method of financing plan.—The fund is financed by weekly con
tributions from the members, which, as set in January, 1931, are
graded within narrow earnings groups and range from nothing for
those earning less than $16 per week to $2 for those earning as much
as $76 per week.
Statistics of operation.—Table 80 presents data on the operation
of the unemployment-benefit plan of the lace-curtain weavers of the
Quaker Lace Co. from March 1 to April 25,1931:
T able
80.— Operation of unemployment-benefit plan of lace curtain weavers of
Quaker Lace Co., Philadelphia, March 1, 1928, to April 25, 1931
Year or period
Mar. 1, to Nov. 1, 1928.................................
1928-29...........................................................
1929-30...........................................................
Nov. 1, 1930 to Apr. 25,1931........................
Number
Number
members
of members ofreceiving
covered
benefits
96
94
90
86
i There is a deficit of $2,534.38 on loan from Branch No. 1.
65655°— 31------ 12
96
94
90
86
Total
benefits
paid
$742.11
2,350.59
8,568.31
842.77
Average
benefit
paid
$7.73
25.01
65.20
9.80
Balance in
fund at end
of period
$3,224.92
3,111.37
1,612.32
1 1,465.62
|f2
UNEMPLOYMENT-BENEFIT P L A N S * W N I T E D STATES
General experience.—The fund started with a donation of $2,272.72
from the general funds of Branch No. 1, a pro rata share of $5,000
given to the three shops of Branch No. 1. During 1929-30, $4,000
was loaned by Branch No. 1 and contributions amounting to $1,500
were donated by the Quaker Lace Co.
At the time the plan was started contributions from members for
the unemployment-benefit fund were as follows: Members earning
less than $15 per week, nothing; from $15 to $29.99 per week, 50
cents; from $30 to $44.99 per week, 75 cents; $45 and over per week,
$1. On January 1, 1929, the contributions were changed as follows:
Members earning less than $16 per week, nothing; from $16 to
$44.99 per week, 50 cents; $45 and over per week, $1. In January,
1931, still another change was made fixing the amount of contribu
tions as at present.
Members of Branch No. 1 who are employed by the Quaker Lace
Co. feel that an unemployment-benefit fund is a necessity. It has
been something of a struggle to keep the fund going. It has been
necessary to borrow from the general funds of the union, and a dona
tion has been received from the company. It has not been possible to
pay back any of the loan, thus leaving at the present time (April,
1931) a deficit of about $2,500 in the fund, but it has been possible to
pay the unemployment benefits at all times. The members feel that
a special reserve fund would have been of great assistance had it been
set up. No changes in the plan are contemplated.
The regular hours are 48 per week, but it has been four or five
years since it has been possible to keep this schedule. For some time
the average has not been over 15 hours a week. For the past two
or three months workers have averaged about 20 hours a week.
Many workers have had shorter hours, however, depending on the
orders. Everything possible is done tq distribute the work evenly,
and the first man out is always the first man to receive work. No
overtime is allowed.
Members of Branch No. 18 Employed by North American Lace Co.
The plan was adopted on November 1, 1925. First contributions
were made on November 13, 1925, and the first benefits were paid
December 4, 1925. The plan provides an unemployment benefit,
guaranteeing a minimum wage. It is not compulsory.
Eligibility for benefits.—Members of Brandi No. 18 employed by
the North American Lace Co. are eligible for benefits after they
have paid dues to the fund for 26 weeks, if they are not 4 weeks in
arrears in their dues. By unemployment is meant lack of orders
only.
The rules state that members waiting for orders must report every
day except Saturday. This rule, however, is left to the discretion of
the foreman. I f a man does not report when there is work, he is
deprived of benefits for that week. There is no rule as to outside
work. Any member trying to defraud is penalized and deprived of
benefits for a period ox four weeks.
Benefits.—When the plan began benefits were $12 or an amount
sufficient to bring the weekly wage up to that amount. On July 1,
173
TRADE-TJNION PLANS
1930, the benefit was raised to $15. There is no waiting period and
no limit to the amount of benefit a member may draw.
Administration.—The fund is administered by a committee of
three—a president, a vice president, and a secretary-treasurer—
elected annually by the shop members. The president and vice
president act as trustees, and see that the plan is carried on
satisfactorily.
Contributions are collected by the secretary and deposited in a
bank. All checks drawn on the account must be signed by the
secretary and one trustee. Payments are made in cash on the
regular pay day.
Method of financing flan.—Members pay dues as follows: Mem
bers earning less than $15 per week, nothing; from $15 to $20 per
week, 50 cents; $20 and over per week, $1. Members whose earnings
are under $10 and who draw benefits bringing their wages up to
the minimum guaranteed are required to pay 50 cents into the fund.
This is deducted from the benefit paid.
Statistics of operation.—Table 81 gives data on the operation of
the unemployment-benefit fund of Levers machine operators of
the North American Lace Co. from November, 1925, to April 25,
1931:
T
8 1 . — Operation of unemployment-benefit plan of Levers machine operators,
North American Lace CoPhiladelphia , November, 1925, to April 2 5 ,19 31
able
Year or period
Number of Number of
members
benefit
covered claims paid
197
November, 1925, to Dec. 31, 1926_________
126
169
20
1927................................................................
22
86
1928................................................................
21
58
1929................................................................
49
1930................................................................
24
January, 1931, to Apr.
___________
24 25, 1931 36
Total
benefits
paid
$2,131.97
1,006.39
581.63
481.27
493.93
410.94
Average
benefit
paid
$10.82
5.95
6.76
8.30
10.08
11.42
Balance in
fund at end
of period
$632.76
416.80
684.63
989.13
1,387.46
1,311.42
133 members in 1925.
General experience.—Branch No. 18, Levers’ Out-of-Work Fund of
the North American Lace Co. has been able to meet all claims for
benefits. It has been somewhat of a struggle, however. The fund
was started with a contribution of $1,000 from the company. In
1926 the fund was very low but was brought up by a donation of
$500 from an officer of the company. Income from members’ dues
has been small since 1927, fewer men being employed by the company
and a smaller number oi those belonging to the fund. In times of
unemployment contributions are less. The year 1930, however,
showed a gain in members covered and in income and a better bal
ance was on hand than at any time since 1926. The balance at
present is slightly less than at the beginning of 1931 but is still higher
than in any year since 1926. It has not been necessary to resort to
any loans.
Employment has been very irregular—about 18 hours a week at
present. The rules provide that in case a depression necessitates it,
machines where the orders warrant shall be operated by three men
upon 6-hour shifts, other men making racks to work six hours per
174
UNEMPLOYMENT-BENEFIT PLANS— UNITED STATES
day. Everything possible is done by the company to distribute work
evenly. The company is friendly to the unemployment-benefit plan,
as is indicated by its contributions, amounting to $1,500.
There is no change contemplated except a return to a $12 benefit.
The rules, as changed July 1,1930, provide that if the funds get down
to $500 the benefit shall be placed back at $12. The members feel
that an unemployment-benefit plan is almost a necessity, and they
desire to keep it running constantly. It has been a great help during
unemployment.
PART 2
UNEMPLOYMENT INSURANCE IN
FOREIGN COUNTRIES
175
PART 2.—UNEMPLOYMENT INSURANCE IN
FOREIGN COUNTRIES
Unemployment insurance under public control or authority has
been established by legislation in 18 foreign countries. In two of
these—Luxemburg and Spain—the legislation has not as yet been put
into effect. In the other 16 countries, unemployment-insurance sys
tems are in active operation.
The operation oi the unemployment-insurance system of the
Union of Socialist Soviet Republics was suspended in October, 1930.
The reason given for this action was that a shortage of labor had
made itself felt in the labor market.
The systems established fall into two main groups, usually dis
tinguished by the terms “ compulsory ” and “ voluntary.” Compul
sory systems are those in which unemployment insurance is made
obligatory for certain designated classes of workers and under def
inite conditions prescribed by law. Voluntary systems are those in
which unemployment insurance through private organizations is rec
ognized, encouraged, and even subsidized by the State, but the estab
lishment of such insurance is not obligatory.
The 18 countries having unemployment-insurance legislation are
almost equally divided between these two types, the legislation in
9 countries being compulsory in character and in 8 voluntary, while
in 1 country—Switzerland—the cantonal legislation is in some cases
compulsory and in others voluntary. The distribution of the 18
countries on this point and the date of the first legislation on unem
ployment insurance in each country, are as follows:
Compulsory system:
Austria-----------------------------------------------------------------------1920
Bulgaria_____________________________________________ 1925
Germany---------------------------------------------------------------------1927
Great Britian and Northern Ireland____________________ 1911
Irish Free State______________________________________1920
Italy_________________________________________________ 1919
Luxemburg___________________________________________ 1921
Poland_______________________________________________ 1924
Queensland___________________________________________1922
Voluntary system:
Belgium______________________________________________ 1920
Czechoslovakia________________________________________1921
Denmark_____________________________________________ 1927
Finland______________________________________________ 1917
France_______________________________________________ 1905
Netherlands__________________________________________ 1916
Norway______________________________________________ 1915
Spain________________________________________________ 1931
Mixed system: Switzerland________________________________1924
As indicated above, legislation on unemployment insurance is a
recent development. Only two of the existing systems antedate the
World War. The others were all creations of war and postwar
177
178
U N E M P L O Y M E N T INSURANCE
conditions, the German system having been put into effect as late
as 1927. As a result of this element of newness, practically all the
systems now in effect are recognized as being more or less experi
mental and subject to constant changes, particularly during the cur
rent period of industrial depression, when the pressure is far greater
than that which the original systems were designed to withstand.
In the following pages a descriptive account is given of the un
employment insurance svstem in each of the 18 countries. Except
for Luxemburg and Spam, where the legislation has not as yet been
put into effect, this account includes? as far as information is avail
able, an analysis of the law, a review of actual operations under
the law, a statement of the attitude of representative individuals and
organizations toward the system, and a digest of any important
changes under consideration at the time the report was prepared.
A reading of the several reports reveals the wide differences in
the unemployment-insurance systems of these countries. They are
alike only in their objective—namely the relief of the evils of unem
ployment through some form of insurance. Otherwise they differ
among themselves on practically all important points—coverage,
methods of contributions, amount and character of benefits, provi
sion for emergency benefits, method of administration, etc. Collec
tively, however, they offer examples of almost all possible forms of
unemployment insurance, and provide a mass of information of
extraordinary value for the study of this important subject.
Austria1
Compulsory unemployment insurance for wage earners and sal
aried employees was introduced in Austria by the law of March 24,
1920. This unemployment insurance law replaced the former system
of unemployment relief out of Government funds which the Govern
ment had been obliged to establish provisionally by executive order
on November 6,1918—a few days after the fall of the old monarchy
and the dissolution of the army—in order to avoid violent political
disturbances throughout the country.
During the years 1920 to 1931 no fewer than 25 amendments to
this law have been passed by the Parliament. These amendments
in many ways changed the original provisions, such as those relating
to the method of financing and the rates of benefit; they subsequently
extended the period of benefit and introduced, as a temporary meas
ure for periods of stringent economic depression, the emergency
relief {NatstcmdsaushUfe) for workers who had been dropped from
the regular benefit. Due to these frequent changes the legislation
on unemployment insurance has become rather complicated, and the
Ministry of Social Welfare, therefore, recently had the State Print
ing Office publish the text of the law revised up to date. In addi
tion the Ministry of Social Welfare has issued 27 orders (Vollmgsanvmsunffen) dealing with the administration of the insurance and
relief and fixing from time to time the rates of contribution required.
Type of System
Unemployment insurance in Austria is, as already mentioned, a
compulsory system. Voluntary insurance is open only to laborers in
purely rural districts who are otherwise excluded from this branch
of social insurance. This voluntary insurance was established by the
order of September 22, 1923, but it is without any practical value.
Coverage of System
The compulsory unemployment-insurance system includes in prin
ciple all classes of wage earners or employees subject to compulsory
sickness insurance under the provisions of either the workmen’s
sickness insurance law or the employees’ insurance law.2
There are, however, certain classes of wage earners who, although
they are subject to sickness insurance, are specifically excluded from
unemployment insurance. The excluded classes are:
(a) Wage earners employed in agriculture or forestry, except
those employed exclusively or mainly in sawmills.
Report prepared by Ernest L. Harris, American consul general, Vienna, as of Apr.
2 The
workmen’s sickness insurance law covers practically all workmen employed in
private commerce, trade, and industry, while the employees’ insurance law covers the
salaried employees.
179
180
•UNEMPLOYMENT INSURANCE
(&) Domestic servants, including day workers, laundry women,
seamstresses, and gardeners who are engaged in private households.
(c) Persons employed by several employers at a time.
Id) Middlemen.
(e) Workmen in purely rural districts, unless engaged in the
building trades or in establishments with more than five workers.
(The Ministry of Social Welfare determines which districts are to
be considered as purely rural.)
(/) Apprentices, up to the last year of their apprenticeship.
(g) The children, stepchildren, and grandchildren of an employer.
The law provides that when home workers become subject to com
pulsory sickness insurance, unemployment insurance for them shall
be enacted by special order.
Contributions
The contributions for the regular unemployment insurance are
equally divided between employers and workers; the Federal Gov
ernment merely contributes to the cost of administration by paying
one-third of the expenses of the district industrial commissions and
the unemployment offices.
The cost oi the emergency relief is divided between the employers,
the workers, the State of which the unemployed is a resident, and
the Federal Government, the employers paying three-twelfths, the
insured three-twelfths, the State four-twelfths, and the Federal
Government two-twelfths.
Regular unemployment insurance.—In the case of insured work
men, the contributions for the regular unemployment insurance are
figured in hundredths of the workmen’s sickness insurance pre
miums; in the case of insured salaried (brain) workers, in hun
dredths of their salary.3
The law leaves it to the Ministry of Social Welfare, jointly with
the Ministry of Finance, to determine by order the rates necessary
to meet requirements. During the past few years a rate of 75 per
cent of the sickness insurance premium for wage earners and of 2.8
per cent of the salary for salaried employees has been in force. By
order of January 5, 1931, however, the ministry increased the rates
to 90 per cent and 3.4 per cent, respectively.
As far as the wage earners’ insurance is concerned, the contribu
tions to the regular unemployment insurance now are as shown in
Table 1:
8 In computing the contribution, however, any part of the salary exceeding 400
schillings ($56.28) per month is excluded.
181
AUSTRIA
T a b l e 1 .— Rates of contribution for regular benefit under wage earners9 unemploy
ment insurance system in Austria
[Conversions into United States currency on basis of schilling=14.07 cents]
Daily wages
Austrian
currency
Class I.........................................................................
Class II...................................................................
Olftss TTT
,
________________
Class IV..................................................................
Class V _______________________________ _____
Class VI ................................................................
Class VII................................................................
Class VIII...............................................................
Class TX„...
^ „
________
Class X _____ __________ __________ __ ___ _____
Schillings
Up to 1.13
1.13-1.39
1.39-1.73
1.73-1.87
1.87-2.40
2.40-3.00
3.00-3.60
3.60-4.80
4.80-6.00
Over 6.00
Weekly contribu
tion
United States Austrian United
States
currency
currency currency
Cents
15.90
15.90-19.56
19.56-24.34
24.34-26.31
26.31-33.77
33.77-42.21
42.21-50.65
50.65-67.54
67.54-84.42
Over 84.42
Schillings
0.48
.56
.70
.82
.94
1.22
1.48
1.90
2.16
2.44
Cents
6.75
7.88
9.85
11.54
13.23
17.17
20.82
26.73
30.39
34.33
For workmen engaged in sawmills and agricultural associations
(Genossenschaften) the contribution rates are somewhat lower.
Emergency relief.—In regard to the wage earners’ emergency
relief, the contributions are also based on the sickness-insurance pre
miums. As far as the amount is concerned the law merely stipulates
that the share which employers and workers have to contribute may
together not exceed 45 per cent of the wage earners’ sicknessinsurance premiums. Within this limit it is left to the local district
industrial commissions to determine the rate necessary to meet
requirements within their individual districts. The district indus
trial commissions have to report to the Ministry of Social Welfare
any change in the rate. I f they fail to do so, or fail to determine
a rate which is sufficient to meet requirements, the rate is fixed by
the ministry.
The contributions which have to be paid for salaried employees’
emergency relief are assessed at the ratio of 0.2 per cent o f the
salary afor each 5 per cent of the contribution paid for workmen.
In districts where there is a larger number of unemployed, as for
instance in industrial centers, the rates are higher than in the more
rural parts of the country where the number of persons who may
claim emergency relief is small.4
Method of paying contributions.—The contributions which em
ployers and workers have to pay, as well as the premiums for the
sickness insurance, are collected from the employer by the local
sickness insurance funds. The employer, who is responsible for the
registration of his workers and for the remittance of the contribu
tions, recovers the amount which the worker is required to pay by
deducting it from the latter’s wages or salary. The local sickness
insurance funds forward the amounts collected every month to the
* In computing the contribution, however, any part of the salary exceeding 400
schillings ($56.28) per month is excluded.
4 Of late, nearly all district industrial commissions have been obliged to increase the
rates of contribution. They now amount in Tyrol to 6 per cent, in Carinthia to 6, in
vicinity of Vienna to 6, in Vorarlberg to 10, in Salzburg to 15, in Gmund to 17, in the
Burgenland to 20, in Vienna to 25, in Upper Austria to 30, in St. Poelten to 40, and in
Wiener Neustadt to 45 per cent.
182
U N E M P L O Y M E N T INSURANCE
Federal Treasury, but for their administration expenses they may
retain 3 per cent of the amounts collected.
Benefits
Conditions for receipt of benefits.—Insured persons, in order to
have a claim for unemployment benefits, must be capable and willing
to perform work and actually unable to find employment. They
must, furthermore, have been employed in Austria for a certain
period in an occupation subject to compulsory insurance. The law
also provides that persons who are not jeopardized in their support
by their unemployment or persons who have not reached the age
of 16 and are not exclusively dependent on their own earnings, may
by order of the ministry, be excluded from the benefits.5
Since the law requires that the unemployed must be able to work,
workers who, on account of age or mental or physical disability, are
unable to work, are excluded from the benefits provided by the
unemployment insurance law.6
Being “ willing to work ” means that the unemployed has to accept
any “ appropriate job ” offered him by the unemployment office,the
term “ appropriate job ” being understood to mean any employment
which does not interfere with his health or morals, for which a suffi
cient compensation is paid and which does not jeopardize his chances
o f procuring in the future a position in the profession for which he
had been originally trained. I f the unemployed refuses to accept
such a job, he forfeits his right to unemployment benefit for a period
of eight weeks. Special courses are established by the district
industrial commissions to train workers for professions in which
there is a larger demand for workers than in the ones to which they
formerly belonged. Unemployed who refuse to avail themselves
of these courses may be excluded from benefit for a period up to
12 weeks.
Unemployment benefit is not payable where the unemployment is
due to strikes or lockouts.
The minimum period during which the unemployed must have
been employed in an occupation subject to unemployment insurance
to become eligible for benefit is 20 weeks during the last 12 months ;7
this period is extended to 40 weeks if the claimant, prior to having
been employed in an occupation subject to compulsory unemployment
insurance, was mainly or exclusively engaged in agriculture or
forestry.
The unemployment insurance law stipulates a waiting time of
eight days. In case the worker has voluntarily given up his job,
or was dismissed by his own fault, the waiting period may be ex
5 An order to that effect was issued on July 9, 1924. As far as the first 12 weeks
during which the unemployed draws the benefit are concerned, the district industrial
commissions take a rather lenient attitude.
6Workmen over 60 receive the provisional old-age allowance; employees who have
reached that age are entitled to the old-age pension under the provisions of the wage
earners’ insurance law or the salaried employees* insurance law. Invalids, if not entitled
to a pension under the accident or employees’ insurance law, become beneficiaries of the
“ poor funds ” of the city or community to which they belong.
7 In emergency cases where the claimant is in dire distress the district industrial com
mission may grant the benefit for a period not exceeding 12 weeks to an unemployed even
if the required 20 weeks of employment are distributed over two years, provided he can
prove that lack of sufficient employment during the last year was due to illness or other
important reasons.
AUSTRIA
183
tended to from four to eight weeks. On the other hand, the waiting
time may be dispensed with entirely if the worker, due to part-time
or short-time work, earned for the last three weeks prior to his
unemployment not more than half of his regular wages.
Period for which regular benefit is paid.—In its original form the
unemployment insurance law limited the period during which an
insured could draw benefit to 12 weeks within 12 successive months.
Even at that time the law authorized the district industrial commis
sions to extend this period to 20 weeks if the employment con
ditions continued to be unfavorable. Soon, however, this period
also proved insufficient to meet the unemployment crisis and the first
amendment to the unemployment insurance law (that of October 1,
1920) extended this period to 30 weeks.8
The law provides that the district industrial commissions shall
grant extended benefit to indigent claimants only.
For the period of the present economic depression the insured who,
after' having drawn the benefit for 30 weeks, has thereafter been em
ployed for at least 10 weeks may, if again unemployed, reapply for
benefit for a period not exceeding 12 weeks.
Benefit is suspended during any period for which an insured draws
sick benefit or is taken care of in a hospital under the provisions of
the compulsory sickness insurance, or tor which he received a dis
missal bonus (Abfertigung) .9
Character and amount of benefit.—With regard to the amount of
benefit, the law distinguishes between two groups of unemployed:
Group 1, including the unemployed who are in greater need ox as
sistance on account of having to support a family or who have to
be entirely self-supporting; and Group 2, including those who have
no dependents and those who live in the household of their parents
or other near relatives, where their living expenses are lower than
they would be if rooming with strangers.
The amount of unemployment benefit is based on the amount of
benefit to which the insured is entitled in case of sickness.10 In wage
Classes I to Y the amount of regular benefit is: For unemployed of
Group 1 eleven-tenths, and for those of Group 2 five-sixths of the
sick benefit. In Group 1 the unemployed person, moreover, receives
for each child (up to three) whom he has to support an additional
5 per cent of the amount ot sick benefit. For the wage Classes V I
to X the law gives specific figures, which are as follows:
8 For insured who were formerly engaged in agriculture or forestry the period is
limited to 20 weeks, unless they have since been employed for 52 weeks in an occupation
subject to unemployment insurance.
9 This is a bonus to which an employee (brain worker) is entitled if dismissed without
his fault after a certain length of employment. It amounts to from 2 to 12 months’
salary, depending on the number of years he was employed.
10 The sick benefit is based on the fundamental wage of the wage class to which the
insured belongs and amounts at present in the existing 10 wage classes to 0.86 schilling
(12.1 cents), 1 schilling: (14.1 cents), 1.24 schillings (17.4 cents), 1.44 schillings (20.3
cents), 1.68 schillings (23.6 cents), 2 schillings (28.1 cents), 2.40 schillings (33.8 cents).
8 schillings (34.4 cents), 3.60 schillings (50.7 cents), and 4.20 schillings (59.1 cents) per
day, respectively.
184
U N E M P L O Y M E N T INSURANCE
T a b l e 2.— Rates of unemployment benefit under wage earners' insurance in Austria
[Conversions into United States currency on basis of schilling=14.07 cents]
Amount of unemployment benefit
Daily wages
Group 1
Group 2
No child
1 child
2 children
3 children
Wage class
Austrian
currency
United
States
currency
§sa
.2
|C
0
Sch,
2.40-3.00
Class V I___
Class V II......... 3.00-3.60
Class V III........ 3.60-4.80
Class I X ........... 4.80-6.00
Over 6.00
Class X .......
Cents
33.8-42.2
42.2-50.7
50.7-67.5
67.5-84.4
Over 84.4
«3 t>»
.*
»a
gg
a
9I
.2
Ss
gg a
ii
P
Sch. Cents Sch. Cents Sch. Cents Sch. Cents Scft. Cents
33.8
1.60 22.5 2.10 29.5 2.20 31.0 2.30 32.4 2.40
36.6
1.80 25.3 2.30 32.4 2.40 33.8 2.50 35.2 2.60
43.6
2.00 28.1 2.50 35.2 2.70 38.0 2.90 40.8 3.10
2.20 31.0 2.80 39.4 3.00 42.2 3.20 45.0 3.40 47.8
49.3
2.30 32.4 2.90 40.8 3.10 43.6 3.30 46.4 3.50
The unemployment benefit is paid at the end of each week and is
paid also for Sundays and holidays. The total benefit which the
unemployed person draws for a week, however, may not exceed 80
per cent of his last weekly wages.
The law of December 7, 1922, also introduced a rent allowance
amounting to one day’s benefit per month.
With regard to the emergency relief benefits, the law merely stipu
lates that the latter may never exceed the amount of the regular
benefit last drawn, and that the maximum benefits are those provided
for Wage Class V III.11
Within these limits the law leaves it to the discretion of the district
industrial commissions to fix the benefits according to the individual
needs of the claimant and financial resources of the fund. As a rule
the full benefit is paid for a period of 22 weeks and then gradually
reduced. The method of procedure, however, is not uniform with the
different district industrial commissions.
Provisions for persons dropped from regular benefit.—For the
period of exceptionally severe unemployment, the amendment of De
cember 15, 1922, introduced, as a temporary measure, the so-called
emergency relief (Notstandsaushilfe) for unemployed of Austrian
nationality,12 who are in dire distress and who have drawn benefit for
the full period for which the regular benefits are paid and have thus
been dropped from the regular roll.
The structure of this emergency relief has undergone repeated
changes. In its present form it is based on the amendment of July
28, 1926. Due to the prolonged economic depression the Austrian
Parliament has been obliged to extend again and again the period
during which the provisions relating to this emergency relief were
11 For beneficiaries of Wage Class X the relief benefits have been subsequently increased
and now amount to between 2.10 and 3.50 schillings (29.5 and 49.2 cents) at the
maximum.
12 Subject to reciprocal treatment, foreigners who were legally admitted to work in
Austria are entitled to emergency relief under the same conditions as Austrians.
AUSTRIA
to remain in force. The last extension was enacted by the amend
ment of January 27, 1931, which extended the period to May 31,
19al*18
The law contains no provisions as to the length of time for which,
during the period the emergency relief is in force, the unemployed
may draw the relief, and leaves it to the district industrial commis
sions to pass on each case according to its urgency.14
Administration
Machinery for administering plan.—The internal organization of
the unemployment insurance is based on the principle of the closest
cooperation with the employment service (Arbeitsvermittlung).
Both are handled by the same agencies—that is, by the district indus
trial commissions and the local unemployment agencies.
The unemployed who wishes to apply for benefit must file his
claim with the unemployment office at the place of his residence.
These offices are, as a rule, identical with the local employment reg
istry agencies. The claimant has to submit a specific certificate of
employment from his former employer, and this must contain all
information, such as wage, class, length and time of employment,
profession, etc., which is important in deciding whether or not an
unemployed is entitled to benefit. If no appropriate job is available
and the office is satisfied that the claimant is entitled to benefit, it
issues a pay order to the disbursement agency which is, as a rule, the
local tax collection office.15
In order to assure regular receipt of the benefit the unemployed
must report twice a week to the unemployment office. I f he fails to
do so, benefit may be suspended for a period of two weeks.
The district industrial commissions, of which there are 11 in Aus
tria, are semiofficial bodies in which employers and workers are
equally represented. The members are appointed for a period of
three years by the Ministry of Social Welfare upon the recommenda
tion of the provincial governor at the suggestion of the employers’
associations and labor unions. Each meeting of a commission has to
be attended by a representative of the ministry and a representative
of the provincial governor who may veto its decisions. In the latter
case the matter is suspended until the ministry has passed on the sub
ject. I f the commission fails to discharge its duties, the ministry
may dissolve it and refer the administration temporarily to a com
mittee consisting of three members.
The district industrial commissions are required to supervise the
employment offices of their respective districts. They have first deci
sion in regard to extensions of the regular benefit as well as the
granting of the emergency relief. They have to pass on appeals from
awards of the arbitration boards, and they have to take measures to
prevent abuse of the insurance. They are also in charge of the
18 A t the time this last amendment was enacted it was hoped that by the end o f May a
recent Government bill looking toward a reorganization o f the entire system would be
passed by the parliament. The latest developments, however, indicate that this hope w ill
hardly be fulfilled in the near future.
M Cases have been reported in which unemployed were able to draw relief for seven
years in succession.
15 In Vienna with its dense traffic and large number o f unemployed, five separate dis
bursement offices have been established fo r paying out the benefits.
186
UNEMPLOYMENT INSURANCE
courses for training the unemployed for new professions. In addi
tion, as far as the emergency relief is concerned, they are responsible
for the appropriate adjustment of the contributions and expenditures.
The final supervision of the entire unemployment insurance sys
tem lies with the Ministry of Social Welfare. In the ministry there
is a board or council on which employers and workers are equally
represented, and which must be consulted in all fundamental and
important questions referring to unemployment insurance. It has,
however, merely a consultative character.
The ministry exercises its authority by issuing orders on the basis
of the existing law; by giving instructions to the district industrial
commissions; by deciding complaints against decisions of the latter,
and by passing upon the budget which the district industrial com
missions and the unemployment office have to submit for approval,
etc.
Provisions Against Abuse
In order to control abuses a special section has been established in
connection with each district industrial commission which has to see
to it that the benefit or relief is not fraudulently drawn by individ
uals not entitled to it, to verify the claim of necessity or dire distress,
and to ascertain that the claimant does not earn an income from
regular side jobs, home work, or the like.
Anyone wTho is found to have deliberately applied for or drawn
benefits to which he is not entitled is punishable by police arrest up
to three months, provided the matter is not rated as fraud, in which
case it falls under the jurisdiction of the criminal code.
Benefits which have been illegally obtained must be refunded and
may, if the person continues to be a beneficiary under the unemploy
ment law, be deducted from the benefit or relief (which is otherwise
exempt from attachment) up to an amount equal to one-half of the
benefit. On a total of 206,846,792 schillings ($29,103,344) paid out
for benefits in 1930, these refunds amounted to 3,528,884.15 schillings
($496,514).
Employers who omit to register their workers, or delay in doing so,
or who register them under a lower wage or salary class than the one
to which they rightly belong, are severely fined and in addition must
reimburse the Government for the uncovered expenses arising there
from when the worker becomes unemployed.
Grievances and Disputes
From the decisions of the unemployment offices the insured may
appeal to the arbitration board16 oi each such office. From the
decision of the arbitration board appeal may be taken by the insured
as well as by the head officer of the unemployment office to the district
industrial commission of the district in which the unemployment
office is situated. The appeals must be filed within eight days and
do not suspend the decision against which they are directed. The
decision of the district industrial commission on such appeal is final.
w These arbitration boards consist o f an equal number o f employees and workers.
187
AUSTRIA
I f the district industrial commission is of the opinion that a deci
sion of an unemployment office involves a violation or false interpre
tation of the law, it may of its own accord revise or cancel such
decision. Against such revision or cancellation as well as against
decisions which the district industrial commissions pass in the first
instance an appeal can be filed within a fortnight with the Ministry
of Social Welfare.
Statistics of Operation
Number of persons covered and proportion of total worlcers.—
According to the latest available statistics, the number of persons
insured against unemployment in Austria in the last quarter of 1929
was 1,180,846.
The total number of wage and salary earners in Austria is approxi
mately 2,200,000. Of these approximately 1,100,000 are commercial
and industrial laborers, 240,000 are private employees, 450,000 are
agricultural laborers, and 380,000 are public-service employees,
including railway and municipal employees.
As already stated, most of the commercial and industrial laborers,
as well as practically all private employees, are subject to compulsory
unemployment insurance, while of the agricultural laborers only a
small number are included in this branch of insurance. The publicservice employees who are permanently employed and who are spe
cially provided for in case ox disability are not covered by the general
social insurance system, and are therefore also not included in the
unemployment insurance.
Number of persons receiving benefits.—Complete statistics as to the
number of persons receiving benefits with reference also to sex, age,
industry, length of benefit, and the like, were published by the
Ministry of Social Welfare in a special booklet entitled “ Statistik
der Arbeitslosigkeit, 1920-1929.”
The following table shows for the year 1930 and the first quarter of
1931 the number of unemployment insurance beneficiaries:
T
able
3 . — Number of persons receiving unemployment insurance benefit in Austria ,
1980 and January to March, 1981
Number of persons receiving benefit
1931
Item
1930
January
Whole of Austria:
Maximum_____________________________________
Minimum_____________________________________
Average_______________________________________
Vienna:
Maximum_________________—_—_______ - ______
Minimum __
__________ __________________
Average__________________________ - ___________ 1
Austria, exclusive of Vienna:
Maximum____
____________ _____ ___ _______
M inim um ___
_____________________________
Average_______________________________________
65655°— 31------ 13
February
March
294,845
149,972
208,370
331,239
334,044
304,084
105,955
70,221
83,282
116,905
115,181
103,475
188,890
77,210
125,089
214,334
218,863
200,600
188
UNEMPLOYMENT INSURANCE
These figures do ruot include some 58,000 unemployed workmen
over 60 years of age who are beneficiaries under the provisional oldage benefit system and from 25,000 to 40,000 unemployed who are
registered with the employment agencies without deriving benefits.
The following table gives the number of registered unemployed
and the number of these receiving benefit, as of January 31, 1931:
T
able
4 . — Number of registered unemployed and number receiving benefit, by
industry or profession, January SI, 1931
Number registered as seek
Number receiving benefit
ing employment
Industry or profession
Males
8,535
Agriculture, forestry, and gardening....................
3,927
Mining and salt winning......................................
Earth, stone, clay, and glass industries............... 14,492
Building industry and connected trades.............. 113,673
Iron and metal industries:
Iron and metal production.............................
6,219
Manufacture of iron, steel, and metal goods.. 22,285
Machine and vehicle construction................. 14,743
Electro industry..^..........................................
2,898
Wood and furniture industry............................... 19,343
2,721
Hide, skin and leather..........................................
7,392
Textile industry....................................................
Clothing and haberdashery industry............ ...... 11,720
4,225
Paper and paper-goods industry..........................
Graphic industry..................................................
2,427
Chemical industry:
3,183
Chemical_______________________________
802
Rubber............................................................
Food and beverage industry................................. 10,436
6,175
Hotel, restaurant, bar, and coffeehouse trade___
Commerce:
8,235
In goods...........................................................
338
As agent..........................................................
Traffic....... .............. ...................................... ...... 11,908
898
Banking, insurance__________________________
Sanitation..............................................................
2,301
Medicine...... .........................................................
553
Education, art, and entertainment......................
1,511
Clerical service at lawyers and notaries________
145
3,572
Public service (nonpermanent)............................
117
Household 1................................................... ........
Miscellaneous......................................................
1,471
Total............................................................
286,879
Females
Total
Males
Females
1,100
479
4,655
5,837
9,635
4,406
19,147
119,510
6,867
3,712
13,582
105,989
812
458
4,289
5,066
7,679
4,170
17,871
111,055
787
5,213
1,464
2,161
1,910
964
13,610
13,939
2,800
1,164
7,006
27,498
16,207
5,059
21,253
3,685
21,002
25,659
7,025
3,592
6,009
19,880
13,143
2,490
17,768
2,448
6,839
10,372
3,944
2,016
646
3,942
1,084
1,548
1,701
801
12,217
12,173
2,522
892
6,655
23,822
14,227
4,038
19,469
3,249
19,056
22,545
6,466
2,908
1,446
1,131
4,409
11,375
4,629
1,933
14,845
17,550
2,768
755
9,092
5,035
1,174
973
3,336
9,403
3,942
1,728
12,428
14,438
5,061
213
485
402
1,818
869
617
269
738
2,006
1,112
13,296
551
12,393
1,300
4,119
1,422
2,128
414
4,310
2,123
2,583
6,734
293
10,838
700
2,000
493
1,423
119
3,142
75
970
2,885
162
410
299
1,560
802
544
201
635
264
365
9,619
455
11,248
999
3,560
1,295
1,967
320
3,777
339
1,335
88,047
374,926
260,064
71,175
331,239
Total
i Having been only temporarily employed as domestic servants.
Receipts and expenditures.—The receipts and expenditures of the
unemployment-insurance system in 1929 and 1930 are shown in
Table 5:
189
AUSTRIA
T a b lej
5.— 'Receipts and expenditures of unemployment-insurance system in
Austria , 1929 and 1930
[Conversions into United States currency on basis of schillings 14.07 cents]
Regular benefits
Item
Austrian
currency
United
States
currency
Emergency relief
Austrian
currency
United
States
currency
Total
Austrian
currency
United
States
currency
Expenditures
Schillings
Benefits paid:
103,883,084 $14,616,350
192 9
138,985,963 19,555,325
193 0
Productive
unemployment
relief:
439,043
3,120,419
192 9
2,903,266
408,489
193 0
Special measures:
62,797
446,318
192 9
540,948
76, 111
193 0
Transportation of unemployed:
22,683
161,220
192 9
17,606
126,138
193 0
Total benefits and relief:
192 9
.
193 0
.
Schillings
42,578,474 $5,990,791
56,350,025 7,928,449
Schillings
146,461,558 $20,607,141
195,335,988 27,483,774
3,120,419
2,903,266
439,043
408,489
446,318
540,948
62,797
76, 111
161,220
125,138
22,683
17,606
107,611,041
142,555,314
15,140,873
20,057,532
42,578,474
56,350,025
5,990,791
7,928,449
150,189,515
198,905,340
21,131,664
27,985,981
10,377,928
11,434,237
1,460,174
1,608,797
1,394,702
1,214,696
196,235
170,908
11,772,630
12,648,933
1,666,409
1,779,705
Gross expenditures:
192 9
193 0
Minus refunds:
1929..............................
117,988,968
153,989,551
16,601,048
21,666,330
43,973,176
57,564,721
6,187,026
8,099,356
161,962,145
211,554,272
22,788,074
29,765,686
2,772,303
3,479,804
489,608
496,004
618,733
69,788
87,056
3,268,307
4,098,537
459,851
576,664
Net expenditures:
.
192 9
193 0
.
Reserves: 1929_________
115,216,665
150,509,747
16,210,985
21,176,721
43,477,172
56,945,988
8,619,085
6,117,238
8,012,301
1,212,705
158,693,837
207,455,735
8,619,085
22,328,223
29,189,022
1,212.705
7,332,919
8,619,085
1,031,742
1,212,705
7,332,919
8,619,085
1,031,742
1,212,705
22,621,921
17,427,449
3,182,904
2,452,042
119,828,557
116,321,296
16,859,878
16,366,400
805,661
608,943
113,356
85,678
805,661
608,943
113,356
85,678
14,223,837
18,779,015
2,001,294
2,642,207
14,223,837
18,779,015
2,001,294
2,642,207
Cost of administration:
192 9
193 0
Receipts
Balance, end of—
192 8
192 9
Contributions by workers and
em] '
Cost of collection of contribu
tions:
192 9
.
193 0
Contributions by States:
192 9
193 0
Contributions by Federal
Government:
Legal share1929— _____________
1930.............................
Advances—
192 9
193 0
Total:
1929..
97,206,636
98,893,847
13,676,974
13,914,364
1,857,777
2,106,082
261,389
296,326
7,111,919
9,389,507
1,000,647
1,321,104
11,495,590
1,262,036
1,617,429
16,152,253
49,509,818
2,272,622
6,966,031
2,121,988
298,564
16,152,253
51,631,806
2,272,622
7,264,595
115,216,665
150,509,747
16,210,985
21,176,721
52,096,257
56,945,988
7,329,943
8,012,301
167,312,923
207,455,735
23,540,928
29,189,022
Cost of administration.—As shown in Table 5, the cost of adminis
tration amounted in 1929 to 11,772,630 schillings ($1,656,409), and
in 1930 to 12,648,933 schillings ($1,779,705). Compared with the
190
UNEMPLOYMENT INSURANCE
total expenditures, the cost of administration in these two years
amounted to 7.42 per cent and 6.1 per cent, respectively. The
amounts expended on the various items of the administrative cost
in 1929 were as follows:
T a b l e 6 . — Expenditure for specified items of cost of administration of unemploy
ment insurance in Austria , 1929
[Conversions into United States currency on basis of schillings 14.07 cents]
gs::1
'
»
■•
r-js:.,
:--------Amount of expenditures
Item
Austrian cur
rency
United States
currency
Schillings
5,027,327
1,986,904
4,102,675
515,095
140, b29
$707,345
279,557
577,246
72,474
19,787
District industrial commissions___________________________
Unemployment offices___________________________________
Collections______________________________________________
Supervision________________________________ ———_______
________________________________________________
Printing
Per cent
of total
receipts
3.2
1.3
2.6
.$
.1
Present financial condition.—There has been a deficit in the regu
lar unemployment insurance system each year since 1925, amounting
in the various years to the following amounts:
192
192
192
192
192
193
5
6
7
8
9
0
9,384,222.22
8, 004, 034.22
10,974,150.96
5,634,627.35
16,152,252.91
49, 509,818.14
schillings
schillings
schillings
schillings
schillings
schillings
($1,320,360)
($1,126,168)
($1,544,063)
($792,792)
($2,272,622)
($6, 966,031)
First quarter 1931________
approximately 30, 000, 000.00 schillings ($4,221, 000)
The total advances which the Federal Government has had to make
therefor since the beginning of 1925 amount to nearly 130,000,000
schillings (about $18,000,000).
In regard to the emergency relief the conditions are somewhat
different. Here the district industrial commissions, if unable to
increase the rate of contributions, have to balance the deficit by
cutting down the benefits proportionately. By the end of 1929 the
district industrial commissions still had reserves in the amount of
8,619,085.24 schillings ($1,212,705). During the year 1930 these
reserves, however, were not only used up but a credit of 2,121,988.12
schillings ($298,564) had to be secured from the Government to cover
the deficit of the emergency relief.
Productive unemployment relief.—The law provides that the
ministry may grant, out of the unemployment insurance funds, sub
sidies, and loans for the encouragement of works of economic value
which offer employment for individuals who would otherwise draw
unemployment benefit. As a rule such subsidies are to be granted
only for works which are conducted by the Provinces, districts, or
communities. The subsidies granted may not in any case exceed the
amount saved in benefits owing to the fact that the workers are no
longer claimants for such benefit, and the loans may not exceed three
times the amount saved in benefits. An employer who receives such
a subsidy or loan is compelled to avail himself of those unemployed
whom the unemployment office designates for that purpose.
AUSTRIA
191
During periods of serious industrial depression employers may
be compensated up to the amount of the unemployment benefit if
they retain in their employment workers whom they are entitled
to discharge.
In view of the strict conditions laid down in regard to these sub
sidies and loans and the limited means of most of the Provinces,
districts, and communities for undertaking such emergency works,
the practical effect of this productive unemployment relief has
heretofore been comparatively small and remained far behind the
maximum (one-fourth of the total requirements for the unemploy
ment insurance) stipulated in the law.17
Contributions Not Based on Actuarial Calculation
While in all other branches of insurance the future requirements
can be calculated more or less arithmetically, this method fails
completely as far as the unemployment insurance is concerned.
There is no way of forecasting the trend of unemployment, since
it is influenced by innumerable factors, such as world and national
economics, political and commercial relations between the different
countries, exchange, crops, weather, rationalization, and so forth.
Moreover, the requirements and revenues are in inverse proportion;
with an increasing number of claimants the contributions automati
cally drop. Since it is impossible to increase the contributions beyond
the financial capacity of the contributing workers and employers,
there remain in times of urgent stress but two possibilities—either
the Government must cover the deficit or the benefits must be pro
portionately reduced. Under the present system the first method is
applied in regard to the regular benefits, the second in regard to the
emergency relief.
Attitude of Various Groups Toward System
The present unemployment insurance system in Austria meets
with much opposition on the part of the employers, who claim that
the burden which it causes is insupportable and is apt to ruin the
country. This opposition is directed partly against the principle
of unemployment insurance and partly against particular items in
the present system. The wage and salary earners on the other hand
strongly favor the insurance system and aim to extend and increase
its benefits still further. The general public leans either to one side
or the other, depending on its political orientation, but it is chiefly
interested in the problem from the viewpoint of price development
and taxes.
The representatives of the employers who are in opposition claim
that an insurance against the risks of unemployment is a contradic
tion in itself, as it is lacking in the fundamental requirements of
actuarial calculation and as, contrary to the principle of sound in
17 The sums expended on productive unemployment during the years 1927 to 1930 were
as fo llo w s: 1927, 4,252,238 schillings ($ 5 9 8 ,2 9 0 ); 1928, 3,867,255 schillings ($ 5 4 4 ,1 2 3 );
1929, 3,120,419 schillings ($439,043) ; 1930, 2,903,206 schillings ($408,490). These
amounts equal about 4, 2.7, 2.0, and 1.4 per cent o f the total expenditures for unemploy
ment insurance during these years.
192
UNEMPLOYMENT INSURANCE
surance, the insured can, at his own discretion, create a condition
whereby the insurance fund is forced to pay the benefit.18 They
also claim that the unemployment insurance jeopardizes the free
functioning of supply and demand on the labor market and that it
prompts a dislike of work instead of stimulating the unemployed to
seek it.
As far as the present Austrian system is concerned the employers
urgently demand the following changes:
(a) Better protection against the constant influx into the towns
of the agricultural population who leave their rural homes in order
to accept occupations in factories, road building, and the like which
are subject to unemployment insurance and who, after a compara
tively short time, become entitled to the benefits of such insurance
when unemployed.
(&) The exclusion of seasonal workers who, by the nature of their
profession, are exposed to seasonal unemployment and who presum
ably receive sufficient compensation in form of higher wages paid for
seasonal work.
(c) Elimination of workers under the age of 18 (at present 16).
(a) Introduction of stricter regulations as to the regular and
maximum periods during which benefit may be drawn and of a slid
ing scale by which the amount of benefit decreases with the length
of time during which it is drawn.
(e) Exclusion from benefits of insured who, in case of unemploy
ment, have other means of support even if it is only the earnings of
the husband, wife, or other members of the household.
(/) Extension of the time for which a worker must have been in an
employment subject to insurance before being entitled to the benefits
of the insurance.
(g) Reduction of the contributions and abolishment of the Gov
ernment advances out of the tax revenues, both of which, it is alleged,
increase the cost of production to an extent that Austrian products
can no longer successfully compete in foreign markets on which the
Austrian industry is largely dependent.
(h) Better and more centralized organization of the adminis
tration.
The representatives of the wage and salary earners, on the other
hand, wish to have the present underinsurance superseded by an
elevation to higher wage classes.19
They further demand that the present provisional emergency relief
become a permanent institution and that the benefits paid under said
relief be not curtailed. This means that the unemployed would be
able to draw full benefit for an unlimited length of time.
As far as the financing of the regular benefit and the emergency
relief is concerned, the representatives of the wage and salary earners
support the idea of placing as much of the burden as possible on
the shoulders of the Government—that is, the taxpayer.
18 It is true that the law extends the waiting time for insured who have deliberately
given up or lost their job to 8 w eek s; after this period the unemployed, however, has full
claim to the benefits. Moreover, it is stated that in time o f economic crisis, when busi
ness is slack, the worker can easily create conditions which lead to his dismissal without
it being possible to prove that such dismissal was caused deliberately.
19 Under the present wage class schedule, any part o f the wage exceeding 6 schillings
(84.4 cents) per day is not taken into consideration when computing the benefits fo r
social insurance.
AUSTRIA
193
Changes Contemplated
These manifold complaints on the part of the employers, the
urgent demand of the wage earners for enforcement of the longproposed old-age and invalidity pension for workmen, and for the
abolition of underinsurance, and the financial needs of the local
sickness-insurance funds, as well as the continuously increasing sums
which the Federal Government has to advance to the unemploymentinsurance fund in order to cover its growing deficit, have caused the
Government to initiate a far-reaching reform of the entire social
insurance system. The Federal Ministry of Social Welfare has
worked out a bill which endeavors to reach a compromise among the
different demands, to abolish certain abuses, to place the finances of
the different funds and their organization on a sounder basis, and to
abolish the necessity of advances to the unemployment-insurance
fund which threaten to disorganize and unbalance its budget.
This new bill which was completed in April, 1931, was referred by
the Government to the local chambers of commerce and chambers of
workmen and employees and to the other important trade and labor
associations for study and suggestions. The reports which the cham
bers of commerce and the chambers of workmen and employees have
compiled, in answer to the bill proposed by the Government, have
just been published. The chambers of commerce, in their report,
admit that the bill contains several changes worthy of approval, but
claim that the bill as a whole represents a great disappointment to
Austrian commerce, trade, and industry, since the proposed changes
fail to meet the demand for relief in social burdens. The chambers
of workmen and employees, on the other hand, reject the entire bill,
which they consider unacceptable from beginning to end and which
they denounce as an attack against the social rights of the laboring
class. They figure that as far as the unemployment insurance is
concerned, the proposed reform would deprive from 80,000 to 100,000
unemployed of their benefits.
As not only the Social Democrats, who hold the majority vote in
the chambers of workmen and employees, but apparently also the
Christian Socialists and the Pan-German representatives of the wage
and salary earners have joined in this opposition, the Minister of
Social Welfare, who had worked out the bill, has now resigned.20
Under the circumstances it is not to be expected that the proposed
bill will be submitted to Parliament in the form in which it was pre
pared by the Government. According to the latest newspaper re
ports, a plan to divide the reform into two phases is being consid
ered. The first phase would merely change the unemployment insur
ance system on points in regard to which further delay might mean
financial disaster. The reform of the other branches of social legis
lation and the introduction of the old-age and invalidity insurance
for wage earners would be left till a later time.
20 The present cabinet is formed by a coalition between Christian Socialists, Pan Ger
mans, and Peasants League. Doctor Resch, the M inister o f Social W elfare, was one o f
the Christian Socialist members o f the cabinet.
Belgium21
Unemployment insurance in Belgium seems to have had its origin
with the Typographers’ Union of Brussels, which instituted a system
of insurance open to contributing members in 1867. Certain other
unions soon followed suit. The system, however, was abandoned by
the Typographers’ Union some three years later and little progress
was made for a long period, although a number of unions meanwhile
gave relief to unemployed members from general funds in their
treasuries. The Longshoremen’s Union of Antwerp revived the
system of contributions in 1920, which continued for a time, but
made little progress as a general measure.
The first step toward the relief of the unemployed from public
sources seems to have been taken in 1897, when the city of Liege made
an appropriation for that purpose, the proceeds of which were dis
tributed through the medium of the local unions. The city of Ghent
made a similar provision in 1902, but went still farther and placed
the matter on a permanent basis by instituting a commission to
handle the distribution of such subsidies as might from time to time
be voted for relief of the unemployed. By 1913 there were 29
municipalities in the country maintaining unemployment funds
which were disbursed through the unions as required. In that year
several of the provincial governments also voted credits for assisting
the unemployed through the same medium.
The National Government first took cognizance of the unemploy
ment question in 1907, when the Parliament voted 10,000 francs
($1,930)22 for the aid of trade-unions in the relief of the unemployed.
Subsidies of similar kind in varying amounts continued to be granted
by succeeding parliaments up to the war.
The serious situation which arose in connection with postwar
readjustments of labor to industry brought about the royal decree
of December 30, 1920, which was issued on the initiative of the
Minister of Industry and Labor. This decree, together with the
series of others on the same subject which have followed, notably
those of May 1$ and December 10,1924, and the latest datea October
25, 1930, regularized the entire subject of unemployment insurance
and forms the basis of the present system, which is described below.
Type of Law
The central idea of the royal decree of 1920 and the amendatory
decrees which have followed is recognition of the trade-unions ana
syndicates of workers as the logical agencies for dealing with the
question of unemployment insurance for the protection of their
21 R eport prepared by M arion Letcher, American Consul General, and
Reineck, American consul, Antwerp, as o f Apr. 30, 1931.
82 Pre-war value o f Belgian fra n c= 1 9 .3 conts ; present v a lu e= 2 .7 8 cents.
194
W alter
S.
BELGIUM
195
members. At the same time, however, it was necessary to recognize
the fact that there are many workers not affiliated with unions.
This fact was taken into account in the provision for the establish
ment of branch agencies of the National Crisis Commission which
deals with the subject, at convenient points throughout Belgium,
which agencies operate exactly as the recognized disbursing officers
of the unions do in collecting contributions from insured workers
and disbursing relief. There are now 19 of these agencies in
operation.
The system in force is entirely voluntary. The individual is
free to insure himself or not as he may desire, either through a union
(if he be affiliated with such an organization) or through one of
the agencies of the National Crisis Commission. The local political
units, such as Provinces and municipalities, also have entire freedom
as to subsidies or other contributions to funds for extending the
normal obligations for relief resting upon trade-unions, although
such units are urged and encouraged to provide subsidies in
necessary cases.
Coverage of System
Insurance is open to all workers.
Contributions
Weekly contributions of 1 franc are required from each insured
worker. Payment is made in cash and receipt is evidenced by stamps
entered in a book provided for that purpose. The person applying
for insurance independently of the unions must, of course, show that
he is a bona fide worker and that he has regular employment in the
trade claimed.
Benefits
Grants to unemployed are made only to workers who have volun
tarily insured themselves, whether through the trade-unions or
through the agencies of the National Crisis Fund. In normal times,
unemployed workers without family dependents may receive a maxi
mum of two-thirds of their daily wages up to 50 days during one
rear. Workers with family dependents receive three-quarters of
?heir
daily wage under similar conditions, except that in cases where
there are more than four children in the family a supplemental
allowance may be made through special arrangement with the
National Crisis Fund.
After the maximum normal relief has been received by the insured
worker, and he still remains unemployed and in need of assistance,
he may receive extended relief on the same conditions for a further
period of 30 days from the National Crisis Fund, upon due approval
of his claim by the directorate of such fund. In either case, relief
is applicable only to working-days. Under emergency conditions,
which are considered as prevailing with respect to any particular
trade when more than 10 per cent of the persons engaged in that
trade are unemployed for reasons other than strikes and lockouts,
196
UNEMPLOYMENT INSURANCE
the usual rule may be set aside and relief extended under such condi
tions as the commission may prescribe. Relief is extended without
reference to the length of time premiums m a y have been paid.
Administration
The elements concerned in the operation of the system are the
workers affiliated with labor organizations; the workers not so
affiliated; local political units, city and provincial; and the National
Government. Each labor organization wishing to share in the
benefits of the national subsidies must be approved by the National
Crisis Commission, and must maintain a proper disbursing office for
the collection of the contributions of insured persons and the dis
bursement of such funds as may be required.
City and provincial governments, although given entire freedom,
are urged to allot from their respective treasuries subsidies to the
local labor unions which may require assistance in meeting unem
ployment obligations, and furthermore, in order to make similar
provision for independent workers insured by the National Crisis
Commission, local governments are enjoined to reimburse the
National Crisis Fund in the amount of 10 per cent of the total
disbursed from such fund to beneficiaries in the corresponding
territory during any year. The commission has the right to refuse
extra relief to any municipality or Province if such unit does not
bind itself to comply with this requirement.
The relation of the National Government to the subject is both
direct and supervisory, the first growing out of the unemployment
insurance offered to workers not affiliated with labor organizations,
and the second out of its control of the Government subsidies allotted
to labor organizations for the extension of relief after their normal
obligations have been fulfilled. The entire question is committed to
the National Crisis Commission, which is composed of from 6 to 10
members, one half of whom must be workers or their representatives
and the other half employers. At least half of the personnel must
be Belgian nationals. The ex officio chairman of the commission is
the Minister of Industry and Labor, whose approval is necessary to
give legal sanction to the measures undertaken.
All fiscal operations under the system are carried out through the
National Crisis Fund, which is a dependency of the National Crisis
Commission. The agents of the National Crisis Fund (now 19 in
number), located in different parts of Belgium, collect insurance
contributions as well as pay out benefits due, and at the same time
exercise appropriate supervision of the disbursement of subsidies
from the National Crisis Fund for supplementing the normal obliga
tions of the labor organizations as insurers against the risk of
unemployment.
One of the very important powers delegated to the commission
under the royal decree of February 18, 1924, was that of making
loans to private agencies for the development of enterprises calcu
lated to give employment in periods of depression. No action has
as yet been taken under this provision, but the delegation of such
powers is regarded as most important, since it represents a distinct
197
BELGIUM
advance toward the aim of labor elements to give the commission
a stable place in the Government, thus insuring its permanence
under all conditions.
The receipts of the National Crisis Fund are normally derived
from three sources: Government appropriations, reimbursements
from cities and prefects for money allotted for local use, and contri
butions paid direct by independent workers. Provision is also made
for a fourth source, donations, but this is practically a dead letter.
Statistics of Operation
Table 7 shows the numbers of insured workers and the total
number of days of unemployment in the different branches of in
dustry in the years 1927 to 1930. The total number of insured
workers in 1924 was 654,580; in 1925. 606,754; and in 1926, 598,251;
while in 1924 the total number ox days of unemployment was
3,157,389; in 1925, 4,804,350; and in 1926, 3,697,999.
T a b le 7 . —Number of insured members and number of days of unemployment
in specified industry groups, 1927 to 1930
Number of workers insured
Number of days of unemployment
Industry group
1927
1928
1929
1930
Mines____ __________ 71,675
Quarries..................... 25,394
Metallurgical............. 127,500
Ceramics.................... 10,200
Glass.......................... 14,110
Chemical__________
.4,791
Foodstuffs.................. 14,413
Textiles...................... 130,609
Clothing....................
6,618
Construction.............
39,995
Furniture................... 29.497
Hides and skins_____ 13,745
Tobacco.....................
8,018
Paper.........................
3,350
Printing___________
12,492
Art___________ ____ 15,967
Transportation_____
23,130
Miscellaneous............ 59,385
70,789
25,002
132,437
10,639
14,088
4,463
14,228
141,088
6,137
40,805
30,218
13,762
8,189
3,518
12,357
16,666
23,509
60,651
65,124
24,432
135,758
11,559
12,909
3,897
14,529
144,875
6,705
43,591
30,265
13,394
8,189
3,332
12,975
16,240
23,194
61,095
64.199
23,480
137,500
11.200
12,220
4,010
15,170
147,200
5,992
45,210
31,250
13,420
8,471
3,427
13,050
17,970
23,770
63,960
Total................ 610,889
628,555
632,063
641,499
1927
1928
1929
1930
156,962
180,773
799,910
115,568
108,434
120,621
53,536
811,275
51,614
567,022
276,189
135,187
162,421
20,012
221,431
173,412
391,004
336,592
99,085
106,296
300,586
63,592
97,731
76,646
32,916
1,197,909
40,475
308,278
115,454
152,896
90,054
14,243
86,213
65,180
318,717
191,615
28,222
131,220
387,198
148,840
40,943
19,418
30,797
1,003,265
39,341
612,852
111, 516
117,726
65,477
13,036
34,980
168,759
340,982
261,191
65,545
201,689
1,668,872
286,210
274,215
32, 752
72,021
3,183,462
71,590
774,820
497,133
247,077
134,331
52,174
66,313
1,392,494
1,017,924
521,275
4,681,963
3,357,886
3,555,763
10,559,897
As far as can be ascertained, no statistics exist covering the total
number of workmen in Belgium. An idea may be formed, however,
from data covering the number of incomes declared in 1928, as these
declarations are tabulated according to the occupations of the declar
ants. Since a tax declaration must be made even if no tax must be
paid, these statistics may be taken as fairly indicative of the number
of persons of the various classes that are engaged in gainful
pursuits.
198
UNEMPLOYMENT INSURANCE
Tax declarations in 1928 (the latest year for which statistics have
been completed) were divided among the following classes:
Manufacturers and merchants_______________________
411,949
Farmers-----------------------------------------------------------------281,088
Functionaries and employees, both public and private_ 477,653
Wage earners______________________________________ 2,194,819
4,823
Administrators, commissioners, etc., of corporations___
Professional men and office managers------------------------16,486
Total_________________________________________ 3,386, 818
Included under the heading of functionaries and employees are
the large number of State employees, whose tenure is practically
certain, and who could not properly be included in the number ulti
mately taken as the basis for unemployment-insurance computations
in Belgium. After eliminating these, however, there still remain the
2,194,819 wage earners and about 200,000 of the functionaries and
employees, or a total of about 2,400,000 persons that would come into
consideration.
It will be noted, therefore, that the total number (641,999) of
persons insured at present, as indicated in Table 7, forms scarcely
more than 25 per cent of the persons who would under a compulsory
system of insurance be forced to contribute to the unemployment
fund. Under the voluntary system only those apply for insurance
whose employment is seasonal or subject to interruption at more or
less frequent intervals by reason of economic vicissitudes.
Attitude of Various Groups Toward System
The people of all classes, employers and employees, are agreed that
some system of unemployment insurance is necessary, and m general
the Belgian system is highly regarded by the people of the country.
Differences exist as to tne scale of payments and other matters of
detail, but there is no issue on the subject by any important group.
Bulgaria 23
The social insurance law of Bulgaria of 1924, with subsequent
amendments, provides for compulsory insurance of wage earners
and salaried employees of practically all classes against accidents,
illness, maternity, invalidity, and old age.24 Unemployment insur
ance was not included in this general social insurance law but was
covered by a special law of 1925, entitled “ Law on Giving Employ
ment and Insurance Against Unemployment.” 25 This latter law sets
up a system of public employment offices and also provides for a
system of unemployment insurance, supported by contributions of
employees, employers, and the State. The administration of the
employment offices and the administration of the unemployment
insurance system are closely associated.
Employment Offices
The term “ giving employment,” as used in the title of the law, is
defined to mean the establishment of connections between workers
and employers in the labor market. The process is effected by the
employment offices under the control of the Ministry of Commerce,
Industry, and Labor. Private offices and agents are forbidden to
engage in this business, except the special offices of labor organiza
tions, when their service is gratuitous. The law affects all industrial
and agricultural enterprises habitually using hired labor and all
Bulgarian citizens of both sexes over the age of 14 years. Foreign
workers are allowed the same benefits on the basis of reciprocity in
their respective countries.
Organization of the Employment Service
Employment offices are created in the cities of Sofia and Plovdiv,
the Minister of Commerce, Industry, and Labor having the right
to create other offices in towns having over 3,000 permanent work
ers. The employment offices have three sections: (l) Employment,
(2) social insurance, and (3) trade instruction. In towns where
no employment offices exist, special employment offices are created
by the minister.
A court of conciliation is created by each of these employment
offices, consisting of the local justice of the peace and one repre
sentative each of the employers and the workers. This court de
cides all questions concerning the granting of employment, dis
28 Report prepared by Thomas F. Sherman. American consul, Sofia, as o f Apr. 30, 1931.
^A pproved by decree No. 7, dated Mar. 6, 1924, published in the Official Gazette on
Mar. 25, 1924, and amended by decree No. 4, dated Jan. 17, 1929, published in the
Official Gazette on Feb. 2, 1929.
25 Approved by decree No. 14, dated Apr. 12, 1925, and published in the Official
Gazette on May 5, 1925.
199
200
UNEMPLOYMENT INSURANCE
missals, appointments, payment of salaries, etc., but its decisions
may be appealed to the district court.
A labor council is created by each of the employment offices,
consisting of the labor inspector of the district, the chief of the
employment office, a member of the district government, the mayor
or his substitute, the chief of the technical service, the municipal
doctor, a member of the chamber of commerce, and three repre
sentatives each of the employers and the workers. The labor coun
cil meets every six months, or whenever necessary, and in case of
much unemployment considers the feasibility of public works.
The service in each district is administered by the labor inspector,
and for the country as a whole by the labor office of the labor sec
tion of the Ministry of Commerce, Industry, and Labor. A weekly
bulletin is issued by the labor office, containing offers and demands
for labor.
Functioning of Employment Offices
The employer submits to the employment office a list of workers
appointed or dismissed and sees that they are supplied with insur
ance booklets from the employment office. Workers and employers
submit their offers and demands for labor to the office on special
application forms. Such offers and demands are inscribed in a
register and a copy is sent to the labor inspection office, another copv
being displayed on the notice board on the office premises. F if
teen days’ notice must be given by the employee on leaving his work
and a similar notice by the employer on dismissing a worker. All
State and district government institutions are required to supply
their labor needs through the employment offices, unless such offices
find it impossible to do so.
Insurance Against Unemployment
Any worker or employee who has not been given employment
directly or through the employment office within eight days from his
application is termed unemployed. Such an unemployed person is
bound to accept any work offered by the employment office, if it is
not too much for his physical strength, is not harmful to his health,
and does not affect his dignity. The following classes of workers
are insured against unemployment:
(a) All workers or employees who are compulsorily insured in
any type of social insurance, with the exception of domestic serv
ants. (The social insurance law covers, in general, all wage earners
and salaried employees.)
C b)
All sailors, who in addition are insured against wreckage.
(e) All workers in public institutions whose positions are not pro
vided for in the national budget and who are not covered by the law
on pensions for State employees.
Foreign workers are allowed the same privileges only on the basis
of reciprocity in their respective countries. The law does not affect
persons under the age of 15 and over the age of 60 years.
In case of widespread unemployment, the Ministers of Commerce
and Finance are authorized to undertake public utility works to
BULGARIA
201
provide work for the unemployed, and also to make agreements with
the employers for reduced hours of work and for keeping industry
operating even at reduced wages.
Benefits
The right to benefits arises when the worker has made contribu
tions to the social insurance fund, unemployment account, for at
least 52 weeks in the course of two years. The benefit amounts to
16 leva (11.6 cents26) per day for the head of a family and to 10
leva (7.2 cents) per day for all others, and is paid each week end,
exclusive of Sunday. Application for the benefit must be made by
the unemployed person within eight days from the date of his
unemployment. In the course of one full year the insured has a
right to the total maximum benefit for 12 weeks, consecutively or
intermittently. Changes may be made by the Minister of Commerce,
Industry, and Labor on the advice of the high council of labor.
Contributions
Contributions to the unemployment insurance account are required
from the employer, the worker, and the State, each of the three
parties paying at the rate of one lev weekly for each worker. In
addition, this account has certain additional receipts such as fines,
donations, etc. All receipts are transmitted to the social insurance
fund, unemployment account.
Administration
The law is administered by the labor inspectors and the employ
ment office service.
Date When Act Effective, etc.
The law of 1925 directed that its provisions should become effec
tive January 1, 1926. The minister was authorized to issue regula
tions for its application. It was also provided that abrogations of
or amendments to the law were to be in conformity with the conven
tion of the International Labor Organization of 1919 and other
international conventions or agreements.
Statistics of Operation
The total number of persons covered by the several forms of social
insurance is not definitely established. According to the census of
December 31, 1926, the total number of persons who had declared
themselves as workers, employed or unemployed, was 306,603, in
clusive of 29,000 workers in the so-called model farming estates but
not including any other farm laborers. However, the total number
of men and women, both insured and uninsured, engaged in work,
as established by the organs of the Ministry of Commerce, Industry,
and Labor in 1927, was 195,278 persons.
26 Conversions into United States currency on basis o f lev at p a r= 0 .7 2 2 cent.
202
UNEMPLOYMENT INSURANCE
The latest data available regarding the financial experience of the
unemployment insurance system are for the fiscal year 1927-28, in
which year the total contributions were 9,343,036 leva ($67,457) and
the total benefit payments were 1,119,564 leva ($8,083); the adminis
trative costs (salaries, etc.) amounted to 1,354,297 leva ($9,778).
Attitude of Various Groups Toward Insurance System
The Social Democratic Party, which was to a large extent the
originator of the social-insurance system in Bulgaria, continues as an
active supporter and shows a lively interest in its further develop
ment.
Employers as a whole were originally against the system, and are
still somewhat dissatisfied, mainly on account of the many formalities
and responsibilities it places upon them and of the contributions
they are required to make.
The public as a whole looks favorably on the system as a work of
public welfare, quite independently of any inherent technical defects.
The Workers’ Party, with communistic tendencies^ being the sub
stitute for the former Communist Party which was dissolved by law,
is the only avowed opponent to the system. The view of that party
is that the burden of the present system falls mainly on the workers
themselves, who derive in return little benefit from it. This party
wants an insurance system covering all risks (accidents, illness,
maternity, old age, etc.) in a single type of insurance, with no con
tributions on the part of the workers, the funds to be provided by
the State and by the employers.
Amendments to the Law
On April 4, 1931, an act was passed and was published in Official
Gazette No. 7 on April 9, 1931, making several important changes
in the social insurance laws. The following changes are of particular
significance in connection with the unemployment insurance.
The amending act provides for the creation of a special office of
labor and social insurance, which will absorb the present labor sec
tion and bureau of social insurance in the Ministry of Commerce,
Industry, and Labor. Social insurance will represent a special sec
tion in the contemplated office. The object of this change is ap
parently to concentrate all services affecting labor in one institution
with enlarged authority and initiative.
A new paragraph is added to article 42, as follows:
Building contractors for public institutions make contributions for unem
ployment at the rate of 1 per cent of the amounts paid for wages and salaries
to workers and employees. The contributions are deducted from the amounts
receivable by the contractors from the respective public institutions for the
work accomplished*
Czechoslovakia2T
At the end of the World War the newly created State of Czecho
slovakia was confronted with a serious unemployment situation as a
result of the cessation of war industries and the return of thousands
of soldiers to their homes. In order to relieve the situation, the Gov
ernment enacted a temporary measure on December 10, 1918, pro
viding for small contributions to unemployed, under the control of
demobilization committees. This measure, valid until February 15,
1919, was replaced by the act of April 10,1919, which extended indefi
nitely the unemployment assistance, but placed the administration
under the district offices. Difficulties were encountered in administer
ing this law and it was not popular with the public. The general
demand for the enactment of unemployment insurance laws resulted
in the passing of an act in 1921 which is the basis of the present’
unemployment assistance extended by the Government.
Legislation and Date of Establishment
The unemployment-insurance system in force in Czechoslovakia at
the present time is based upon legislative Act No. 267, which was
passed on July 19,1921. The system provided for by the law of 1921
was based on the so-called Ghent system, which was first used in
Ghent, Belgium, and afterwards, with certain modifications, adopted
by the Governments of Denmark, Norway, and Holland. While
this type of so-called insurance was provided for by legislation in
1921, it was not actually put into force until April 1, 1925, the delay;
having been occasioned, it is reported, by adverse financial conditions
and particularly by tne inflated condition of the currency of the
country. Until April 1, 1925, the unemployed were assisted by the
old law of 1918, mentioned above.
Important Changes Since First Establishment
Since the establishment of this type of insurance, the only impor
tant changes were those provided by Law No. 74 of June 5, 1930.
This amending law did not change the basic system under which
unemployment assistance was given but merely provided for new
rates of benefits and greatly increased the percentage of State aid
in the payment of contributions to the unemployed. The informa
tion hereinafter given concerning the working ox the law relates to
the present operation under the act of 1921, as amended by the act
of 1930.
n Report
prepared by John W. Bailey, jr., American consul, Prague, as of Apr. 28, 1931.
65655°—31----- 14
203
204
UNEMPLOYMENT INSURANCE
Type of System—Voluntary or Compulsory
Unemployment insurance in force in Czechoslovakia, while in
principle providing for unemployment assistance to all workers, is
not in effect compulsory. The law specifically provides that all citi
zens of Czechoslovakia and also all foreigners, in so far as their
country grants reciprocity to Czechoslovak citizens, who are covered
by compulsory sickness insurance and who belong to some union or
organization which provides support for its members in case of
unemployment and which is so recognized by the Government, have
a valid claim to receive State benefits in the event of unemployment.
Since every worker is compulsorily insured against sickness, any
member of a union complying with the requirements of the State is
entitled to receive a State benefit.
Classes of Persons or Industries Covered
. As indicated in the foregoing paragraph, the only distinction made
as to persons qualified to receive the unemployment benefits of the
State is that of union membership. No important groups of workers
are excluded, except agricultural laborers and, of course, nonunion
laborers in any industry, or members of a few small unions which do
not provide funds for the relief of their unemployed members.
Character and Amount of Contributions
No regular system of contributions is in force and, in fact, it can
not be said that contributions enter into the system used in this coun
try. The payments made by the unions for the relief of their unem
ployed members come from funds set aside from receipts from mem
bership dues. Membership dues vary in practically all unions, as do
the amounts which are allotted to unemployed members. The State
receives no contributions from either the workers or the union, and
benefits paid out by the State are dependent upon budgetary pro
visions.
Benefits
Conditions for receipt of benefits.—Benefits are paid to members
in good standing by labor organizations which provide for assistance
to unemployed members and which have been recognized by the
State. The only restrictions on membership in such an organization
is that the worker be engaged in the branch covered by the organi
zation and that his membership fees be paid. The labor organization
can, for good reason, suspend a member and cut him off from receiv
ing benefits. Each organization is responsible for ascertaining if an
unemployed member also belongs to another organization and for
deciding from which he is to receive unemployment support. The
labor organization is required to issue a membership booTk to every
resigned member, stating the length of time during which he be
longed to the organization. The nonpayment of membership dues
because of sickness, if it does not extend beyond six weeks, does not
cause the member to lose his unemployment benefit. The control of
CZECHOSLOVAKIA
205
the payment of benefits rests with the board of the labor organization,
which must act in accordance with its by-laws.
The following persons are defined as having no right to receive
State unemployment benefits:
1. Persons not having claim to benefits according to the by-laws of
the respective trade organization.
2. Persons who have not been members of the trade organization
for three months immediately preceding the commencement of their
unemployment, with the provision that if the member belonged to
another recognized trade organization during the three months he
will be entitled to support.
3. Persons participating in a strike or persons discharged for a
specified period of time, except when the discharge is caused by lack
of raw materials or by lack of transportation.
4. Persons who are discharged or who leave their employment
voluntarily.
5. Persons who, on account of physical or mental defects, are
incapable of performing work.
6. Persons receiving support from the sickness insurance organi
zation.
7. Persons not living within Czechoslovakia.
8. Seasonal workers.
Workers lose their right to receive State benefits under the follow
ing conditions:
1. When, according to the by-laws of the respective labor organi
zation, the time provided for the payment of benefits by the organi
zation expires.
2. When the worker, if capable of performing the work, refuses
employment offered by the public employment exchange, provided
such work would not be detrimental to his professional efficiency.
However, the unemployed is not required to accept work in any
company where a strike exists.
3. When the worker is offered, for a period of time, public work
which is proportionate to the benefits received.
4. When an unemployed laborer is discovered to have received
payments from some other organization.
Amovmt and period of benefits.—As mentioned previously, the
benefit rates of the various labor organizations vary considerably and
consequently there is a similar variation in the State aid. The State
aid, which previous to the amending act of 1930 amounted to ap
proximately the same as the benefit paid by the labor organization,
has been greatly increased by the amendment; in most cases it is now
equal to four times the benefit paid by the organization. A married
member who can show at least one year of membership in a labor
organization receives four times the amount of the organization bene
fit, while a single member who can show at least five years of mem
bership in the organization receives State benefit in the same
proportion.
The Minister of Social Welfare is authorized, in cases of need; to
give a benefit equal to four times the amount or the labor organiza
tion benefit to single members who have children to care for or who
take care of parents over 65 years of age with whom they live. In
the case of married members, only one can receive the State benefit;
206
UNEMPLOYMENT INSURANCE
in case both are out of work, the benefit going to the one entitled to
the largest amount. I f one married member is unemployed the other
can receive the State benefit only if it is shown that the other is in a
high degree dependent upon him for support. Widows and persons
separated or divorced, if they do not have the responsibility of tak
ing care of children or of the former married partner, are considered
as single and receive the benefit accordingly.
The act provides for benefits during 26 weeks of unemployment
in one year. During this period the minimum benefit paid by the
labor organization is set at 75 hellers (2.2 cents)28 per day. The
State benefit of four times the benefit of the labor organization can
not amount to more than 18 crowns (53.3 cents) per day. The total
amount of the benefits by the labor organization and the State can
not exceed two-thirds of the unemployed person’s preceding wages.
Any amount over two-thirds of the preceding wages is deducted from
the State benefit. The unemployed can claim support from the day
that he has applied, providing the unemployment lasts for seven
consecutive days.
Under the amendment of July 5, 1930, unemployment assistance
may be given after the original 26 weeks for an additional 13 weeks
at a lower rate. Benefits during this period are fixed at a minimum
of 40 hellers (1.2 cents) for the union, in which case the State benefit
would be 1.60 crowns (4.7 cents). For married members and single
members supporting children or parents, the State benefit would
be raised to 2.10 crowns (6.2 cents). I f the union support is more
than 40 hellers (1.2 cents) then the State benefit is three times this
amount, and for married members and single members supporting
children or parents, four times. The minimum benefit from both
labor organization and the State is 2 crowns (5.9 cents) per day, and
2.50 crowns (7.4 cents) for married members and single members
supporting children or parents.
In the event of extraordinary unemployment the unemployed are
entitled to receive further benefits for an additional 13 weeks. The
Ministries of Finance, Labor, Commerce, and Social Welfare are
authorized to announce such periods of extraordinary unemployment,
either for one branch of industry or for all industries. Benefits dur
ing this period are set at a minimum of 25 hellers (0.74 cent) for
the labor organization and 1.75 crowns (5.2 cents) for the State,
and 2.25 crowns (6.7 cents) in the case of married members and
single members supporting children or parents. If the benefit from
the union exceeds 25 hellers (0.74 cent), then the State benefit of 1.75
crowns (5.2 cents) or 2.25 crowns (6.7 cents) is increased three times
ordinarily, and four times for married members and single members
supporting children or parents.
In addition to the benefits of the State, regulated by the amount
of benefits paid by the labor organization, the law also authorizes
the Ministry of Social Welfare to use from funds allotted for un
employment money for public works and construction projects to
give employment to workers. Such construction, however, must be
undertaken by the State, county, or district, and must employ pri
marily persons who receive union and State benefits. The State
28Conversion into United States currency made on basis of crown at par= 2.96 cents;
heller at par=0.0296 cent.
CZECHOSLOVAKIA
207
will contribute for such, construction work 10 crowns (29.6 cents)
per day for each worker.
Provision for persons dropped from regular benefits.—As far as
can be ascertained, no provision is made for persons dropped from
regular benefits other than the provision for an additional period
of 13 weeks above mentioned.
Administration
Machinery for administration.—Inasmuch as the system of unem
ployment assistance in force in Czechoslovakia is not, strictly speak
ing, insurance, the administration is comparatively simple and is
conducted without a centralized administrative organization or
independent insurance company. The State is relieved of the burden
of administrative duties, and as the principal responsibility in this
respect lies with the labor organizations the burden is distributed
among the numerous labor organizations, and consequently does
not prove onerous. The accounting and bookkeeping relating to un
employment benefits given by the labor organizations, together with
the State contributions for this purpose, must be kept by the unions
separate from other accounts, and are subject to inspection and full
control by the Ministries of Finance and Social Welfare. Any labor
organization desiring to provide for unemployment assistance to its
members and to receive the State contributions must present to the
Ministry of Social Welfare its by-laws and demands and state its
rate of payments. for the relief of unemployed members. The
Ministry of Social Welfare must be promptly informed of any
changes in the by-laws.
State contributions for the support of unemployed members will
be given only after obtaining the consent of the Ministry of Social
Welfare. When its consent is obtained? the labor organizations pay
to the unemployed members the prescribed benefit of the organiza
tion, together with the State benefit. Upon the presentation of the
appropriate signed vouchers the State treasury reimburses the labor
oranization for the share falling to the State. Before the State
benefit is paid the unemployed member must present a certified
card from the public employment exchange, showing that he has
applied for work immediately upon the loss of employment and
also a statement showing that he has applied for the union benefit.
The unemployed persons receiving benefits must apply three times a
week at the employment exchange for work.
Method of payment.—As payments for unemployment assistance
are small in amount, they are made in cash.
Frequency o f and Provisions Against Fraud
The Ministry of Social Welfare reports that cases of fraud in the
payment of unemployment assistance are infrequent and may be
considered as negligible. As each labor organization must pay out
its own funds for this purpose, as provided in its by-laws, it is to
the advantage of such organization to keep a close check, and the
large number of the labor organizations concerned makes it possible
to do so with a high degree of efficiency.
208
UNEMPLOYMENT INSURANCE
As protection against fraud, the law provides that any person who
receives the State benefit without just cause, or by fraud, is liable to
imprisonment for one month and must reimburse the State for the
losses sustained. The officers of the governing board of the labor
organization are held personally responsible for the accounts relating
to unemployment assistance. For any transgression of the law or
carelessness in carrying it out, the officer is liable to a fine of 1,000
crowns ($29.60), or imprisonment up to three months. The Minis
try of Social Welfare is empowered to rescind the right of any labor
organization to pay out State benefits when it is shown that such
organization has, in several cases, given unemployment benefits, as
provided for by the law, to persons undeserving of assistance.
Grievances and Disputes
All grievances and disputes arising in connection with the pay
ment of benefits are acted upon and settled by the administrative
board of the particular labor organization.
Statistics of Operation
Number of persons covered by system.—The number of persons
covered by the unemployment system in force in Czechoslovakia
varies from year to year, and is, of course, dependent upon the mem
bership of the labor organizations providing for unemployment
assistance to their members and recognition by the State. The
membership in such organizations was 1,671,250 in 1926, 1,681,081
in 1927, and 1,733,979 in 1928, the last year for which such figures
are available. According to figures compiled by the Ministry of
Social Welfare, 583 labor organizations have complied with the pro
visions of the act of 1921, thus entitling their members to receive
State assistance when unemployed. These organizations are com
bined into 139 larger organizations, with which the State deals
directly in the allocation of unemployment support. As it is esti
mated that there are approximately 4,000,000 workers in the entire
country, the proportion of workers belonging to recognized labor
organizations, and consequently entitled to receive State unemploy
ment support, amounts to about 40 per cent of the total.
Number of persons receiving benefits.—Statistics concerning the
number of persons receiving State benefits under the unemployment
insurance system are very meager and are not given in great detail.
According to figures furnished by the Ministry of Social Welfare,
136,364 cases of State unemployment assistance were recorded in 1926,
96,879 cases in 1927, and 76,591 cases in 1928. Table 8 shows the
total number of persons receiving unemployment assistance during
each month of 1927,1928, and 1929:
209
CZECHOSLOVAKIA
T a b l e 8 .— Number of persons receiving unemployment aid during 1927 , 1928 ,
and 1929
Number of persons Number of persons Number of persons
receiving—
receiving—
receiving—
Month
Union
State
Union
State
Union
State
aid, 1927 aid, 1927 aid, 1928 aid, 1928 aid, 1929 aid, 1929
-------------------------------------i
January....................................................
February..................................................
March.....................................................
April.........................................................
M ay......... ........................................ .......
June.........................................................
July..........................................................
August.....................................................
September...... .............. . .........................
October................................................ .
November................................................
December.................................................
33,279
31,431
27,074
22,356
18,057
13,833
11,845
10,032
9,609
8,677
10,883
14,334
31,968
30,810
26,448
21,691
17,493
13,286
11,293
9,504
9,150
8,389
10,618
13,954
20,369
20,131
17,734
16,683
16,556
13,468
13,627
15,588
16,559
13,228
12,532
19,698
19,926
19,677
17,287
16,293
16,220
13,214
13,262
15,249
15,950
12,866
12,153
19,218
31,819
36,147
30,526
26,835
21,866
19,436
16,859
18,674
19,468
16,248
17,108
30,170
30,977
35,473
29,838
26,157
21,347
18,992
16,515
18,300
19,057
15,803
16,715
29,693
Table 9 gives details concerning unemployment relief during 1928,
such as the number of cases, amount for aid expended by the State
and by the labor organization, and the average per case, distributed
according to the central workers’ organizations:
T able
9.— Statistics of unemployment assistance in 1928
[Conversions into United States currency on basis of crown at par=2.96 cents]
Unemployment aid
Central labor organization
Num
ber of
cases
Number
of days
insured
By labor
organiza
tion
By State
Total
Average
aid per
case
Czechoslovak currency
Joint Central, Czechoslovak Associated
Labor Unions_______________________
Central Unions....................................
Central Commission of German La
bor Union.........................................
Czechoslovak Labor Union.......................
International AlJ-Labor Union............... .
Czechoslovak Christian-Social All-Labor
Commission............................................
Central Czechoslovak Association of
Clerks and Messengers* Organizations..
Kepublican Employment Central............
All-State German Labor Union................
Association of Slovak Labor Organiza
tions........................................................
National Association of Labor Organiza
tions..... ..................................................
Association of Christian Labor Unions. _.
Labor organizations having no labor cen
tral________________________________
Czechoslovak...................... ................
German................................................
44,429
19,250
1,396,830
606,247
25,179
6,706
16,559
790,583
187,776
557,676
Crowns
6,264,725
2,731,828
Crowns
Crowns
8,091,874 14,356,599
3,541,037 6,272,866
3,532,897 4,550,836
902,156
679,688
2,346, 111 3,300,322
8,083,733
1,581,845
5,646,433
Crowns
325
321
235
340
856
28,473
82,018
114,107
196,126
229
300
38
1,878
20,501
1,942
65,175
157,018
4,749
280,551
190,790
6,641
368,157
347,808
11,390
648,708
1,159
299
345
51
1,828
5,467
7,876
13,343
261
165
3,787
7,883
122,259
28,507
431,739
38,256
597,265
66,764
1,029,005
404
271
1,822
957
865
63,067
34,587
28,480
299,846
165,618
134,228
355,334
212,980
142,354
655,181
378,598
276,582
395
319
Total___________ . . . _. . . ________ 76,591
2,453,410 10,580,423 13,972,784 24,553,207
United States currency
Joint Central Czechoslovak Associated
Labor Unions_______________________
Central Unions. .................................
Central Commission of German
Labor Union.....................................
Czechoslovak Labor Union....................... ,
International All-Labor Union.................
44,429
19,250
1,396,830
606,247
$185,436
80,862
$239,519
104,815
$424,955
185,677
$9.62
25,179
6,706
16, 559
790,583
187,776
557,676
104,574
20,119
69,445
134,705
26,704
97,690
239,278
46,823
167,134
9.50
6.96
10.06
210
UNEMPLOYMENT INSURANCE
T able
9.— Statistics of unemployment assistance in 1928 —Continued
Unemployment aid
Num
ber of
cases
Central labor organization
Number
of days
insured
By labor
organiza
tion
By State
Average
aid per
case
Total
United States currency—C ontinued
Czechoslovak Christian-Social All-Labor
Commission..................... ......................
Central Czechoslovak Association of
Clerks’ and Messengers’ Organizations.
Republican Employment Central............
All-State German Labor Union......... ......
Association of Slovak Labor Organiza
tions.................- ........- ...........................
National Association of Labor Organiza
tions.................... .......... — ......... .........
Associations of Christian Labor Unions..
Labor organizations having no labor
central
_____________________
Czechoslovak.......................................
German................................................
Total
856
28,473
$2,428
$3,378
$5,805
$8.78
300
38
1,878
20,501
1,942
65,175
4,648
141
8,304
5,647
197
10,897
10,295
337
19,202
34.31
8.85
10.21
51
1,828
162
233
395
7.73
165
3,787
7,883
122,259
844
12,779
1,132
17,679
1,976
30,459
11.96
8.02
1,822
957
865
63,067
34,587
28,480
8,875
4,902
3,973
10,518
6,304
4,214
19,393
11,207
8,187
11.69
9.44
................................... 76,591
2,453,410
313,181
413,594
726,775
Total receipts and expenditures.—Inasmuch as receipts for the
organization funds are dependent upon membership dues and the
State money for unemployment needs are derived from budgetary
provisions, it is not possible to give receipts which go into these
funds. The total benefits paid out by the labor organizations and
the State during 1925, 1926, 1927, and 1928 are given in Table 10:
T able
10.— Total unemployment benefits paid by unions and the State, 1925 to 1928
[Conversions into United States currency made on basis of crown at par=2.96 cents]
Union
Year
Czechoslo
vak cur
rency
Crowns
1925........................................... 3,055,131
1926 ......................................... 15,007,385
1927........................................... 13,289,955
1928........................................... 10,580,423
State
United
States
currency
$90,432
444,219
393,383
313,181
Czechoslo
vak cur
rency
Crowns
3,673,337
20,032,423
17,815,457
13,972,784
Total
United
States
currency
$108,731
592,960
527,338
413,594
Czechoslo
vak cur
rency
Crowns
6,728,468
35,039,808
31,105,412
24,553,207
United
States
currency
$199,163
1,037,178
920,720
726,775
Statistics for 1929 and 1930 have not yet been given out for pub
lication, but the Ministry of Social Welfare states that the Govern
ment’s contribution in 1929 amounted to 19,000,000 crowns ($562,400),
and in 1930, to 46,000,000 crowns ($1,361,600). The Ministry of
Social Welfare states that the budgetary provision of 72,000,000
crowns ($2,131,200) for the payment of unemployment benefits dur
ing the calendar year 1931 will be entirely exhausted by the end of
April. When the act of 1921 was amended by the act of June 5,
1930, it was estimated that the Government’s expenditures would
amount to about 60,000,000 crowns ($1,776,000) annually. The pres
ent condition is attributed to the increased proportion of payments
CZECHOSLOVAKIA
211
by the Government, which now amount to about four times the con
tribution by the labor organization, as compared with an approxi
mately equal amount previous to 1931, and also to the aggravated
and unexpected unemployment situation now existing in the country.
Cost of administration.—No figures are available as to the cost
of administering this form of unemployment insurance. The chief
burden is borne by the labor organizations, but on account of the dis
tribution of the administrative duties among a large number of
organizations, the work involved for each is not great. The Govern
ment expense in administration is unimportant, as its duties are
chiefly concerned with control and inspection of the labor organiza
tions’ by-laws and accounts.
Present financial conditions.—As indicated above, the present
financial condition of the unemployment insurance system may be
considered as critical, both as regards the labor organizations and
the State. It is not possible to ascertain the amount of the deficit
at the present time. An official of the Ministry of Social Welfare
states that all of the labor organizations are without unemployment
funds and report deficits. With the Government’s budget for unem
ployment assistance exhausted at the end of the first four months
of the year, a large deficit for the State is inevitable. The Govern
ment hopes that the unemployment situation will be somewhat ame
liorated toward the end of the year, but can not yet estimate the
amount which will be neccessary to reinforce the budget provision.
Basis of Calculation of Contributions and Benefits
The contributions and benefits are not based on actuarial calcula
tions. The insurance put into force was a copy of the Ghent sys
tem, and an official of the Ministry of Social Welfare states that the
difficulty in obtaining accurate figures of unemployment makes it
impracticable to fix an equitable risk. Calculations of the probable
expenditures connected with unemployment, even under the present
comparatively simple system, can not be made with any degree of
accuracy, as shown in the enormous discrepancy between the budget
ary provision for the current year and the actual expenditures up
to the present time. All calculations appear to be valueless when
a situation of extraordinary unemployment arises, and it is thought
that in any system the State will have to provide for special funds
for unemployment support during periods of economic crisis. The
labor organizations find themselves in the same difficulty. Funds
that have been accumulating over a period of several years have been
wiped out during a few months of increased unemployment.
Attitude of Various Groups Toward the System
Attitude of employers, workers, public, etc.—The general attitude
toward the system of unemployment in force in Czechoslovakia is
not favorable, but while it is opposed by practically all classes, it
is retained in the absence of something better.
The employers were originally opposed to the system on the
ground that it tended to strengthen the labor organizations. How
ever, this opposition has diminished somewhat, as the actual opera
212
UNEMPLOYMENT INSURANCE
tion of the system has demonstrated that the labor organizations
have gained little in strength as a result of its adoption. Contrary
to expectations, the passing and putting into effect of the law pro
viding for State aid for the unemployed did not result in any material
increase in the membership rolls of the labor organizations, and
hundreds of thousands of workers are still unorganized and conse
quently do not benefit from the law.
The opposition of the workers to the present system is based
principally upon the fact that the employers do not contribute in
any way to the aid of the unemployed. The laborers maintain that
the employer derives the greatest profit from their work and is at
liberty to discharge them when their labor is no longer necessary
or profitable.
The bourgeoisie are opposed to the system and wish to have it
replaced by a form of insurance which will provide relief for the
unorganized workers and thus support them against the unions and
weaken the labor movement.
According to an official of the Ministry of Social Welfare, the
defects of the Ghent system of unemployment insurance as carried
out in Czechoslovakia are as follows:
1. It has been found necessary for the State to extend the pay
ments from the original three months contemplated to six months,
and even longer, in spite of the fact that the unions did not have
sufficient funas to take care of their payments for such extensions
and did not have time to raise the membership dues in order to take
care of the larger demands.
2. The system has little elasticity and fails completely during a
crisis or period of extraordinary unemployment.
3. The system does not distribute the burden of payments equi
tably, as "the employers do not contribute to the aid of the
unemployed.
4. It brings an undesirable State control over the direction and
disbursement of the unemployment funds of the unions.
5. It makes no provision for the unorganized workers, who, accord
ing to statistics, form the bulk of the laboring population.
6. It increases the administrative work of the unions.
7. It transfers the general risk of paying the State benefits to the
treasuries of the unions.
The same official cites the advantages of the system as follows:
1. It provides an accurate check on the unemployment situation.
2. It provides a cheap and efficient form of control and dis
bursement.
3. It serves to organize and strengthen the unions.
4. It provides a closer control over the unemployed and makes
possible a study of the causes of unemployment.
5. It gives aid, and, to some extent, work to the unemployed.
Of the advantages of the system cited above, it appears that econ
omy and efficiency of administration is the only one that is of real
value. However, economy of administration means little if, as
appears to be the case, the system fails in the chief purpose of
unemployment insurance legislation; that is, it fails to provide
adequate and equitable relief in any contingency for all classes of
unemployed in need of assistance.
CZECHOSLOVAKIA
213
In summary it may be said that the opposition of the various
groups in this country to the present system of unemployment is due
to defects in the system. The necessity of unemployment insurance
of some kind is generally recognized.
Abuses Under the System
As far as can be ascertained the operation of this system has not
given rise to abuses in its administration or working.
Changes Contemplated
While the defects of the present system are generally recognized,
it is only during the present unemployment situation that they have
become so apparent as to reveal the inherent weaknesses of the sys
tem, and consequently no definite changes in the law have as yet
been advanced. However, the Ministry of Social Welfare has ap
pointed a committee to study the problem and make a report with
recommendations for new legislation. Actual unemployment con
ditions in Europe and the various unemployment relief systems in
force will afford a good field for study. It appears certain that a
change will be made in the existing legislation, but it is uncertain
whether the compulsory system in use in Germany will be adopted,
or whether the Ghent system will be continued in a modified form.
Denmark28
Almost all Danish industrial wage workers are organized in
trade-unions and nearly all Danish employers of industrial labor
are also organized in an association called “ The Employers’ Associa
tion,” both the workers’ and the employers’ organizations being
recognized by law. The employers’ association deals directly with
the trade-unions, and its members employ union labor only. Repre
sentatives of the trade-unions and a body representing the employers’
association meet from time to time to draw up agreements regard
ing wage schedules and shop conditions. In case of nonagreement,
appeal is to the Government board of arbitration, and on rejection
by one or both of the parties of the decision of this board strikes
and lockouts automatically ensue, with a view to bringing the
contending parties to terms.
According to Danish law, a normal state of contractual relations
exists when there is a working agreement between the trade-unions
and the employers’ association. On the other hand, if these rela
tions are disrupted through a strike or lockout, the Danish laws
dealing with unemployment aid to trade-union members cease to
be operative as far as the body of workers involved in the labor
struggle is concerned.
Unemployment aid came into vogue in Denmark at the begin
ning of the century, and it is distributed under State supervision.
In Denmark by the term “ unemployment fund ” is understood an
association of wage workers in a certain restricted activity of
industry, trade, commerce, transportation, etc., who have joined
voluntarily for mutual aid in the event of unemployment (except in
case of a strike or a lockout), and who for that purpose make
regular contributions to a certain fund out of which the aid is to
be paid to members out of employment. Hereafter, therefore, when
unemployment funds are mentioned, it must be understood that
they are administered by officials elected by the members of the
fund under State supervision for the benefit of organized labor.
Under the present laws, the length of time during which a mem
ber of an unemployment fund may enjoy unemployment benefits
varies according to the by-laws under which the fund has been
created. The minimum length of time is usually 70 days in 12
consecutive months, the average about 100 days, and the maximum
about 120 days during the same period.
While all the urban and suburban skilled and common laborers
in Denmark are organized in trade-unions,'most of the office work
ers and the rural workers are not so organized. These latter, to
gether with the domestic workers, constitute about three-fifths of
the working population of Denmark and are little affected by the
legislation and administration of unemployment relief.
* Report by E. Gjessing, American vice consul at Copenhagen, as of Apr. 25, 1931.
214
DENMARK
215
Unemployment insurance in Denmark can be called neither com
pulsory nor voluntary. It is contingent, in reality, on membership
m a trade-union or other organization of workers authorized by law.
I f membership has been attained through voluntary action, unem
ployment insurance becomes practically compulsory. A member of
a Danish trade-union is as much under obligation to pay his unem
ployment contribution as his membership fee. He is encouraged
to do so through substantial financial aid by the State and munici
pality in which he resides.
Unemployment insurance is now administered in Denmark accord
ing to the law of July 1, 1927. By this law the workers, the State,
and the municipalities contribute to unemployment funds, the pub
lic contributions being now in direct relation to the average annual
earnings of the workers.
Changes in Danish Unemployment Insurance
By the law of April 19, 1907, State contributions for unemploy
ment relief were authorized. The World War caused extraordinary
unemployment in Denmark and in order to relieve the situation
laws were passed by which the State’s contributions, both ordinary
and extraordinary, increased by leaps and bounds.
The law of 1917 increased the public contributions and authorized
the payment of unemployment relief to persons as soon as they had
enrolled themselves as members of unemployment funds. Thus
persons who were shiftless and habitually out of work were enabled
to enroll as members and obtain, without effort or financial sacrifice,
the same benefits as thriftier members who had paid their fees for a
long time.
The evil effects of the law were so apparent that it was repealed
by. another law in November, 1918. By this law the granting of un
employment relief was made conditional on members having paid
their tees during the previous 12 months and on submission of proof
that they had been employed at least 14 months during the preceding
24 months.
The public contributions were not diminished, however. During
the years 1917 to 1921 the State paid out 62,000,000 kroner ($16,616,000)80 and the municipalities 22,200,000 kroner ($5,949,600) to
unemployment funds, while the members’ contributions were com
paratively insignificant.
The State sought to shift the enormous burden it had assumed.
By the law of December 22, 1921, the contributions of local and
municipal authorities were increased to one-third of the member
ship fees, and the creation of a central unemployment fund was pro
vided for, which in the main was to be raised by contributions from
employers of labor and was to be administered by locally appointed
officials under supervision of the State Bureau of Labor (a State
institution.)
The central employment fund was to be used to relieve unemploy
ment distress in localities where it was ascertained by competent
authorities that extraordinary depression existed. There have been
80 Conversions into United States currency made on basis o f krone at p ar= 2 6 .8 cents.
216
UNEMPLOYMENT INSURANCE
varied opinions as to how extraordinary unemployment was to be
defined and ascertained. For the purpose of determining the normal
unemployment the average for the preceding. 16 years, minus the 4
years of highest unemployment, is now taken instead of the average
for the preceding 10 years, as was the rule in the beginning.
Money from the central unemployment fund was to be used to
relieve the other unemployment funds from undue financial strain,
to increase support to members, to start extra undertakings to relieve
unemployment, to defray expenses for education and training of
members of unemployment funds during times of idleness, and to
maintain unemployed persons during the period of instruction.
The central unemployment fund was to be built up through the
following contributions: (1) Employers of labor were to contribute
annually 9 kroner [$2.41] for each worker, organized or unorganized,
employed during the year; (2) the unemployment funds were to
contribute 5 per cent of their annual membership fees; (3) the State
was to contribute a lump sum of 7,000,000 kroner [$1,876,000], and in
addition was to pay one-third of the total annual expenditures of the
fund.
The contributions were to be continued at the above rates until the
fund had reached an amount of 50,000,000 kroner ($13,400,000).
This amount was never reached, and by the law of March 4,1924, the
contributions were changed materially. The contributions of the
unemployment funds were abandoned and the employers’ contribu
tions were reduced from 9 kroner ($2.41) to 5 kroner ($1.34) per
worker, and to 2 kroner (53.6 cents) for rural workers, while the
State’s contribution was altered. The law mentioned a figure of
30,000,000 kroner ($8,040,000) as being the ultimate maximum of this
fund.
In March, 1926, this fund was about 17,100,000 kroner ($4,582,000)
and in 1930 about 9,393,000 kroner ($2,517,324). By that time, how
ever, the plans regarding the creation of a large national central
unemployment fund for the relief of extraordinary unemployment
had stranded.
The principal reasons for the temporary abandonment of the plans
were the employers’ objections to the large per capita assessments of
organized, as well as unorganized, labor levied on them.
During the period when large contributions by employers were
being made to this fund, Danish legislation aimed at reducing
public contributions to unemployment funds. By the law of March
4,1924, the State’s contributions were reduced from 50 to 35 per cent
and the municipalities’ contributions from 33 to 30 per cent of the
total annual membership fees. In this manner members were there
after made to bear 60 per cent of the total burden of unemployment
insurance, as against 54 per cent previously.
The law of July 1,1927 (popularly known as the law of February
17,1927, as it was introduced for debate in Parliament on that date)
is the law now governing unemployment insurance. It is called the
employment office and unemployment insurance law because in this,
as in previous laws, there are clauses authorizing the establishment
and operation of local employment offices at public expense, which
cooperate with the unemployment funds.
DENMARK
217
Public Employment Offices
Public employment offices are established at the more important
centers of population and are under the management of officials
appointed by the local authorities, but who receive no remuneration.
The head o f the office may not be an employer of labor nor a wage
worker, and his appointment must be sanctioned by the Minister
of the Interior. Two-thirds of the expenses of the operation of the
office and the payment of the salaries of the clerical force are borne
by the district in which the office is located, while the remaining
one-third is paid by the State.
As soon as a member of an unemployment fund is out of em
ployment the management of the fund must immediately communi
cate this fact to the employment office on blanks prescribed by the
Minister of the Interior, giving a full description of the member.
The employment office, which is in touch with all employers of labor
in the district and has a list of all vacancies, thereupon notifies,
in writing, the employer with whom there is a vacancy that the
person out of employment has been directed to apply for the
vacancy. I f employment is not effected because another has already
been engaged, or if the applicant immediately after engagement
quits his job, the employer must, under pain of fine, so advise the
employment office, and this office must in turn advise the unem
ployment fund.
I f the applicant, on the other hand, obtains employment without
the help of the employment office, the unemployment fund must at
once notify the employment office. A worker who obtains employ
ment without the help of the employment office must at once give
due notice of his employment and so must the employer.
I f an employer will not engage an applicant sent to him by the
employment office, in accordance with the terms of the labor agree
ment between the applicant’s trade-union and the employer’s asso
ciation, the employment office ceases to direct applicants to him.
If, on the other hand, the applicant refuses to accept employment
with an employer where the conditions of the labor agreement are
fulfilled, due investigations are made, and if there is found to be no
reason for the refusal, unemployment benefits will be withheld.
Unemployment Insurance
Persons and Industries Covered
Recognition is given the unemployment funds by the Minister of
the Interior when the by-laws of the fund are found to be in accord
with the law and when the membership consists of at least 100 per
sons engaged in a certain trade, or, in rare cases, embraces all organ
ized laborers in a certain locality.
Only persons who are wage workers without any means can be
accepted as members. I f applicants are in possession of means of
5,000 kroner ($1,340) if unmarried, and of 10,000 kroner ($2,680) if
married, they will be barred. I f the property consists of real estate,
the maximum amounts are 8,000 kroner ($2,144) and 15,000 kroner
($4,020), respectively. Applicants must be in possession of the proper
218
UNEMPLOYMENT INSURANCE
occupational qualifications, but the fact that there is a personal differ
ence between them and the trade-union to which they belong will not
be cause for debarment.
The following persons are debarred from admission to unemploy
ment funds: (1) Persons who are not in possession of the qualifica
tions of the trade to which they, in accordance with the by-laws of
the unemployment fund, should belong; (2) Persons who do not come
within the age limits of 18 and CO years; (3) Persons who are recipi
ents of old-age pensions or who are in poor health; (4) Persons who
are physically or morally unfit to perform work in the trade and to
associate with coworkers (habitual drunkards or persons who have
been arrested, etc.); (5) Persons who are already members of another
State unemployment fund.
In addition, the following classes of persons may not receive unem
ployment support: (1) Persons who do not seek work or are unwill
ing to work; (2) Persons who have not been members for at least one
year; (3) Persons whose record shows that they, during the last 24
consecutive months, have been employed for less than 10 months; (4)
Members of unemployment funds for seasonal workers, during the
season of the year when there is normally no employment in their
trade; (5) Persons who are on a strike or lockout; (6) Persons who
have left their work without any good cause; (7) Persons who are
recipients of invalid support, old-age pensions, etc.
All Danish organized laborers engaged in industries and trades,
except the majority of the seamen, are covered by unemployment
insurance under the supervision of the State Bureau of Labor. The
greater part of the rural laborers, clerks, and office and store workers
of Denmark are not organized and receive no unemployment
insurance.
There are no statistics as to the total number of wage earners in
Denmark, but the head of the Danish State Bureau of Labor esti
mates this number at from 775,000 to 800,000 in 1930, whereas the
number of laborers covered by unemployment insurance in 1930 was
288,428. This latter class oi laborers constitutes, therefore, about
37^ per cent of the entire labor population, if 775,000 is taken as
the number of wage earners in Denmark.
According to the census of 1921 (the latest census in Denmark)
the wage workers are classified in the following manner:
Agricultural workers__________________________________ 262,000
Workers in industries and trades______________________ 251,000
Workers engaged in commerce_________________________ 32,000
Workers engaged in transportation____________________ 29,000
Domestic workers____________________________________181,000
Total--------------------------------------------------------------- 755,000
#As the population in Denmark has increased by about 8 per cent
since 1921 there should now be about 800,000 workers in the country.
Among the agricultural workers mentioned above are included
young people over 14 years of age working on parents’ farms. The
wage-working population, less these young people and about 200,000
domestics, would be about 410,000. This is the estimate made by the
Danish Statistical Office.
219
DENMARK
Character and Amount of Contributions
Employers now contribute 3 kroner (80.4 cents) per industrial
worker and 2 kroner (53.6 cents) per rural worker annually to the
central unemployment fund, but these contributions will be discon
tinued when this fund reaches an amount of 10,000,000 kroner
($2,680,000) ? only the interest on which can then be used.
The contributions of the State and of the municipalities are pro
portioned to the average yearly earnings of the members of the
unemployment funds, and, in accordance with the law of July 1,
1927, are as given in Table 11:
T able
11.— Per cent of membership fees contributed by State and by municipalities,
by earnings groups
Per cent of total mem
bership fees
Average yearly earnings
State con
tributions
Up to 1,600 kroner ($402)......................................................................................... j
1,600 kroner ($402) to 2,000 kroner ($536)_________ -_______ ____ . . . . __________
2,000 kroner ('$536) to 2,500 kroner ($670)_________________ ______________ :____
2,500 kroner ($670) to 3,000 kroner ($804)......................... ......................................
3,000 kroner ($804) to 3,500 kroner ($938)___________________ ______ _____ _____
3,500 kroner ($938) to 4,000 kroner ($1,072)...... .......................................... .............
Over 4,000 kroner ($1,072)................... .......... ..........................................................
40
35
30
25
20
15
10
Municipal
contribu
tions
30
30
25
20
15
10
5
All extraordinary aid to the unemployment funds by the State
has been abolished, but the management of the unemployment fund
is authorized to set up an emergency fund from which members can
be given benefits for 70 days in addition to the maximum period per
mitted by the by-laws, at two-thirds of the ordinary benefit. To
these emergency funds the State and municipalities contribute in
the same proportion as to the ordinary funds. From the central
unemployment fund (mentioned in the foregoing) a contribution to
the emergency funds is authorized, equal to 25 per cent of the amount
of the membership fees. Only the interest on this fund may be
used, however, and this would suffice to cover contributions to only
a few emergency funds.
The emergency funds of the individual unemployment funds, it
was hoped, would take the place and the functions of the central
unemployment fund after the ambitious plans for this fund had
been abandoned in 1927. The unemployment funds found, however,
that it was too heavy a burden on their members to create these
emergency funds and only three emergency funds were established
in 1927. By an amendment to the law of 1927, dated April 4, 1928,
such funds set up before July 1, 1928, were entitled to an extra
initial contribution of 10 kroner ($2.68) and a loan of 5 kroner
($1.34) per member. This did not prove sufficient inducement, and
there are only six emergency funds in existence at present. They
receive contributions in the same manner as the ordinary unemploy
ment funds, besides contributions from the central unemployment
65655°—31----- 15
220
UNEMPLOYMENT INSURANCE
fund up to 25 per cent of the membership fees. As only the in
terest on the central unemployment fund of 10,000,000 kroner
($2,680,000) can be used for that purpose, this support would soon
be exhausted, and this is one of the reasons why no more emergency
funds have been established.
The contribution of the members is to be fixed by the management
of the unemployment fund, and must be such an amount that it,
together with the contributions of the State and municipalities, will
cover the average yearly expenditures. Extra assessments can be
made to cover sudden needs and requirements.
The contributions are fixed in conformity with reports as to earn
ings in the various trades made by the State Bureau of Labor. In
the trades of highest earnings the members pay about 87 per cent
of the relief distributed, and m those where the lowest average earn
ings obtain the members pay but 59 per cent of the amount of con
tributions to the unemployment fund.
The law provides that 15 per cent of the wages of laborers on
emergency work initiated by the Government to relieve unemploy
ment is to be held back by the employers and turned into the central
unemployment fund.
The actual contributions by the State and municipalities, including
contributions in arrears for extraordinary unemployment relief and
contributions to the central unemployment fund, during the five
fiscal years immediately preceding 1930, were as follows:
T a b l e 1 2 . — Amount of contributions by State, by municipalities, and by member
ship, 1925-26 to 1929-80
[Conversions into United States currency on basis of krone=26.8 cents]
By State
Fiscal year
1925-26..............................
1926-27..............................
1927-28________________
1928-29..............................
1929-30..............................
Danish
currency
Kroner
6,000,000
7,000,000
5.100.000
6.090.000
6.616.000
B y municipality
By membership
United
States
currency
Danish
currency
United
States
currency
Danish
currency
United
States
currency
$1,608,000
1,876,000
1,366,800
1,632,120
1,505,088
Kroner
8.300.000
10,800,000
3.570.000
4.410.000
5.082.000
$2,224,400
2,894,400
956,760
1,181,880
1,361,976
Kroner
11.500.000
14.600.000
21,000,000
19.300.000
18.900.000
$3,082,000
3,912,800
5,628,000
5,172,400
5,065,200
Payment of contributions and fees.—The membership fees are paid
once a week in cash to the cashier of the unemployment fund. Re
ceipts for the fees are given in the form of stamps, which are pasted
in the membership book. In the same book an account is kept of
the unemployment support received from year to year.
Benefits
The law of July 1, 1927, stipulates that a person must have been
a member in good standing for at least one year before he is entitled
to unemployment insurance benefits and that he is disqualified if he,
within the last 24 months, has had employment for less than 10
DENMARK
221
months. The benefit is not contingent on the number of contribu
tions made, and benefits are paid immediately after it has been estab
lished that the applicant is out of employment and entitled to
benefits.
The benefits can be paid for a period of at least 70 days or an
average of 100 days, and, according to the by-laws of the respec
tive unemployment funds, for an additional period of 70 days at
two-thirds of the ordinary rate in case of an extraordinary state of
unemployment. In such an event the extra support is paid out of
the special emergency fund of the respective unemployment fund.
Under the law of July 1, 1927, the daily benefits must not exceed
two-thirds of the average daily wages earned when at work, nor
must they, for the head of a family, exceed 4 kroner ($1.07) and for
a single person, 3 kroner (80.4 cents) per day. The minimum bene
fit is 1 krone (26.8 cents). Certain monetary assistance is also given
to cover traveling and moving expenses. No supplementary allow
ance is now given for children to the heads of families.
Persons who have been dropped from regular benefits because of
nonfulfillment of conditions as to payment of fees, etc., can not be
compensated from the unemployment funds. If, for instance, a
member does not pay his weekly fee for four weeks, his name is
erased from the list of members entitled to benefits, and he must
thereupon pay fees for 12 months before he again is entitled to un
employment benefits.
Administration
For each unemployment fund there is a manager and usually a
cashier elected by the members. An account o f all receipts and
expenditures and a complete list of the members must be kept. A1
journal must also be kept, in which there is a record of the time
when members out of employment report at the office of the unem
ployment fund. Membership books and cards must also be issued
to every member, giving his name and membership number.
The management of the funds is under the supervision and con
trol of the Danish State Bureau of Labor, which must audit the ac
counts of the unemployment funds at least every quarter. At the
head of the State Bureau of Labor is a commissioner appointed by
the State, and this official makes an annual report to the Minister
of the Interior of the accounts of all of the unemployment funds,
and the Minister of the Interior in turn publishes the report on
duly prescribed forms. In the State Bureau of Labor there are a
number of State-appointed officials under the Commissioner of
Labor, who cooperate with two committees, known as labor tribunals,
dealing with matters concerning employment offices and unemploy
ment funds, respectively. The committee dealing with matters con
cerning the last class is composed of six labor representatives elected
by the unemployment funds, two members of the lower house, and
two members of the upper house of the Danish Parliament. All are
elected for a period of six years.
None of the members of the tribunal receive a salary, but they are
paid for their attendance at meetings and traveling expenses.
222
UNEMPLOYMENT INSURANCE
Practices of Fraud Under System
In Denmark the contact between workers and the management of
the unemployment fund is so close that practices of fraud are easily
detected. Every person is registered and his circumstances are so
well known that any unusual action on his part will at once excite
suspicion. There is also a strong spirit of cooperation pervading the
people which militates against any person’s taking advantage of
another.
A person seeking unemployment support must report in person at
the office of the unemployment fund, and as long as he is out of em
ployment he must present himself at least once a day personally and
register at the office.
The management of the Danish State Labor Bureau declares that
there have been no cases of fraud of late years and no statistics are
kept as to frauds practiced.
Adjustment of Grievances and Disputes
In paragraph 17 of the law of July 1,1927, the following are men
tioned as classes which are to be refused unemployment benefits:
(1) Persons who are on a duly declared strike or affected by a lock
out; (2) sick persons or invalids; (3) persons who have been dis
charged on account of intoxication or for boisterous or querulous
conduct towards employers and coworkers; (4) persons who are serv
ing sentence in prison or who are under arrest; (5) persons who are
recipients of poor aid, old-age pension, or invalid support; (6)
persons who, for apparently no valid reason, refuse to accept the
work offered through the Government’s employment office or the un
employment fund; (7) persons who are working on two-thirds time.
I f members of unemployment funds feel that they are being treated
unjustly by being classified in the above classes by the management,
or for other reasons feel that they have ground for complaint, they
can appeal their cases to the committee cooperating with the State
Bureau of Labor on matters relating to unemployment support. The
decision of this committee can be appealed to the Minister of the
Interior.
A person who changes his occupation may, without any alteration
of his status as beneficiary, change membership from one unemploy
ment fund to another. For instance, a person belonging to the hod
carriers or masons’ helpers’ unemployment fund, to which he has
paid his fees so that he is entitled to benefits there, may at once
obtain such benefits from the masons’ unemployment fund if he begins to work in that trade.
The committee on matters concerning unemployment funds makes all regu
lations regarding such transfers and sits in judgment in all disputes arising
out of them.
Number of Persons Covered by Unemployment Insurance System
On March 31, 1929 and 1930, the following persons were covered
by unemployment insurance:
223
DENMARK
T a b le
13.— Persons covered by unemployment insurance, March 81,1929 and 1930,
by occupation group
Number of members
Occupation group
Mar. 31,1929 Mar. 31,1930
Food and candy industries_____________________________________________
Leather, textile, and clothing industries___ - __ . . . . . . . . . . . . . . . . . . . __ . . . . . . .
Woodworkers______________________________ ___ . . . _________ . . . . . ___ _
Metal workers_________________________ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . __
Bookbinders and paper workers________ . . . . . . . . . __ ____________________
Building trades and furniture makers___ •___________ ___ . . . . . _____ ______
Stone, glass, and ceramic workers__ ____ . . . . __ . . . . . . . . _. . . ______ ____ __
Cement workers and common laborers___ _________________ ______ ___ ___
Agricultural workers and gardeners___ ____________________ . . . . . . . ___ __
Seamen and firemen________________ _____ . . . __ _______________ ____ ___
Clerks and store workers_________ _________ ________________ __________
All other trades and industries__ . . . . . . . __ . . . ____ ___ . . . ______ . . . . . _____
25,889
23,485
7,539
34,009
10,188
31,968
2,523
96,668
12,326
5,057
11,407
12,981
26,774
24,494
7,801
35,870
10,422
33,369
2,629
103,796
12,421
5,197
12,138
13,517
Total...........................................................................................................
274,040
288,423
From the above it will be seen that of the large class of agricul
tural workers in Denmark, which approaches 420,000 in number,
only 12,421 were members of unemployment funds in March, 1930.
The class of persons engaged in clerical work is not well represented,
and only a negligible number of seamen are covered by unemploy
ment insurance. As has been previously stated, from 35 to 37%
per cent of the total labor population of Denmark is covered by
unemployment insurance.
Table 14 shows for the four quarters of the last two fiscal years
the average numbers, per day, of unemployed male and female
workers receiving unemployment support:
T a b le
14*— Average number receiving unemployment benefits, 1928-29 and 1929-80,
by quarters
1929-30
1928-29
Men
Quarter
Women
Men
Women
Number Per cent Number Per cent Number Per cent Number Per cent
March_____________
June................. ........
September_________
December..................
69,500
39,400
31,000
41,000
89.3
85.7
84.0
87.3
8,300
6,600
5,900
6,000
10.7
14.3
16.0
12.7
52,600
32,700
23,300
30,800
89.9
85.6
83.8
87.3
5,900
5,500
4,500
4,500
10.1
14.4
16.2
12.7
224
U N E M P L O Y M E N T INSURANCE
Table 15 shows the number of persons^ by industry or occupation,
who received unemployment benefits during the same two years:
T a b le 15.— Number receiving unemployment benefits, 1928-29 and 1929-80, by
occupation groups
Number receiving
benefits
Occupation group
1928-29
1929-30
A 11 other trades and industries_____ ___________ _________ ________ . . . ________
11,515
14,769
4,014
16,704
2,724
21,548
1,578
51,796
7,751
2,850
2,212
2,715
8,973
11,629
3,391
13,244
2,580
17,490
1,272
47,779
6,411
2,654
2,069
2,464
T o ta l ________ _____ ______________ . . . __________. . . . . ________ _______
139,176
119,956
Food and candy industries____________________ ______ __ __ __________ _____
Textile, leather, and clothing industries_______- ___________________________ _
Woodworkers___________ - _____________ . . . . . . ___ __. . . __ . . . _____ _______
Metal workers...________ - ______ . . . . ___ _______________ ______ ___________
Bookbinders and paper workers________ _________ ____________ _____ ___ __
Building trades and furniture makers__ ,_________________________________ . . .
Stone, glass, and ceramic workers_____ ___ ______________ . . . __ . . . . . . . . . __ __
Cement workers and common laborers____ ___ ______________ ___ ___________
Agricultural workers and gardeners'________________________________________
Seamen and marine firemen_____. . . . . __ ___ . . . ______ ______________________
Clerks and store workers
______ . . . . ___ ____ _____ ___ ___ . . . . ___________
There were 70 State-recognized unemployment funds in Denmark
on March 31, 1930, which had 2,859 branches all over the country.
The income and expenditures of these funds for the three fiscal
years 1927-28, 1928-29, and 1929-30, are given in Table 16, in round
figures:
T a b le
16*— Income and expenditures of unemployment funds, 1927-28 to 1929—SO
[Conversions into United States currency on basis of krone=26.8 cents]
1927-28
Item
1928-29
1929-30
United
States
currency
Danish
currency
United
States
currency
Danish
currency
United
States
currency
Kroner
Membership fees and assess
ments..................................... 21,124,000
34,600
Members’ fines____ _________
608,600
Interest and other income____
State contributions.................. 5,093,600
Municipal contributions......... 3,571,500
$5,661,232
9,246
163,105
1,365,085
957,162
Kroner
19,426,600
35,300
519,600
6,092,100
4,407,600
$6,206,329
9,460
139,263
1,632,683
1,181,237
Kroner
19,028,000
51,600
664,900
6,617,400
6,083,100
$6,099,604
13,829
175,513
1,505,463
1,362,271
Total............................... 30,432,200
8,155,830
30,481,200
8,168,962
30,436,000
8,166,680
7,539,912
440,217
67, 111
24,302,800
1,577,000
149,000
6,513,150
422,636
39,932
18,098,500
1,692,600
179,300
4,850,398
453,617
48,052
8,037,240. 26,028,800
6,975,718
19,970,400
5,352,067
Danish
currency
Income
Expenditures
Unemployment benefits_____ 28,134,000
Administration expense.......... 1,642,600
213,100
Interest and other expenses__
Total___ _____________
29,989,700
Both the State and municipal contributions for ordinary unem
ployment relief are not paid into the unemployment funds until
one or two years after the lapse of the year to which they apply.
For this reason it is impossible for the management of the unemploy
ment funds to estimate the amount of the yearly fees to be paid with
DENMARK
225
any approach toward exactitude. The fiscal years 1928-29 and
1929-30 were prosperous ones, and unemployment was less than
expected. During the same years the same State and municipal
contributions were received as for previous years when unemploy
ment had been relatively high. This accounts for the great surplus
at the end of the two years, especially at the end of the latter.
In this connection it may be remarked that the surpluses are
carried over from year to year, and membership fees are fixed in
proportion to the surplus, so that the sum of the total fees, plus
contributions and the previous year’s surplus, in the estimation of
the management, will equal the year’s expenditures. I f any deficits
occur they are covered by assessments on the members, levied by
the management of the fund.
Basis of Calculations of Contributions and Benefits
The contributions to and benefits from unemployment funds are
not based on actuarial calculations.
Attitude of Various Groups Toward Present System
The Agricultural-Liberal and the Conservative Parties sponsored
the bill regarding unemployment insurance which became a law
under date of July 1, 1927. Most of the property-owning, agricul
tural population, employers of labor, and storekeepers belong to
these two parties, and they can, therefore, be considered as being in
favor of the law. The employers object, however, to any direct
contributions (3 kroner (80.4 cents) per capita of workers employed)
toward the central unemployment fund, from which fund contribu
tions are made to the emergency funds of six unemployment funds.
Some object on general principles to contributions of any kind by
the State and municipalities to the unemployment funds. There is
no objection to voluntary unemployment insurance in itself.
The majority of the people—the workers and, in general, persons
without means—object to the law. These groups belong to the
Social Democrats and radical parties, which at present control
the Government. They are not opposed to voluntary unemployment
insurance, but they demand greater contributions oi public funds to
enable the unemployment funds to give larger unemployment bene
fits and to set up and amplify the emergency funds. Under the
present law the maximum benefit is 4 kroner ($1.07) per day, which
is considered too small. It is also considered unjust that the 70
days’ extra support, granted in case of extraordinary unemployment,
should be at the rate of but two-thirds of the regular support. The
extra support is paid out of the emergency fund and is paid to
persons whose financial resources have been seriously weakened by
a long period of unemployment. There are no data available as
to abuses under the present system.
Workers object, in general, to the requirement in the law of July
1, 1927, that 15 per cent of the wages paid on emergency work
initiated by the Government to relieve unemployment is withheld
and paid into the central unemployment fund.
226
UNEMPLOYMENT INSURANCE
Anticipated Changes in Unemployment Insurance
At the time when contributions to the central unemployment fund
were heavy, large amounts were drawn annually from this fund to
relieve unemployment. With the material curtailment of contribu
tions to this fund, relief in cases of extraordinary unemployment
began to be distributed from funds that originally were not intended
for unemployment support. These funds are called Hjaelpekasser (funds for the relief of temporary need). They are local funds
and are raised through general taxation. Relief from these funds
is not considered as being poor relief. In the years 1926-27,1927-28,
and 1928-29, 8,000,000 kroner ($2,144,000). 14,000,000 kroner ($3,752,000), and 17,000,000 kroner ($4,556,000), respectively, were dis
tributed from these funds. These, payments from the so-called
Hjaelpekasser grew in the same proportion as the contributions
from the central unemployment fund decreased. These payments
were, however, neither as effective nor as easy to regulate and con
trol as the contributions from such funds as the emergency funds or
the central unemployment fund administered by representatives of
labor and controlled by the State Bureau of Labor.
This is realized by the politicians of all parties, and there is a
growing belief among them that contributions by the State should
be granted to encourage the setting up of new emergency funds by
the individual unemployment funds and to enlarge the central un
employment fund.
The Conservative and Liberal members of the Danish Parliament
are willing to vote for a law to increase the contributions of public
funds in support of unemployment insurance and have so expressed
themselves in Parliament. The radical parties have recently intro
duced a bill by which it is proposed to increase the State’s contribu
tions in many cases to more than 100 per cent of the membership fees,
and in all cases to advance such contributions materially. There are
grave differences of opinion among the various parties as to what
extent public contributions are to be increased, but in well-informed
circles, such as in the State Labor Bureau, no doubt is entertained
that a law which is more liberal in its provisions than the law of
July 1, 1927, will eventually be passed.
Strangely enough it is among the labor leaders that there is the
most objection to the creation of new emergency funds. They fear
the withdrawal of public support after the setting up of the emer
gency funds, which will be very difficult to administer without gen
erous contributions by the State and municipalities.
Finland 81
Unemployment insurance was established in Finland by a law
promulgated on November 2, 1917, to take effect on the 1st of Jan
uary following. Regulations for administering the law wrere issued
on December 28 of the same year. The law was amended once ,in
order to increase the benefits provided thereunder, which had shrunk
to an inadequate amount, due to the depreciation of the Finnish cur
rency, and once to repeal the provision requiring municipalities to
contribute.
Type of System
The Finnish unemployment insurance system is of a voluntary
character. It contemplates the establishment of “ unemployment
funds,” which, if administered in accordance with the law above
mentioned, will secure financial assistance from the State.
Persons and industries Covered
Any group of workers or any laborers’ organization may establish
an unemployment fund; the only restriction imposed by the law in
this respect is that the age of members of such a fund may not be less
than 15 years nor more than 60 years. But even a worker over 60
years of age may join an unemployment fund if he does so within 60
days of having ceased to be a member of another such fund enjoying
Government subsidies. By-laws of unemployment funds may, and
usually do, however, contain provisions whereby the insured are
divided into classes according to the trade followed, amount of
wages, family status, or other factors, if deemed advisable.
An unemployment-insurance fund (known in Finland as an
“ unemployment aid fund ” ) may be established by a group of at
least 10 workers, but in order to receive contributions from the
public funds there must be at least 50 members. In practice the
insurance funds are operated by trade-unions, which practice the
law specifically permits, on condition that the operation of such
funds be separate and distinct from the other functions of such
unions.
Contributions
The workers themselves, through the administrative bodies of
insurance funds, determine the amount of their own contributions
to the unemployment insurance funds. They are related to the
wages earned and must be sufficient for the purposes of the law.
The lowest contribution is 40 Finnish pennies (1 cent)32 per week
and the highest is 1 Finnish mark (2.52 cents).
n Report prepared by John R. Bouchal, American consul, H elsingfors, as o f Apr. 21,
1931.
' 82Conversions into United States currency made on basis o f Finnish m ark= 2 .5 2 cen ts;
Finnish penny= 0.02 52 cent.
227
228
UNEMPLOYMENT INSURANCE
Contributions from public funds are paid once every six months
and are calculated on the basis of the amount of insurance paid by
the unemployment funds. The State pays two-thirds of the bene
fits given a married man who has one or more children under the
age of 15 years, and one-half of the benefits paid to others.
Municipalities are no longer obligated to contribute, while em
ployers have always been free from such obligations.
It should be mentioned that in some instances a certain per cent
of labor-union dues paid by workers is applied to the accumulation
of the unemployment insurance funds, in which cases the workers
do not make a separate contribution for that purpose. This is,
however, the exceptional method.
Benefits
Amount of benefits.—According to law the benefit may not be
lower than 3 marks (7.6 cents) nor higher than 10 marks (25.2
cents) per day. The benefits may be paid in money or in land;
also they may take the form of rent or travel money.
Conditions for receipt of benefits.—To receive the benefits con
templated by the unemployment insurance fund law of Finland, a
worker must have belonged to such a fund for at least six months
preceding his unemployment for which insurance is paid. Such
benefits may not be granted before a waiting period of six days,
although they must be given before the expiration of 15 days. By
laws of most unemployment funds fix the waiting period at seven
days. Travel money, however, may be given irrespective of these
provisions.
An administrative body of one fund may make an agreement
with the administrative body of another fund with regard to the
payment of insurance to a worker who, on account of change or
work or locality, ceases to bei a member of his former fund before
having been such a member for a period of six months. I f an un
employed worker secures temporary work which does not last more
than six days he is entitled immediately to receive the benefits of
insurance upon the cessation of such temporary work.
Time covered.—A beneficiary of an unemployment insurance fund
may receive insurance for 60 days each year m a successive period
of two years. Thereafter he must regularly contribute to the fund
again for a period of one year before he will be entitled to derive
additional insurance benefits.
Who may not receive benefits.—The following classes of persons
may not receive unemployment insurance as contemplated in the
Finnish law of 1917:
(1) Workers on strike or out of work by reason of a lockout.
(2) A sick or disabled member.
(3) A worker who, according to the opinion of the administrative
body of an insurance fund, has stopped working for an insufficient
reason or who has been discharged tor cause.
(4) A worker who does not accept a job offered him, if such work
is not in a place involved in a strike or lockout and if the work
otherwise suits the laborer in question.
FINLAND
229
Administration
An unemployment-insurance fund, as previously stated, may be
established by a group of workers or organization of workers.
Proper articles of incorporation and by-laws must be drawn up and
submitted to the Ministry of Social Affairs for ratification. There
must be at least three members on the board of administration and a
necessary number of deputy members. The by-laws must make pro
vision for the following:
(I) The name of the fund, which name must contain the words
“ unemployment fund.”
(2^ The district and trade or trades covered.
(3) The domicile of the fund and of its administrative body.
(4) Conditions for admitting and expelling members.
(5) The amount of dues to be paid and the manner of calculating
them, as well as the manner of payment.
(6) The rights of the members.
m The procedure to be followed in applying for membership.
(8) The manner of appointing or electing the members of the ad
ministrative body and the period of incumbency.
(9) The manner in which reserve and other possible funds are
to be accrued, and a stipulation as to how moneys possessed by the
fund are to be invested; and further, the manner of keeping and
examining documents.
(10) The fiscal year and the time when books are to be closed.
(II) Time and manner of holding the regular meetings of the
administrative body and the matters there to be decided.
(12) The voting power of members of the funds and the procedure
to be followed in electing administrative bodies.
(13) The manner of serving notices of meetings and other notices
to members.
(14) The manner in which the by-laws may be amended.
(15) Under what circumstances and in what manner the fund
may be dissolved and how moneys accrued shall then be disposed of,
it being noted that they may not be distributed among the members.
Government examination.—Unemployment insurance funds con
templated by the law of November 2,1917, are under the supervision
of the Finnish Government, which supervision is exercised through
a duly appointed examiner. The examiner must report any irregu
larities which come to his notice, and he must also report on the
financial standing of the funds if he deems them insufficient to
meet their obligations.
Moreover, a special register is kept of unemployment funds in
accordance with a special law of December 28, 1917. This register
is kept by the Ministry of Social Affairs and contains the pertinent
facts in each instance. Changes in the administration of unemploy
ment insurance funds must be reported promptly to the ministry for
inclusion in the register.
Grievances and Disputes
The law makes no special provision for the adjustment of griev
ances and disputes arising from the administration of unemployment
230
U N E M P L O Y M E N T INSURANCE
insurance fund*; but merely stipulates that the court of jurisdiction
is the lower court in the district where the fund is domiciled.
Statistics of Operation
At the present time the unemployment insurance system of Fin
land may be said not to be in operation. The insurance funds, as
previously stated, are for the most part administered in connection
with trade-unions and nearly every one of these unions was dissolved
in 1930 due to alleged communistic activities. Accordingly, the
insurance funds also ceased operating. The matter is now pending
in the courts, although several new labor unions have already been
established under the auspices of the Social Democratic Party.
There are no recent statistics concerning the operation of unem
ployment insurance funds, the latest available being for the year
1928, which are given below.
Number of ftends.—In 1928 there were in operation nine unemploy
ment insurance funds which received State subsidies. A large num
ber of unemployment insurance funds were actually in operation,
but as they did not fulfill the conditions for receiving State aid
there are no statistics available with regard to them. One condi
tion upon which public funds are granted to unemployment insur
ance funds is that the membership must be at least 50, and another
condition is that the income of the funds must be at least one-half
of that received in contributions from the insured, such other income
not to include subsidies from the State nor donations the capital of
which may not be used for current expenditures.
Government aid.—Table 17 gives the names of the unemployment
funds which in 1928 received State aid and the amount of such aid,
paid semiannually:
T a b le
17.— Amount of State aid to unemployment insurance funds in 1928
[Conversions Into United States currency on basis of mark® 2.52 cents]
Government contribution in 1928
Unemployment insurance fund
First half
National
National
National
National
National
National
National
National
National
Union of Paper Industry Workers____ __________ J
Union of Textile Industry W orkers...................... . j
Union of Metal Industry Workers.................. .........
Union of Printing Industry Workers........................
Union of Building Industry Workers_____________
Union of Lumber Industry Workers______________
Union of Leather Industry Workers. ............ ...........
Union of Transportation Workers,....................
Union of Food and Drink Industry Workers______
Total, Finnish marks........................................................
Total, United States currency___________ ___________
Marks
19,554
Second half
Total
35,330
7,676
55,472
30,232
2,424
1,050
905
Marks
12,668
14,449
29,761
5,713
29,772
40,725
2,373
739
668
Marks
32,222
14,449
65,091
13,389
85,244
70,957
4,797
1,789
1,673
152,643
$3,847
136,868
$3,449
289,511
$7,296
Statistics of unemployment insurance fwnds.—Tables 18 and 19 are
compiled from statistics in Social Review No. 1, 1930, published by
the Ministry of Social Affairs at Helsingfors. Table 18 gives sta
tistics of unemployment insurance funds by industries:
231
FINLAND
T a b le
1 8 . — Statistics
of unemployment insurance funds, 1928, by industries
Unemployment insurance funds
Item
Paper Tex Metal Print Build Lum Leath Trans Foods
indus tile in indus ing in ing in ber in er in porta indus Total
dustry dustry dustry dustry tion
try dustry try
try
Number of members:
January, 1928—
Men___...............
Women...............
2,738
1,138
2,554
9,314
320
2,235
10,942
1,751
11,295
1,532
1,350
1,685
1,235
1,021
1,331
2,181
41,429
13,118
Total................
3,876
3,543
9,634
3,171
12,693
12,827
3,035
2,256
3, 512
54,547
December, 1928Men......... - .........
Women...............
2,927
1,206
1,145
3,250
12,851
2,475
1,125
15,390
1,925
12,875
1,768
1,850
2,185
1,420
1,434
1,472
2,749
52,405
16,228
Total................
4,133
13,437
3,600
17,315
14,643
4,035
i, 854
4,221
18,633
662
108
577
19
2,151
627
22,082
22,605
605
76,133
Number of members re
ceiving benefits:
Per diem benefits----Travel benefits..........
Number of days of unem
ployment:
Reported---------------Days for which bene
fits given.................
201
162
51
10
418
339
6,183
12,115
9,578
7,966
100
2.795
2.795
1,848
3,471
1,396
386
In Table 19 are shown the income, expenditures, and surplus of
the unemployment-insurance funds:
T a b le
1 9 . — Income,
expenditures, and surplus of unemployment insurance funds
1928
[Conversions into United States currency on basis of mark=2.52 cents]
Expenditures
Income
Unemployment insurance fund
National Union of Paper Industry
Workers
_____________________
National Union of Textile Industry
Workers
__ ___ __________
National Union of Metal Industry
Workers
_____________________
National Union of Printing Industry
Workers................. ............ - .............
National Union of Building Industry
Workers.............................................
National Union of Lumber Industry
Workers _______________________
National Union of Leather Industry
Workers.................................. - ........National Union of Transportation
Workers
_____________________
National Union of Food and Drink
Industry Workers..............................
Member State
ship dues sub
sidy
Sur
Per Travel Other Admin
Inter diem
istra plus
bene
est, etc. benefits money fits tive ex
penses
Marks Marks Marks Marks Marks Marks Marks Marks
17,191 27,021
53,112 36,817 11,121 50, 773 6,074
1,066
11,159
27,406
60,591
23,519
91,928 28,364
13,413
24,836
41,631
237,706
19,483
4,835
.51,696 149,828
560 9,683
20,000
107,877
14,198
376,684
75,149 119,929 131,508
246,880
45,129
31,060
2,645
3,560
7,857
579
15,595
2,072
3,729
2,948
100
12,000
6,348
61,149
1,106
8,542
2,273
572
22,355
45,597
9,309
2,605
80,409
42,500 385,840
38,060 174,043
40,036 109,466 10,476
1,330
6,505
20,994
Total, Finnish marks................. 1,171,694 237,707 235,008 448,995 57,100 13,618 229, 790 894,915
$343 $5,791 $22,552
$29,527 $5,990 $5,922 $11,315 $1,439
Total, United States currency
232
UNEMPLOYMENT INSURANCE
Reasons for Slow Development of Funds
As already stated, no statistics concerning the operation of unem
ployment insurance funds after 1928 are available. Up to that time
development was slow. In 1924, for example, only six insurance
funds applied for Government subsidies, these six funds having a
total membership of but 19,644. Noteworthy, however, is the fact
that in the printing industry 58 per cent of all the workers that year
were members of an insurance fund, and the percentage in the metal
industry was 36 per cent. In the paper, textile, and lumber industries
the respective percentages were 12, 9, and 7.
This slow development was due, in the first place, to the fact
that there was no serious unemployment in Finland before the de
pression which began with the slump in the building industry
toward the end of 1928 and which has subsequently spread to ail
other industries and trades; in the second place, the insurance paid
according to the amendment to the law of 1917 is from 3 to 10 marks
(7.6 to 25.2 cents) per day. In the 1917 law the maximum was 3
marks (7.6 cents), which, according to Dr. Eino Kuusi, formerly
attached to the Ministry of Social Affairs, should have been 25 to
30 marks (63 to 75.6 cents) per day in 1926, since which time living
expenses have not changed materially. It is not to be wondered
at that workers did not care to assume added responsibilities, no
matter how limited, with the prospect of getting from 3 to 10 marks
(7.6 to 25.2 cents) per day for subsistence in case of possible un
employment. Another factor which has deterred workers from
availing themselves of the benefits of voluntary insurance is the
fact that previous to 1930 the trade-unions had gravitated toward
the left and the leaders were considered unreliable.
Other Unemployment Relief
Unemployment insurance, however, should not be considered as
an isolated factor but rather as a part of a general system of un
employment relief. As important in solving the whole problem
is the institution of municipal employment agencies, which are
provided for by special laws and regulations, while as another factor
must be mentioned the appropriations made by the Finnish Diet
for emergency work. The whole system of unemployment relief
should, of course, be studied in connection with unemployment
insurance, but space and time prevent its being done in this report.
It may be mentioned in passing that since 1925 appropriations for
emergency work to relieve unemployment have amounted to approxi
mately $250,000 to $300,000 annually.
Proposed New Law
The present widespread unemployment and consequent distress
arising from the world depression has brought the matter of unem
ployment insurance to the forefront again, and the Government has
submitted a bill for a new insurance law to the Diet. This bill is
framed on the same principles as the law of 1917, but is designed
to prevent certain abuses which were possible under the old law and
to correct certain deficiencies therein.
FINLAND
233
The Government submitted a bill for an unemployment insurance
law to the Diet in 1925, but it did not pass that year. Instead of
acting upon the proposition the Diet instructed the Government to
make a study of the problem of unemployment and to submit to it its
findings in the premises, together with a report as to the possibilities
of enacting a compulsory unemployment insurance law. In its pres
ent proposition to the Diet the Government finds it inadvisable to
make a law on the compulsory basis.
According to the Government’s proposition now before the Diet,
unemployment insurance funds may not under any considerations be
operated in connection with trade-unions, inasmuch as it has been
found impossible to prevent abuses under the 1917 law. It was
ascertained that funds granted by the Government have been diverted
for expenditures of the union other than the payment of insurance to
unemployed workers.
The new law also contains provisions designed to reduce adminis
trative expenses of insurance funds, which in many instances have
been too great. It is provided that State subsidies will be reduced by
such amount as administrative expenses exceed 15 per cent of the
contributions made by the workers insured.
Appropriations from public funds are to be one-half of the insur
ance paid to workers in all instances, whereas in the old law the
Government paid two-thirds of such insurance as was paid to workers
having one or more children under 15 years of age.
For periods of unusually great unemployment, reserve funds must
be accumulated, and it is provided that yearly at least 10 per cent of
the contributions of the insured must be placed in these funds.
An unemployed worker is to secure insurance to the amount of
two-thirds of the wage usually earned by an unskilled laborer, but
not to exceed 30 marks (75.6 cents) per day. For purposes of the
administration of the law, 36 marks (90.7 cents) per day is taken as
the pay of such a laborer, so that the assistance to be paid per diem
would be 24 marks (60.5 cents) in the case of workers having either
dependent children or parents (parents were not included in the 1917
law) and 18 marks (45.4 cents) per day in the case of single workers.
The State would pay one-halt of such assistance in the former case
and one-third in the latter case.
Provision is also made for the payment of insurance to workers
whose hours of work have been reduced to such an extent as to cause
distress. These payments are to be made in proportion to the hours
unemployed.
If the number of members of an insurance fund is below 100, tho
Government will not pay a subsidy to it. It is deemed inadvisable to
assist very small and perhaps financially unsound institutions. In
the 1917 law the minimum number of members for this purpose was
fixed at 50.
According to Government calculations, assistance was given in
1929 for a total of 276,173 day units, making about 4.32 day units per
member of unemployment aid funds. I f the membership of these
funds is, therefore, taken as at 64,000 (approximately the same as in
1929) and the per member day unit as at 4.5, the total day units for
which assistance would be given would amount to 288,000 annually.
, I f it is further estimated that about two-thirds of the assisted would
234
UNEMPLOYMENT INSURANCE
be in the class (having dependent parents or children) receiving
payments equaling two-thirds of the wage of an unskilled laborer, as
mentioned above, the amount of the Government subsidy would be
arrived at by the following formula: 192,000 unitsX12 marks per
day+96,000 unitsXG marks per day=2,880,000 marks ($72,576).
In contrast to this the payments by the unemployment insurance
funds themselves would be arrived at by the following formula:
192,000 units X 12 marks per day + 96,000 units X 12 marks per
day = 3,456,000 marks ($87,091).
Report of Committee on Labor Matters.—The Government’s prop
osition has been before the Committee on Labor Matters of the Diet,
but at this writing it is uncertain whether or not it will come before
the Diet itself until the next fall session in view of the short period
remaining before adjournment. A brief survey of the committee’s
report follows.
The Committee on Labor Matters agrees with the Government that
at the present time it is inadvisable to enact a compulsory insurance
law. It also agrees to the principles contained in the Government’s
proposition, but makes several changes in the bill, most of which are
of an immaterial nature.
In the matter of separating the administration of insurance funds
from the administration of labor unions the committee agrees with
the Government, but it would change the law in such manner as to
permit the same officials to be employed and the same premises to be
used.
In the Government’s bill it is contemplated that the Ministry of
Social Affairs appoint a member to the administrative body of in
surance funds for purposes of effective supervision. The Committee
on Labor Matters deems such action as violating the independence
of such insurance funds, and suggests that such a supervisor be
appointed when there is deemed a necessity therefor and that such
appointment may be revoked at any time when such necessity ceases
to exist.
In contrast to the Government’s provision for accruing reserve
funds by transferring thereto annually one-tenth of the contribu
tions of workers, the committee proposes that the amounts be fixed
by the funds themselves and provisions therefor included in the
by-laws.
The committee agrees with the Government in that a definite time
must elapse from the establishment of an insurance fund to the date
of granting aid in order to accumulate capital, and suggests that the
rovision of the law in this respect stipulate that anyone who has
een a member of such an unemployment fund for six months and
who has paid his contributions for at least 26 weeks shall be entitled
to assistance.
With regard to the amount of assistance to be paid the committee
suggests a maximum of 20 marks (50.4 cents) per day.
The proposition of the Government stipulates that a worker who
will not accept work which is within his strength and for which a
wage equaling that of an unskilled worker is paid will not receive
assistance from an unemployment insurance fund. The Committee
on Labor Matters considers that such a provision will deter skilled
laborers from becoming members of unemployment funds and sug-
E
FINLAND
235
gests in its report that an unemployed worker shall have the right
to refuse work only if the wage therefor is less than two-thirds of
that paid in his own trade.
The committee agrees with the Government that the State must
not be drawn into labor conflicts on either side in the matter of
subsidizing unemployment funds, but as it considers that in many
instances it would be unjust to refuse assistance to workers who have
been thrown out of work through strikes or lockouts which they
themselves or their union have not been instrumental in bringing
about, the law should be made to read in such a way that in these
instances each case should be considered on its own merits.
In the opinion of the committee 15 per cent of the contributions of
insured workers might not in all cases suffice for defraying adminis
trative expenses ox unemployment-insurance funds and therefore
suggests that the maximum permissible be increased to ^0 per cent
of such contributions.
Dissenting opimon.—The Social Democratic members of the Com
mittee on Labor Matters dissented in certain respects from the opin
ion of the committee. They state that if the law is enacted in the
form proposed by the Government and by the Committee on Labor
Matters it would soon make an end of all unemployment-insurance
funds. They therefore suggest that the second paragraph of the
first section of the proposed law be made to provide that such unem
ployment-insurance funds as contemplated by the law be permitted
to operate in connection with labor unions.
In regard to section 20, which provides the conditions under
which an unemployed worker may refuse lower paid work than that
of his trade, the Social Democratic members state that if that section
is approved as proposed it will make it impossible for organized
skilled workers to become members, inasmuch as it manifestly tends
to decrease wages. They further state that organized workers sup
port unemployment funds in so far as such support does not involve
the necessity of skilled workers working at wages lower than the
minimum provided in collective agreements.
Present Public Opinion
The question of unemployment insurance has not been discussed in
the press as yet and as the Diet has not yet acted on the Govern
ment’s proposition the opinions of the various parties are not
available.
65055°—31----- 16
France83
State-Subsidized Unemployment Insurance
While no system of compulsory unemployment insurance exists in
France, there have been established for many years in that country
voluntary associations of workers—either trade-unions (syndicats
professionels) or mutual-aid associations (societes de secours mutuels)—one of the functions of which has often been that of creat
ing funds, through member contributions, for the purpose of paying
benefits to members in times of unemployment. This practice may
properly be called a system of voluntary unemployment insurance.
In some cases unemployment insurance has been the sole purpose
of the voluntary-labor associations, in other cases only one of several
purposes. In this report both types of labor associations, whether
mutual-aid associations or trades-unions, are referred to as unemployment-aid associations (caisses de chomage).
In 1905, realizing the merits of the self-help methods exemplified
in the few unemployment-aid associations then in existence, the Gov
ernment decided to render financial assistance to them in proportion
to their own efforts. It was desired thus to increase the number of
such organizations in operation.
An appropriation of 110,000 francs ($21,230)84 in the 1905-06
French national budget, to be administered by the Minister of Com
merce, Industry and Jpost and Telegraph, in the form of subsidies to
unemployment-aid associations resulted in the decree of September
9, 1905. This decree specified the conditions to be fulfilled by
associations wishing to receive State subsidies and fixed the system
of disbursement of the sums appropriated for that purpose.
Though the control of the system has since been transferred to
the Ministry of Labor, the 1905 decree still remains the basic piece
of legislation governing unemployment aid associations. Modifica
tions have been effected in its terms since its original promulgation
but these have been minor in character.
While there are some free-lance unemployment aid associations
which have failed to conform to the terms ox the decree and which
consequently are disqualified from receiving subsidies, the most
important associations have subscribed to its requirements. It is
with these latter that this report deals; the variations in organiza
tion, motives, and procedure of the relatively unimportant, noncon
forming associations do not admit of helpful analysis.
Coverage of System
There is no restriction upon the power of subsidized unemployment
aid associations to admit to participation of their benefits any class
83 Report prepared by Richard W. Morin, American vice consul, Paris, as of May 5,
1931.
84Pre-war franc=19.3 cents.
236
FRANCE
237
of persons they may see fit. Members of either sex, without age
restrictions, may participate.
Limitations according to industries and size.—A subsidized unem
ployment aid association may be organized by workers in any branch
of industry but its members must be drawn solely from that branch.
They must all exercise the same or similar trades, or associated
trades, contributing to the production of related products. To
illustrate, laborers in the pastry-making and bread-baking indus
tries, or laborers in the bookbinding and book-gilding industries,
etc., may form single associations entitled to subsidies.
In submitting the original decree of September 9, 1905, for the
President’s signature, the Minister of Commerce said, in part:
It seems to us that these associations (representing a single or similar
industry) present the maximum chance of success and the maximum guaranty
of control. The risks of unemployment vary a great deal with the occupations.
In one trade the laborers are occupied regularly from one end of the year to
the other and are only occasionally unemployed. In other trades the laborers
are periodically exposed to long dead seasons. The wages vary also as much
from one trade to another. It is thus difficult for associations formed of
laborers belonging to different trades to establish, in an equitable fashion, the
contributions required of each member and the rate of benefits to which they
will be entitled. Moreover, the associations made up from a single trade are
in a better position to exercise control over the unemployed and assure the
securing of work for them.
These associations by trades must consist of at least 100 members
unless they are purely local associations which also receive sub
sidies from the communes or departments in which they function,
in which case they may have as few as 50 members. The danger
of complicating the control by a large number of very small asso
ciations is reduced when the accounts of such associations are also
subject to local governmental operation.
An exception is made in the requirement that members be from
the same or closely similar trades in the case of associations created
in communes of less than 50,000 inhabitants (20,000 inhabitants by
the original decree of September 9, 1905, raised to 50,000 by the
decree of December 31, 1906). In such cases the members of the
association may be drawn from divers trades but the association
will still receive the State subsidy provided it is also subsidized
by the communes or the department and comprises at least 50
members. The ministerial report recommending the original decree
of September 9, 1905, to the President justifies this exception in the
following words:
It Is difficult in small communes to find 50 members of the same trade, the
minimum number below which it does not seem that unemployment associations
could properly function.
In counting the membership, no active member owing more than
three months* contributions may be included.
Although the decree permits the formation of unions of unemployment-aid associations for the purpose of rendering assistance to
members traveling from one locality to another in search of work,
none have as yet been formed.
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UNEMPLOYMENT INSURANCE
Contributions by Members
The rate of contributions or premiums of members, while ordi
narily having no bearing on the amount of wages received, must be
definitely fixed by each association.
In practice the monthly contribution required by the average
association is between 0.50 franc (1.96 cents)35 and 3 francs (11.8
cents), though one or two associations have required as high as
14 francs (54.9 cents) per month.
In case an association fixes the rate of contribution so low as to
make impossible the securing of sufficient funds to make payments in
case of unemployment, the Ministry of Labor may decline to approve
the regulations or by-laws of the association, with the result of
barring it from receipt of the State subsidies. To give a concrete
example, there were submitted for approval the regulations of a
particular association of from 200 to 300 members, which fixed a
contribution rate of 0.25 franc (0.98 cent) per month, although it
guaranteed to pay the unemployed members 2.50 francs (9.8 cents)
per day for 40 days. These regulations were rejected by the Ministry
of Labor because of the strong probability that the reserves would be
insufficient, in view of the low monthly contributions from the small
membership, to meet the fixed demands in case of the simultaneous
unemployment of several of its contributors. Had there been a
larger number of members in this association, or had the contribution
been fixed at even 1 franc (3.92 cents) per month for each member,
the situation might have been different; in either case the probability
of an adequate reserve would have been much greater.
If an approved association has not received from its members,
during the six months preceding its claim for the subsidy, contribu
tions equal to at least one-third of the unemployment benefits it has
paid during the same period, its subsidy from the State will be very
substantially cut.
State Subsidy
Amount and conditions of State subsidy.—The rate of the State
subsidy granted to unemployment-aid associations is at present fixed
at 33 per cent of the benefits paid by the small associations and 40
per cent of those paid by the large associations (i. e., Federal asso
ciations operating over at least three Departments and including at
least 1,000 active members). The subsidies are paid as a reimburse
ment after the benefits have been paid. The subsidy for Federal
associations was fixed at a higher rate for the deliberate purpose of
increasing the number of this type because of their greater stability
and efficiency.
The State subsidy was fixed in the original decree of September 9,
1905, at 16 per cent and 24 per cent, respectively, for the two types
of associations, but has been progressively augmented since that date
in conformity with the increasing demands made upon the associa
tions.
The Ministry of Labor is at present contemplating an increase in
the rate of subsidy for Federal associations from 40 to 50 per cent
35 Conversions of present-day franc into United States currency on basis of franc=3.92
cents.
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239
and for the smaller associations from 33 to 40 per cent, to bring these
rates more nearly into line with the State subsidies to the depart
mental and communal funds, described later.
The present State subsidy of 33 and 40 per cent is definitely lim
ited in its application. The subsidy is payable on benefits not exceed
ing 8 francs (31.4 cents) per day for each unemployed member and
2.50 francs (9.8 cents) per day for his wife and each of his children
or ascendents in a direct line if these persons are dependent upon
him and are receiving no wages at all or wages of less than 2 francs
(7.8 cents) per day. The total daily benefit to any one family, upon
which the State subsidy is paid, may not exceed 16 francs (62.7
cents), not including benefits paid to other members of the family
who are themselves members oi the association.
While an unemployment-aid association may not expect a subsidy
on those portions of its benefits which are in excess of the above
limits, there is no limit upon the amounts it may grant as benefits to
members. It is, in fact, the custom among some of the larger and
wealthier associations to pay benefits in excess of those upon which
the State subsidy is payable.
The maximum benefits upon which the State subsidy is calculated
have been subject to frequent change since the inception of the system
in 1905. By the original decree ox September 9, 1905, the maximum
basic benefit was set at 2 francs (then 38.6 cents^ per day for the
unemployed member, with no provision for the otner persons in his
family; the latter provision has been a comparatively recent inclu
sion. Every few years since the promulgation of the original decree
the basic maximum benefits have been altered by decree in an effort
to bring them into approximate conformity with the variations in
the purchasing power of the franc.
Limitation of State subsidy with regard to duration of benefits.—
In addition to the limit on individual basic benefits on which the
State subsidies will be calculated, there is a limit as to the length of
time those maximum benefits may be accorded. Thus, at present an
association may secure a State subsidy based on maximum benefits
only up to 120 days. Due to the severe and prolonged unemployment
in France the Ministry of Labor is advocating an extension of this
limit to 150 days. It appears likely that such a step will be taken
within a very short time.
Limitation of State subsidy with regard to duration of association’s
operations.'—Another limitation on the granting of State subsidies is
the requirement that the unemployment-aid association must operate
for at least six months, a period judged sufficient for building up a
reserve under normal circumstances, before it becomes entitled to
enjoy State aid. Nevertheless, by a provision not appearing in the
original decree of September 9, 1905, but added later, a sum of 100
francs ($3.92) is donated to a new association as a special subsidy for
the purpose of encouragement, providing the association consists of
at least 50 members and requires adequate contributions from its
members. Associations which receive at their inception sufficient
funds from their creating labor organization to represent six months1
contributions from members are considered as having operated six
months.
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UNEMPLOYMENT INSURANCE
Limitation of State subsidy with regard to mnount of members’
contributions.—A further condition in the receipt of full-rate State
subsidies is the requirement that contributions from members must
equal, during the six months preceding the claim for subsidy, at least
one-third of the amount paid in benefits by the association to its
unemployed members during the same period. An amendment of
1912 provided that when the members’ contributions fall below onethird of the benefits paid, 20 per cent of the contributions received
may be allotted to the association as a State subsidy, a sum inevitably
much smaller than 33 per cent, or 40 per cent of the maximum basic
benefits paid during the period. This provision acts as an induce
ment to associations to maintain themselves on a sound financial basis.
To meet emergencies that may confront well-established associa
tions it is provided that, in exceptional cases, sums taken by the
association from its reserves may be regarded as members’ contribu
tions in order to make up the required one-third of the amount of
benefits paid during the period in question.
State subsidy in absence of paid benefits.—An unemployment aid
association which has received contributions during the 6-month
period but has paid no benefits which may be used as a basis for
claiming the regular State subsidy is nevertheless entitled to an inde
pendent subsidy of 50 francs ($1.96) for that period. This provi
sion, not appearing in the original decree of September 9, 1905, was
added later to maintain the continuity of control.
Local Government Subsidies
In regard to contributions to unemployment aid associations from
Departments and communes there is a great variety of practice, but
as a general rule they are granted only to associations operating in
industrialized regions such as the northern part of France. As has
already been observed, associations of over 50 but fewer than 100
members, which are open only to laborers in the same or very similar
industries, must receive departmental or communal subsidies in order
to be entitled to State subsidies. The same is true of local associations
organized in communes of less than 50,000 inhabitants and having
at least 50 members irrespective of occupation.
However, the State subsidy is not paid on benefits paid from funds
allotted to the association by local governments or irom any source
other than the contributions of its members. For example, in the
north of France there are associations which receive 33 per cent of
their paid benefits from the Department and 22 per cent from the
commune. Assuming that such an association paid benefits totaling
999 francs ($39.16) to its unemployed members during a 6-month
period it would receive 333 francs ($13.05) as the Department’s con
tribution and the same amount as the commune’s contribution. I f
the State subsidy (33 per cent) were computed on benefits totaling
999 francs, the association receiving such a subsidy would have
drawn not a penny from its members. The State subsidy is, how
ever, computed as 33 per cent of the 333 francs remaining after
deducting the local government contributions.
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241
Employers’ Contributions
The Ministry of Labor is informed of only one unemployment aid
association to which contributions are made by employers. The
policy in such a case, however, is to regard contributions from em
ployers in the same light as those of Departments and communes in
so far as the computation of the State subsidy is concerned.
Conditions for Receipt of Benefits
There are certain minimum conditions which members of Statesubsidized unemployment aid associations must fulfill before receiv
ing benefits:
(1) No worker may be an active member of more than one associa
tion offering benefits for the same situation. Thus, while a laborer
might be at the same time a member of an association organized to
give aid to members remaining in the district and of another paying
benefits to members journeying from one labor center to another, he
could not belong actively to two associations of the first type or to
two of the second.
(2) No member of an unemployment aid association ib eligible
for benefits until he has belonged to the association at least six
months. (This requirement holds even though he is a member of
an association which at its inception has received from the organiza
tion creating it a sum representing six months of members’ contri
butions.)
(3) An unemployed member must accept a job offered him by the
association or by the public employment office to which the associa
tion has delegated the placement of its members, if the employment
proffered is in his trade. Thus, an automobile mechanic might be
required to take a job as an airplane mechanic but could not be com
pelled to accept one as a farm hand.
(4) Each unemployed member who is receiving benefits from his
association must comply with the requirements laid down by his
association and approved by the Ministry of Labor, to determine
his rights to continued benefits.
Aside from the above, the State subsidy to unemployment aid
associations is contingent upon no definite conditions governing the
receipt of benefits by members. However, the Ministry of Labor
reserves the right to disapprove association by-laws or regulations
which provide for impracticable or unrealizable conditions regard
ing the receipt of benefits.
Any subsidized unemployment aid association is free to fix the
waiting time—i. e., the period of delay between the time the member
becomes unemployed and the time he may receive his first benefit.
The practice as to this varies but in general the period is three days.
The regulations of an association may restrict tne payment of bene
fits to a period less than 120 days, the present maximum on which
the State subsidy is based. Many associations which, due to limited
membership and small contributions, are unable to build up a large
reserve, do pay benefits for considerably less than 120 days. On
the other hand, associations in a financial position to do so may ex
tend their benefits beyond that period, even though the State sub
sidy is not payable on the extended benefits.
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UNEMPLOYMENT INSURANCE
The association may also require, before paying benefits, a longer
period of membership than the 6-month period upon which the State
subsidy is based.
Ordinarily the benefit does not vary in amount according to the
number of contributions made by the individual member, but is paid
at a fixed daily rate during the determined maximum period or until
the member finds employment.
I f the member, having received benefits for the fixed maximum
period, finds himself still without work (a situation rare in France),
he may apply for aid from the departmental or communal funds.
Administration of System
The Minister of Labor has supervision over the associations. To
assist him an Unemployment Aid Association Committee was cre
ated, whose members are appointed by him each year. This commit
tee consists of 1 senator, 1 deputy, the Director of Labor (Ministry
of Labor), the Director of the General Administration of Mutual
and Social Aid (in the Ministry of Labor) or his delegate, the
Director of the Budget or his delegate, a financial inspector, a bureau
chief from the Labor Directorate of the Ministry of Labor, 5 repre
sentatives of the unemployment aid associations, and 1 person spe
cially versed in unemployment and labor-market matters.
With this committee lies the actual administration of the unem
ployment insurance system in France. It acts in an advisory capacity
to and in reality in behalf of the Minister of Labor, its functions
being outlined by his ministerial order.
Control of associations’ indes and regulations.—In support of their
original applications for admission to State subsidy, all unemploy
ment aid associations must furnish the Minister of Labor with a
copy of their rules and regulations, for the consideration of the Un
employment Aid Association Committee. Also, notification must be
given in the same manner of any subsequent changes in them.
The rules and regulations of associations granting unemployment
benefits other than those of transportation must fix the rate of con
tribution from members, and the amount and duration of the benefits.
I f it is an association rendering benefits to unemployed in their
journeys to other localities, the amount of such benefits, the method
of calculating them, their rate, and the maximum of possible benefit
during a determined period must be set forth.
Requirement of separate accovmts.—All associations claiming the
State subsidy are required to keep the accounts dealing with their
unemployment aid services entirely separate from the accounts of any
other function which they may exercise.
Periodic statements of operations required.—Not more than six
weeks after the close of each half year associations claiming State
subsidies must prepare a complete statement of operations covering
the preceding six months for the approval of the Unemployment Aid
Association Committee. This statement must show the number of
active members, the amount of their contributions, the amount of
income from other sources, the number of unemployed members, the
number of daily allowances in the form of benefits, the total amount
of benefits paid, and the number and amounts of benefits accorded
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243
to unemployed persons transferring to another district. The state
ment must also show the number of members receiving benefits on
each day or during each week of the 6-month period (if for admin
istrative purposes the association is divided into subsections, each
section must make a report on these points). When an association
finds itself with a reserve at the end of the 6-month period, its state
ment must show the amount.
On the recommendation of the Unemployment Aid Association
Committee the Minister of Labor may by order authorize the sub
stitution for the above of the association’s regular financial statement
if the latter contains sufficient details.
A special register must be kept by the association receiving State
subsidy indicating the contributions made by individual members
in order to avoid the penalty, already mentioned, attendant upon
the inability to show contributions during a 6-month period equal
to at least a third of the benefits accorded during the same period.
Individual receipt for benefits accorded to unemployed members
must appear on the register, with all the necessary information to
justify the allowances paid.
Examination of records.—The associations are required to furnish
the Minister of Labor with any explanation of their records or ac
counts which he may request. If necessary they must submit to a
special control of their unemployment accounts.
Inspectors are sent out by the Minister of Labor, acting through
his committee, after each periodic statement of operations is ren
dered. These inspectors examine the books of the associations claim
ing subsidies, to determine whether they have conformed to the re
quirements during the period concerned and whether their claims
are properly submitted in view of the operations which have taken
place.
Payment of subsidies.—The total subsidy to unemployment aid as
sociations is fixed by ministerial order within the six months follow
ing the 6-month period to which they apply.
The budget appropriations for this purpose are divided into two
equal parts to correspond to the two 6-month periods in each year
which they cover. The Minister of Labor may change the percent
age of State subsidy for each period; in practice, however, the rate
remains the same until some special circumstance makes a change
desirable.
When budget appropriations do not permit of satisfying all the
approved claims by unemployment associations, the larger and
wealthier associations with financial reserves carry their approved
claims over as charges against the State.
Employment Agencies
A very important feature of the system is the requirement that
each association shall either maintain its own employment agency to
secure work for members or delegate this function to a public em
ployment agency. Since 1909 all communes having more than 1,000
inhabitants have been required to maintain free public employment
agencies, and they are instructed to foster the closest relations with
the unemployment aid associations.
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UNEMPLOYMENT INSURANCE
Grievances of Associations
Statements of grievances on the part of associations against deci
sions in regard to administering the system of State subsidies may
be addressed to the Unemployment Aid Association Committee for
consideration.
Internal Control and Administration of Associations
I f the unemployment aid association is a large one, with members
drawn from several localities, it establishes subsections or agencies
in the principal centers of its field of operation. These agencies act
as receiving and distributing branches and keep records which must
be submitted to the central office.
The demands of unemployed members are carefully examined to
determine their authenticity. In order to determine that members
receiving benefits are actually not employed, they are required to
sign, three times a week during working hours, a register maintained
by the association.
Benefits are usually paid in cash, though in rare instances they
are accorded in the form of a certificate for food or other necessary
items.
Fraud or attempted fraud on the part of a member in securing
benefits renders him liable to exclusion from the association or to the
temporary suspension of his rights.
Complaints on the part of members may be addressed to the gov
erning board of the association.
Statistics of Operation
It is estimated that there are about 300 unemployment aid associa
tions now in existence in France, having an enrollment of approxi
mately 300,000 members. Only part of these associations are in
active operation at any one time, however.
There are such variations as regard the financial status of the
numerous unemployment aid associations that it may only be said
in general that the large well-established associations maintain at all
times substantial reserves while the smaller associations often find
themselves very near the end of their resources at the termination of
any given 6-month period.
Neither contributions by nor benefits to members are based on
actuarial calculations, the sole consideration being to determine a fixed
monthly contribution which, with the help of the State subsidy and
other sources of income will give under usual conditions of unem
ployment such assistance as the members of the particular association
may feel necessary.
The appropriation for State subsidies to unemployment aid asso
ciations in the 1931-32 national budget, passed April 1, 1931, was
650,000 francs (about $25,500). The same amount was appropriated
for the fiscal year 1930-31.
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Attitude of Various Groups
The attitude of French labor in general toward the principle of
unemployment insurance, while in no sense positively disapproving,
has been one of indifference. The enrollment in unemployment asso
ciations is comparatively small when considered in relation to the
number of workers who might so band together.
The habit, ingrained in the majority of French people, of inde
pendently building up their small savings toward a rainy day, plus a
disinclination to combine with cooperative groups for any purpose,
have militated against the generalization of the system of unemploy
ment insurance. The average Frenchman prefers to put his surplus
.funds into a Government savings bank or to invest in a small piece
of land rather than to contribute to some machine which appears
complicated and from which he may never derive any personal
benefit.
Also, very important in preventing the extension of the system
since tne World War has been the knowledge that should a worker
actually fall into want through unemployment he may apply to the
departmental or communal unemployment funds (described later)
from which allowances about the same in value as the usual benefits
from unemployment associations, would be awaiting him without
the necessity ox his having contributed a centime himself.
However, the workers in the highly organized industries of the
north, who have repeatedly enjoyed the benefits of unemployment
insurance and consequently realize its value, look with much favor
on the system.
There are no objections among the workers to particular items of
the present system sufficiently important to be widely voiced. The
members of any subsidized association may, of course, construct their
organization in any way they see fit, as long as it does not run coun
ter to the State requirements.
The State, while maintaining the greatest faith in the present
system, has been disappointed at the slowness of the response of
labor as a whole. Considering the length of time the system of en
couragement by subsidy has been in operation (since 1905) the State
feels the progress has been very slow.
Proposed Changes
One rather important change in the system has been suggested by
Informed persons in the Ministry of Labor. It has been felt that
the limiting of membership in associations located in communes of
over 50,000 inhabitants to members of the same or very similar occu
pations has been a deterrent to the establishment of the large and
financially sturdy associations considered so desirable. The proposed
change would extend the State subsidy to individual associations
made up of members from any industry or occupation.
There is apparently no official opinion in favor of other radical
changes in the system, as it is considered that the mediocre progress
made thus far is due not to the system but to a natural diffidence on
the part of the French laborer with regard to unemployment
insurance.
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UNEMPLOYMENT INSURANCE
State-Subsidized Local Government Unemployment Funds
Municipal and Departmental Funds
Municipal and departmental governments in France have for
some time maintained funds for rendering financial assistance to
the unemployed within their jurisdiction, regardless of sex or occu
pation. These organizations, reduced in numbers and compara
tively inactive in good times, spring into activity in times of stress.
The assistance offered is usually in the form of direct cash pay
ments, though in rare instances it may be in the form of a certificate
entitling the holder to food or clothing.
These payments are in no way dependent upon any contribution,
past or present, from the recipient, as in the case of the unemploy
ment aid associations. There is no element of insurance present.
It is a simple allowance based on the principle that unemployment
is a social evil, the burden of which should fall upon public funds.
Creation of National Unemployment Fund
Immediately following the general mobilization on the eve of the
World War many French industries, large percentages of whose
workers were called to the army, found continued operation tem
porarily impossible and therefore closed their factories. Their
workers who remained were thrown upon the labor market, where
there was no demand for their services^ in such numbers that it
became immediately apparent that the limited funds available for
distribution through the municipal, departmental, and intercommunal funds were inadequate. It was at this time, August, 1914,
that the national unemployment fund was created. This is a sum
of money provided for in the annual budget appropriations and
made available to the Ministry of Labor to be paid out in the form
of proportional reimbursements for allowances made by municipal,
departmental, and intercommunal unemployment funds. The na
tional appropriations vary, of course, following the needs of the
situation. Thus, while the national budget for the fiscal year
1930-31 provided for a sum of 1,500,000 francs ($58,800) for the
national unemployment fund, it became necessary in March, 1931,
to appropriate an additional sum of 25,000,000 francs ($980,000)
due to the enormous increase after the beginning of 1931 in the
numbers of unemployed calling upon the municipal, departmental,
and intercommunal funds for assistance. The budget for 1931-32,
in anticipation of continued wide-spread unemployment for some
months to come, provided for an appropriation of 21,500,000 francs
($842,800).
Conditions for National Contributions to Local Unemployment Funds
In the interest of uniform and proper distribution of funds to
the unemployed, the National Government, through the Ministry of
Labor, has found it necessary to make its contributions from the
national fund to the municipal and departmental foundations con
tingent upon the latter’s fulfilling well-defined conditions laid down
in the decree of December 28,1926, as follows:
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Scope of local unemployment funds.—Small communes of only a
few hundred inhabitants may organize an unemployment fund whose
grants will be partially reimbursed from the national fund. Origi
nally it was provided, in order to avoid an unwieldy and unnecessary
number of separate municipal unemployment funds, that the national
fund would make contributions to local funds only when the popu
lation of the communes or groups of communes for which the founda
tion was created exceeded 5,000. But the present depression has made
such inroads into small isolated communities of hand craftsmen that
that restriction was lifted.
Control of administration and accounts of local funds.—The local
funds must submit their regulations to the Ministry of Labor for its
approval; moreover, any subsequent changes therein must likewise be
submitted. In view of these requirements, the Ministry of Labor has
established specimen regulations or by-laws for local government
funds.
The accounts of the local funds must be kept in such a manner as
readily to reveal figures on the number of unemployed assisted and
the fulfillment of the conditions required to receive Government
assistance. These accounts must be open for examination at any time
by representatives of the Ministry of Labor or the prefect of the
Department in which the fund is located.
Claims by local government unemployment funds upon the national
fund for proportional reimbursement for allowances made and their
reports 01 operation must be submitted to the Ministry of Labor each
month through the prefect of the Department. These reports must
reflect in detail the operations of the local fund during the period
covered. Ministry 01 Labor inspectors subsequently examine the
accounts and records of the local government funds and report to
the ministry.
Classes of persons entitled to aid.—The local unemployment funds
benefiting by grants from the national fund are empowered to render
aid to persons regardless of sex or occupation who are involuntarily
without employment due to lack of work, who are under no contrac
tual obligation to a former employer and who are in a position to
accept new employment. It is required of such persons before receiv
ing aid that they have followed a trade for a substantial period of
time, from which they derived a regular wage, and that they have
resided in the commune for a certain period. The minimum period
of employment and residence was originally fixed at six months but,
due to the present unemployment conditions, has been reduced to two
months. The worker requesting aid must establish his right to it by
documentary evidence.
The following are barred from aid by funds receiving grants from
the national fund: Persons declining to accept employment offered
them by the local unemployment fund from which they solicit aid;
persons not living by their work; beneficiaries of certain retirement,
old-age, and sick benefits; persons unemployed because of labor dis
putes; persons unemployed because of age or incapacity; and, finally,
ersons addicted to the excessive use of alcohol. Allowances already
egun may be discontinued if the recipients are found subsequently to
fall within the above categories, or if applicants fail to submit to the
E
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UNEMPLOYMENT INSURANCE
periodic summons issued by the local fund in question, or if they
practice fraud in securing the allowance.
Waiting time.—In order to discourage workers from calling upon
the local unemployment fund upon finding themselves out o f work,
without an effort m their own behalf, it is provided that unemploy
ment must continue at least three days before an allowance will be
made.
Duration of assistance.—To debar 66professional ” unemployment,
the number of days in one year during which an individual may
secure assistance is limited to 120. This period may be extended by
decree at any time that it becomes inadequate to care for bona fide
unemployed who are unable^ because of temporarily bad times, to
find employment. In fact, it is at present rumored that the maximum
will soon be extended by decree to 150 days, in view of the fact that
the unemployment crisis which came to a head at the beginning of
the year has already run nearly 120 days.
Administration of local government funds.—Each local unemploy
ment fund benefiting by proportional reimbursements from the na
tional fund must create a central committee, containing equal num
bers of laborers and employers, to pass upon applicants for aid and
to maintain relations with the municipal or departmental employ
ment offices to obtain jobs for the unemployed.
Article 1 of the model regulations for a municipal unemploy
ment fund provides that this committee shall consist of the mayor or
his assistant, 2 members named by the municipal council, 2 employer
members, and 2 labor members. The employer and labor members
are named by the mayor and are chosen by preference from among
the leaders of the labor unions or labor courts and from the indus
trialists responsible for the greatest number of unemployed. In
particular it is the duty of this group to examine the documentary
evidence presented by the applicant to substantiate his claim to unem
ployment aid. It must issue to each beneficiary an identity card and
keep a complete record of the circumstances surrounding his case.
It must verify periodically the status of each beneficiary by inquiries
from employers, by examining lists of those employed in various
industries and commercial establishments, by requesting the presence
of the beneficiaries from time to time during working hours to
examine them and secure their signatures, and by any other investiations. In flagrant cases it shall prosecute the wrongdoer for fraud,
t must continually endeavor to secure work for applicants or bene
ficiaries through the municipal employment bureau. Finally, the
committee is responsible for the periodic reports and claims for
reimbursements which the fund submits to the Ministry of Labor.
The departmental fund central committee differs from that of the
municipal fund in that it consists of the administrative committee
of the departmental unemployment bureau, in order that the two
types of work may be more closely coordinated. In addition, the
departmental fund central committee is made up of a fixed number
of the representatives of the communes subscribing to the depart
mental fund, two members of the social-service bureaus of these com
munes, and two labor and two employer members from the indus
tries or commerce most heavily touched by unemployment. It must
pass upon applications for aid presented to it by the mayors of the
communes concerned, through the medium of the prefect of the De-
f
249
FRANCE
partment. In the matter of examining applications it functions in
much the same way as the municipal committee, except that it is em
powered if it sees fit to delegate a subcommittee in each commune to
examine local applications. It is required to submit to the Ministry
of Labor separate reports of transactions and claims for each com
mune sharing ,in the fund. Otherwise its functions are substantially
the same as those of the committee of the municipal fund.
Sources of Moneys Disbursed by Local Funds
The municipal funds are financed through sums appropriated by
the municipal council, through possible gifts and legacies to the city
for this purpose, and through the State subsidies, i. e., by propor
tional reimbursement from the national fund for allowances granted.
The departmental funds secure their money from appropriations
of the general council of the Department, from appropriations of the
communes participating in the fund, from gifts and legacies received
by the Department for this purpose, and finally from btate subsidies
through the national fund.
The few intercommunal funds which exist obtain their moneys
much the same way as the departmental funds.
Rate of State Subsidy and Amount of Allowances
While the decree of December 28, 1926, fixed the State subsidy at
33 per cent of the total cash aid disbursed by the local funds within
fixed limits, this rate was temporarily increased to 50 per cent by the
decree of February 21, 1931, due to the rapid increase in unemploy
ment after the beginning of the year. In 1927, also to meet a similar
emergency, the rate of State contribution was temporarily increased
from 33 per cent to 60 per cent.
It must be emphasized that the rate of State subsidy (50 per cent
at present) is not applied to the total disbursements of the local funds
regardless of the amounts paid out by these organizations to appli
cants. On the contrary, the amounts of the daily allowances upon
which the reimbursement from the national fund may be based are
definitely limited. Table 20 gives the allowances for each class of
persons aided:
T a b le 20.— Basic daily allowances upon which reimbursement may be obtained
from national unemployment fund in France
[Conversions into United States currency on basis of franc=3.92 cents]
Original amount
Class of beneficiary
Head of family____________________________________ _____
Unemployed person over 16 years living at home of parents or
relatives_________________ ______________________________
Spouse of unemployed person, or person under 16, dependent
upon unemployed person and not working, or earning less
than 4 francs (15.6 cents) per day.............................................
Unemployed ascendants in direct line, dependent on head of
fam ily..__________ . . . _____________________________ _
Total to any one household____________________ __ ___ _____
Amount fixed by
decree of Feb. 13,
1931
United
United
French
French
States currency States
currency currency
currency
Francs
4.50
Cents
17.6
Francs
7.00
Cents
27.4
3.00
11.8
3.50
13.7
2.00
7.8
3.00
11.8
1.50
12.00
5.9
47.0
2.00
18.00
7.8
70.6
250
UNEMPLOYMENT INSURANCE
Any cash allowance made by local funds in excess of these fixed
rates will not be counted for reimbursement from the national fund.
Thus, if a local government unemployment fund allows unemployed
heads of families 10 francs (39.2 cents) per day because of an exces
sive cost of living in the locality, it may claim only 50 per cent of
7 francs (27.4 cents), or 3.50 francs (13.7 cents), as reimbursements
from the national fund.
In exceptional cases the Ministry of Labor may extend State sub
sidies for aid granted by local funds, in the form of certificates repre
senting a job or food. When such a method is to be followed the
local fund must, in order to secure reimbursement, secure the
approval of the Ministry of Labor.
Statistics of Operation
According to the Journee Industrielle of May 3-4,1931, there were
in existence in France on April 30, 1931, 44 departmental unemploy
ment funds of which 15 were in active operation, 329 municipal
unemployment funds of which 205 were in active operation, and
14 intercommunal unemployment foundations of which 1 was in
active operation.
On the same date there were 49,958 (39,114 men and 10,844 women)
unemployed and registered for assistance at the funds actively oper
ating. In normal times this number runs from a few hundred to
about 2,000, but since the beginning of 1931 unemployment has
greatly increased.
General Considerations
While the system of State aid to unemployed workers was regarded
as a temporary measure at the time of its inception in 1914, it has
been in more or less active operation ever since. The slowness with
which French labor had accepted unemployment insurance through
the unemployment-aid associations was the reason for its creation
at a moment of crisis. The situation to-day is not altogether a happy
one, as the system of State subsidy of local unemployment funds
tends to keep down the membership of the unemployment-aid asso
ciations which the State is so eager to see expanded. The present
weakness of the latter system causes the State to hesitate to withdraw
its support exercised through the local government funds.
A special attempt is made, however, to keep the allowances made
through the local government funds down to such a point as to render
recourse to them the last step by a worker out of employment.
Germany86
In September, 1925, the preliminary text of the first unemployment-insurance bill was published, but it was not introduced into
the Reichstag until December, 1926. The first Federal unemployment-insurance law in Germany was enacted on July 16, 1927.
For administrative purposes the unemployment-insurance system
introduced by this law was directly connected with the public em
ployment exchanges established all over the country. All employ
ment exchanges which had been operated by the individual com
munes, or collectively by groups of communes, were removed from
these jurisdictions and became Federal institutions under the new
law. The structure of the new unemployment-insurance system was
greatly influenced by this general reformation of the employment
exchanges. A combination of unemployment insurance and em
ployment exchanges seemed the only logical solution because the
task of the latter is to register and control all unemployed indi
viduals and to provide work for them if possible. By a combination
of the two, many of the previous deficiencies were eliminated.
This general reorganization was a tremendous task. Some 62,000
communes throughout Germany had been operating 900 public em
ployment offices, all of which were now taken over by the Federal
Bureau of Employment Exchanges and Unemployment Insurance
and consolidated into the 361 local and 13 district employment offi
ces now maintained by the unemployment-insurance system.
In view of the importance attributed to an efficient operation of
employment exchanges in conjunction with the unemployment-in
surance system, special provision was made in October, 1929, when
the original law was generally revised and amended, to concentrate
all private employment agencies, with a few exceptions, in the hands
of the official Federal Bureau of Employment Exchanges and Un
employment Insurance. This revised law provided that all commer
cial employment agencies of a private character were to close by
January 1, 1931.37 Noncommercial employment agencies, operated
by political parties or political party organizations, were prohibited.
Employment agencies maintained by organized labor or employers
of specific callings were allowed to continue, but all were placed
under the jurisdiction and supervision of the Federal bureau and
are required to cooperate with the official public employment agencies.
Type of System
General unemployment relief in Germany is of three kinds: (1)
Ordinary unemployment benefit (Arbeitslosenunterstutzung) covered
86 Report prepared by W illiam E. Beitz, American consul, Berlin, as o f May 2, 1931.
87 Those which had been operated with the permission o f the authorities since June 2,
1910, were entitled to claim damages which were to be regulated by a special law.
65655°— 31------ 17
251
252
UNEMPLOYMENT INSURANCE
by unemployment insurance; (2) extended unemployment benefit
(Krisenunterstutzung) four-fifths of which is paid by the Federal
Government and one-fifth by the communes; and (3) “ welfare sup
port ” (Wohlfahrtunterstutzung) paid entirely by the communes.
Coverage of System
Unemployment insurance in Germany is compulsory and applies,
generally speaking, to all classes of workers liable to compulsory
health insurance (Kranken-Versicherung) of which the upper wage
limit is 3,600 marks ($856.80)38 per year; to employees covered by
compulsory old-age and invalidity insurance (Invaliden und Angestellten Yersicherung) and earning not more than 8,400 ($1,999.20)
annually; and to crews of German vessels. Seasonal workers are
also included, but subject to slightly varying conditions. Employees
earning in excess of the salary limit set for compulsory insurance
may take out unemployment insurance voluntarily.
The following groups and classes are exempt from compulsory
unemployment insurance:
1. Any person engaged in agriculture, forestry, or fishing, either
as owner, provided the size and extent of his property is such that
it provides a living for himself and the members of his household,
or as employee or wage earner, provided he is engaged by written
contract for more than a year with six months’ notice,39 members of
his household, and persons occupied in fishing on a share basis.
2. All apprentices serving an apprenticeship of not less than two
years. Apprentices, however, become subject to compulsory unem
ployment insurance one year before the apprenticeship period as a
whole expires.
3. All workers engaged in casual, unimportant work for not more
than 30 hours a week and earning a wage of not more than 10 to 45
marks ($2.38 to $10.71) per month.
4. Home workers and others doing piecework at home or away
from the principal establishment.
5. The personnel of employers who had in operation at least one
year before this law became effective a financially sound system pro
viding relief for their employees and wage earners in case of un
employment and legally guaranteed benefits which are even better
than those provided by the Federal Bureau of Employment Ex
changes and Unemployment Insurance. This modification was
especially designed for the Zeiss Optical Works, at Jena, which for
years has been operating one of the most efficient unemployment
insurance systems along with its many other model social welfare
schemes for employees and wage earners. The employer in this case
is, however, compelled to pay a certain contribution towards the
upkeep of the Federal bureau.
38 Conversions into United States currency on basis o f m ark = 2 3 .8 cents.
89 The exemption becomes autom atically void six months before the day when the em
ploym ent contract expires, so that the wage earner or employee is insured in time should
he remain unemployed when his contract expires.
253
GERMANY
Contributions
The contributions amount to 6y2 per cent of the wages or salaries
forming the basis of calculation as shown in the classified wage scale
below. The rate of contribution has been repeatedly changed during
the last few years. When the law first became effective on October
1, 1927, the contribution was set at 3 per cent of the standard wage
or salary forming the basis of calculation. On December 27, 1929,
it was raised to Sy2 per cent; on July 30, 1930, to 4y2 per cent; and
on October 6, 1930, to §y2 per cent. A further advance is unlikely,
although the present financial status of the Federal Bureau of Em
ployment Exchanges and Unemployment Insurance is very uncertain
as a result of the terrific increase of the number of unemployed dur
ing the last year, which automatically decreased the number of con
tributors and increased the amounts paid out in benefits. The con
tributions would obviously either have to be further increased or
the benefits reduced, as the Federal Government refuses to grant
additional financial support.
Heretofore the Government has repeatedly subsidized and given
loans to the Federal bureau. Since this practice has now ceased, the
Federal bureau must function on its own account as an insurance
company, so far as the funds needed to cover the persons insured
under the unemployment insurance system are concerned. As re
gards the so-called “ extended benefits,” however, four-fifths of the
funds therefor are supplied by the Government and one-fifth by the
communes, although throughout Germany the benefits are paid
through the employment offices of the Federal Bureau of Employ
ment Exchanges and Unemployment Insurance.
The unemployment-insurance contribution is paid in equal parts
by the employer and the employee or worker. The rates have been
fixed by the administrative council of the Federal Bureau of Em
ployment Exchanges and Unemployment Insurance. By the emer
gency decree of December 1, 1930, however, any further change in
the rate will be made by the Government itself.
The 6y2 per cent contribution is calculated and based on the follow
ing classified wage scales:
Weekly wage
Wage
Wage
Wage
Wage
Wage
Wage
Wage
Wage
Wage
Wage
Wage
Class I-----------------------------10 marks and under ($2.38 and under).
Class II--------------------------- Over 10 to 14 marks (over $2.38 to-$3.33).
Class III.--------------------------Over 14 to 18 marks (over $3.33 to $4.28).
Class IV---------------------------Over 18 to 24 marks (over $4.28 to $5.71).
Class V---------------------------- Over 24 to 30 marks (over $5.71 to $7.14).
Class VI---------------------------Over 30 to 36 marks (over $7.14 to $8.57).
Class VII------------------------- Over 36 to 42 marks (over $8.57 to $10.00).
Class VIII------------------------Over 42 to 48 marks (over $10.00 to $11.42).
Class IX -------------------------- Over 48 to 54 marks (over $11.42 to $12.85).
Class X ----------------------------Over 54 to 60 marks (over $12.85 to $14.28).
Class X I-------------------------- Over 60 marks (over $14.28).
All workers and employees who are subject to compulsory-unemployment insurance and earn more than 60 marks ($14.28) per week
belong to Class X I, but the highest wage or salary on which contribu
tions are calculated and benefits paid is 300 marks ($71.40) per
month. For example, a person earning 700 marks ($166.60) per
month is not subject to compulsory health insurance (Kranken-Versicherung) which is limited to persons earning a maximum of 3,600
254
UNEMPLOYMENT INSURANCE
marks ($856.80) annually, but he is just within the maximum limit
for compulsory old-age and invalidity insurance (8,400 marks
($1,999.20) annually) and he is therefore obliged also to pay unem
ployment insurance, under wage Class X I. The unemployment-in
surance contribution, however, is not calculated on his full salary,
but only on 300 marks ($71.40) a month; he and his employer each
contribute one-half of 6y2 per cent of 300 marks each month.
The following statement shows the amounts collected in contribu
tions by the Federal Bureau of Employment Exchanges and Unem
ployment Insurance from 192? to 1930:
Amount o f contribution
192
192
192
193
7
8
9
0
690,700,000 marks
823, 700,000 marks
868,400, 000 marks
1,061, 700, 000 marks
($164,386,600).
($196,040, 600).
($206, 679,200).
($252,684,600).
Aside from regular subsidies the Federal Government extended
loans to the Federal Bureau of Employment Exchanges and Unem
ployment Insurance from 1927 to the end of March, 1930, amounting
to 623,000,000 marks ($148,274,000). This entire debt has been can
celed by tne Government.
Benefits
The benefit consists of a basic benefit and a family allowance
amounting to a fixed per cent of the standard wage or salary of the
class in which the unemployed person has been placed. Wages and
salaries are divided into 11 classes for purposes of calculation of
benefits, resembling those classes on which the contributions are cal
culated but differing to the extent that a definite standard wage or
salary is fixed.
The standard weekly wages are as follows:
Standard weekly wage
Class
Class
Class
Class
Class
Class
I__________ 8 marks ($1.90).
II ________12 marks ($2.86).
III _______ 16 marks ($3.81).
IV _______ 21 marks ($5.00).
V________ 27 marks ($6.43).
VI_______ 33 marks ($7.85).
Standard weekly wage
Class
Class
Class
Class
Class
VII________39 marks ($9.28).
VIII_______ 45 marks ($10.71).
IX ________ 51 marks ($12.14).
X _________ 57 marks ($13.57).
X I________ 63 marks ($14.99).
In other words, these standard wage rates range from 8 marks
per week for the lowest grade to 63 marks for the highest, and the
average benefit, including family allowances, ranges from 80 per cent
of the standard wage for the Classes I and II to 60 per cent for
the highest classes. I f family allowances are excluded, the average
benefit ranges from 75 per cent of the standard wage for Class I,
to 35 per cent for Classes V III to X I, as shown below:
Per cent of
standard wage
Class I _______________________________________________
Class II______________________________________________
Class III_____________________________________________
Class I V _____________________________________________
Classes V and VI______________________________________
Class V II-------------------------------------------------------------------Classes V III-X I_______________________________________
75
65
55
47
40
37. 5
35
255
GERMANY
An additional allowance of 5 per cent of the standard wage is
granted for each member of the family, entitling the recipient to
additional benefit; but the total benefit, including the family allow
ances, can not exceed the following:
P ercen t o f
standard wage
Classes I and II----------------------------------------------------------Class III_____________________________________________
Class I V _____________________________________________
Classes V and VI--------------------------------------------------------Class V II____________________________________________
Classes VIII-XI______________________________________
80
75
72
65
62.5
60
Conditions for receipt of regular benefit.—To claim benefit the
first time the insured must have been at work and have paid his
contributions for a period of 52 weeks out of the two years preced
ing the day when he first files his application for benefit. The
conditions for later receipt of benefits are that the recipient must
have been employed and must have paid contributions for at least
26 weeks during the 12 months preceding the filing of his new
claim for benefit.
The amount of unemployment-insurance benefit paid is determined
by the amount of the wage or salary received and the length of time
the insured was engaged in an occupation subject to compulsory
unemployment insurance. The unemployed person is placed in one
of the 11 classes, on the basis of the average wage or salary earned
during the last 26 weeks (or during the last six months, in the case
of salaried employees paid monthly) preceding the date of regis
tered unemployment. Apprentices without income are placed in
Class I.
Unemployed persons belonging to Classes V II to X I receive the
full benefits of these classes only if, during the two years preceding
their first unemployment, they have been engaged in an occupation
subject to compulsory unemployment insurance during at least 52
weeks and if during this time they have not received unemployment
allowances of any kind. Otherwise, they receive the benefit corre
sponding to the rates for Class V I instead of those for Class VII,
to Class V II instead of Class V III, to Class V III instead of Classes
I X and X , and to Class I X instead of Class X I. The family allow
ances, however, are granted according to the rates of the original
classes.
'Waiting period.—The waiting period before an individual is
entitled to receive benefit is (1) 14 days for unemployed persons
without family members entitled to additional family allowances;
(2) 7 days for unemployed persons with one, two, or three family
members entitled to additional allowances; and (3) 3 days for
unemployed persons with four or more family members entitled to
additional family allowances. The waiting period, however, is
shortened in the first case to 7 days, in the second case to 3 days,
and is dropped entirely for the third category, when the insured
person registers his application for benefit immediately after a
period of short-time work of at least two weeks’ duration, as a result
of which his earnings were cut by at least one-third of his usual
wage, after a period of at least two weeks’ incapacity, or after
spending at least two weeks in a hospital or other sanitarium officially
256
UNEMPLOYMENT INSURANCE
prescribed. I f the last occupation of the unemployed person con
tinued for less than six uninterrupted working weeks, the waiting
time is shortened by as many days as his last occupation was pre
ceded by unemployed days.
Benefit period.—If all provisions of the unemployment-insurance
law have been met, the insured person has a legal claim to benefit
and he is not required to prove that he is in need. This does not
apply, however, to the extended benefits or the “ welfare support.”
The insured unemployed person is not obliged to accept or perform
compulsory work, except when the period of the regular benefit has
expired.
Before 1927 the benefit period under the old unemployment support
act was, generally speaking, 26 weeks. An extension to 39 weeks
was considered for trades or occupations suffering under extremely
bad conditions. Especially hard-pressed individuals were also given
another 13 weeks, so that in unusual cases aid was given for 52 weeks.
The regular benefit period under the new law on employment and
unemployment insurance is fixed at 26 weeks.
Extended unemployment benefit.—All persons insured against un
employment are automatically eligible to the extended benefit when
their regular benefit period of 26 weeks has expired and they have
not been successful in finding new employment.
Generally speaking, extended unemployment benefits are given to
all persons who have been dropped from the regular benefit but are
also given to other persons, i. e., to unemployed persons who are able
and willing to work, but who lost their jobs through no fault of their
own, and are considered needy; to persons insured against unem
ployment, who have as yet no claim to the benefit proper but who have
worked and paid contributions for at least 13 weeks during the pre
scribed period; and to persons who have exhausted their claim to the
regular benefit of the unemployment insurance.
Recipients of extended benefits are also entitled to all the benefits
and additional financial aid provided by the law, such as traveling
expenses if transferred to other places oi occupation, working equip
ment if such is lacking, and limited financial aid in addition to
wages or salaries should these be too low to maintain a family over
the critical period.
The extended unemployment benefit is financed to the extent of
four-fifths by the Federal Government and one-fifth by the com
munes, which also contribute in the same ratio to the sick benefit and
old-age and invalidity insurance contributions of the unemployed,
in so far as the unemployed are in danger of losing part of their
rights to such insurance. The recipients of extended unemployment
benefit are taken care of by the employment offices, and the Federal
Bureau of Employment Exchanges and Unemployment Insurance
receives from the Federal Government 5 per cent on all money paid
in extended benefits to help cover the expenses of the organization.
The communes and the Government pay their respective shares
of one-fifth and four-fifths of the total funds needed for the extended
benefit to the Federal bureau direct at the end of each month. Any
commune failing to settle its monthly account regularly is forced
to pay on the amount overdue an interest rate of 2 per cent above
the discount rate of the Reichsbank. Upon request of the Minister
GERMANY
257
of Labor, the State in which the commune in arrears is located may
force the latter to include the debt to the Federal bureau in its
budget; the State is also held responsible for the proper payment of
the communal debts as far as these are concerned with extended
unemployment support.
For the current fiscal year, the Government has included in its
budget 400,000,000 marks ($95,200,000) to meet its obligations for
extended unemployment benefit. This is only 100,000,000 marks
($23,800,000) more than was provided last year and there was a
deficit of some 65,000,000 marks ($15,470,000) to be covered at the
end of the year. This deficit is now covered by the additional
100,000,000 marks ($23,800,000) granted for the current fiscal year,
but unless there is a decided improvement in the labor market the
deficit this year will presumably be considerably greater than last
year.
Numerous restrictions and limitations were introduced by the
decree of October 11,1930, and the definition of “ need ” was revised,
with a view to excluding all who are not positively in want. The
practice of having a definitely fixed period of aid was dropped and
provision was made to vary the length of the period according to
special conditions and need in the various callings and in the various
districts. The local manager of the employment office or the local
employment arbitration board may reduce and limit the support
period, as deemed feasible, especially if there is reason to believe
that by so doing the unemployed person will make greater effort to
find work of some kind. The general period of extended benefit is
now limited to 32 weeks, but the local employment office may extend
this period to 45 weeks for unemployed persons over 40 years of
age provided they are found especially deserving and badly in need.
The amount of extended unemployment benefit paid is based on
the classified wage scale (the 11 classes shown above), but all
recipients of extended unemployment benefit in Classes V to X I are
paid as follows:
(1) Unemployed persons with at least one family member entitled
to additional family allowances 40 receive the rates of Class V instead
of those of Class VI, of Class V I instead of Classes V II and VIII,
and of Class V II instead of Classes IX to X I. The reductions also
apply to additional family allowances.
(2) Unemployed persons without family members entitled to
additional family allowance receive the rates of Class IV instead
of those of Class V, and instead of the reduced rates fixed above
under (1) the rates of the next lowest class.
Welfare support.—The “ welfare support ” is an entirely separate
and independent relief system carried out by all the communes,
towns, and cities throughout Germany without any financial assist
ance from the Federal or State Governments.
When the period of regular benefit under the unemployment
insurance (26 weeks) has expired the unemployed person becomes
automatically eligible to the extended unemployment benefit. When,
in turn, the extended benefit, varying in periods up to 26 weeks in
40 Family members entitled to additional support include husband or wife, parents,
grandparents, and other members o f the family if they live in the same household.
258
UNEMPLOYMENT INSURANCE
usual cases and up to one year in
and he has not been successful
application for “ welfare support ” with his local communal or
municipal authorities.
Here a very strict test is applied and the applicant must prove
that he has no other means of support, no one to help him finan
cially, no one to take care of him or his family, and that his relatives,
if any, are not in a position to help him.
The period during which welfare support may be granted is prac
tically indefinite.
Administration
Organization.—The administration of unemployment insurance
in Germany is carried out by the Federal Bureau of Employment
Exchanges and Unemployment Insurance (Reichsanstalt fur
Arbeits-Vermittlung und Arbeitslosen-Versicherung), with head
quarters at Berlin and with 13 district and 361 local employment
offices.
Each of the 361 local employment offices so far as they are located
in rural districts maintains flying employment squads. These squads
consist of from one to three members of the local employment office.
They cover a different district each day and the unemployed are
compelled to report to receive instructions regarding available jobs
in the district, to have their unemployment control cards stamped,
and to receive their regular or extended benefits.
Germany is divided into 13 districts, coinciding generally with
the boundaries of the larger States. A number of districts, how
ever, include several smaller States, while in Prussia there are sev
eral districts in one State. In making the divisions, State bound
aries and economic spheres of interest were taken into consideration.
The Federal bureau is an independent institution. Its organs are
the administrative committees of the district and local employment
offices, the administrative council and the managing board of the
Federal bureau.
The administrative committee of the local employment office con
sists of an equal number of reprsentatives of employers, employees,
and local authorities; the manager of the local employment office is
also a member of the committee. There must be at least five members
from each group. The members are appointed by the president
of the district employment office, to whom a list of the proposed
members is submitted by the various groups of organized labor and
of employers. The representatives of the local authorities are
appointed by the superiors of the communal or municipal admin
istration. Disputes are settled by the highest State authority or by
the Minister of Labor.
The administrative committee of the district employment office
is constituted similarly to that of the local office. The number of
members of each group, however, is seven instead of five. Rep
resentatives of the employees and employers are first proposed by
their organizations to the managing board of the Federal bureau
which also appoints them. Representatives of the authorities are
appointed by the highest State authorities. Differences are settled
by the Minister of Labor.
GERMANY
259
The administrative council of the Federal bureau consists of the
president of the Federal bureau and at least 10 representatives each
of employees, employers, and public authorities. The statutes pro
vide for a maximum of 16 representatives from each group. The
representatives of the employees and employers are appointed by
the Federal Economic Council, while the representatives of the public
authorities are appointed by the Federal Council (Reichsrat).
The managing board of the Federal bureau consists of the presi
dent, who is also chairman of the administrative council, and five
members each of the three groups represented in the administrative
council, all of whom are appointed by the Minister of Labor.
The administrative committee of each local employment office
as well as of the district employment office must contain at least
one representative of salaried employees. The administrative coun
cil of the Federal bureau must have representatives from employers
and employees in agriculture and forestry, and there must be at
least two representatives of salaried employees, while at least two
of the members representing public authorities must be experts in
communal affairs.
Provision is also made to have women represented in each group,
although this is not absolutely obligatory. I f so required, special
branch departments and special branch committees are created at
the local and district employment offices to protect the interests of
certain industrial or commercial branches, or the interests of salaried
employees as against those of the wage earners. The main office
also maintains a large special department for agriculture and
forestry. The interests of both employers and employees are
guarded in these special departments or special committees.
The original personnel budget of the Federal Bureau of Employ
ment Exchanges and Unemployment Insurance for the fiscal year
1929 provided for a regular staff numbering 13,212. Of this num
ber, 169 were assigned to the main office, 733 to the district employ
ment offices, and 12,310 to the local employment offices. These
figures, however, include only the regular staff of officials and salaried
employees and not wage earners or temporary assistants. The em
ployees of the institution are not considered as Government or State
officials. Of the total staff of 13,212 there were only about 1,450
officials who had been taken over from other Government, State, or
communal offices and who retained their claims to pensions, etc.,
as Government, State, or communal officials.
On March 1, 1931, the number of officials, salaried employees, and
temporary assistants totaled about 28,000, or more than double the
number of the original staff. In the meantime, however, unemploy
ment had increased from a figure fluctuating around a million in
1927 to 5,000,000 in March, 1931. With seasonal unemployment
partly terminating at the end of March, the institution hoped to
reduce its staff in the ratio of 4.4 to every 1,000 unemployed stricken
from the records.
Functioning of the organization.—With compulsory health, sick
ness, old-age, and invalidity insurance systems operating throughout
Germany, the unemployment-insurance system is able to cooperate
very closely with these institutions in carrying out its general scheme.
Even the police are called upon to cooperate in identifying the
260
UNEMPLOYMENT INSURANCE
individual and confirming his residence when he makes his first
application for unemployment benefit.
The unemployment-insurance contributions are paid in cash and
are collected by the numerous local compulsory health-insurance
offices located in every city, town, and community throughout Ger
many, and by the various health and sickness insurance offices oper
ated by the labor unions and the employees’ associations.
The employer is statutorily bound to deduct the employee’s share
of the unemployment-insurance contribution, together with the com
pulsory sickness-insurance contributions from the wages or salaries,
and, alter adding his own share, to transfer the amounts to the local
sickness-insurance office. These insurance offices are in turn com
pelled by law to send the collected unemployment-insurance contri
butions to the district employment office of the district in which they
are located. The Federal Bureau of Employment Exchanges and
Unemployment Insurance has supervising and controlling organs
operating as a check on the sickness-insurance offices. The insurance
offices receive 0.5 per cent of the amount of unemployment contri
butions collected to defray their expenses. The district employment
office retains whatever amount it presumably needs for the next
month and transfers the balance, also of the funds received from its
own local offices, to the main office in Berlin.
Each month the district office estimates its financial needs for the
following month on the basis of regular reports received from the
local offices and informs the main office, which then forwards the
necessary additional funds if required. The main office is supposed
to maintain a special reserve fund sufficient to support at least
600,000 unemployed for a period of three months. The main office
thus regulates the total financial needs of the 13 district employment
offices, which in turn are expected to meet the requirements of the
361 local employment offices.
Provisions Against Abuses
The unemployment-insurance law and the regulations thereunder
are so carefully constructed and such great pains have been taken
to eliminate every possible chance of irregularity, that fraud on a
large scale is practically impossible. Furthermore the law provides
for heavy fines for the employer as well as for the insured or other
applicant for support should they neglect to comply with the regu
lations of the unemployment-insurance law.
Every employer is obliged to render a written statement regard
ing the length of time an employee or wage earner was engaged,
and the local sickness-insurance office is compelled to give to the
unemployed person a statement showing the amount and the length
of time for which unemployment-insurance contributions have been
paid. These documents must be submitted, together with the appli
cation for unemployment support.
Fines and imprisonment up to six months are provided for per
sons violating the unemployment-insurance law. Employers retain
ing the unemployment-insurance contribution after having deducted
it from the salaries or wages of their employees can be sentenced to
prison. Employers who do not transmit the contributions to the
GEE M ANY
261
local sickness-insurance office on time may be fined up to five times
the amount overdue. Unemployed persons violating the regulations
are fined by the suspension of claim up to six weeks; the period of
suspension is then subtracted from the benefit period of 26 weeks.
Grievances and Disputes
All disputes and grievances concerning unemployment-insurance
benefit are settled by arbitration. Each local employment office has
its arbitration committee consisting of the employment office man
ager, or his representative, and one member each of the employees’
and employers’ representatives seated in the local administrative
committee.
An arbitration chamber has been created at the chief district Fed
eral insurance office which covers the sphere of interest of the district
employment office. Thus the Federal insurance authorities (ReichsVersicherungs-Anstalt) cooperate with the Federal Bureau of
Employment Exchanges and Unemployment Insurance to settle
important disputes and grievances on unemployment insurance sup
port in the district, and to decide all cases which have been appealed
at the local arbitration committee. The membership of the arbitra
tion chamber consists of a member of the Federal district insurance
office as chairman and one representative each of the employees and
employers, also connected with the structure of the Federal district
insurance office. Other arbitration chambers may be created in case
of necessity by the highest State authorities with the consent of the
Minister of Labor. Half of the expenses connected with these arbi
tration chambers are covered by the Federal Bureau of Employment
Exchanges and Unemployment Insurance, the other half being paid
by the Federal district insurance office.
A higher authority for appeal on matters dealing with unemploy
ment insurance is the so-called arbitration senate. It has its head
quarters at the Federal Insurance Bureau (Reichs-VersicherungsAmt) in Berlin. It consists of a chairman, who must either be a per
manent member of the Federal insurance office or a member of the
main office of the Federal Bureau of Employment Exchanges and
Unemployment Insurance, a member of the German courts, and a
representative each of the employees or wage earners and the employ
ers. I f necessary other arbitration senates may be formed.
All cases presented to the arbitration bodies dealing with salaried
employees, or with agricultural and forestry branches, require the
presence of at least one representative of these groups as a member
of the arbitration committee, chamber, or senate.
All other grievances and disputes not dealing with unemploymentinsurance benefit—that is, disputes concerning railroad fare, loans,
or financial assistance in procuring tools and equipment, extended
education, occupational changes through education, etc., and disputes
on employment classification with regard to the calling, etc.—are
settled by the administrative committee of the employment office.
Appealed cases are brought before the administrative committee of
the district employment office which has the final decision.
If a decision by the manager of the local employment office is
altered by the local administrative committee, the former may file
262
UNEMPLOYMENT INSURANCE
protest against tlie change with the administrative committee of the
district office. If the administrative committee o f the district employ
ment office renders the decision in the first instance, this decision may
be appealed, the case going to the managing board of the Federal
bureau; the case may then be carried to the administrative council of
the Federal bureau.
A special procedure is provided for all disputes and grievances
dealing with the noncommercial employment exchanges maintained
by the various labor and employees’ organizations. I f the jurisdic
tion of these organizations covers territory embodying several district
offices, as is usually the case, complaints go direct to the managing
board of the Federal bureau and from there to the administrative
council of the Federal bureau, if appealed. Should the appeal be
rejected by the latter body, further complaint may be filed with the
Minister of Labor.
Statistics of Operation
Number of persons covered.—The exact number of persons cov
ered by unemployment insurance in Germany fluctuates, of course,
with the labor market. According to the unemployment-insurance
law all persons covered by compulsory health insurance (KrankenVersicherung) and salaried employees’ old-age insurance (Angestellten-Versicherung) are also compelled to contribute to the unem
ployment insurance. There are a few exceptions, but these are
negligible.
The number of persons insured and contributing to unemploy
ment insurance in December, 1928, was 16,780,091; in December,
1929, 17,024,280; and in February, 1931, 15,600,000. The low figure
in February, 1931, has considerable significance in view of the ap
proximately 5,000,000 unemployed who are not contributing.
According to the census of June 16, 1925, the total number of
persons engaged in some sort of occupation that year was 32,000,000;
the number in 1931 is estimated at 33,500,000. This increase is
chiefly due to prevailing economic conditions in Germany which
are forcing onto the labor market a large number of persons who
were not obliged to work formerly but who are now forced to seek
occupation because of the low earnings of the head of the family
or because of the inadequacy of pensions. In round numbers there
are in Germany to-day about 17,000,000 wage earners, 3,500,000
.salaried employees, and 2,500,000 civil employees.
' The average annual number of compulsorily insured workers and
employees (sickness, old-age and invalidity insurances) totaled
22,111,000 persons in 1929. The number of unemployed registered
at employment offices throughout Germany at the end of February,
1931, totaled 4,971,843. The number of unemployed and dependents
\s estimated at 10,000,000. * Germany’s present population is approx
imately 64,000,000, so that about one-sixth of the population is
directly affected by unemployment, and practically one-fourth of
Germany’s wage earners and salaried employees are without jobs.
Aside from unemployment there is also a tendency to increase
the amount of short-time work. Statistics from organized labor
263
GERMANY
unions showed at the end of February, 1931, that of their members,
34.5 per cent were unemployed, 19.5 per cent were working short
time, and only 46.0 per cent were working full time.
Persons receiving benefits.—The tremendous increase in the num
ber of persons granted the extended unemployment benefit since
1928 is shown in Table 21:
T a b l e 21 .— Number of persons granted extended unemployment benefit in Germany,
December, 1928, to March 15, 1931
Month and year
Males
December, 1928__________________________
January, 1929____________________________
December 1, 1929_________________________
February, 1930___________________________
February, 1931___________________________
March 15,1931.................................................
Females
97,809
115,467
156,768
224,263
775,106
813,149
19,030
22,982
37,641
52,939
132,559
136,529
Total
116,839
138,449
194,409
277,202
907,665
949,678
The yearly average of* unemployed persons from 1928 to 1930 and
the number of persons receiving regular and extended unemploy
ment-insurance benefit (not including “ welfare support ” ) are shown
in Table 22:
T a b l e 22 .— Average number unemployed and number receiving regular and extended
unemployment relief in Germany, 1928 to 1930
Year
1928— ......................................................................
1929...........................................................................
1930.........................................................................
Number of
receiv
Average yearly persons
ing regular
number unem and
extended
ployed
unemploy
ment benefits
1,390,887
1,896,938
3,075, 580
1,029,694
1,451,137
2,158, 049
In 1927, when unemployment insurance was first introduced in
Germany, the number of persons receiving welfare support remained
within narrow limits. The gradual increase of the number of;
unemployed from 1927 to 1930 and the unemployment wave of
1930-31 have changed the picture completely. In 1928 the number
of persons receiving welfare support from the communes, towns,
and cities totaled 464.268, and in 1929 this number rose to 569,839,
while during 1930 the figure advanced to 800,000. During the first
three months of 1931 the figure nearly reached the million mark
and now is daily increasing at such a rapid rate that it will soon
reach 1,250,000.
According to figures recently published the number of unemployed
persons registered at employment offices of the Federal Bureau for
Employment and Unemployment Insurance at the end of February,
1931, was 4,971,843. A comparison of the number receiving finan
cial assistance granted under the three classes of unemployment
relief is shown in Table 23:
264
UNEMPLOYMENT INSURANCE
T a b l e 2 3 .— Comparison of number receiving benefits, by type of unemployment
relief
Type of benefit
Regular unemployment insurance benefit__________
Extended benefit.______________________ - ___ ___
Welfare support__________________________________
Number of
recipients
2,589,314
907,665
900,508
Per cent of
total number
of unem
ployed
52.1
18.3
18.1
Cost to the communes.—As the communes are also compelled to
contribute one-fifth of the amounts paid in extended benefits, the
number of beneficiaries of which likewise reached the million mark
toward the end of April, 1931, with large daily additions from the
regular insurance benefit, the communes were supporting or contrib
uting toward the support of some 2,250,000 unemployed at the end
of April, 1931.
The large financial burden resting on the communes can be esti
mated, when it is considered that one-fifth of the cost of the extended
benefit and all of the cost of the welfare support must be met by them.
During the months of January and December, 1929, and January,
1931, the Government and the communes contributed four-fifths and
one-fifth, respectively, of the following amounts for extended unem
ployment benefit:
January, 1929________________ 10,876,560.78 marks ( $2,588,621).
December, 1929_______________ 14,861,941.05 marks ( $3,537,142).
January, 1931________________ 49,886,866.05 marks ($11,873,074).
The total expenditures for the year 1929 amounted to 166,594,219.50
marks ($39,649,424).
The budget for welfare support for 1931 to 1932 is estimated at
1,250,000,000 marks ($297,500,000). Under the present system the
communes will be required to raise all of this large amount.
The amount of financial aid received by the unemployed through
the welfare support varies widely, depending on the cost of living
in the particular district and the financial standing of the commun
ity. Generally speaking, the rates of support are considerably below
those of the regular and extended benefits.
The welfare budget of the city of Berlin alone amounts to 360,000,000 marks ($85,680,000) for the current year. This sum, however,
also includes additional support of old-age pensioners, youth wel
fare, etc. During the month of January, 1931, the Berlin municipal
welfare offices supported 131,150 unemployed, no longer eligible to
the regular or the extended benefit. To-day the figure is probably
somewhere around 200,000.
The communes are suffering tremendously under the heavy finan
cial burden caused by the “ welfare support,” and their whole
financial structure threatens to collapse unless the Government and
States comes to their assistance. It is pointed out that the communal
welfare budgets now carry an estimated deficit of 385,000,000 marks
($91,630,000) for the fiscal year 1931-32.
The unemployment-insurance law was originally based and calcu
lations were originally made on the presumption that not more than
GERMANY
265
800,000 unemployed would have to be reckoned with, while the pres
ent figure of 5,000,000 unemployed has changed the entire structure
of the system^ so that the importance of the unemployment insurance
as such is being temporarily replaced by the increasing importance
of the extended benefits and welfare support carried, respectively, by
the Government and communes jointly and by the communes alone.
The comparative proportion of unemployed supported by the com
munes, as against the total unemployment figure, increased from
9.7 per cent in January, 1930, to 21.2 per cent in September, 1930,
while the proportion of unemployed supported by insurance decreased
during the same period from 69.4 to 48.9 per cent.
The public welfare agencies calculate the average per capita cost
of the supported unemployed persons at 700 marks ($167) per year.
In the large cities and in densely populated industrial districts where
the cost of living is relatively higher, the above figure advances to
about 750 marks ($179) per year, while in the country districts it
goes as low as 550 marks ($131). The “ welfare support ” figures are
relatively high when compared with the regular insurance benefit and
the extended benefit, as the public welfare agencies not only support
the unemployed financially, but also provide them with food, cloth
ing, fuel, etc. It is furthermore noteworthy that many unemployed
receiving extended unemployment benefit also receive additional wel
fare support if the extended benefit falls below the amount stipulated
as the minimum for existence in the particular community.
The longer the duration of unemployment, the greater becomes the
burden of the communes under the present system. Experience has
shown that those unemployed who receive welfare support are the
last to be engaged in case there is work available, as the employer
prefers to rehire or hire men who have been out of work for but a
short time. It has been found that persons who have been unem
ployed for a long period are bad workers; they lose their efficiency,
reliability, and health, and become in general undesirable. There
fore, the greatest moral, political, and social danger arises from the
mass of long-term unemployed, which is constantly on the increase
in Germany.
Receipts and expenditures.—Table 24, published in the Wochenbericht des Instituts fur Konjunkturforschung of April 15, 1931,
presents a clear picture of the general financial development of unem
ployment relief and unemployment insurance in Germany from 1924
to 1930, that is, before and after the unemployment-insurance law
became effective October, 1927:
266
UNEMPLOYMENT INSURANCE
T a b l e 24.— Receipts and expenditures (in millions) under unemployment relief and
insurance system , 1924 to 1980
[Conversions into United States currency made on basis of mark=23.8 cents]
1927
Item
1924
1925
1926
Janu Octo
ary to ber to
Sep Decem
tember ber
1928
1929
1930
German currency
Marks Marks Marks Marks Marks Marks Marks Marks
Expenditures:
217.8 1,077.2
499.6
122.4
819.3 1,118.1 1,651.1
Benefits and allowances paid1___ 285.8
31.4
30.7
55.7
47.4
Cost of administration, etc...........
17.7
83.7
108.0
121.3
16.1
14.2
79.6 2 56.0
5.8
31.6
33.9
Productive emergency work____
23.5
5.4
2.6
8.6
6.9
*6.0
.6
6.6
Miscellaneous................................
3.8
T o ta lExcluding productive emer
gency work......................
Including productive emer
gency work.......................
Receipts:
Insurance contributions................
Subsidies—
By Federal Government *___
By States__________________
By communes_____________
Miscellaneous receipts..................
Total receipts.............................
319.1
254.6 1,141.5
553.0
140.7
909.9 1,232.7
1,776.2
333.3
270.7 1,221.1
609.0
146.5
941.5 1,266.6
1,799.7
222.4
165.0
523.6
499.9
190.8
823.7
868.4
1,061.7
74.6
74.6
34.1
6.7
.2
.2
36.2
7.7
258.3
243.0
148.4
6.5
52.8
53.8
116.0
3.0
50.0
396.3
729.4
209.3 1,179.8
725.5
246.4
412.4
5.6
6.3
7.0
851.8 1%?71.0
28.1
1,798.1
United States currency
Expenditures:
Benefits and allowances paid *___
Cost of administration, etc..........
Productive emergency work........
Miscellaneous................................
$68.0
7.3
3.4
.6
T o ta lExcluding productive emer
gency work__...................
Including productive emer
gency work__...................
Receipts:
Insurance contributions...............
Subsidies—
By Federal Government8___
By States__________ _______
By communes_____________
Miscellaneous receipts................
Total..........................................
$51.8
7.5
3.8
1.3
$256.4
13.3
18.9
2.0
$118.9
11.3
*13.3
21.4
$29.1
4.2
1.4
.1
75.9
60.6
271.7
131.6
79.3
64.4
290.6
144.9
52.9
39.3
124.6
17.8
17.8
8.1
1.6
.05
.05
8.6
1.8
61.5
57.8
35.3
1.5
98.2
49.8
280.8
$195.0
19.9
7.5
1.6
$266.1
25.7
8.1
1.6
$393.0
28.9
5.6
.9
33.5
216.6
293.4
422.7
34.9
224.1
301.5
428.3
119.0
45.4
196.0
206.7
252.7
12.6
12.8
27.6
.7
11.9
94.3
173.6
1.3
6.7
1.5
1.7
172.7
58.6
202.7
302.5
427.9
1 Including health insurance contributions paid for beneficiaries.
2Approximate.
8Including loans granted by the Government in 1929 and 1930 and the emergency reserve fund placed at
the disposal of the Federal Bureau of Employment Exchanges and Unemployment Insurance.
Present -financial conditions.—With the cancellation by the Fed
eral Government of some 623,000,000 marks ($148,274,000) of debts
which the Federal Bureau of Employment Exchanges and Unem
ployment Insurance owed it at the end of March, 1930, the financial
status of the bureau was claimed to be generally sound, although it
was forced to negotiate a loan with the Reichsbank in March, 1931
(the Government having refused to grant further loans), to the extent
of 83,000,000 marks ($19,754,000) to carry it over the first few
GERMANY
267
months of the new fiscal year, after which contribution receipts were
expected to show a seasonal gain. Officials of the bureau consider
the financial status good, under the prevailing circumstances,
although certain impartial experts believe that the officials are a
bit too optimistic. The Federal bureau estimated in its 1931 budget
that the total receipts from contributions would amount to 1,680,000,000 marks ($399,840,000), with which amount it could support
an average of 1,750,000 unemployed persons entitled to regular bene
fit from unemployment insurance. Here it is pointed out by the
less sanguine that the constantly decreasing monthly receipts, which
have dropped from 140 to 120-130 million marks, have not been suffi
ciently considered. It is also feared that the Federal bureau over
estimated the expected decrease in unemployment for the coming
months, while the general impression prevails that there will be but
a slight change on the labor market and that this change will only
extend to the usual seasonal stimulation.
Basis for Calculating Contributions and Benefits
Unemployment insurance in Germany is not based on actuarial
calculations, as the term is usually understood in connection with
ordinary insurance. Although the first calculations were made
according to certain assumed unemployment figures on which the
size of the contribution was based, unemployment-insurance experts
in Germany all agree that it is impossible to place unemployment
insurance on the same plane with other insurance systems, such as
the health and old-age and invalidity insurance.
In working out the unemployment-insurance scheme the experts
had available the results of the years of experience with the unemployment-relief systems operating prior to the establishment of the
present unemployment insurance. They knew very closely the an
nual figure of unemployment since the end of the war and were able
to make appropriate allowances for seasonal fluctuations. By com
pelling all persons subject to compulsory health, old-age, and invalid
ity insurance to participate in unemployment insurance, they were
in a position to figure almost exactly the number of insured persons
to be included in its scope. On the basis of available wage and
salary statistics for all persons subject to other compulsory insurances,
they were able to calculate approximately the total sum of contribu
tions that could be annually collected. The 11 classes of standard
wages were compiled on the basis of these figures. The average
amount of support granted weekly or monthly per unemployed indi
vidual under the old unemployment-relief systems was also known.
In view of all of these available data an approximate risk basis
could at least be estimated. But even with these advantages, subse
quent experience and the unexpected wave of unemployment which
soon followed, showed the fallacy of all previous calculations, esti
mates, and budget plans, and the entire system had to be constantly
reformed, revised, altered, and many features eliminated as time
went on. It proved to be necessary to increase the size of the con
tribution not less than three times, and now the Federal Bureau of
Employment Exchanges and Unemployment Insurance is faced with
65655°— 31------ 18
268
UNEMPI/OYMENT INSURANCE
the question of whether it will be able to carry on as an independent
insurance agency or whether new general reforms will be needed to
connect the insurance system more closely with the other two cate
gories of unemployment support, that is, with the extended unem
ployment benefit and the welfare support which are dependent upon
fiscal resources alone.
When the first plans for unemployment insurance were laid the
available statistics from the compulsory insurance system revealed
that some 18,806,032 persons could be covered by compulsory unem
ployment insurance. Allowances were made for exemptions, so that
the final figure on which calculations were based totaled 16,500,000
persons. These were then divided into five wage classes, based on
the census statistics of 1925 and on the then existing wage scales.
The amount of wages and salaries earned annually by these groups
was thus determined. The unemployment figures for the years 1924,
1925, and 1926 were added together and the average annual unem
ployment figure for these three years (including 1926, a very critical
unemployment year) was found to be 700,000.
This ngure was then multiplied by the amount of benefit to be
aid and by adding the estimated administration costs, the final
gure was reached for making up the debit side of the first budget.
Calculations were then made to determine what percentage of the
wage or salary would have to be collected from the 16,500,000 insured
to meet these expenditures. The result was that a 3 per cent contri
bution rate was adopted as most likely to cover the benefits and
costs for 700,000 unemployed and also to provide a future reserve
fund sufficient to carry 600,000 additional unemployed for a period
of 3 months.
The Federal bureau had absolutely no capital to start with and
was forced to rely solely on private contributions and loans from
the Federal Government to function during the first year. During
1927-28, the first year of its practical operation, the Federal Bureau
of Employment Exchanges and Unemployment Insurance paid bene
fits to 820,000 instead of 700,000 persons. The employment figure
continued to increase, however, and radical revisions followed which
eliminated the first discrepancies and repeatedly increased the con
tributions until by an emergency decree effective October 6, 1930,
the contributions were fixed at 6% per cent of the wages and salaries.
During 1928 the classes of persons covered by compulsory unem
ployment insurance were also extended to include higher-paid sal
aried employees. This increased the number of insured persons to
17,057,877 at the end of November, 1928; but as a result of the present
acute unemployment crisis the number of persons paying contribu
tions dropped to about 15,600,000 at the end of February, 1931.
As a result of the war and its effects during the following years,
the labor market in Germany has been glutted with millions of people
who formerly belonged to the middle and upper classes and who were
being supported by their families, parents, or by State pensions. The
distressing economic conditions are forcing many youths and some
900,000 married women to seek employment. In addition the socalled rationalization of industry and agriculture has caused a gen
eral shift in the employment market itself. Many laborers, skilled
E
GERMANY
269
workers, and salaried employees have been replaced by machinery
and are now forced to learn other trades or seek some other form of
occupation.
Attitude of Groups Toward System
Attitude of employers.—Historically speaking, it might be said
that the employers at first vehemently opposed the introduction of
compulsory unemployment insurance when the first drafts of the
unemployment insurance bill were being made in 1926. At that
time the social burdens carried by the employers (their contributions
to health and old-age insurance, etc.) were considered about the limit
of their capacity. * Before long, however, the employers began to feel
that unemployment insurance also had certain advantages. It tended
to stem the tide of radicalism and also to stabilize the labor market
by keeping a steady and ready supply of qualified and specially
skilled and trained workers at the employers’ disposal. Without
benefits, or sufficient support, these trained workers would wander off
to other districts and accept any jobs they could get, thereby sacri
ficing much of their professional efficiency. Experience during the
last few years has repeatedly shown that unsupported unemployed
skilled workers who had taken up some other occupation in order
to make a living had lost a high percentage of their efficiency when
they returned to the trade which they had learned. This labor res
ervoir is especially advantageous for seasonal workers and, of course,
also for many industries in which only highly skilled labor can be
used but which, for economic or market reasons, are not able to keep
a steady staff during the entire year.
This attitude is, of course, not shared by all employers, and un
doubtedly many an employer regards unemployment as a favorable
condition for securing cheaper labor, although the wage-scale agree
ments are designed to prevent him from accomplishing his aim, but
not always successfully. On the whole, however, it must be stated
that the employers, generally speaking, have also come to realize the
potential dangers involved in large masses of unemployed.
Besides carrying a 3% per cent wage share of the unemployment
insurance, the German employers are also burdened with some 11 per
cent wage-share assessments for other social insurances, including
sick benefit, old-age and invalidity insurances. This heavy burden is
vigorously opposed by the employers, and many go so far as to
attribute to these burdens indirectly part of the unemployment.
However, they also realize that if there were no unemployment in
surance collecting some 1,600,000,000 marks ($380,800,000) to pay
benefits to the unemployed, this money would have to be raised in
some other way, and sooner or later, directly or indirectly, they would
ultimately be called upon to pay or contribute their share to this
amount by way of taxation, thereby losing some of the recognized
advantages and also, most likely, the security and order established
by the unemployment insurance and its affiliated relief systems
(extended unemployment benefit and welfare support).
The chief opposition coming from the (employers to-day is directed
more against numerous alleged abuses due to still existing deficien
cies—that is, against particular features of the present system—
270
UNEMPLOYMENT INSURANCE
rather than against the principle of unemployment insurance or
unemployment relief as such.
In April, 1929, the Union of German Employers’ Associations
drafted extensive reform proposals which were submitted to the
Eeichstag with some very interesting data regarding general irregu
larities and numerous cases of fraud, and alleging the psychological
shortcomings of unemployment support by relating numerous inci
dents which occurred in the establishments of its members.
Attitude of wage earners.—Generally speaking, the demands of the
wage earners in Germany to-day are identical with the demands and
party programs of the Socialist and Communist Parties. The atti
tude of the wage earners is determined by the programs of these two
parties.
As the Weimar Constitution of republican Germany guarantees
every citizen the “ right to work,” or financial support in the absence
of work, the labor unions, immediately after the armistice, com
menced drafting bills for the Eeichstag to provide a job for every
German citizen, or at least to guarantee him subsistence for himself
and family. Tnese bills were the foundation upon which the unemployment-insurance system was erected in 1927, although previous to
this date the foundation had been well cemented by a far-reaching
unemployment-relief system known as the “ Arbeitslosen-Fiirsorge.”
To-day this word is again playing a very important part in the
reform proposals of the Socialist Party, as well as the Deutscher
Stadtetag and the Deutscher Landkreistag, which demand that the
present system of unemployment support of three classes be reformed
so that there will be but two classes—unemployment insurance and
unemployment relief.
The wage earners are, of course, strongly in favor of the entire
system. The only objection they have is that the benefits and support
allowances are not high enough, but they resist payment of even a
fraction of a per cent more in contributions.
Unemployment insurance and unemployment relief are regarded
by wage earners as well as by salaried employees as the best method
for preventing the unemployed from appearing on the labor market
as a potential force for reducing wages. Under the present system
the employees are partially protected by law against the appearance
of cheaper competitive labor by the unemployed.
In the eyes of the wage earner the prevailing system also has many
other advantages. It prevents the unemployed from having to apply
to the charitable organizations, begging for relief. It prevents the
spreading of, and psychologically tends to eliminate, the inferiority
complex so readily developed when the unemployed, formerly finan
cially sound workingmen or employees, are forced to accept alms and
support of a recognized charitable character. It gives the unem
ployed individual a legal claim for benefit for which he made sacri
fices by paying insurance contributions for many weeks, months, or,
in many cases, for several years. It is argued that in spite of his
unemployment he can still regard himself and his family as respect
able members of society. In reality, however, any person who has
been unemployed for any length of time and has been receiving unem
ployment benefit, extended benefit, or welfare support, will say that
GERMANY
271
the inferiority complex can be avoided only during the first few
months, but that it eventually takes hold of every one who has been
unemployed for a period of over six months.
Attitude of salaried employees.—The attitude of salaried employ
ees is much the same as that of wage earners, except that they protest
against being thrown into one group with the wage earners, not on
account of class distinction but for reasons of the insurance risk.
Attitude of the public.—The attitude of the German public at large
could be summarized in one sentence, were it not for the unemploy
ment insurance and unemployment support. It is the general belief
that conditions would have oeen many times worse if the country
were facing the present unemployment crisis without unemployment
insurance or extended unemployment relief.
Abuses Under the System
Cases of alleged abuse are occasionally reported in the daily press,
but the officials of the Federal bureau, and even the industrialists,
admit that the losses caused by these irregularities—which are also
constantly being investigated and eliminated—can not be estimated
at more than from 1 to 5 per cent of the total amounts involved.
High officials of the Federal bureau insist that these losses are but
a small fraction above 1 per cent.
There are no statistics available regarding the abuses under the
prevailing system of unemployment insurance and unemployment
relief in Germany.
In general, the alleged abuses and fraud fall under the following
four classes:
1. “ Masked employment” (Schwarzarbeit), i. e., performing
some sort of work for wage or salary, and at the same time receiving
unemployment support, without reporting the job to the employment
office authorities. This is now being very closely checked by special
control squads, who are even authorized, to enter the homes of the
beneficiaries.
2. 64Feigned employment ” (Schein-Arbeits-Verhaltnis), i. e., some
friend furnishes a statement that the unemployed person had been
working for him for a certain length of time.
3. False control stamps. Spurious control stamps are made and
unemployment control cards stolen or printed, enabling the indi
vidual to stamp his own card and present it once a week to the
cashier of the employment office to collect his benefit. (These cases
are said to be very rare now, as the stamping system and the repeated
change of stamps and color make it most difficult to determine the
combination agreed upon for the week by each individual employment
office.)
4. Change of occupation to gain claim to benefit. In these cases
(usually those of domestic servants), a change is made from their
occupation to some other in order to acquire a claim to unemploy
ment benefit or support. Household help is exempted from the
insurance, so by working for a certain period in some other occu
pation subject to compulsory unemployment insurance, the person
can gain a legal claim to benefit and then return to domestic serv
272
UNEMPLOYMENT INSURANCE
ice, simultaneously continuing to collect support or benefit. This
is also done by housewives.
Against all of these abuses and frauds, heavy fines and imprison
ment are provided by law, which also provides that the illegally
collected benefits must be repaid to the employment office. (Also,
the rigorous control squads recently organized are doing their share
to eliminate this group as far as is humanly possible.)
Contemplated Reforms
The various reforms urged by various groups and contemplated
by the Federal, State, and municipal authorities, may be classified
as reforms urged by employers, wage earners, employees, the public,
municipal authorities, the Federal Bureau of Employment Ex
changes and Unemployment Insurance, and the Brauns Commission
of Experts on Unemployment.
Proposals by employers.—Interviews with the social-political ex
perts of the employers’ organizations, revealed that the following
three basic reforms are now being demanded by the employers:
1. The budget of the Federal Bureau of Employment Exchanges
and Unemployment Insurance must be made to balance. This can
only be done by raising the fees, or reducing or limiting most rigor
ously all paid benefits and additional allowances. The first alter
native is being very strongly opposed, so that their demands
concentrate on a restriction of benefits by eliminating all higher
insurance risks.
2. Immediate introduction of the u need ” test, now only fully
applied when granting welfare support. This implies cancellation
of the legal benefit claim, necessitates changing the law to that
effect, and consequently implies exclusion from benefits all com
pulsorily insured persons unable to qualify for benefits under a
very severe “ need ” test.
3. Removal of the upper wage classes under the prevailing
system of 11 standard wage classes and a better and more just dis
tribution of benefits to all those found badly in need, by grouping all
beneficiaries into 5 instead of 11 classes. This would enable the
Federal bureau to raise the benefit rates for the lowest classes, usually
found to be mostly in need and insufficiently supported by the
present scheme, so that they must often get additional financial
or other aid from the welfare organizations.
The employers also want all civil-service officials and employees,
who are exempted from compulsory unemployment insurance to-day,
to be included in the insurance scheme. The argument used here is
that everybody must make sacrifices to-day to help support the
unemployment-relief schemes, so that the civil service can not
be very well allowed to enjoy additional advantages beyond those
already guaranteed by the State in long-term employment, pensions,
etc.
Another demand is that the Federal bureau be also granted inde
pendence by the Government in determining its own expenditures.
At present the Federal bureau practically has complete independence
regarding the credit side of its budget, but is dependent on the
GERMANY
273
Government in making dispositions regarding its expenditures—
that is, regulation of benefit payments.
Proposals by wage earners.—Just before the Reichstag adjourned
in March, 1931, the Socialists introduced a bill aiming at a fusion
of the second and third classes of the present unemployment relief
system; the extended unemployment benefit and the welfare support
to be combined. The bill provides for the inclusion in the new
“Arbeitslosen-Fursorge ” of many persons now excluded, or insuffi
ciently supported for various reasons prescribed by present legis
lation.
The Socialist labor unions want the new Federal unemployment
support (distinct from unemployment insurance) to be operated
partly by the employment offices of the Federal bureau and partly
by the local weliare organizations. The local or district welfare
organizations are to make the “ need ” test in each case, while the
employment offices are to make the final decision as to whether the
applicant is actually in need, and accordingly to reject or support
the unemployed applicant apart from the unemployment insurance.
Another demand is that all colonists or settlers who fail to make
a living, as well as needy peasants and agriculturists, be included in
the new support system if their income does not reach a certain
amount.
The Socialists demand further that reduction of wages cease im
mediately; they partly oppose short-time work, especially if con
nected with a wage decrease, and want the present world depression
and unemployment situation to be settled and solved by international
agreements.
The communists want the Reichstag to convene immediately to
check the present crisis, prevent further exclusions being made from
the unemployment-relief system, and pass laws to include all those
excluded or exempted from unemployment insurance or extended
benefit in the new system of Federal unemployment support which
is expected to pay at least as high a relief rate as the present extended
benefit to all persons in need.
Proposals by salaried employees.—The reforms demanded by all
salaried employees’ organizations deal chiefly with the question of
erecting an independent unemployment-insurance system for such
employees. They complain bitterly of the unfair distribution of risk
under the present system. Unemployment statistics show that
salaried employees are, relatively speaking, not as frequently and
as quickly out of work as the wage earner, but once out of work it
is often much more difficult for the salaried employee to find work
again under the prevailing conditions, so that usually the unemploy
ment period is much longer. But even so, the risk for the 3,500,000
salaried employees covered by the unemployment insurance is con
siderably less than the risk of the 17,000,000 wage earners always
subject to very strong employment fluctuations.
. The salaried employee, it is furthermore pointed out, has a differ
ent standard of living to contend with. He needs more clothing, is
accustomed to different food, etc., so that the support and allowances
should be graded differently from those of the wage earner.
On December 12, 1930, a resolution was introduced in the Reich
stag demanding the erection and permission for operation of inde
274
UNEMPLOYMENT INSURANCE
pendent employees’ unemployment insurance. The Democratic Party
(Staatspartei) also introduced a similar resolution recently request
ing that employees’ organizations be permitted to operate unemploy
ment insurance similar to their independent health-insurance sys
tems (Ersatz-Kranken-Kassen). This resolution also demanded the
fusion of the extended unemployment benefit with the welfare sup
port in a new uniform relief organization to be directly connected
with the unemployment-insurance system; and that the Federal
Government, the States, and the communes all contribute toward the
needed funds.
Public opinion.—The general interest taken by the German public
at large in all measures and reforms planned or urged regarding
unemployment insurance or relief is best demonstrated by the fact
that the Brauns Commission of Experts on Unemployment received
some 3,000 reform proposals during the first three weeks of its activi
ties. The minority of these came from experts and interested
roups, the vast majority from the man on the street, university stuents, and political party enthusiasts of all complexions. Many of
these well-meant efforts went into the wastebasket, but there were
some that deserved consideration. Many of these public proposals
contained severe criticisms of shortcomings of the present system.
Members of the expert commission make no secret of the fact that
some of these criticisms and the reforms proposed in connection
therewith have been of great importance to the commission in judg
ing specific angles of the problems facing them.
The demand for short-time work has been publicly voiced so
strongly through the daily press, that many industries and Federal
and State institutions and enterprises have already introduced a
40-hour week, either to prevent further dismissals or to give the
unemployed a chance at new jobs.
The Leuna-Werke near Magdeburg, the Harburg Oil Refinery, the
Allgemeine Elektrizitatsgesellschaft (A. E. G.), and some of the big
shipbuilding plants near Hamburg and Bremen have already adopted
the 40-hour working week. Some have done this without simultane
ously cutting the wages, but most of the industries try to combine the
two.
The Prussian Minister of the Interior and the Prussian Minister
of Finance have also decreed a 40-hour week for civil-service officials
and employees of the Prussian State.
Proposals by municipal authorities.—As a result of the critical
financial developments caused by the unemployment support (ex
tended benefit and welfare support) the community and municipal
budgets are threatening the entire communal financial structure
throughout Germany.
The Deutscher Stadtetag, the Deutscher Landkreistag, and the
Socialist Party have therefore submitted reform plans to the Reich
stag to combine the extended benefit and the w'elfare support classes
of the present unemployment system into a new Federal unemploy
ment relief which is to run parallel to the unemployment insurance,
but instead of being almost exclusively financed by the communes as
heretofore the Government, the individual States, and the communes
are to carry the burdens proportionately.
§
GERMANY
275
The proposals vary somewhat as to form. Contrary to the Social
ists, the communes and cities want their own organizations to take
over the new relief system exclusively, because they believe they can
control and check the needs of the individual better than the local
employment offices of the Federal Bureau of Employment Exchanges
and Unemployment Insurance, which are to be used, in the opinion
of the Socialists, to concentrate all unemployment relief in one giant
Federal organization.
Branms Commission of Experts on Unemployment.—The reforms
which the Federal bureau will finally adopt and carry through de
pend largely on the results of the deliberations of the Brauns Com
mission of Experts on Unemployment sitting in Berlin since the
end of February. Doctor Brauns, former Minister of Labor, deliv
ered a radio lecture on the problems of the commission in February,
1931, from which it can be seen that the task facing the committee
will probably lead to revolutionary changes in the entire system.
The 40-hour week is almost certain to come in some legal form,
giving the employers, however, sufficient independence to arrange
the division of time in their factories according to their specific
requirements. One form has been introduced by a firm in Madgeburg which introduced the 40-hour week by laying off a part of
the workers for a whole week without pay, after every five weeks
of work, and engaging an additional staff totaling one-fifth of
the permanent staff; thus short-time work and the 40-hour week
were combined with provision for additional employment.
The question of the compulsory service-year has been flatly rejected,
but proposals will be made to the Government to organize crews
of voluntary workers for agriculture, road building, and other kinds
of emergency and public utility work.
The question whether married women are to be excluded from
benefits and whether or not all married women are to be legally
forced to vacate their positions, has not been definitely settled.
Great Britain41
The unemployment-insurance scheme of Great Britain has been
from its inception a compulsory and contributory plan.42 It was
originally designed to take care of seasonal and temporary unemploy
ment caused, on the one hand, by seasonal changes in trades such as
the building trades and, on the other, by fluctuations in the indus
trial situation. The scheme operated only two and one-half years,
however, before the war, and the whole period since the outbreak
of the war has been abnormal.
History of Development of Scheme
The original unemployment-insurance scheme was a part of the
movement in social legislation which took place around the year 1911.
The Royal Commission on the Poor Law, which reported in Feb
ruary, 1909, recommended, among other things, the establishment by
the State of a national system of labor exchanges for the purpose of
assisting the mobility 01 labor and of collecting accurate informa
tion on unemployment. It also recommended the establishment of
the compulsory unemployment-insurance system based on contribu
tions from employer, worker, and the national exchequer. In
accordance with these recommendations, labor exchanges (later
called employment exchanges) were established in 1909, and in 1911
a national insurance act provided for a partial scheme of compul
sory insurance against unemployment. The scheme applied to a
few specified trades only, the chief of which were engineering, ship
building, and building construction, and covered about 2,250,000
workers. The contributions first became payable in July, 1912, the
employer paying 2y2d. (5.1 cents) 43 a week, the worker 2y2d. a
week, and the national exchequer l% d. (3.4 cents) a week for each
insured person. The benefits, at the rate of 7s. ($1.70) a week,
became payable in January, 1913, to persons who were genuinely
unemployed, capable of work, and unable to obtain suitable employ
ment, and who had contributed for 26 weeks prior to unemployment.
The employment exchanges, which are discussed later, were an
essential part of the scheme, and by January, 1913, there were 414
exchanges (with 927 branch offices) throughout Great Britain. It
is to the employment exchange that the worker applies for his un
41 Report prepared by K. A. H. Egerton, clerk, American consulate general, London, ad
of May 6, 1931.
43Up to 1922 England. Scotland, Wales, and Ireland were under a single unemployment
insurance system, but with the establishment of home rule, the Governments of Northern
Ireland and of the Irish Free State took over the system for their respective territories,
while the British Government continued its system for England, Scotland, and Wales.
The relations between the British system and that of Northern Ireland are close, and are
discussed in the section on Northern Ireland. In this section data up to 1922 apply to
the whole of the United Kingdom, but from that date onward relate only to England,
Wales, and Scotland, unless specifically stated to be of wider application.
48Conversions into United States currency made on basis of £=$4.8665, shilling=24.33
cents, penny=2.03 cents.
276
GREAT BRITAIN
277
employment pay and it is the exchange which ascertains whether
suitable work can be found for him, or whether he is entitled to
benefit.
The scheme before and during the war.—The scheme, which was
regarded as an experiment, did not have a thorough test before the
war.
During the period January, 1913, to August, 1914, emplojrment
in the trades covered was good and there was no serious call upon
the unemployment insurance fund.
Employment during the war was also exceptionally good and be
tween July, 1912, and November, 1918, the fund had accumulated
an undistributed balance of over £15,000,000 ($72,997,500).
During the war the employment exchanges served a very useful
purpose in transferring labor from peace-time employment to war
work. In 1916 the unemployment-insurance scheme was extended
to cover workers in the production of munitions and other materials
for war, bringing another 1,500,000 into the scheme, which then
covered 3,750,000 workers.
“ Out-of-work donation ” for soldiers discharged from the
forces.—For a little over a year? immediately after the armistice,
a temporary “ out-of-work donation ” was paid to men discharged
from the forces and to civilian workers who were out of work in
consequence of the change from war to peace conditions. This had
no connection with the unemployment-insurance scheme, however,
and was paid entirely from the exchequer. It continued in opera
tion until November, 1919, for civilians, and until March, 1921, for
ex-service men and women, and cost the exchequer the sum of
£62,448,000 ($303,903,192). The “ out-of-work donation” also car
ried a separate allowance for dependents, which was not a part of
the regular unemployment-insurance scheme at that time. Most
of the benefits paid during the period when “ out-of-work dona
tions ” were in operation, were distributed under that scheme and
the unemployment insurance fund was little called upon.
Unemployment insurance extended to all trades in 1920.—In
December, 1919, the rate of unemployment benefit paid by the unemployment-insurance fund was increased from 7s. ($1.70) a week to
11s. ($2.68) a week, and in November, 1920, the unemployment-in
surance act of 1920 came into force, extending the unemploymentinsurance scheme to all workers under a contract of service or
apprenticeship, with a few exceptions, the principal exceptions being
agricultural workers and private domestic servants.
Contributions under the act of 1920 were the same in principle
as under the act of 1911, but were increased in amount to 4d. (8.1
cents) each from workers and employers and 2d. (4.1 cents) from the
exchequer. About 11,375,000 workers were covered in Great Britain
and Ireland, and after the taking over by the Government of
Northern Ireland and the Irish Free State of the administration in
Ireland, the number covered in Great Britain was 11,250,000.
The benefit, which was 15s. ($3.65) a week for men and 12s. ($2.92)
a week for women, payable in any individual case, was limited to
one week’s benefit tor every six contributions paid and was subject
to a maximum of 15 weeks’ benefit in any insurance year. Benefit
278
UNEMPLOYMENT INSURANCE
was payable only after 26 contributions bad been paid (this was
later increased to 30).
Increase in numbers of unemployed in 1921.—At the time of the
passing of the act of 1920, insured workers who were unemployed
numbered about 500,000; the trade depression soon followed and in
May and June, 1921, the number had increased to 2,000,000 wholly
uemployed and another million working short time and claiming
benefit. The numbers were swollen at that time by the coal strike
and diminished somewhat after the termination of the dispute, but
the total has been almost constantly over a million since that date.
“Unco-venanted benefit”—Owing to the trade depression, it was
considered impracticable for the large numbers of workers newly
covered into this scheme to build up any reserve of contributions
against which they could draw benefits. A new act was accordingly
passed in March, 1921, introducing an entirely new principle into the
unemployment-insurance scheme. This principle has been called
44uncovenanted benefit ” or 44extended benefit” and is now referred
to as 44transitional benefit.” It provided that an unemployed person
who was normally employed in an insurable employment might
receive unemployment benefit notwithstanding an insufficient number
of contributions or even an entire absence of contributions, provided
he was genuinely seeking work and unable to obtain it. This provi
sion, with some "modifications, has been extended up to the present,
but it has always been regarded as temporary and included as a part
of the scheme only because of the necessities arising out of the
abnormal situation. The benefit was originally granted for a limited
number of weeks during a period defined by law. This period has
been extended by a series of acts passed periodically up to the
present time.
The act of 1921 made the grant of 44uncovenanted benefit ” depend
ent upon a decision of the Minister of Labor that, having regard to
all the circumstances of the case, it was 44expedient in the public
interest ” that it should be paid. This provision continued in all the
acts down to that of August, 1924, when it was abolished, and the
benefit in excess of that earned by contributions was made payable
as a right. This act of 1924, establishing the 44right ” to 44uncove
nanted benefit,” was passed by the Labor Government which was in
power at that time. It was reversed in 1925 by the Conservative
Government which had returned to power and again the “ uncove
nanted ” or 44extended ” benefit became payable at the discretion
of the Minister of Labor. In 1927, however, another act was passed,
effective April 1, 1928, which did away with the distinction between
44standard '5and *4extended ” benefit, and abolished the discretionary
power of the Minister of Labor to place restrictions upon the grant
ing of benefit.
The 44uncovenanted benefit” is now usually known as the 44tran
sitional ” benefit. The act of 1927 provided that, to be entitled to
unemployment benefit, the claimant must have paid eight or more
contributions during the two years immediately preceding his claim,
or 30 contributions at some time, but allowed for a relaxation of
these conditions during a transitional period. The duration of the
transitional period was set for one year from April 19, 1928, but
has since been extended by successive enactments.
GREAT BRITAIN-
279
Coverage of System
The scheme covers all manual workers, plus nonmanual workers
receiving less than £250 ($1,217) annually, with the following excep
tions : Agricultural workers, domestic servants, permanent employees
on the railways, certain employees of local governments and of
the poor law and asylum authorities, and certain employees in
public-utility companies. Insured persons under the scheme num
ber approximately 12,290,000 at the present time. In addition,
employees in the banking and insurance industries, numbering
41,000 and 96,000. respectively, are covered by schemes under the
“ contracting-out ” clauses of the original bill.
When the 1920 act was framed, it was thought that a number
of industries would prefer to organize their own schemes with
separate funds, and provision was made whereby any industry
desiring to do so could “ contract out.” An industry contracting
out could withdraw entirely from the general scheme, its contribu
tions being paid into its own fund and benefits being paid entirely
from that fund. It was expected at the time that industries cover
ing about one-third of the total workers would contract out, but it
happened that general business conditions were so bad in November,
1920, when the act came into force, that advantage was not taken
of this clause by any industries except insurance and banking.
The right to contract out was suspended by the act of 1924 and
was ultimately abolished by the act of 1927.
Contributions
The principle of the unemployment-insurance scheme is that
benefits shall be paid from a fund consisting of contributions paid
by employers, workers, and the State. The contributions of the
employer and worker are paid by means of stamps, purchasable
from the local post office, which the employer affixes to the unem
ployment insurance book of each worker weekly before paying his
wages, deducting the employee’s share of the cost from his wages.
The books are issued to insured workers by local employment
exchanges and have a currency of one year, after which they must
be renewed. Special provisions are made for large employers who
prefer to pay their contributions in lump sums.
Several increases in the rates of contributions to the unemploy
ment insurance fund have been made since the act of 1911 under
which the worker and employer each paid 2%d. (5.1 cents) a
week and the exchequer l% d. (3.4 cents) a week for each insured
worker. These contributions were increased in 1&20 to 4d. (8.1
cents) each from the worker and the employer and 2d. (4.1 cents)
from the exchequer, and again, later, to lOd. (20.3 cents from the
employer, 9d. (18.3 cents) from the worker, and 6%d. (13.7 cents)
from the exchequer. The rates prevailing to-day are roughly 8d.
(16.2 cents) from the employer, 7d. (14.2 cents) from the worker, and
7y2d. (15.2 cents) from the State. They now stand as shown in
Table 25 which follows:
280
T a b le
UNEMPLOYMENT INSURANCE
25.— Present weekly rates of contribution to unemployment insurance fund
of Great Britain
[Conversions into United States currency on basis of penny =2.03 cents]
Weekly contribution by—
Total contribution
Employer
Employed person
Exchequer
Class of employed persons
English United English United English United
English United
States currency States currency States currency States
currency currency
currency
currency
currency
Males:
21 and under 65 years___
18 and under 21 years___
Under IS years.................
Females:
21 and under 65 years___
18 and under 21 years___
Under 18 years.................
d.
8
7
4
7
6
3X
Cents
16.2
14.2
8.1
14.2
12.2
7.1
d.
7
6
Cents
14.2
12.2
7.1
6
5
3
12.2
10.1
6.1
d.
m
3h
6H
g
Cents
15.2
13.2
7.6
d.
22K
19M
11X
Cents
45.6
39.5
22.8
13.2
11.2
6.6
im
16H
m
39.5
33.5
19.8
The proportion of the contribution for each person paid by the
exchequer was increased to its present ratio, one-third of the total,
by an act passed in 1929. In addition, the exchequer now bears the
whole cost of the “ transitional ” or “ uncovenanted ” benefit. Up to
1930 all benefits were paid from the general insurance fund, but a
bill passed in that year extending the transitional period to April 19,
1931, imposed upon the exchequer the payment of transitional benefit,
and retroactively made it responsible for this benefit from April,
1929. The exchequer also assumed a small part of this cost for the
previous 12 months of the transitional period.
Benefits
Rates of benefit vary as between men and women, and as between
adults, young persons and juveniles, and there are also allowances
for dependents; otherwise the benefits are paid at flat weekly rates.
Like the rates of contribution, they have been changed several times
since the inception of the scheme. They were increased from the 7s.
($1.70) a week established in 1911 to 11s. ($2.68) a week in 1919, to
15s. ($3.65) a week in 1920, and to 18s. ($4.38) a week in 1924, and
were reduced to 17s. ($4.14) in 1927-28. These figures refer to the
rates for adult male workers. Slightly lower rates for female
workers, and lower rates for young persons have also prevailed.
The unemployed workers’ dependents (temporary provision) act
of 1921, granted, for a special period of six months, additional allow
ances for the wife and dependent children of an insured unemployed
worker receiving benefit. These additional allowances later became
a permanent part of the unemployment insurance scheme and were
paid for a time at the rate of 5s. ($1.22) a week for the wife and 2s.
(49 cents) for each dependent child of school age, being later in
creased to the present scale of 9s. ($2.19) a week for adult dependents
and 2s. a week for a child.
Present rates of benefit.—The weekly benefits now paid to young
men and women and to boys and girls between 16 and 18 are shown
in the statement following.
281
GREAT BRITAIN
s.
Men aged 21 and under 65----------------------------------- 17
Young men aged 18 and under 21________________ 14
Boys aged 17 and under 18______________________ 9
Boys under 17--------------------------------------------------- 6
Women aged 21 and under 65___________________ 15
Young women aged 18 and under 21______________ 12
Girls aged 17 and under IS______________________ 7
Girls under 17__________________________________ 5
Dependents* benefit:
Adult dependent______________________________ 9
Child dependent______________________________ 2
d.
0
0
0
0
0
0
6
0
($4.14)
($3. 41)
($2.19)
($1.46)
($3.65)
($2. 92)
($1. 82)
($1.22)
0 ($2.19)
0 ($0.49)
Conditions for receipt of benefit.—These must be dealt with under
two different headings—conditions for receipt of standard benefit,
conditions for the receipt of “ uncovenanted,” “ extended,” or “ tran
sitional ” benefit.
Standard benefit was originally paid by the “ one-in-six ” rule and
limited to 15 weeks in 12 months. In other words, a claimant could
not receive more than one benefit for every six contributions paid
and/or not more than 15 weeks’ benefit during any 12 months’ period.
Later this was changed and claimants could receive benefits only
as long as it could be proved that they had paid 30 contributions
during the two years immediately preceding the date on which they
became unemployed. They could receive benefit, moreover, only for
a limited number of weeks during any one year; this number of
weeks varied under the different acts between 15 and 44 weeks.
There was also what had become known as the “ gap,” which was
the period in the middle of a person’s benefits when no benefits were
allowed. The purpose of this was to encourage the worker to seek
employment. It was varied in length, and was finally abolished in
1924 by the Labor Government. Many unemployed workers had
recourse to poor law relief for the maintenance of themselves and
their dependents during these gaps.
In accordance with the recommendations of the Blanesburgh com
mittee, the limitation of the period during which benefit could be
paid was abolished in 1927, and since then claimants have been able
to draw standard benefit for an unlimited period, provided they can
show 30 contributions during the two years immediately preceding
their claim. The claimant must satisfy this 30-contributions test
every three months to qualify for standard benefit.
Other conditions for the receipt of standard benefit are: The
claimant must be capable of work and available for it; he must
apply for benefit in the prescribed manner at the employment ex
changes ; and he must attend a course of instruction if so required.
For receipt of transitional benefit, the claimant is required to show
that he has paid 8 or more contributions during the two years imme
diately preceding the date of the claim or 30 or more contributions
at any time, and also that, normally, he is employed and will seek his
livelihood in insurable employment. He must also meet the last
three qualifications mentioned above for standard benefit.
Disqualifications.—A claimant is disqualified for both standard
and transitional benefit if he refuses suitable employment or fails
to carry out written instructions for obtaining employment (the
maximum period of disqualification under this cause is six weeks),
or if he is unemployed because taking part in a trade dispute. I f
he has lost his job through misconduct or has left it voluntarily, he
282
UNEMPLOYMENT INSURANCE
is disqualified for a period of six weeks or less. He is disqualified
also if he is an inmate of a prison, workhouse, or similar institution,
if he is receiving sickness benefit under the national health insurance
act, or if he fails to attend a course of instruction after having
been required to do so.
Waiting period and “ continuity.”—The waiting period has varied
under the different acts. In 1920 and 1921, and for a short period
in 1924 it was three days. Otherwise it has been, and is now, six days.
The “ continuity rule ” provides that any 3 days of unemploy
ment, whether consecutive or not, within a period of 6 consecutive
days shall be treated as a continuous period and any two such con
tinuous periods separated by a period of not more than 10 weeks shall
be treated as one continuous period of unemployment, and the expres
sion “ continuously unemployed ” shall be construed accordingly.
This ruling was considered necessary in order that workers obtain
ing only a day or two of employment at odd times should not be
disqualified from benefit.
Administration
The administrative machinery consists of the head office, 7 divi
sional local offices and their staffs, 417 employment exchanges, 748
branch employment offices, and the adjudicating authorities.
The employment exchanges were started before unemployment in
surance became established, their purpose being to reduce unemploy
ment, assist the mobility oi labor, and to afford a means of ascertain
ing the amount of unemployment in the country. The exchanges
are open to applicants for all types of work, both insurable and uninsurabley and all insured employed workers are placed on their
books. Though employers are not compelled to apply to the ex
change when they need worker's, and though it is urged that they
should do so more generally, many employers do use the exchanges,
and these offices now place over 40,000 persons in jobs weekly.
Provisions Against Abuse
The most common type of abuse is that of claiming benefit for days
on which a claimant was actually employed. In most cases these
periods are short, involving usually only a single day. Other types
of fraud are attempts to obtain dependents’ benefit illegally, or of
obtaining benefit concurrently with the national health insurance
benefit.
The complicated methods by which the Ministry of Labor endeav
ors to avoid the improper payment of benefit are: Briefly, the
claimant must leave his book at the unemployment exchange while
drawing benefit and can not, therefore, take it to a new employer to
be stamped. An inquiry addressed to his former employer insures
that the employment exchange will be informed of the reasons for
the worker’s dismissal. The record of dates furnished by the
employer is checked against those given by the claimant. Frequent
attendance at employment exchanges during normal working hours
and the interviewing of individual claimants are required. Apart
from these automatic checks, investigations of individual claims are
constantly being carried on.
283
GREAT BRITAIN
Grievances and Disputes
The adjustment of grievances and disputes is taken care of by
appeal to the courts of referees in every district, and by a final appeal
to the umpire. The umpire is appointed by the Crown. The courts
of referees consist of one representative of employers, one of
employees, and a paid chairman (usually a member of the legal
profession), appointed by the Minister of Labor. In each district a
list or “ panel ” of suitable persons is kept, and from this list the
courts are appointed for such times as they are needed. The insur
ance officer at the employment exchange, who is an official of the
Ministry of Labor, may allow any claim at his own discretion. I f
in doubt, he can either consult the divisional officer or refer the case
to a court of referees, whose decision is final unless appeal is made
to the umpire, (Formerly ^the court of referees made only a recom
mendation, on which the insurance officer might or mignt not act,
as he saw fit.) The insurance officer, on the other hand, may not dis
allow a claim without reference to a court of referees. The decisions
of the umpire constitute a voluminous case law, which is printed
monthly and supplied to all courts of referees and may also be
purchased by the public.
Statistics of Operation
The number of persons covered by the scheme is approximately
12,290,000. The number unemployed fluctuates. On March 30, 1931,
the registered unemployed were given as 2,581,030, of whom 1,842,705
were wholly unemployed, 623,700 were temporarily out of work, and
114,625 were normally in casual employment. It is estimated that
93 per cent of the insured persons unemployed at any one time are
receiving benefit, the other 7 per cent being persons whose claims to
benefit have not yet been allowed, on account of the waiting period
or for other reasons. Table 26 shows the estimated number of work
ers insured, the number unemployed, and the estimated number
employed at the beginning of each insurance year for eight years past:
T a b le
26.—Estimated number of insured persons aged 16 to 64 in employment
in Great Britain, 1023 to 1930
Date
July,
July,
July,
July,
July,
July,
July,
July,
1923............................................................................
1924__________________________________________
1925__________________________________________
1926__________________________________________
1927............................................................................
1928............................................................................
1929............................................................................
1930..........................................................................
i Provisional figure.
65655°—31------19
Estimated
total insured,
aged 16 to 64
Number un
employed on
specified date
10.908.000
11.074.000
11.288.000
11.435.000
11.534.000
11.662.000
11,852,000
112,154,000
1.254.000
1.070.000
1.234.000
1.636.000
1.059.000
1.323.000
1.141.000
2.002.000
Estimated
number em
ployed after
allowance for
sickness, trade
disputes, etc.
9.228.000
9.527.000
9.456.000
8.384.000
10.065.000
9.930.000
10.296.000
9.724.000
284
UNEMPLOYMENT INSURANCE
Table 27 shows the estimated monthly average number in eaoh
of these groups for each 3-month period since July, 1928, and for
each month of 1931 up to the end of March:
T a b l e 21.— Estimated monthly average number of insured persons aged 16 to 64 in
employment in Great Britain, 1928 to 1931 , by stated periods
Date
1928:
July-September..................................... ........... .........
October-Deeember......................................................
1929:
January-March........ ..................................................
April-June...................................................................
July-September..........................................................
0 c lober-D ecember............................. .......................
1930:
January-March................................. .........................
April-June................................................. .................
July-September..........................................................
October-December........................... - ........................
1931:
January-March..........................................................
January........................................- .............................
February.....................................................................
March.......... ...............................................................
Estimated
total insured,
aged 16 to 64
Number
unemployed
Estimated
number em
ployed after
allowance for
sickness, trade
disputes, etc'.
11,694,000
11,750,000
1,317,000
1,351,000
9,966,000
9,985,000
11,786,000
11,822,000
11,870,000
11,923,000
1,333,000
1,138,000
1,156,000
1,269,000
10,032,000
10,265,000
10,297,000
10,233,000
11,995,000
12,115,000
12,173, 000
12,225,000
1,552,000
1,784,000
2,056,000
2,317,000
10,021,000
9,868,000
9,689,000
9,477,000
12.275.000
12.260.000
12,275, 000
12,290,000
2,595,000
2,581,000
2,617,000
2,587,000
9,207,000
9,128,000
9,225,000
9,267,000
Receipts cmd expenditures.—Table 28 shows the receipts and
expenditures of the scheme from 1920 to March, 1930:
T able 28.— Receipts and expenditures of the unemployment fund of Great Britain from November 8, 1920, to March 81, 1980
[Conversions into United States currency on basis of £=$4.8665]
Item
Year ending—
Period, Nov.
8,1920, to
July, 1921
July, 1922
July, 1923
July, 1924
July, 1925
July, 1926
March, 1927
(9 months)
March, 1928
March, 3629 March, 1930
£8,916,940
2,168,639
£30,553,608
11,057,901
£34,029,359
12,166,266
£36,743,365
13,184,784
£36,723,531
13,148,085
£33,615,624
12,910,861
£20,340,065
7,954,599
£30,885,479
12,024,910
£30,165,861
11,757,831
£30,564,614
119,411,386
1,357,315
579,263
8,289
820,260
553,411
38,905
443,659
273,472
292,963
319,253
254,651
279,359
368.607
371,363
34,022
24,820
14,671
19,008
13,116
10, 052
16, 993
20,032
£13,030,446
$63,412,665
£43,024,085
$209,376,710
£46,673,306
$227,135,644
£50,226,441
$244,426,975
£50,179,250
$244,197,320
£46,864,746
$228,067,286
£28,562,431
$138,999,070
£43,199,800
$210,231,827
£42,309, 292
$205,898,170
£50, 367,395
$245,112,928
£45,174,415
7,673,799
4,838,136
47,108
£38,831,481
3,049,351
4,451,311
191,101
£33,658,586
2,312,825
4,086,260
378,833
472,685
246,568
803,171
553,848
601,230
149,957
£42,010,779
2,562,418
4,595,084
595,242
1,330,663
301,364
155,273
£40,277,482
3,381,352
4,889,848
94,797
157,482
376,148
114,043
£35,098,011
3,560,772
3,513,090
14.124
14.124
414,161
108,371
£34,609,903
1,864,143
4, 913, 576
17,534
18,274
1,169,367
184,819
£44,466, 743 2£43,965,847
2 1,956.689
2,263, 681
«5,462,513
5,071,925
6,432
10.767
38,419
17,836
1,808,228
1,712,331
159,368
150,073
Receipts
Contributions from—
Employers and employed.........
Exchequer.......................- ..........
Service departments (Admiralty,
War Office, Air Ministry)______
Interest__________________ _____
Other receipts...................................
Total, English currency.........
Total, United States currency
Expenditures
Benefits:
Direct_____ _______ __________ £29,656.576
3,921,370
Association________ __________
1,047,480
Administration expenses__________
28,621
Refunds at age 60.......................... —
Compensatory payments at age 50_.
Interest on advances.............. .........
102,188
Other payments and refunds______
£58,452,711
£47,880,263
£41,187,691
£51,550,823
£49,291,153
£42,752,653
£42,777,616
£53,696,356
£53,397,496
$284,460,118
$233,009,300
$200,439,898
$250,872,080
$239,875,396
$208,055,786
$208,177,268
$261,313,316
$259,858,914
£99,798 ......................
$485,667
------------
Total, English currency......... £34,756,235
Total. United States cur
rency____________________ $169,141,218
Credit balance at end of period:
English currency_____________
United States currency_______
* Includes £3,985,000 special exchequer grant under the unemployment insurance act, 1930, in respect of the benefit (and the relative cost of administration) paid to claimants
under the transitional provisions of the unemployment insurance acts, in respect to benefit years commencing after Mar. 31, 1929.
s These items include charges totaling £3,690,000 in respect to the transitional benefit payable by the exchequer. (See note 1.)
* Includes £295,000 in respect of the cost of administering transitional benefit. (See note 1.)
T able 28. — Receipts and expenditures of the unemployment fund of Great Britain from November 8, 1920, to March 31, 1980— Continued
Item
Year ending—
July, 1922
July, 1923
July, 1924
July, 1925
July, 1926
March, 1927
(9 months)
March, 1928
March, 1929 March, 1930
£14,969,256
$72,799,219
£16,148,217
$78,585,298
£7,093,871
$34,522,323
£8,441,690
$41,081,484
£10,859,945
$52,849,922
£25,050,167
$121,906,638
£24,627,983
$119,852,079
£36,012,047
$175,252,627
£39,042,149
$189,998,618
£14,323,068
$69,703,210
£15,315,121
$74,531,036
£6,679,475
$32,505,665
£8,105,722
$39,446,496
£10,497,569
$51,086,420
£24,710,000
$120, 251,215
£24,530,000
$119,375,245
£35,960,000
$174,999,340
£38,950,000
$189,550,175
£260,000
$1,216,625
* The apportioned shares of the debt attributable to Northern Ireland and the Irish Free State are excluded from these figures as from the respective dates of severance, vi*.
Dec. 31,1921, and Mar. 31, 1922.
INSURANCE
UNEMPLOYMENT
Debit balance at end of year: *
English currency_____________
United States currency_______
Investments at end of period:
English currency........................
United States currency.............
Treasury advances outstanding:
English currency....... ............ ...
United States currency_______
Period, Nov.
8,1920, to
July, 1921
287
GREAT BRITAIN
Approximate figures for the receipts and expenditures of the
scheme for the fiscal year ending March 31, 1931, are shown in
Table 29:
T a b l e 29.— Receipts and expenditures of vnemployment insurance fund of Great
Britain for fiscal year ending March 81, 1981
[Conversions into United States currency on basis of £=$4.8665]
Amount
Item
English
currency
Keceipts:
Contributions from employers and workers__________________ - ___
From the exchequer1__________________________________________
From other sources................................. .........................................
Expenditures:
Benefits................................................................................................. .
Administration____________________________________ __________ _
Interest on loans from treasury__________________________________
Other expenditures___ ________________________________________
United States
currency
£29,725,000
35,470,000
20,000
$144,656,713
172,614,755
97,330
65,215,000
317,368,798
92,220,000
6.370.000
2.510.000
230,000
448,788,630
30,999,605
12,214,915
1,119,295
101,330,000
493,122,445
* ... -----------------------------------------------------------------------------------i Includes exchequer's full payment of “ transitional” benefit.
The position of the fund as regards debt at the close of each calen
dar year up to December 31,1926, on June 30 and December 31, 1927,
to 1930, and on April 10,1931, is shown in Table 30:
T a b l e 30.— Amount of the debt of the unemployment fund of Great Britain, December
81, 1921, to April 10, 1981 1
[Conversions Into Un’ted States currency on basis of £=$4.8665]
Debt of fund at specified
date
Date
Dec. 31,1921................
Dec. 31,1922................
Dec. 31, 1923................
Dec. 31, 1924................
Dec. 31, 1925...............
Dec. 31, 1926................
June 30,1927................
Dec. 31, 1927................
English
currency
£7,600,000
15,613,480
12,497,054
5,093,549
7,262,569
22.640.000
24.160.000
23.180.000
United
States
currency
$36,985,400
75,983,000
60,816,913
24,787,756
35,343,292
110,177,560
117,574,648
112,805,470
Debt of fund at specified
date
Date
English
currency
June 30, 1928................ £25,680,000
Dec. 31, 1928................
31.720.000
June 30, 1929...............
36.620.000
Dec. 31, 1929................
37,850, GOO
42, 930,000
June 30, 1930................
Dec. 31, 1930................
59.999.000
Apr. 10,1931................
76,000,000
United
States
currency
$124,971,720
154,365,380
178,211,230
184,197,025
208,918,845
291,941,335
369,854,000
i The apportioned shares of the debt attributable to Northern Ireland and the Irish Free State are ex
cluded from these figures as from the respective dates of severance, viz, Dec. 31,1921, and Mar. 31, 1922.
On April 10, 1931, the debt of the unemployment insurance fund
to the Treasury was £76,000,000 ($369,854,000). At that time it
was estimated that within another 13 weeks the present statutory
limit of its borrowing power, £90,000,000 ($437,985,000), would be
reached. The statutory borrowing powers of the fund have been
increased by a number of acts of Parliament over a succession of
years. The cost of “ standard ” benefit is estimated now to be
288
UNEMPLOYMENT INSURANCE
approximately £1,000,000 ($4,866,500) per week greater than the
revenue of the fund, while the cost of “ transitional ” benefit, which
is paid entirely from the exchequer, amounted in 1980 to £22,000,000
($107,068,000), and it is estimated that it will cost £85,000,000
($170,827,500) to £40,000,000 ($194,660,000) in 1981.
Actuarial Basis of Contributions
The first two acts were based on actuarial calculations. The
actuary in 1911 assumed, as normal for the special trades affected
by that act, 8.6 per cent of unemployed over a cycle of years. The
percentage assumed when the 1920 act was framed was somewhat
less, since trades with a smaller risk of unemployment were included.
Actually, since 1921, the average percentage for the year of unem
ployment has only once fallen below the 10 per cent of 1924, and has
ranged from there up to 12 per cent, 14 per cent, 16 per cent, and, as
at the present time, to over 20 per cent. The Blanesburgh committee
had an actuarial estimate made. The actuary’s computations
assumed a rate of unemployment of 6 per cent on the average
throughout the whole of the period commonly regarded as a trade
cycle, and contemplated a waiting period of six days and the other
ualifications embodied in the act of 1927. Provision was also made
or temporary rates of contribution which should later be reduced
when the debt to the Treasury should have been paid off.
Thus, the original idea was that the system should be an insurance
system on a sound actuarial basis, but concessions to unusual condi
tions have rendered it insolvent, and created a problem which will
be very difficult to solve. A royal commission, appointed in Decem
ber, 1980, is now engaged in working out a new scheme which shall
be on an actuarial basis.
J
Opinions as to Social and Economic Effects of Unemployment
Insurance Scheme
There are widely differing opinions in Great Britain as to the
value of the unemployment insurance scheme as it has been applied
to the postwar problem. The opinion of the Balfour committee
(the Royal Commission on Industry and Trade which sat for many
months and issued its findings in five volumes, the final summary
being published in March, 1929) is of particular interest. The
committee’s discussion of the situation does not cover the present
acute crisis, for it was published in early 1929, before the trade
slump and while the Conservative government was still in power and
the stricter legislation with regard to the payment of benefits was
in force. The committee refers to the measures of the act of 1927
passed in accordance with the recommendations of the Blanesburgh
committee, in general approving the steps taken to insure that the
incentive to seek work and to keep employment should not be dimin
ished by the operation of the scheme.
On the effect of the scheme on the mobility of labor, the committee
gave its opinion as follows:
That the provision of unemployment benefit should to some extent lessen
the incentive to migration and to industrial redistribution is perhaps inevitable.
GREAT BRITAIN
289
It is, however, possible by wise regulations and procedure to reduce this danger
to a minimum, and in view of the outstanding importance of preserving and
increasing mobility in the widest sense of the term we are of opinion that no
efforts for this purpose should be spared. One of the governing considera
tions that should always be present to the minds of those who frame and
administer the provisions of such a scheme is the necessity of avoiding any
tendency to stereotype the existing distribution, whether geographical or
industrial, of the working population, or to check the natural flow from indus
tries and districts in which demand is diminished toward those in which it
is more active.
The work of the Industrial Transference Board should be noted in
this connection.
Regarding the effect on the will to work, the committee stated that
it had careiully examined the contention often lightly asserted that
the removal of much of the terror of unemployment has relaxed the
will to work. In the light of the results of four sample inquiries
made by the Ministry of Labor into the personal circumstances of
individuals insured against unemployment, and also in the light of
such information as was in its possession with regard to industrial
unemployment in the United States, the committee concluded that—
The proportion of the unemployed who might be considered as “ verging on
the unemployable” was extremely small, being only about 2 per cent of the
total, and including a majority of elderly persons, and that the nucleus of
individuals who had remained on benefit for long periods was only 6 per cent
of the whole number. * * *
It can not be said that the figures of industrial unemployment in the United
States give any support for the view that the mass of unemployment in this
country is to any material degree the result of the measures taken for miti
gating the resulting hardships and could be appreciably reduced by discon
tinuing these measures.
Regarding the general beneficial effect of the scheme up to the
time of its report, the committee stated that—
The employers’ contributions to the unemployment fund represent a negligible
addition (averaging much less than 1 per cent) of the total costs of production,
and we are satisfied that on the whole the resulting advantage to them has
very greatly exceeded any burden of this kind * * *.
and further, that—
Having regard to the terrible possibilities of suffering and even of social
upheaval from which these operations probably saved the country, we feel little
disposed for meticulous criticism, but rather desire to accord our unstinted
praise for the fine work accomplished by the staff of the Ministry of Labor
under such difficult conditions.
There has been practically no decline in the consumption of the essential
necessaries of life in spite of the fact that a million or more workers have been
earning no wages at their trades. For this happy result a large part of the
responsibility undoubtedly rests with the unemployment-insurance scheme.
In December, 1930, a royal commission was appointed to inquire
into the working of the unemployment-insurance scheme, and to sub*
mit recommendations for putting it on a more satisfactory basis.
Various organizations have submitted memoranda by request to this
commission, and these probably form the best reflection available of
the attitude of the various groups represented.
The chamber of commerce presented a memorandum dealing with
certain abuses of the present system which it felt were serious. The
principal of these is the drawing of benefit by women who had left
their employment to marry and whose husbands were perfectly well
able to maintain them. The general rule is that “ an insured con
290
UNEMPLOYMENT INSURANCE
tributor who loses his employment through misconduct or voluntarily
leaves his employment without just cause is disqualified for receiving
unemployment benefit for a period of six weeks, or such shorter
period as may be determined, from the date when he so left his
employment.” Thus, an insured woman worker who marries and
leaves her employment voluntarily is able, after a period of six weeks,
to obtain benefit so long as she is available for work if any presents
itself. In districts where there is a very large proportion of unem
ployment the chances are that no suitable work will be offered for a
long period and she is able to draw 15 shillings a week almost in
definitely. I f she is compelled to leave employment on marriage
(many employers refuse to employ married women) she may begin
drawing her benefit at once; even though her husband may be working
3fc wages of a sufficiently high standard to support her.
The chamber of commerce also considers that the Ministry of
Labor’s interpretation of “ suitable work ” is too lenient in many
cases. Also it complains that dock laborers and other casual workers
who earn comparatively high wages for short periods are entitled
to benefit during the days when they are out of work, and that short
time may be so arranged by employers that they obtain practically a
subsidy to wages, and it considers that rates 01 benefit are too high.
The recommendations are that the scheme should be once more
purely an insurance scheme; that “ transitional ” benefits should be
abolished and that the claimants should be required to prove that
they are genuinely seeking work. It also recommends a reduction in
the rates of benefit, the extension of the period of disqualification for
dishonesty, and the exclusion of married women and of all children
up to the age of 18.
It does not, however, make any constructive suggestions for the
relief of persons who would not qualify for “ standard ” benefit dur
ing the present emergency.
The Trade Union Council, on the other hand, is recommending to
the royal commission that the unemployment-insurance system
should not be contributory and that a special graduated levy for
unemployment on all incomes should be made, starting at a rate of
1 per cent on all incomes below £250 ($1,217) per year. It recom
mends that benefits should be available to all genuinely unemployed
persons without discrimination, and that the cost should be borne
by the system of taxation mentioned above. It criticises the principle
of a fiat rate of contribution paid without regard to the amount of
wages received and contends that the cost of maintaining the reserve
labor supply of the country should be a national charge and that
the country should be treated as an economic unit. It considers that
the waiting period should be shorter and that benefit should be paid
for all days of unemployment.
The principal criticism of the system by the Liberal Party is that
more of the funds available should be used for providing actual work,
while the business community in general constantly asserts that the
heavy financial burden on industry is excessive and is hampering
trade recovery.
Interesting evidence has also been submitted by associations of
county councils and other local Government authorities. Their sug
gestions are of the greatest interest, because these are bodies on
GREAT BRITAIN
291
which would probably fall the duty of providing relief for those
persons who could not qualify for “ standard ” benefit if the scheme
should once more be made a purely insurance scheme and “ transi
tional ” benefit abolished. First, they urge that the financial burden
should be a national one and that local governments should not be
called upon to supply the money necessary for relief which would be
needed. They point out, on the other hand, that in so far as the
scheme, as it is at present, is not purely an insurance scheme, a
“ needs ” or a “ means ” test would be desirable, and that the poor-law
authorities have the most suitable machinery for investigating indi
vidual cases and deciding on the rate of relief necessary for each
family.
Sir James Hinchcliffe, who gave evidence on behalf of the associa
tions of county councils, submitted a memorandum in which it is sug
gested that the unemployed should be divided into, three groups and
that each of these three groups should be dealt with in a distinctive
manner. The first would contain persons temporarily unemployed
and entitled to receive “ standard ’’ benefit during a fixed temporary
period. This group might be called the “ insured group.” The sec
ond class would be those who, by reason of age, infirmity, or for a
sufficient cause, might be regarded as permanently unable to work.
This class should be provided for by the public assistance authorities
under the local governments, who have the machinery to study each
individual case. The third group would include all those not quali
fied, or who had ceased to qualify, for inclusion in either of the two
first groups, and the responsibility for providing for them would be
the complete obligation of the Government, no part of the cost fall
ing on local taxes.
In a sense, these three groups exist to-day and are roughly taken
care of in the manner outlined above, since “ standard ” benefit is
paid from the insurance fund (first class) and “ transitional ” benefit
paid entirely from the exchequer (third class), while many of the
persons who would fall into the second group are at present receiving
relief from the local poor law authorities. It is probable, however,
that many of those receiving “ transitional ” benefit at present would
be moved over into the second class and would come under the more
careful supervision of the poor law machinery on a basis of need
rather than at a flat rate, while those receiving “ standard ” benefit
would, after the limited period, come into the third group.
One other interesting criticism is that of Mr. Ben Green, who
pointed out that the unemployment fund is composed in part of con
tributions paid by employers, who provide steady employment for
their workers, while employers who provide only irregular employ
ment cease payments into the fund in respect of each worker as soon
as he is dismissed. He suggested that a scheme should be worked
out whereby employers would pay for the relief of workers after they
are dismissed and should be excused from payments so long as they
provide regular employment. This suggestion, however, is not likely
to receive any serious consideration, since it would be impossible to
launch it except in a “ boom ” period. It is thought, also, that the
scheme recommended by the Trade Union Council would also receive
no serious consideration, since the present Government is definitely
pledged to a contributory system.
292
UNEMPLOYMENT INSURANCE
Principal Problems Under British Experience With Unemploy
ment Insurance
It is particularly important to remember, in studying the present
situation of unemployment insurance in Great Britain, that the
scheme was originally framed as a pure insurance scheme on an
actuarial basis; that benefits were low and were looked upon as a
small addition to other resources saved by the worker; that benefits
were at a flat rate, having no relation to wages and other means of
the worker or the individual needs of the unemployed person, such as
support for dependents, etc. (The only variations in rates were as
between men and women, and as between adults and young persons.)
The actuarial position of the insurance funds was originally pro
tected by establishing a definite relation between the period of bene
fit and the contributions paid by each worker.44
This general attitude toward unemployment insurance was evident
in 1918, when the great emergency resulting from the demobilization
of troops was met from outside the unemployment insurance scheme
by the “ out-of-work donations ” which were paid entirely by the
exchequer. Even when the act of 1920, the original basis of all the
legislation which has followed since, was framed, the scheme was
still looked upon purely as an insurance scheme, and all the princi
ples embodied in the act of 1911 are also found in the act of Novem
ber, 1920, extending the unemployment insurance scheme to cover
practically all industrial workers. In this act45 benefits claimable
were definitely related to contributions paid.
At that time it was the general opinion that the country was going
through an ordinary trade depression of short duration and that,
although at the moment conditions were very bad and the unemploy
ment percentage high, in a short time business would be so much
better that the revenue of the fund would increase and the expenses
would fall rapidly, with a resulting solvency of the fund.
When the total volume of unemployment reached 2,000,000 in 1921
and many persons had been out of work for long periods, it became
evident that a very large number could not qualify for benefits under
the provisions relating to benefits46 and that a large amount of
“ relief ” was immediately necessary. It should not be forgotten at
this point that British law provides for the maintenance of the
destitute under the poor law relief system, and that persons out of
employment, if they did not receive insurance benefits, would have
to be taken care of by government authorities, necessitating large
sums of money.
There were two alternatives. One was the provision of “ mainte
nance 55 for unemployed workers and their families by the poor-law
machinery. This would have meant heavy expenditures by local
governments, to be met out of “ rates ” or local taxes, unless the
poor-law authorities were assisted by exchequer funds especially ap
44 One week’s benefit for every six contributions paid, and a maximum o f 15 weeks’
benefit in an insurance year (July-.Tune).
45 Eight weeks’ benefit payable between Dcc. 23, 1920, and Mar. 31, 1921, inclusive,
on p roof o f 10 weeks’ insurable employment since Dec. 31, 1919, or 4 weeks’ insurable
employment since June 7, 1920.
48 One week’s benefit for every six contributions and a maximum o f 15 weeks’
benefit in an insurance year.
GREAT BRITAIN
293
propriated to meet the emergency. It would also have meant the
humiliation of large numbers of persons who were unemployed
through no fault ot their own. The second alternative was to use
the machinery of the unemployment-insurance system to provide the
necessary maintenance until the emergency should be over, at which
time the scheme could be returned to a pure insurance basis.
The second alternative was chosen, and this decision has so pro
foundly affected the whole unemployment-insurance system ever
since that it is very important to examine the fundamental changes
that became necessary and the resulting alteration in the whole
attitude toward unemployment insurance, both on the part of work
ers and employers, and on the part of the State and the general
public.
The idea that the scheme would be an insurance scheme perma
nently, and that relaxation in the qualifications for benefit occasioned
by the necessity to provide maintenance during the emergency should
be temporary m character, is evident throughout the legislation com
prised in 25 acts of Parliament which have been passed since 1920
amending the original act. Although this conception of a suitable
permanent unemployment-insurance system is evident in the legisla
tion, it has become decidedly blurred in the minds of workers, em
ployers, and the general puolic, and has also caused a great deal of
confusion in foreign countries with regard to the whole system.
It has also been evident throughout the period that a trade revival
was always thought to be just around the corner. Both in 1920,
when the greatly extended act was framed, and in 1927, when the
Blanesburgh Committee formulated a permanent scheme, the country
was thought to be at the bottom of a trade cycle, whereas 1920 actu
ally marked the beginning of a long business depression, and 1927
was comparatively a boom year.
As soon as the scheme was used to provide maintenance, irrespec
tive of the actuarial position of the fund, a host of the most difficult
problems arose. The actuarial position of the fund was originally
protected by limiting the benefit period on the basis of contributions
paid and by setting a maximum benefit period. When it became im
possible for large numbers of employed persons to qualify, the rela
tion between benefits and contributions had to be broken and it then
became necessary to define a genuinely unemployed person and to
specify his qualifications or disqualifications for benefit. Benefits, in
order to provide the required relief in the exceptional circumstances,
had to be increased, though they were, of course, kept below general
wage rates; but the difference between wages and benefits in many
cases was small.
The provision of allowances for dependents also became neces
sary, unless poor-law authorities were to be called in to carry heavy
burdens, and such allowances were first introduced as a temporary
measure in 1921, but were soon afterwards made a permanent part
of the scheme. This, in a measure, was an introduction of a “ needs
test,” which might be criticised in a compulsory contributory scheme,
though this feature of the present system is now generally accepted
in Great Britain as a desirable feature, even of a permanent scheme.
At first, it was hoped that the fund, with temporary assistance from
the Treasury (in the form of advances on which interest was paid),
294
UNEMPLOYMENT INSURANCE
could meet additional payments and, with increased rates of con
tribution and the expected return of prosperity, could repay its debt
to the Treasury, become solvent, and begin to build up a reserve
for the next trade depression. The first of a long series of acts
providing for temporary relaxations of the qualifications for bene
fit was passed in 1921, and “ uncovenanted benefit ” was introduced.
“ Uncovenanted benefit ” was, however, payable only for limited
periods, which varied in length from 15 to 44 weeks and which,
during certain periods, contained a “ gap ” in the middle, during
which no benefit was payable. In 1927 “ transitional” benefits be
came payable for an unlimited period, provided the claimant’s right
to benefit was investigated every three months. “ Uncovenanted ”
and “ extended ” benefits (that is, benefits paid under the temporary,
relaxed qualifications and no longer related to contributions) were
paid only at the discretion of the Minister of Labor between 1921 and
1928, with the exception of a short pferiod in 1924, when the Labor
Government was in power. Since April, 1928, “ transitional ” benefit
has been paid as a right, and since April, 1929, it has been paid,
not out o f the revenue of the unemployment-insurance scheme, but
out of the exchequer. During the period when the minister was
allowed to use his discretion, in addition to the “ needs test ” (the
existence of dependents), the Ministry of Labor applied also a rough
means test, taking into account other earnings by members of a
family and the general ability to provide for the necessaries of
life. Obviously, this meant a great increase in the administrative
work and in the difficulties involved in the allowing of claims by
the authorities. During most of this period the worker had to
prove that he had paid some contributions, namely, 30 at any time,
or 8 contributions during the previous two years. This test amounted
actually to proving that he was an insurable worker (that is, that
he was normally employed in an insurable trade), but did not main
tain a proportional relation between contributions and benefits.
Further, he had to prove that he was capable of work and that
he was “ genuinely seeking work.” This last qualification became
very difficult to establish and caused problems almost impossible of
solution. No general rule could be made for all trades defining
what constituted a genuine search for work. In some trades it in
volved calling on employers. In others this would not be a reason
able method of finding employment. The question then arose,
Should the worker be expected to seek or accept work in trades
outside his own particular trade or industry, or nis home district?
The authorities decided on the rather vague rule that after a “ rea
sonable period ” of unemployment, a worker should be expected to
seek and accept employment outside his trade or even his district.
The “ reasonable period ” varied, and the scope of other employment
jvhich he might be expected to accept (“ suitable employment ) also
varied in nearly every case.
The insured worker, moreover, tended to avoid employment in
noninsurable trades, such as agricultural and domestic service, since
he feared that by accepting temporary employment in a noninsured
trade, he might lose his claim to benefits. Special regulations had
to be made by which a temporary period of employment in a non
insurable industry should count as a period when he had contributed
GEEAT BRITAIN
295
to the unemployment insurance fund. Even this provision did not
entirely meet tne case, because, in spite of all the publicity given
to this regulation, many workers still feared losing their status as
insurable employees.
The “ genuinely seeking work” qualification was the subject of
many decisions by the umpire, who constitutes the final appeal. The
most interesting and most generally quoted of these decisions is No.
1404/26 of July 14, 1926. This decision contains a discussion of the
genuineness of an applicant’s desire for work. According to it, the
state of the claimant s mind, his employment record, and the wages
he could earn are the chief factors to be considered, while usually
he should also be called on to show that he is soliciting work from
suitable employers. The latter condition is no longer required of
him.
“ Suitable employment ” is also discussed in this decision. It is
particularly interesting to note in the latter discussion the following
sentence:
In the case of skilled workers (like the present applicants)47 unskilled or
poorly paid work, such as office cleaning, might presumably be unsuitable, but
there may be some branches of the tailoring or dressmaking trades which would
be suitable for them and for which they have the necessary qualifications.
The general definition of “ suitable work” is still an important
part of the case law of the unemployment .insurance system. The
general rules are set forth in a pamphlet entitled “ Summary of
Unemployment Insurance Acts, 1920,” as follows:
34. For the purpose of the first disqualification above, employment is not
deemed to be suitable if it is—
(1) Employment in a situation vacant in consequence of a trade dispute; or
(2) employment in the claimant’s usual occupation in the district where he was
last ordinarily employed at a rate of wages lower or on conditions less favor
able than those which he might reasonably have expected to obtain having
regard to those which he habitually obtained in the usual occupation in that
district or would have obtained had he continued to be so employed; or (3) em
ployment in the claimant’s usual occupation in any other district at a rate of
wages lower or on conditions less favorable than those generally observed in
that district by agreement between associations of employers and employees, or
failing any such agreement, than those generally recognized in the district by
good employers.
After the lapse of a reasonable interval employment is not deemed to be
unsuitable by reason only that it is employment of a kind other than the claim
ant’s usual occupation (if it is employment at a rate of wages not lower and
on conditions not less favorable than those generally observed by agreement
between associations of employers and of employees, or failing any such agree
ment, than those generally recognized by good employers).
So many differences arose over the definition of “ genuinely seeking
work ” that the Blanesburgh Committee, which sat m 1926 and 1927,
recommended that this qualification be abolished and for it they
recommended that a disqualification be substituted, which has been
adopted and which has met with a good deal of criticism. A claim
ant for “ transitional ” benefit is now disqualified if it can be proved
by an officer of the Ministry of Labor (a) that the claimant has
refused suitable work, or (6) has failed to carry out written
instructions for obtaining it.
This case was in reference to skilled workers in a textile industry.
296
UNEMPLOYMENT INSURANCE
These provisions have shifted the burden of proof from the unem
ployed person to the Ministry of Labor. An insurance officer can,
through the employment exchange, offer suitable employment when
it is available on the books of the exchange, or, even where employers
have not applied to the exchange, if an insurance officer (who keeps
in close touch with employment conditions in his district) knows of
the existence of suitable employment, he can instruct the claimant to
apply for it. On the whole, the new disqualification appears to be
considered as satisfactory to the Ministry of Labor officers as the
previous “ genuinely seeking work ” qualification. Though in some
ways? especially in the minds of the general public, it is thought to
lend itself to more abuses, in actual fact it is doubtful which regula
tion has caused'the most difficulty and led to the most abuse.
It should be mentioned that the abuses for which the scheme is now
criticized are actually comparatively rare, and that the unemploy
ment insurance scheme as a whole .is almost universally regarded in
Great Britain as necessary. The following quotation from the
Blanesburgh report is of interest:
We have found in all quarters a general agreement that the risk of unem
ployment should be insured. Nobody has suggested to us that the principle of
unemployment insurance should be abandoned. It has been recognized by all
who have appeared before us, and we ourselves share the view, that an unemployment-insurance scheme must now be regarded as a permanent feature of
our code of social legislation. It is agreed, for instance, that the scheme must,
as at present, be compulsory on the persons covered by it A voluntary scheme
has not been suggested to us in any quarter, and we can not ourselves think
that such a scheme could be adequate to the need. It is agreed, too, on all
hands, that a permanent scheme should cover at the least all the occupations
for which the present scheme provides.
It should be remembered that the great majority of the present
unemployed draw a “ standard ” benefit—i. e., they have passed the
test as regards the 30 contributions during the past two years. Fig
ures published by the Ministry of Labor show that in October, 1929,
out of a total of 940,250 receiving benefit, 810,250 were drawing
“ standard ” and 130,000 “ transitional55 benefit. By September,
1930, the recipients of transitional benefit numbered 326,610, the rise
being ascribed partly to the general increase of unemployment, and
partly to the operation of the act of 1930. On the 23d of March,
1931, the number receiving “ standard 55benefit was 1,937,125, and the
number receiving “ transitional” benefit was something around
400,000.
It is also of interest to note that about 20 per cent of the insured
persons registered as totally unemployed48 are out of work for less
than four weeks.
Supplementary Note
Early in June the Royal Commission on Unemployment Insurance,
appointed in December^ 1930, handed in two interim reports, the
minority report being signed by only two members. The majority
report goes into the history and finances of the scheme at some length,
and, explaining that more time is required for dealing fully with the
difficulties of the situation, presents some recommendations for reu That is, th ey are not “ temporarily stopped,” or still on the books o f tlieir employers.
GREAT BRITAIN
297
ducing at once the rate at which the deficit is increasing. These
include an increase in the contributions, a decrease in the rate of
benefit, a diminution of the period over which regular benefit may
be paid, and a reduction in the allowance for dependents. Many of
those now receiving transitional benefit, they say, would be forced to
resort to poor-law relief if benefit were stopped, and there are certain
objections to that; consequently, the majority recommend that the
payment of transitional benefit be continued, but that it be more
strictly administered. It is recommended that a means test should be
applied, that the benefit be graduated according to the need and also
that a stricter attitude might be taken as to what, under such cir
cumstances, constitutes “ suitable ” employment. Finally, it recom
mends special action in regard to those classes with regard to whom
there are frequent charges of abuses—intermittent, short-time and
casual workers, seasonal workers, and married women who may
really have quitted industry.
The minority report dissents from the recommendations concerning
increase of contributions, reduction of benefits, and lessened benefit
period, holding that no far-reaching changes should be made before
the commission’s work is finished. In the main, they assent to the
recommendations concerning the special classes, though one of the
minority signers objects to making any discrimination between mar
ried women and other workers. The minority approve of the exten
sion of the time during which transitional benefit may be paid.
Shortly after the issuance of these reports the Government pub
lished the text of a new bill, permitting modifications of the scheme
in respect of the special classes pointed out for action by the com
mission. In regard to these, the bill gives the Minister of Labor
authority to alter the present situation by establishing administrative
regulations, regardless of existing legislation, subject to the approval
of a consultative committee, consisting of a chairman and eight
members, appointed by the Minister. Three members are to represent
the interests of the workers, three those of the employers, and one is
to represent the Treasury. This bill was presented with the explana
tion that the Government does not feel justified in adopting the more
far-reaching recommendations of the commission before its final
report is presented.
On June 22 the Minister of Labor introduced in committee of
the House of Commons a resolution authorizing the Treasury to
increase the limit of advances to the unemployment insurance fund
by £25,000,000 ($121,662,500)—from £90,000,000 ($437,985,000) to
£115,000,000 ($559,647,500)—and to extend the period for the con
tinuance of transitional benefit by six months from October 18. The
existing borrowing powers of the fund, she said, would be exhausted
by July 8 or 9. On the basis of the live register of unemployed
being 2,500,000 the additional borrowing powers would last until
January, 1932; on a basis of 2^50,000, until next November; and on
a basis of 3,000,000 until next October.
The resolution was agreed to without division.
298
UNEMPLOYMENT INSURANCE
Northern Ireland 40
Before the establishment of Irish home rule one unemploymentinsurance system applied impartially to all parts of England, Scot
land, Ireland, and Wales, but by the Government of Ireland act of
1920 arrangements were made for transferring to the two Irish Gov
ernments the operation of the system within their respective borders.
For Northern Ireland the transfer was to become effective on Janu
ary 1, 1922, and shortly before that date a provisional order was
issued giving the modifications and adaptations subject to which the
system would become effective. These are summarized in the Labor
Gazette for January, 1922, as follows:
The following are the main modifications and adaptations contained in the
order: (1) The Minister of Labor and the Ministry of Labor for Northern
Ireland are given power, with the consent of the Treasury and the Ministry of
Finance for Northern Ireland, respectively, to enter into agreements for
enabling contributions and benefit paid in either country to be taken into
account in the other country for any purpose for which they would have been
taken into account had they been paid in that country; (2) provision is made
for the apportionment of the assets and liabilities of the unemployment fund
and the unemployed workers’ dependents’ fund (other than the right to receive
contributions and the liability to pay benefit) between these funds and the
corresponding Northern Irish funds; (3) the employed persons in respect of
whom contributions are, after the appointed day, payable to the Northern Irish
funds are defined; (4) provision is made for the apportionment between the
funds of the two countries of sums payable out of moneys provided by Parlia
ment, by way of employers’ and employed persons* contributions in respect of
discharged seamen, marines, soldiers, and airmen; (5) arrangements made by
the Minister of Labor with societies or associations, under which they pay out
State benefit or dependents’ grants, continue in force in Northern Ireland as if
made by the Ministry of Labor for Northern Ireland.
The scheme is administered by the Ministry of Labor and the cost
of administration is borne by the unemployment fund to the extent
of one-eighth of the total income of the fund. Any excess over this
amount must be paid out of moneys provided by Parliament on the
vote of the Ministry of Labor.
Classes Not Covered by System
The principal classes excepted from compulsory insurance are
juveniles under 16 years of age, persons aged 65 and over, nonmanual workers earning more than £25050 ($1,217) per annum,
persons employed in agriculture or private domestic service, and
outworkers. “ Exception” may also be granted in respect of em
ployment under a Government department, a local authority, a rail
way company, or a public utility company (such as a gas, water, or
dock undertaking), where the Ministry of Labor is satisfied that
the employment is permanent in character, that the employed per
son has completed three years’ service therein, and that the other
circumstances of the employment are such as to make insurance
under the acts unnecessary.
Exemption from liability to be insured is granted to any person
proving that he is either (a) in receipt of a pension or income of at
least £26 ($127) per annum not dependent upon his personal efforts;
R eport prepared by Lucien Memminger, American consul general, Belfast, as o f Apr.
22. 1931.
Conversions into United States currency made on basis o f £ = $ 4 .8 6 6 5 .
299
N O R T H E R N IRELAND
(b) ordinarily and mainly dependent for his livelihood upon some
other person; (a) ordinarily and mainly dependent for his liveli
hood on earnings derived by him from an occupation which is not
employment within the meaning of the acts; or (d) ordinarily em
ployed only in a seasonal occupation which does not normally extend
over more than 18 weeks in any year.
Statistics of the total number of workers in this area not covered
by the insurance system, such as persons employed in agriculture or
private domestic service, are not available. An authoritative publi
cation states, however, that out of some 145,000 persons engaged in
agriculture in Northern Ireland in 1925, 88,000 were paid laborers.
Contributions, Benefits, and Administration
As regards contributions to the unemployment fund and benefits
payable therefrom the rates established in Northern Ireland are
identical with those in effect in Great Britain. This similarity ap
plies also to form of administration and most of the regulations
pertaining thereto.
Financial Arrangement With Great Britain
The arrangement with the Imperial Government in connection with
the unemployment insurance fund is explained as follows in the
annual report of the Ministry of Finance of Northern Ireland, issued
in September, 1980:
Under agreements concluded with the imperial treasury, and confirmed by
statutes, the Northern Ireland and Great Britain unemployment-insurance
funds are kept in parity as regards deficit or surplus accruing subsequent to
September 30, 1925, by the payment by the exchequer of the poorer fund into
that fund of the amount necessary to render, as respects any financial year,
the accruing surplus or deficiency, equivalent to the accruing surplus or
deficiency of the richer fund in proportion to insured population in the two
areas. This payment is known as the equalization payment. The exchequer
of the richer fund then pays a contribution to the exchequer of the poorer
fund equal to three-quarters of the amount necessary to equalize the cost per
head of population of the entire State contribution to the unemployment insur
ance fund (including equalization payments) in both areas.
Amounts of equalization payments .—The amounts of equalization payment
by the Northern Ireland exchequer to the Northern Ireland unemployment
insurance fund, and the contributions paid by the imperial exchequer to North
ern Ireland in respect of the years 1928-29 and 1929-30 were as follows:
T a b le
31.— Equalization payment, contribution by imperial exchequer, and net cost
to Northern Ireland exchequer, 1928-29 and 1929-30
[Conversions into United States currency on basis of £=$4.8665]
1928-29
Item
English
currency
United
States
currency
1929-30
English
currency
Equalization payment by Northern Ireland exchequer to
Northern Ireland unemployment insurance fund.............. £777,940 $3,785,845 i £591,744
Contribution by imperial exchequer to Northern Ireland
exchequer_________ _____ ____________________________
483,059 2,350,807 i 334,804
Balance, representing net cost to Northern Ireland exchequer1 Payments on account; final figures not yet settled.
65655°— 31---20
294,881
1,435,038 | 256,940
United
States
currency
$2,879,722
1,629,324
1,250,398
300
UNEMPLOYMENT INSURANCE
Deficits of respective funds.—The deficit of the Northern Ireland unemploy
ment fund had on September 30, 1925, reached the sum of £3,615,538 [$17,595,010], while the deficit ow the British fund at the same date was £8,262,001
[$40,207,028], a far smaller figure in proportion to the insured population. On
the basis of insured populations the corresponding deficit on the Northern Ire
land fund would have been £191,104 [$930,007] only, and the “ excess debt ” of
the fund at the date mentioned was, therefore, £3,424,434 [$16,665,008]. The
agreement of February, 1926, made no provision for the liquidation of this debt,
but by that concluded in December, 1928, the Government of Northern Ireland
undertook to write off on March 31, 1929, a sum of £424,434 [$2,065,508] from
the excess liabilities of the fund, and a further amount of £100,000 [$486,650]
on each succeeding March 31 until the whole of the “ excess debt ” is extinguished.
Statistics of Operation
Unemployment in Northern Ireland.—The average percentage of
the insured population of Northern Ireland who were unemployed
(including an appropriate allowance for persons working systematic
short time) during each calendar year is shown in the following
table:
Year mid per cent unemployed
24.2
23.3
13.1
1925.
1926.
1927.
1928.
1929.
1930.
17.2
15.1
24.3
Unemployment according to trade groups.—Table 32 shows the per
cent of persons in specified trade groups unemployed in Northern
Ireland during each calendar year. The greater part of the insured
population is employed in the industries shown in the table.
T a b le
32.— Per cent of persons unemployed, 1925 to 1930 , by trade groups
Per cent of persons unemployed
Trade group
1925
Building_________________________________________
Distributors______________________________________
Dress, etc________________________________________
Engineering______________________________________
Flax, linen, and hemp_____________________________
Food and drink_______________________________ ___
Shipbuilding (including marine engineering) 1_______
25.4
16.3
13.8
25.5
32.5
18.4
33.3
1926
32.5
17.3
13.0
26.0
27.0
17.4
35.6
1927
24.9
10.6
8.7
16.5
8.4
11.3
27.7
1928
21.8
11.4
14.2
14.0
20.5
12.3
28.2
1929
21.3
12.6
12.1
0)
14.1
13.6
18.2
1930
27.2
17.4
24.6
(l)
32.4
16.8
19.8
i Engineering trade group combined with shipbuilding group in 1929 and 1930.
Number of unemployed at present.—According to figures compiled
by the Ministry of Labor the number of persons on the unemploy
ment register in -Northern Ireland on April 13, 1931, was 74,906, of
whom 63,818 were wholly unemployed. This was a considerable in
crease in the number or unemployed as compared with the same
period in the previous yeaT Replying to a question in the Ulster
Parliament on April 16, 1931, the Minister of Labor stated that the
amount paid out in benefits to unemployed each week was approxi
mately £64,000 ($311,456).
Unemployment insurance expenditure.—According to the North
ern Ireland Ministry of Finance’s account of revenue and expendi
ture during the financial year ending March 31,1931, the contribution
301
NORTHERN IRELAND
by the imperial exchequer to the Northern Ireland exchequer under
the unemployment fund equalization agreement, during that period,
was £517,302 ($2,517,450); the expenditure for unemployment insur
ance and employment services was £1,858,450 ($9,044,147), of which
£1,744,000 ($8,487,176) comprised unemployment insurance and
£114,450 ($556,971) employment services.
In the Northern Ireland estimates for the financial year 1931-32,
the amount estimated for unemployment insurance for the coming
financial year, April 1,1931, to March 31, 1932, is £1,542,000 ($7,504,143), which is less by £202,000 ($983,033) than the figure for 1930-31.
The estimate for employment services tor 1931-32 (administered in
connection with unemployment insurance) is £82,002 ($399,063).
The reduction in the estimate for unemployment insurance is
accounted for by the fact that the provision for transitional benefit
has been limited to the first six months of this year. There is, there
fore, a reduction of £107,000 ($520,716) in this portion, while the
equalization payment under the reinsurance agreement is reduced by
£82,000 ($399,053), owing to the high rate of unemployment now
prevailing in Great Britain compared with last year. This factor
reduces the amount which it is necessary to pay into the Northern
Ireland fund in order to keep it in parity with the British fund.
Increased borrowing powers.—The Ulster Parliament has recently
enacted legislation enabling the Provincial Government to raise to
£2,500,000 ($12,166,250) the borrowing powers of the Northern Ire
land unemployment fund and to extend for six months the period of
the payment of transitional benefit. The borrowing powers prior to
this new legislation had been limited to £1,750,000 ($8,516,375), an
amount which would last only until the middle of April. The exten
sion by six months of the period for the payment of transitional
benefit, it is stated, was designed to keep the position for the pay
ment of such benefit unchanged until the royal commission on unem
ployment insurance has reported on the matter and opportunity has
been afforded for consideration of its recommendations.
Number insured under unemployment insurance acts.—During the
calendar year 1930 there were in Northern Ireland approximately
266,000 persons insured under the unemployment insurance acts, this
number being divided among the various main trade groups as shown
in Table 33:
T a b le
33.— Number of persons insured under unemployment-insurance acts in
1930 , by trade groups
Trade group
Males
Females
Total
Building, construction, and allied trades...
Shipbuilding and engineering....................
Construction of vehicles................. . ......... .
Sawmilling, furniture, upholstery, etc____
Hotel and similar service, laundries............
Transport.....................................................
Mining and quarrying.................................
Printing, paper making, etc........................
Textile manufacture....................................
Textile bleaching and dyeing................... .
Manufacture of clothing..............................
Food, drink, and tobacco.............................
Distributive trades....... ...............................
Public services (gas, water, and electricity)
Other trades.................................................
24,500
27,300
2.500
3.400
2.500
14.100
2.400
2,900
23,800
4.400
4.000
8.400
23.100
10,900
7.000
2,300
51,900
4,400
22,300
3,200
11,500
800
1,900
24.700
27,800
2,700
4,000
7,100
14,500
2,400
5,200
75.700
8,800
26,300
11,600
34,600
11.700
8,900
Total...................................................
161,200
104,800
266,000
200
500
200
600
i, 600
400
302
UNEMPLOYMENT INSURANCE
In the calendar year 1928 the number of persons in Northern
Ireland insured under the unemployment insurance acts was 251,000.
The 5.98 per cent increase in the number of insured since then has
occurred in practically all groups except textile manufacture, which
has remained stationary, and construction of vehicles and public
services, which has decreased.
Amount of unemployment benefit paid.—In Northern Ireland bene
fits are paid at 28 employment exchanges situated in the most impor
tant industrial centers.
The amount of unemployment insurance benefit paid in Northern
Ireland during each calendar year is shown in Table 34:
T a b le
34.— Unemployment-insurance benefits paid, 1925 to 1980
[Conversions into United States currency on basis of £=$4.8665]
Total expenditure on benefits
Expenditure per
insured person
Year
English cur
rency
1925..............................................................................
1926..............................................................................
1927..............................................................................
1928..............................................................................
1929..............................................................................
1930....................................................... ......................
United States English
currency
currency
£2,481,000
2.410.000
1.210.000
1.454.000
1.325.000
2.372.000
$12,073,787
11,728,265
5,888,465
7,075,891
6,448,113
11,543,338
£9.32
9.15
4.76
5.79
5.13
8.92
United
States
currency
$45.36
44.53
23.16
28.18
24.97
43.41
Fraudulent Claims
To assist in the early detection of fraudulent claims to benefit
and also to insure that the conditions for the receipt of benefit con
tinue to be satisfied an examination is made of a large proportion of
the claims and inquiries made in all cases of doubt. Special atten
tion is given to the claims of applicants whose employment is such
as to facilitate benefit being obtained during periods of employ
ment. Particulars as to the cases investigated in each calendar year
are given in Table 35:
T a b le
35.— Results of investigation of claims, 1925 to 1930
Number of claims—
Year
Investigated Considered
doubtful
1925........................................................................................
1926........................................................................................
1927........................................................................................
1928........................................................................................
1923........................................................................................
1930........................................................................................
* Separate statistics discontinued after 1928.
20,702
25,482
17,021
13,794
15,404
16,619
2,115
2,483
2,012
1,521
0)
0)
Prose
cuted
125
226
278
129
108
236
Con
victed
101
191
254
107
88
200
NORTHERN IRELAND
303
Attitude of Employers Toward System
The attitude of employers in Northern Ireland toward the system
is believed to be similar, in a general way, to that of employers in
Great Britain. In this area criticism is directed chiefly against par
ticular items in the system rather than the general principle of un
employment insurance.
The attitude of some of the local employers is reflected in the fol
lowing quotation from a recent issue 01 the Belfast Chamber of
Commerce Journal:
In a statement issued by the National Confederation of Employers’ Organi
zations—a body representing employer's in industries normally employing
7,000,000 work people—the industrial situation and the causes of the depres
sion which are within the control of the Government and people of this country
are examined. Measures are recommended for reducing public expenditure and
the charges on industry in order that prosperity may be regained. The state
ment emphasizes that before the war export industries, sensitive to world con
ditions, set the general standard of wage levels. To-day, it is pointed out,
the standard is set by the “ sheltered ” industries. By fixing high rates of un
employment insurance, by making grants to local authorities, enabling them
to maintain wage rates higher than the export industries can pay, and by the
extension of statutory wage-fixing machinery, the State has in large measure
determined the general standard of wage levels. Since 1921 unemployment
benefit has increased and the cost of living declined; and if the 1921 rates of
benefit had been scaled down according to the cost of living a single man to-day
would be receiving 33% per cent less. It is recommended that an immediate
reduction of unemployment benefit by 33% per cent be made; that the fund be
placed on a strict insurance basis; and that a special fund should be created
and locally administered for the uninsured unemployed.
Attitude of Workers’ Groups and the Public
The attitude of the groups comprising the workers is believed to
be favorable to the present system or to its extension.
The attitude of the public, outside of the groups of employers and
workers, in regard to particular items in the present system, may
be said to vary depending upon individual points of view, political
beliefs, personal experience, etc. Acting on the principle that the
Ulster worker shall not be in a worse position than the cross-channel
worker, the Parliament of Northern Ireland has thus far enacted
unemployment-insurance legislation similar to that enacted at
Westminster.
Irish Free State51
Before the Irish Free State was established, in 1922, the British
unemployment-insurance system was in effect in Ireland, as enacted
in the unemployment insurance acts of 1911 and 1920, the latter of
which set up the main features of the present system. These acts,
with British amendments of 1921 and 1922, continued in effect after
the Irish Free State was established, ana have been amended in
some details by Irish Free State acts of 1923, 1924 (two acts), 1926,
and 1930.
The trend of the amendments has been to make the system strictly
an insurance matter on a business basis, and to remove any features
savoring of a Government dole for the workless. Surplus income
made possible an important reduction in contributions in the amend
ing act of 1930.
Type of System and Classes Covered
The system is compulsory. It includes all persons aged 16 years
or over employed under a contract of service, but excepts many
groups of workers, of which the most important are workers in
agriculture and private domestic service.
Contributions
Contributions are fixed according to age and sex and are not
dependent on earnings. They have been recently lowered, but prior
to January 5,1931, weekly contributions were as follows:
T a b le
36.— Weekly contributions under unemployment-insurance system in Irish
Free State prior to January 5, 1931
[Conversions into United States currency on basis of shilling=24.33 cents; penny=2.03 cents]
Contribution from
employer
Sex
M en__________________________________
Women.........................................................
Boys (16-18 years).......................................
Girls (16-18 years).......................................
Contribution from
employee
Total
United
United
United
Irish
Irish
Irish
States currency
States
States
currency currency
currency currency currency
d.
10.0
8.0
5.0
4.5
Cents
20.3
16.2
10.1
9.1
d.
9.0
7.0
4.5
4.0
Cents
18.3
14.2
9.1
8.1
s. d.
1 7.0
1 3.0
9.5
8.5
Cents
38.5
30.4
19.3
17.2
The State contributed a sum which was 35.6 per cent of the total
from employers and employees. From January 5, 1931, the State
81 Report prepared by B. M. Hulley, American consul, Dublin, as of Apr. 25, 1931.
304
305
IRISH FREE STATE
contributes a sum equal to three-sevenths (42.9 per cent) of the total
contributions from employer and employee, who contribute weekly,
as follows:
T a b le
37.— Weekly contributions under vnemployment-insurance system in Irish
Free State, since January 5> 1931
[Conversions into United States currency on basis of shilling=24.33 cents; penny=2.03 cents]
Contribution from
employer
Sex
Contribution from
employee
Total
United
United
United
Irish
Irish
Irish
States currency States currency States
currency currency
currency
currency
M en__________________________________
Women........................................................
Boys (16-18 years)........... ...........................
Girls (16-18 years).......................................
d.
7.0
6.0
3.5
3.0
Cents
14.2
12.2
7.1
6.1
d.
6.0
5.0
3.0
2.5
Cents
12.2
10.1
6.1
5.1
s. d.
1 1
11
6.5
5.5
Cents
26.4
22.3
13.2
11.2
Benefits
The benefits amount to 15s. ($3.65) per week for men, half that
amount for boys, 12s. ($2.92) for women, and half that amount for
girls. Additional amounts may be granted for dependents.
Insured persons are entitled by statute to benefits, after 6 con
tinuous days of necessary unemployment, if they have paid at least
12 weekly contributions and satisfy the other conditions of the 1920
act. For each week for which contribution was paid, one day’s
benefit is granted. The benefits cease when they have continued
for the number of days equal to the number of contributions. No
provision is made for persons dropped from regular benefits.
Administration
Unemployment insurance is administered by the Irish Depart
ment of Industry and Commerce, through employment exchanges in
the larger cities and branch employment offices in smaller places.
This department issues an unemployment-insurance book for each
worker. The book is kept by the employer, who is primarily liable
for keeping it up to date. Each week a special stamp, purchased
at the post office, is affixed to the card by the employer, who deducts
the employee’s share from his wages. The post-office accounts
periodically for the money received for unemployment-insurance
stamps. On leaving a job the employee receives his book and either
presents it to his new employer, or deposits it at an employment
exchange in connection with his claim for benefit.
Provision Against Abuse
A person claiming benefit must, as proof of unemployment, sign
a register at the employment office daily between 10 a. m. and noon,
or between 2 and 4 p. m., or in remote districts must report himself
as unemployed on a special form and have this form authenti
306
UNEMPLOYMENT INSURANCE
cated by a police officer. This is to guard against payments to
persons actually employed. There are no statistics on frauds, but
they are considered infrequent.
Grievances and Disputes
Grievances and disputes may be adjusted by appealing from a
decision of the insurance officer in the Department of Industry and
Commerce to a local court of three referees, including a chairman
appointed by the Ministry of Industry and Commerce and repre
sentatives or both employers and employed. A final appeal from
this court may be made to an umpire appointed by the executive
council of the Government, whose decision is final.
Statistics of Operation
On October 5, 1930, there were in the Irish Free State 282,622
workers covered by unemployment insurance, and this number in
cludes all workers insurable by law. There is no estimate of the
total number of workers, but the number insured is 9.5 per cent of
the total population.
The average number of persons receiving unemployment benefit
in each of the years 1926 to 1930 was 15,258, and the annual figures
declined from 37,366 in 1922 to 13,704 in 1927 and then rose gradually
to 16,237 in 1930. The beneficiaries are not classified statistically as
to sex, industry, and so forth.
Total receipts in the year 1929-30 amounted to £953.295a
($4,639,210), of which £703,020 ($3,421,247) was contributed by em
ployers and employees and £250,275 ($1,217,963) by the Govern
ment. In the same year, expenditure for unemployment benefits was
£467,114 ($2,273,210). Approximately £140,000 ($681,310) annually
is used to pay the cost of administration. The surplus has been used
to retire the debt assumed in taking over the system when the Irish
Free State was founded. Revenue has increased steadily since
1925-26, while expenditure for benefits decreased notably from that
year to 1927-28, since which time it has slightly increased. The
recent cut in contributions by law is ascribed to the rapidity with
which the funded debt was being reduced and indicates the healthy
financial position of the system. Statistics of the present indebted
ness are not available, but it is estimated that the expected small
annual surplus of receipts will easily extinguish it.
Calculations on Actuarial Basis
The contributions and benefits fixed by the British law of 1920
are understood to have been based on actuarial calculations, but
such figures are not available in the Irish Free State. The reduction
in contributions, effective January 5, 1931, was based on the expe
rience of the last eight years, but actuarial figures are not available.
“ Conversions into United States currency made on basis of £=$4.8665.
IRISH FREE STATE
307
Attitude of Various Groups
In general the present unemployment-insurance system has the
support of employers, workers, and the general public, in view of
its manifest benefits and comparatively small cost. The principle
of unemployment insurance has through usage become accepted with
out serious question. As experience accumulates, minor changes in
the system are made by law. There is no opposition in the press
or by any political parties to the general scheme.
The chief difficulty encountered is noncompliance in the case of
small employers, but for most industrial workers the system operates
smoothly.
Contemplated Changes
No important change in the system is contemplated by the legis
lative authorities or urged by any important group.
Italy52
Unemployment insurance was established in Italy by decree law
of October 19,1919, effective January 1,1920, and it was then admin
istered directly by the State through the National Office for Employ
ment and Unemployment (Ufficio Nazionale per il Collocamento e la
Disoccupazione).
Later on, by legislative decree of December 30, 1923, the admin
istration of unemployment insurance was intrusted to the National
Institute for Social Insurance (Cassa Nazionale per le Assicurazione
Sociali). Thus, unemployment insurance became coordinated with
compulsory invalidity and old-age insurance, especially as to the
collection of contributions, which is handled jointly for both kinds
of insurance.
Coverage of System
Unemployment insurance in Italy is compulsory. The decree of
December 30, 1923, abolished the commercial offices which in addi
tion to the various provincial offices, administered unemployment
insurance under previous regulations.
As a general rule, the same classes of persons who are subject to
compulsory insurance against invalidity and old age and against
tuberculosis are also subject to compulsory unemployment insurance.
These include all wage earners of both sexes over 15 years and not
over 65 years of age who are not independent workers. Seamen of
the merchant marine, which has a separate office for invalidity and
old-age insurance, are also subject to compulsory unemployment
insurance.
Glasses excluded from the system.—Representatives and employees
of the State, of the State railways, of the royal household, of the
communes and Provinces, and of public-welfare institutions are
exempt from insurance against unemployment, provided they are
regular employees. Private employees are exempt from such
insurance if their monthly salary is more than 800 lire ($42.08).58
The following classes are also exempt from unemployment insur
ance : All agricultural workers; home workers; persons in domestic
or private service; regularly employed persons whose judicial status
is similar to that of State employees; persons employed in establish
ments which are operated only during fixed periods of less than six
months; and other minor classes of workers.
Character and Amount of Contributions
Half of the compulsory contribution for unemployment insurance
is borne by the employer and half by the insured employee. The
82 Report prepared by Hiram A. Boucher, American consul, Rome, as o f May 1, 1931.
83 Conversions into United States currency made on basis of lira at par= 5.26 cents.
808
309
ITALY
amount of the insurance contribution is fixed in relation not to the
the actual wage of the insured, but to three standard classes of
wages, fixed by law as follows:
Daily wage:
Weekly contribution
Up to 4 lire (21 cents)--------------------------------------------0.35lira (1.8cents).
4 to 8 lire (21 to 42 cents)________________________ .7 0 lira (3.7cents).
Over 8 lire (42 cents)_____________________________1.05lire (5.5cents).
Contributions are collected by means of insurance stamps, together
with the contributions for compulsory insurance against invalidity,
old age, and tuberculosis.
No contributions are now made by the State, the Provinces, or
the communes, although originally (decree of April 21, 1919) an
annual contribution of 40,000,000 lire ($2,104,000) was to be made
by the State. This contribution was paid only for two years—
namely, for the fiscal years 1920 and 1921.
Benefits
Conditions for receipt.—To be entitled to a benefit the unemploy
ment must be involuntary and at least 48 weekly contributions must
have been paid within the two years preceding the period of unem
ployment. The waiting period is seven days, and therefore the
benefit begins on the eighth day of unemployment.
Seasonal unemployment and unemployment arising from normal
suspension periods do not make the insured eligible to benefits. The
industries subject to seasonal unemployment or to normal suspension
periods are specifically indicated by ministerial decree of August
18, 1925, which has since been modified and supplemented.
Amount of benefits.—The amount of unemployment-insurance
benefits is fixed in relation to the three standard classes of wages
governing the contributions, as follows:
D a ily w a g e :
Daily benefits
Up to 4 lire (21 cents)__________________________ 1.25 lire (6.6 cents).
From 4 to 8 lire (21 to 42 cents)_________________ 2.50 lire (13.2 cents).
Over 8 lire (42 cents)__________________________ 3.75 lire (19.7 cents).
In no case may the amount of the daily benefit exceed one-half
of the amount of the daily wage insured.
Special provisions govern the granting of benefits for partial and
occasional unemployment. Insured persons who are subject to
partial or occasional unemployment may receive benefits for all
days of actual unemployment, except holidays, after deducting 10
days (holidays not included) for each calendar month for which
benefits can not be granted because the total unemployment during
that month is only 10 days or less.
The part-time or casual occupations in which insured persons are
entitled to unemployment benefits are specified in the ministerial
decree of June 11, 1926, and the subsequent modification in minis
terial decree of March 1, 1927, as follows: Loading and unloading
at seaports (porters and unloaders); waiters in hotels, restaurants,
etc.; grinding of cereals (millers) and bakeries; throwing, spinning,
and weaving of silk; spinning, twisting, and weaving of cotton;
weaving of wool, including preparatory work such as carding and
spinning; manufacture and working of felt materials (hat makers);
sulphur refineries.
310
UNEMPLOYMENT INSUEANCE
Voluntary quitting is treated the same as involuntary dismissal
and entitles insured persons to unemployment benefits after an
additional waiting period of 30 days after the normal waiting period
of 7 days.
Period for which paid.—I f at least 48 weekly contributions have
been paid within the preceding two years, benefits are granted for
a maximum period of 90 days during one year; if at least 72 con
tributions have been paid, benefits are granted up to a maximum of
120 days during one year.
Persona dropped from benefits.—After the expiration of the maxi
mum benefit period, the insured person has no further benefit rights
during his subsequent unemployment, although assistance might be
granted to such persons by various public welfare institutions and
presumably also by the trade organizations (sindicale) to which
they belong.
Administration of System
The Italian unemployment-insurance system is administered by
the National Institute for Social Insurance (Casa Naziondle per la
Assicurazioni Sociali) in conjunction with compulsory invalidity,
old-age, and tuberculosis insurance. This organization has its head
quarters in Rome, and branches, provincial offices, and agents
throughout the Kingdom. The provincial offices are dependent offices
and have no independent administrative powers nor functions.
There is but a single unemployment-insurance fund, known as
the National Unemployment Fund (Fondo Nazionale per la Disoccupazione), which is administered at the headquarters of the
National Institute. The fund, established through the surplus
resulting from unemployment-insurance administration, amounted
at the end of 1930 to 920,000,000 lire ($48,392,000). The existence
of only one fund is explained by the fact that after the abolition of
the commercial insurance offices by the decree of December 30, 1923,
the granting of all classes of unemployment-insurance benefits was
handled on a national basis.
Administrative questions of a general character are handled by
the administrative council of the National Institute, and ordinary
administrative matters are dealt with by a special committee comosed of the president and two vice presidents of the National
nstitute (one of the latter representing the employers and the other
the employees); a representative of the employers and a repre
sentative of the insured, both elected by the administrative council
from among its own members; and one representative each of the
Ministries of Corporations, Finance, and Public Works.
Collection of contributions and payment of benefits.—The contri
butions for unemployment insurance (together with those for other
social insurance) are collected through the medium of special insur
ance stamps, for sale at all post offices and provincial offices of the
institute. The collections made by the post offices are remitted
through the director general of posts and telegraphs of the Ministry
of Communications to the Bank of Italy and credited to the current
account of the National Institute for Social Insurance. Although
payment of benefits for invalidity and old-age insurance is intrusted
to the post offices, the payment of unemployment benefits is handled
directly through the national institute and its branches, provincial
f
ITALY
311
agencies, and certain communal offices designated for the purpose.
When a communal official has been authorized to make such payments
(without responsibility on the part of the commune itself), funds
are advanced to him by the provincial office of the institute for the
payment of benefits, based on documentary proof furnished by the
official as to the number of ascertained days of unemployment under
each class? subject always to the decision of an officer of the institute
as to eligibility to receive benefits in each case. In general, unem
ployment benefits are paid fortnightly, at the end of each period.
Provisions Against Fraud
Infractions of the regulations regarding unemployment insurance
contributions on the part of employers are punishable by fines rang
ing from 100 to 5,000 lire ($5.26 to $263) in addition to the amount
due for delinquent and accrued contributions. This provision comes
under the Civil Code and not the Penal Code. Before a final decision
by the court in such a case, the offender is permitted to petition for
administrative settlement of the case by the institute, where the
matter is considered by the special committee above mentioned.
The decree of December 30, 1923, provides:
Whoever collects unemployment benefits through altering dates or in any
other fraudulent way shall be punished by a fine of not less than twice nor
more than 10 times the amount of benefits fraudulently obtained, such fines not
to effect any heavier punishment than that provided for by the Penal Code.
In addition to the above fines such offenders, by decision of the
special committee, may be excluded from the enjoyment of unem
ployment-insurance benefits for the period of one year. Attempts to
obtain benefits fraudulently may also be punished by exclusion for
one year from further benefits by action of the special committee,
and irrespective of liability for infraction of the Penal Code. Simi
lar provisions are also effective as respects employers and accessories
in the fraud. While cases of fraud have occurred, they have been
so infrequent as to be a negligible factor in the administration of
the system.
Adjustment of Grievances and Disputes
Interested parties have the right of appeal from actions or deci
sions of the local unemployment-insurance representatives as to
the amount of contributions or benefits payable, the manner of their
payment, etc., in the first instance to the special committee for the
administration of compulsory unemployment insurance located at the
headquarters of the National Institute in Rome. Decisions of the
special committee may be appealed to the Ministry of Corporations,
whose decision is final.
Statistics of Operation
Number of persons covered.—The number of persons covered by
the compulsory unemployment system amounts to about four and
one-quarter millions, which is about 22.3 per cent of the total work
ing population, estimated at 19,000,000.
Number receiving benefits and- number unemployed.—The number
of unemployed persons in Italy receiving benefits on March 31,1931,
312
UNEMPLOYMENT INSURANCE
was given as 230,000, or 32 per cent of the total unemployed, which
numbered 709,486, of which 548,356 were men and 161,130 were
women.
Unemployed on March 31, 1931, by occupation
Agriculture, hunting and fishing____________________________________ 175, 056
Mining industries-------------------------------------------------------------------------- 18, 695
Preparation of products of agriculture, hunting and fishing---------------- 56,291
Metal-working industries--------------------------------------------------------------- 57,825
Working minerals, building, street and hydraulic construction_______ 222, 761
Textile and fiber industries________________________________________ 90,098
Chemical industries______________________________________________
9,326
Public-utility industries and services----------------------- --------------------- 39, 704
Public services__________________________________________________ 12, 960
Personal services, other than workmen____________________________ 21, 528
Personal services not specified_____________________________________
5,242
Total________ ______________________________________________ 709,486
The monthly average, the maximum, and the minimum of the un
employed for the last five years for which figures are available are
shown in Table 38:
T a b le
38.— Monthly average, maximum, and minimum unemployment, 1925 to 1981
Year
Average
1925................................ .............................................................
1926...............................................................................................
1927...............................................................................................
1928...............................................................................................
1929.......................................................................... ...................
19301.............................................................................................
1931........... - .................................................................................
Maximum
Minimum
156,659
181,493
414,283
439,211
489,347
466,231
110,298
113,901
278,484
324,422
300,787
72,211
79,678
214,603
234,410
193,325
322,291
2 700,000
1 First 10 months.
2 First 3 months, approximately.
Receipts and expenditures.—Unemployment-insurance receipts of
all kinds since the inception of the system, by fiscal years, are shown
in Table 39:
T a b le
39.— Unemployment-insurance receipts (in thousands) ,b y fiscal years, 1920-21
to 1980
[Conversions into United States currency on basis of lira at par=5.26 cents]
Fiscal year
Insurance Govern
ment
Fund
Other
contribu contribu
revenues receipts
tions
tion
Lire
Lire
1920-211........................................................ 120,356 |
1921-22......................... ................................
85,968 1280,000
99,853
1922-23..........................................................
1923, second half__ - „ ____ ^ „ „ T49,553
1924................................................ .............. 104,847
1925............................................................... 114,411
1926............................................................... 123,606
1927________________________ __________
126,603
1928__________________ ________________ 128,241
1929............................................................... 133,285
1930............................................................... 3 133,500
J
Total
Lire
United
States
currency
Lire
Lire
24,214
14,086
474,030
$24,934
13,908
18,094
28,082
34,510
36,345
40,134
476
163
214
292
380
368
119,231
132,668
151,902
161,405
164,966
173,787
6,272
6,978
7,990
8,490
8,677
9,141
118 months ending June 30,1921.
2 The decree of Oct. 19, 1919, establishing unemployment insurance, provided for annual contribution
of 40,000,000 lire by the State during the first three fiscal years, subsequent contributions to be established
by decree; but in view of the surplus in the national unemployment fund at the end of the first 2 years
no further contribution was made by the State. The original decree provided also that the State’s con
tribution in no case should exceed one-third of the average annual benefits paid during the preceding 3year period.
s Approximate.
313
ITALY
Unemployment-insurance expenditures of all kinds, by fiscal years,
are shown m Table 40:
T a b le
40.— Unemployment-insurance expenditures (in thousands), by fiscal years
1920-21 to 1980
[Conversions into United States currency on basis of lira at par=5.26 cents]
Total
Benefits
paid
Fiscal year
1920-211.............................................................................
1921-22...............................................................................
1922-23____________________________________________
1923, second half__ ________________________________
1924....................................................................................
1925....................................................................................
1926....................................................................................
1927....................................................................................
1928....................................................................................
1929....................................................................................
1930............................................................... : ...................
Adminis
tration
expenses
Lire
Lire
7,070
84,556 • 38,463
50,158
16,979
24,110
9,710
14,087
8,970
22,365
- 9,620
69,793
11,370
65,345
11,718
59,086
13,472
*100,000
Lire
United
States
currency
197,226
$10,374
35,820
23,057
31,985
81,163
77,063
72,558
1,884
1,213
1,682
4,269
4,054
3,817
118 months ending June 30, 1921.
* Approximate.
The surplus of the unemployment insurance reserve fund at the end
of each fiscal year since 1921 is shown in Table 41:
T a b le
41.— Surplus of unemployment insurance reserve fund (in thousands) a
end of each fiscal year, 1921 to 1930
[Conversions into United States currency on basis of lira at par=5.26 cents]
Date
Lire
June 30,1921............................
June 30, 1922_______________
June 30, 1923___ ___________
Dec. 31, 1923............................
Dec. 31,1924............................
Dec. 31, 1925............................
151,066
189,504
237,161
270,869
356,320
465,940
United
States
currency
$7,946
9,968
12,475
14,248
18,742
24,508
Date
Dec.
Dec.
Dec.
Dec.
Dec.
Lire
31, 1926............................ 585,850
31,1927............................ 666,129
31, 1928............................ 754,076
31, 1929........................... 855,287
31, 1930............................ 1920,000
United
States
currency
$30,816
35,038
39,664
44,988
48,392
i Approximate.
Contributions and Benefits Not Based on Actuarial Figures
The financial estimates in connection with the Italian unemploy
ment insurance contributions and benefits were not based on actua
rial calculations j in fact, it was not seen how actuarial statistics could
be used as a basis for such estimates. The extent of unemployment,
statistics of cost of living, etc., prevailing during the immediate
after-war period were, however, taken into consideration.
Attitude of Various Groups Toward System
There has been no general opposition either to the principle of
unemployment insurance or to the administration of the system in
Italy so far as could be ascertained. It is understood that the in
314
UNEMPLOYMENT INSURANCE
sured employees are in favor of greater benefits in case of unemploy
ment, but only in case it does not occasion an increase in the amount
of contributions. Although there appears to have been no active
demand for a revision oi the present ratios between contributions
and benefits, it is sometimes pointed out that the accumulation of a
large surplus in the national unemployment fund even without the
continuance of Government contributions warrants the payment of
larger benefits without increasing the amount of contributions.
The coordination of unemployment insurance with old-age and
invalidity, and tuberculosis insurance, particularly as to payment of
contributions under a single insurance card, has met with general
approval.
It is alleged that no abuses in the system worth mentioning have
made their appearance in Italy. This is doubtless due to the fact
that the amount of benefits is so small and the fines for infractions
of the regulations and for frauds are so heavy that abuses of the
system are seldom attempted.
Contemplated Changes in the System
According to the general secretary of the national social insurance
fund, the only important change in the system contemplated at pres
ent by the Italian authorities, which will probably be effected through
a legislative decree, is the proposal to increase the amount of benefit
in relation to the size of family or number of dependents of the
unemployed insured person without increasing the amount of his
contribution. He emphasizes, however, that the Government in
tends to keep benefits down to a minimum living basis to prevent
the possibility of removing the stimulus to find employment and in
consequence promoting laziness and abuses. The same official points
out that the proposed increase in benefits to insured persons having
numerous dependents could be easily effected in view of the surplus
of 920,000,000 lire ($48,392,000) at the end of 1930, and the fact that
even during the severe economic depression a surplus of 65,000,000
lire ($3,419,000) was accumulated in 1930 in spite of the payment of
benefits amounting to over 100,000,000 lire ($5,260,000) as compared
with 59,000,000 lire ($3,103,400) in 1929.
Other Unemployment Relief Measures
The National Institute for Social Insurance employs its capital
and insurance funds to make loans for public works involving the
employment of considerable numbers of unemployed. Such loans
are made to communes, Provinces, reclamation unions, railroad con
struction enterprises, etc., provided adequate guaranties can be given.
Free employment exchanges have also been established by the
Government, and employers are required to apply to these exchanges
when they take on additional personnel. The Government labor
exchanges also deal with the transfer of excess labor from one indus
try to another.
A committee, under the supervision of the head of the Government,
has been instituted for the purpose of regulating the migration and
transfer of agricultural workers from one region of the country to
another according to the changing demand for farm labor.
Luxemburg, Grand Duchy o f 54
At the outset it must be stated that the question of unemployment
insurance in the Grand Duchy of Luxemburg has been settled in
broad, general outline, but that, as yet, the legislation on the subject
has not been put into effect. Hence the following report merely
gives an indication of the system that has been mapped out for use
at such time as unemployment becomes sufficiently acute to demand
the institution of unemployment insurance.
Luxemburg has had practically no unemployment. Its steel indus
try is the only pursuit of any importance except agriculture. When
aliens employed in the steel mills are out of employment, they return
to the countries to which they belong; when Luxemburg nationals are
similarly unemployed they return to the farms. The consular officer
at Luxemburg reports on the basis of information obtained from the
competent authorities, that no relief payments were made until
recently, when a few scattered cases have arisen in the Grand Duchy.
The basic legislation regarding unemployment insurance is con
tained in a law of August 6,1921, and a decree issued on the same day
by virtue of authority granted in the law itself, as well as in two
amending decrees of February 9, 1927, and January 5, 1931. The
amendments deal exclusively with the scale of relief or benefits to
be paid, but since the system has not as yet been put in force, it is
believed that these amendments have been made merely to provide
a basis for the payments of relief apparently now being made
exclusively from Government funds.
Coverage of System
The legislation provides that any workman of Luxemburg nation
ality, whether man or woman, above 16 years of age, who loses his
employment and makes a serious but unsuccessful attempt to find
other remunerative employment, is entitled to the benefits of the
law.
Provision is made, however, to extend the benefits to such alien
workmen as are residents of Luxemburg and fulfill the other condi
tions imposed upon Luxemburg nationals.
Contributions
Contributions to the unemployment fund, when the insurance is
definitely put in force, will be made in equal parts (that is, 25 per
cent each) by the National Government, by the municipality in
which the workmen reside, by the employer, and by the employee.
The amounts due the National Government (which will make all
54 Report prepared by W alter S. Eeineck, American consul, Antwerp, Belgium, as o f
May 4, 1931.
65655°— 31------ 21
315
316
UNEMPLOYMENT INSURANCE
relief payments) from the municipalities will be billed to the latter
quarterly and collected in the same manner as other sums owing to
the central Government by the communes are collected. The manner
in which the contributions of the employees and the employers are to
be made is to be prescribed by decree to be issued when the system is
put in force. This enforcing decree will also establish the national
unemployment fund as such.
Benefits
The decree of August 6,1921, prescribes that to receive the benefits
provided for the applicant must be certified in due form as indigent,
must be at least 16 years of age, must show that he is receiving no
assistance from a sick fund, must provide proofs that he has been
dismissed by his employer, must be a resident of the Grand Duchy,
and must prove that he has been regularly employed during at least
200 days of the year immediately preceding his application for relief.
Present Operation of System
As previously stated, while the legal basis for unemployment insur
ance in Luxemburg has been provided, no steps have as yet been taken
looking to the actual inauguration of the system. Unemployment
insurance has to a great extent been eclipsed in the Grand Duchy by
insurance or pensions covering sickness, accident, invalidity, and old
age, all of which are compulsory. It is therefore unlikely that any
steps will be taken to give effect to the unemployment insurance
system in the near future.
Netherlands65
The unemployment-insurance system of the Netherlands is con
ducted by the labor unions and not by the Government, although
both the national and municipal governments contribute to the insur
ance funds of the insurance associations formed by various unions,
in an amount equal to the sums raised by these unions from contribu
tions from the members. The unions themselves are in reality official
bodies, each being properly recognized and chartered by the Gov
ernment. They thus differ, to a certain extent, from labor unions
as known in the United States, as they retain some of the features
of the old guilds which existed in former times. This status of the
unions and the fact that these bodies conduct the insurance system,
with only a general oversight by the Government and the municipal
ity, with reference to the destination of the funds supplied by them,
should be borne in mind in connection with the study of the opera
tion of the unemployment insurance system of this country.
The law establishing the unemployment-insurance system of the
Netherlands is embodied in a royal decree of December 2,1916, which
is known as the unemployment decree of 1917, for the reason that
it went into effect in January, 1917.
The unemployment-insurance system may be voluntarily accepted
by any union, out as far as the individual members of the unions
which accept are concerned the system is compulsory. This is evi
dently a matter of Government policy, for neither the law itself
nor any of the Government decrees make a stipulation of this
character.
Coverage of System
The labor unions in the Netherlands are divided into trade groups
which, in turn, are divided into subgroups; thus the woodworking
union includes brush makers, carpenters, furniture makers, and
barrel and box makers. In each group may be a number of different
unions which are usually organized on political or religious lines;
thus the building trades group includes the Christian National Union,
the National Federation of Carpenters, the Netherlands Roman
Catholic Union of Building Trades Workers, the Netherlands Asso
ciation for the Protection of Building Trades Workers, and the
Neutral Association of Building Trades Workers. The following
statement shows the main trade groups, together with the number
of workers in each, all of whom are members of the unemploymentinsurance association of the various unions:
65 Report prepared by Charles L. Hoover, American consul general, Amsterdam, as o f
May 5, 1931.
317
318
UNEMPLOYMENT INSURANCE
Number o f members
Diamond industry-------------------------------------------------------Printing trades_______________________________________
Building trades (including painters—11,182)------------------Woodworking industry-----------------------------------------------Clothing industry_____________________________________
Leather industry______________________________________
Mining industry----------------------------------------------------------Metal industry-----------------------------------------------------------Textile industry______________________________________
Foodstuffs industry (including the tobacco and cigar in
dustry—13, 616)____________________________________
Agriculture and peat industry-------------------------------------Transport trades_____________________________________
Hotel industry________________________________________
Commercial and office work-----------------------------------------Technical and supervising work________________________
Factory industries____________________________________
Hairdressing industry-----------------------------------------------Other groups_________________________________________
5, 889
19, 728
82,304
14,064
5, 845
3, 909
13, 077
64, 304
34, 796
27, 625
36,862
46, 971
1, 599
31, 065
7,101
48, 247
(50)
2,155
Total_________________________________________ 445, 541
At the end of 1929 there were 93 national labor organizations and
28 local labor organizations, or a total of 121, having 5,437 local
lodges, which provided unemployment insurance for their members.
Most of these organizations had a large number of branches, or
local lodges, the greatest number, perhaps, being that of the Roman
Catholic Building Trades Workers Association, which had 391)
branches throughout the country; but, on the other hand, some of the
associations, like the six diamond workers’ unions, had no branches
at all. Table 42 shows the number of unions in each trade group,
and the total number of branches under these various subgroups:
T a b le
4 3 . — Number of subdivisions of unions
General trade group
Building trades.______________
Diamond industry_____________
Factory industries_____________
Printing trades_________ _____ _
Commercial and office work____
Hotel industry________________
Woodworking industry._______
Hairdressing industry_________
Clothing industry_____________
Agriculture and horticulture
Metal industry______ _________
Mining industry______________
having unemployment-insurance
associations in the Netherlands
Sub Number
local
groups of
lodges
12
5
6
5
5
3
7
1
3
6
6
4
1,282
5
669
276
256
29
248
17
83
863
342
138
General trade group
Technical and supervising work.
Tobacco industry______________
Textile industry_______________
Transport trades, fishing, and
shipping____________________
Foodstuffs industry___________
Associations not included in the
foregoing____________________
Local unions__________________
Total...................................
Sub Number
local
groups of
lodges
9
4
5
169
226
180
5
7
297
266
28
0
63
28
121
5,437
No classes of persons or industries are excluded from insurance,
but individuals must insure through their own labor organizations,
and these labor organizations may be admitted to the subsidized
insurance system only with consent of the Crown; that is to say, the
union itself may be recognized only by royal decree, but once having
been recognized as an organized union with a legal status, the right
to insurance subsidy automatically accrues under article 2 of the
decree of 1917.
M Received right to subsidy Apr. 29, 19 29; no figures available.
319
NETHERLANDS
Contributions
The amount of contribution by the State and local governments
depends upon the amount of contribution by the members of the
insurance association; the employers make no contribution whatever.
Each union reports the amount of the members’ contribution, and
the National Government and the municipalities each contribute
half that amount, so that the total government subsidy amounts to
100 per cent of the workers’ contributions. Members’ contributions
are based on both the wages and the age of the worker, but are fixed
by the unions themselves and not by the Government. Table 43
shows the wage classes and contributions by the workers in the
General Netherlands Building Trades Workers’ Association:
T a b le
43.— Weekly contributions of members of General Netherlands Building
Trades Workers’ Association
[Conversions into United States currency on basis of fiorin=40.2 cents]
Weekly contributions of members aged—
Average hourly
rate of specified
wage class
15,16, or 17
years
18 or 19 years
20 or 21 years
22 years or
more
Wage .class
United Nether United Nether United Nether United
Nether United Nether
lands States lands States lands States lands States
lands cur States
cur
cur
cur
cur
cur
cur
cur
cur
currency rency rency
rency
rency rency rency rency rency rency
Class 1...............
Class 2...............
Class 3...............
Class 4...............
Class 5...............
Florin
0.71
.63- .70
. 56- . 62
.51- . 55
.50 or less
$0.29
.25- .28
. 23- . 25
. 21- . 22
.20 or less
Florin
0.25
.23
.20
.18
.15
$0.10
.09
.08
.07
.06
Florin
0.30
.28
.25
.23
.20
$0.12
.11
.10
.09
.08
Florin
0.40
.37
.34
.31
.28
$0.16
.15
.14
.12
.11
Florin
0.50
.46
.42
.38
.34
$0.20
.18
.17
.15
.14
This schedule may be taken as fairly typical, but, as has already
been stated, each union fixes the amount of the contribution for its
members. The Diamond Workers’ Union of Amsterdam bases the
contribution solely on wages, the scale being as follows:
Wage Class:
Contribution
15.99 florins ($6.43) per week or less___ 0.50 florin ($0.20).
16 florins ($6.43) to 10.99 florins ($8.04)
per week____________________________ .75 florin ($0.30).
20 florins ($8.04) per week and higher----- 1.00 florin ($0.40).
The manner in which the contributions must be paid is not estab
lished in the law", but in most cases they are made in the form of
stamps affixed to the contribution books of the members of the
various unions.
Benefits
Conditions for receipt.—It may be emphasized that the unions
are practically autonomous as far as the unemployment insurance is
concerned, and that, therefore, each union fixes the conditions, not
only with regard to the contributions but also with respect to the
benefits. Each union has therefore adopted such scales of contribu
tions and benefits and has formulated such regulations as have ap
320
UNEMPLOYMENT INSURANCE
pearecl suitable to its own requirements. The usual waiting period
is one week, six days being always counted as a week in legislation
pertaining to labor, and on the average the member must have paid
premiums for a period of 26 wTeeks—that is, one-half of a year—
before he becomes entitled to receive benefits from the insurance
funds of the union.
Amount and period for which paid.—With respect to the payment
of the benefits, the periods are fixed by the unions themselves and
are by no means uniform. Table 44 shows for 30 different unions the
maximum amount of the weekly contributions by the members, the
maximum amount of the daily benefits paid to unemployed members,
and the number of days for which benefits may be paid each year:
T a b l e 4 4 . — Contributions required and benefits paid in specified union unemploy~
ment-insurance associations
[Conversions into United States currency on basis of florin=40.2 cents]
Weekly contributions
Union
Nether
lands
currency
United
States
currency
Daily benefits
Nether
lands
currency
United
States
currency
Florins
Florins
Cents
4.4- 6.0
2.85-3.00 $1.15-1.21
Bakers__________________________________ 0.11-0.15
27.3
4.00
Overseers in building trades_______________
.68
1.61
10.1
2.60
Brush makers____ •
_______________________
1.05
.25
20.1-24.1
.
50.
60
2.35
.94
Building trades _________________________
Private chauffeurs________________________
6.0
2.50
1.01
. 15
40.2-50.3
2.70-3.00
Diamond workers________________________ 1.00-1.25
1.09-1.21
8.0-12.1
2.60-3.00
Factory workers_________________________ .20- .30
1.05-1.21
1.8- 4.8
1.41-2.01
Commercial and office workers____________ . 04^- •12
3. 50-5.00
4.8-16.1
2.00-3.00
Hotel employees_________________________ . 12- . 40
. 80-1.21
8.0-10.9
2.40-2.60
Woodworkers __________________________
.20- . 27
. 96-1.05
. 18- . 24
7.2- 9.6
2.60
Clothing makers_________________________
1.05
.25
10.1
2.25-2.60
. 90-1.05
Coopers__ _ ____________________________
12.1-16.1
.30- . 40
1.20-1. 70
. 48- . 68
Farm workers____________________________
4.0
5.30
Lithographers____________________________
. 10
2.13
8.0 -12.1
2.40-3.00
. 20- . 30
. 96-1.21
Metal workers__________________________
3.2
Mine workers
_ _ _ __ _____________
.08
3.00
1.21
Overseers in transport operations
. 14
5.6
4. 50
1.81
22.1
2.60
Painters ______________________________
1.05
. 55
10.1-14.1
2.56-2. 70
1.03-1.09
Cigar makers____________________________
. 25- . 35
8.0- 9.2
2.60-3.00
. 20- . 23
1.05-1.21
Butchers________________________________
14.1
2.60
Masons
_____________________________
.35
1.05
18.1
2. 50
1.01
Road workers _________________________
.45
32.2
3. 50
1.41
.80
Plasterers ______________________________
3.50-4.50
1.41-1.81
Technical trades__________________________ . 22- . 34V2 8.8-13.9
6.0- 8.0
3.00
1.21
Textile workers__________________________ . 15- . 20
4.44-4. 58
1.78-1.84
4.0- 6.0
. 10- . 15
Printers_________________________________
2.25-2.60
10.1-16.1
. 90-1.05
Transport workers________________________ . 25- . 40
8.0- 8.8
4.50
1.81
Overseers________________________________ . 20- . 22
16.1
2.25
.90
.40
Seamen ________________________________
2.60
6.0
1.05
Dairy workers___________________________
.15
Number
of days*
benefits
paid
per year
54-78
78
60
39-50
90
78
60
72-78
40-66
54
42-48
60-78
36-48
l 90
60
72
78
48
60
54-78
48
48
42
60-90
60
*90
36-42
78-90
42
78
1In 67 weeks.
Table 45 shows the schedule of benefits of the General Netherlands
Building Workers’ Union:
321
NETHERLANDS
T a b le
45.— Daily unemployment benefit of General Netherlands Building Workers9
Union
[Conversions into United States currency on basis of florin=40.2 cents]
Rate of daily unemployment benefit paid to members aged—
22 years or more
15,16, or 17 years
18 or 19 years
20 or 21 years
Class
Single
Married or
breadwinner
Nether United Nether United Nether United Nether United Nether United
lands States lands States lands States lands States lands States
cur
cur
cur
cur
cur
cur
cur
cur
cur
cur
rency rency rency rency rency rency rency rency rency rency
Class 1......................
Class 2......................
Class 3......................
Class 4____________
Class 5......................
Florin
0.60
.55
.50
.45
.40
Cents
24.1
22.1
20.1
18.1
16.1
Florin
0.95
.90
.85
.80
.75
Cents Florins
38.2
1.40
36.2
1.30
34.2
1.25
32.2
1.15
30.2
1.05
Cents Florins
1.75
56.3
1.60
52.3
50.3
1.50
46.2
1.40
42.2
1.30
Cents Florins
70.4
2.35
64.3
2.15
2.00
60.3
56.3
1.85
52.3
1.70
Cents
94 5
86.4
80.4
74.4
68.3
Article 13, paragraph 1, of the decree of 1917 provides that the
total benefits payable to a person who is insured in the subsidized
associations may not exceed 70 per cent of his average daily wages.
Provisions for persons dropped from reaular benefits.—Neither the
decree of 1917 nor any other law specifically makes provision for
persons who have been dropped from the regular benefits of the
unemployment-insurance associations, and such persons, if destitute,
are normally considered public charges and are supported by the
communities in which they live, the National Government, however,
aiding in their care under the provisions of the so-called poor law
of April 27,1912, as amended by the laws of May 31, 1929, and June
22, 1929. In some cases the poor are cared for by private charity
associations.
It has been found necessary at the present time, when unemploy
ment is unusually great and has been of long duration, to make
special arrangements for the support, not only of persons dropped
from benefit because of the exhaustion of their right to benefit or of
the funds of the unemployment associations, but for other unem
ployed as well. The regulations governing the granting of this sup
port have been announced by the Minister of the Interior and Agri
culture, and revive the “ crisis regulations ” which were put into effect
shortly after the close of the war and which were abrogated in 1924.
The funds for emergency relief provided for in these regulations
are to be derived from various sources, but principally from a surplus
existing in the national treasury from emergency taxes, the collection
of part of which has continued up to the present. The funds arising
from the new cigarette tax are to be covered into the emergency
relief funds.
The following excerpt from the Maandschrift, the monthly jour
nal of the Bureau of Statistics, sets forth in brief the regulations
for relief as prescribed by the Minister of the Interior and Agricul
ture on January 7,1931:
322
UNEMPLOYMENT INSURANCE
The Minister of the Interior and Agriculture has prescribed a system for
the support of those unemployed in consequence of the crisis, which system,
in its principal lines, corresponds to the plan of 1924. Again, a Government
contribution will be given to the municipalities concerned toward the cost
of support of unemployed laborers belonging to certain industries. To be
qualified for such a contribution, the municipalities are obliged to observe
strictly the stipulations laid down in this decision and in others which may
be made later. In the decree the unemployed are classified as follows: (a)
Those already qualified; (&) those requalified: (c) those who, according
to the rules and regulations of tlie unemployment fund, are not yet entitled
to receive benefits; (d) the unorganized workmen.
The following is taken from the provisions of the arrangement:
“ Two classes have been created, one for those now entitled to the benefit,
and one for the three other categories. For those qualified (qualified for
benefits from an active unemployment fund subsidized by the Department of
Labor, who have not yet enjoyed the benefit during the number of weeks
fixed by the Minister of the Interior, etc.) it has been stipulated that able
workmen wholly or partly unemployed against their will who, for the three
months preceding the date on which they became, unemployed, have been
engaged for at least six weeks in industries to be named by the Minister of
the Interior and Agriculture, shall receive a weekly benefit in money for
as long as they are qualified therefor according to the judgment of the
organization recognized by the minister. The time during which they will
be qualified for the benefit is, at most, 18 weeks for boarders and 24 weeks
for married or unmarried breadwinners. When a person qualified for the
benefit has enjoyed benefits for the number of weeks fixed for his case, he
shall fall under the class of ‘ requalified persons.’ Careful consideration is
further paid to the condition of tlie family and no one may demand relief
under these regulations as a right, while boarders can be given relief only
after the approval of each individual case by the minister. The municipali
ties concerned must make proposals with regard to the extent of the emergency
benefit. Two-thirds of the income of the ‘ qualified benefit recipient ’ and of
the members of his family on his benefit fixed according to the arrangement
is to be deducted from the benefit. The emergency benefit to married and
single breadwinners may never exceed 65 per cent, and to boarders 55 per
cent, of what they might earn in a 48-hour work week in the trade to which
they belong. Only one member of the family can be considered for the
benefit according to this arrangement. No payment may be made (1) to
persons older than 60 years; (2) to those who have received benefits from
an unemployment insurance fund and/or payments from public funds for the
support of unemployed for a year or longer, without having worked in that
time for at least a month in ‘ free industry’ ; (3) to those of whom it may
be expected that they will not again find employment in the branch of industry
in which they have worked regularly; or (4) to women.”
In the regulations prescribed it is also stipulated that the recipient of
emergency benefits is obliged to accept work for which he may be considered
bodily fit, and that should he refuse this the payment of relief shall be stopped.
The amounts to be paid are smaller and the time of payment shorter for those
not yet entitled thereto according to the rules and regulations, for those who
have been “ requalified ” for the benefit, and for the nonunionized workers
than for the qualified. The relief given to those may never exceed 60 per
cent of the wages for married and unmarried people and 50 per cent for
boarders, while the maximum period of emergency benefit is fixed for the
requalified at 15 weeks for boarders and 21 weeks for married and unmarried
breadwinners; for those not yet entitled to benefits according to the rules and
regulations and for unorganized workmen at 26 weeks for boarders and 35
weeks for married and unmarried breadwinners.
Under these regulations the initiative is with the municipality. It ap
plies for support to the minister, and the latter decides whether support will
be given. The emergency benefit is granted only to unemployed persons who,
in the three months preceding the date on which they became unemployed,
were employed for at least six weeks in the industries in which, in the opinion
of the minister, there was locally a condition of general unemployment in
consequence of the crisis. The minimum contribution of the National Gov
ernment is 25 per cent, and the maximum 75 per cent of the payments made,
depending upon the financial condition of tlie municipality and the extent and
duration of the unemployment. It is, among other things,, further provided
NETHERLANDS
323
that the whole system of relief to unemployed of the municipality, as also
that of provision of work, must have the approval of the minister, and that
when the minister considers it necessary a number of the unemployed, to be
fixed by him, shall be sent to the places where the Government is carrying
011 work for the relief of the unemployed. Finally, provisions have been made
in the regulations with regard to petitions for validity of the regulations
governing relief, directions as to execution of the regulations, petitions for
support, reporting, payment and control, etc.
Administration
The various unemployment-insurance associations are administered
solely as sections of the several unions, of which 121 have been rec
ognized by the Government for the purpose of carrying out such in
surance under subsidy. The supervision of the unemployment in
surance by the National Government is through the State Bureau of
Unemployment Insurance and Employment Service (Rijksdienst
der Werkloosheidsversekering on Arbeidsbemiddeling) in the De
partment of Labor, Commerce, and Industry. The supervision ap
plies principally to the central administration of the national unions
and to the administrations of the local unemployment-insurance as
sociations—i. e., the local associations which are not associated with
any of the national unions.
The supervision of the municipal authorities covers the transac
tions of the insurance sections of the unions within the municipal
limits with respect to the members who are living within these lim
its. In order that the municipal government shall have the infor
mation necessary for it to exercise appropriate supervision, the in
surance associations are required to submit to the government of
each municipality where the union members are living (a) a copy
of their constitution and by-laws; (b) a report giving the names and
addresses of the directors or administrators of the association; and
(e) data regarding the members residing in each municipality and
reports of all changes which may occur.
The municipal governments and the managers or administrators
of the insurance associations must maintain a member card index.
The card index of the municipality must cover all association mem
bers residing therein, regardless of whether or not they are mem
bers of an insurance association which is situated in the municipality.
Provision Against Fraud
There is no provision in the decree of 1917 itself regarding the
punishment of fraud, and any cases of fraud would be punished
under the ordinary criminal code. The director of the Bureau of
Unemployment Insurance states that no statistics are available but
that cases of fraud occur very rarely. .
Grievances and Disputes
The managing board of an insurance association may appeal to
the Minister of Labor, Commerce, and Industry against the decision
of a municipal council or of the director of the Bureau of Unem
ployment Insurance. Grievances and disputes are adjusted by a com
mittee appointed by the Minister of Labor, consisting of an impar
tial chairman, a representative of the State and local governments,
324
UNEMPLOYMENT INSURANCE
and a representative of the workers’ unions. No worker, however,
has the right of appeal against a decision of his union.
Statistics of Operation
According to the Maandsc rift for February, 1931, the number
of members of unemployment surance associations in the Kingdom
in the early part of Februar, was 445,541. According to the census
of 1920, the number of persons gainfully employed at that time was
2,722,407, the total population at that time being 6,865,000. The offi
cial figures of the census taken in 1930 have not been published, but
the population is stated in preliminary reports to have been approxi
mately 7,950,000, an increase of around 16 per cent. On this basis,
assuming that the number of employees increased in the same pro
portion as the population, the number of workers of all kinds in the
Netherlands would be around 3,158,000. This includes all classes of
workers, many groups of which are not unionized. As nearly as can
be ascertained, the number of what may be considered industrial
workers is about 1,250,000, and the number of insured would thus
be about one-third of the number of industrial workers in the
country. This estimate agrees with that of the director of the bureau
of unemployment insurance, who gives the number of insured at
450,000.
Number of beneficiaries.—No figures could be obtained regarding
the number of persons who received benefits from unemploymentinsurance funds during any of the past years; however, the Maandschrift gives, for the months of 1930, the number of unemployed
persons who were members of the various subsidized unemploymentinsurance associations, and therefore presumably receiving benefits
from unemployment-insurance funds, as follows: January, 48,395;
February, 34,180; March, 20,768; April, 16,270; May, 14,118; June,
11,914; July, 16,468; August, 18,856; September, 19,812; October,
22,282; November, 29,459; December, 79,996.
Receipts and expenditures.—The amount of expenditures for 1930
is not available but Table 46 shows disbursements for relief payments
and refunds from 1917 (when the law came into effect) up to and
including 1929, as given by official reports:
T a b le
46.— Expenditures under unemployment insurance system in the Netherlands.
each year, 1917 to 1929
[Conversions into United States currency on basis of florin=40.2 cents]
Total expenditure
Year
Netherlands
currency
1917___
1918___
1919___
1920----1921___
1922___
1923___
Expenditure per
insured person
United
United Nether
lands
States
States
cur
cur
currency rency
rency
Florins
Florins
4.35
130,374.35
$52,410
397,383
7.06
988,515.25
1,789,916.24
719,546
6.88
9,792,438.00 3,936,560
27.20
15,193,102.70 6,107,627
39.98
34.84
12,540,897.36 5,041,441
7,154,316.05 2,876,035
23.85
$1.75
2.84
2.77
10.93
16.07
14.01
9.59
Total expenditure
Year
Netherlands
currency
1924___
1925___
1926___
1927___
1928___
1929___
Expenditure per
insured person
United
United Nether
lands States
States
cur
cur
currency rency rency
Florins
Florins
5,206,685.41 $2.093,088
18.75
18.36
5,053, 568.44 2,031,535
18.45
5,215,977. 25 2,096,823
20.20
5,999,801.18 2,411,920
16.18
5,130,217.79 2,062,348
22.37
8,117,794.56 3,263,353
$7.54
7.38
7.42
8.12
6.50
8.99
325
NETHERLANDS
The latest statistics published by the Government Bureau of
Unemployment Insurance, those for 1929, are given in Table 47 and
show the income and expenditures of the subsidized insurance asso
ciations of the country for that year:
T a b l e 4 7 . — Receipts and expenditures of State-subsidized unemployment associa
tion in the Netherlands in 1929
[Conversions into United States currency on basis of fiorin=40.2 cents]
Amount
Item
Netherlands
currency
United
States cur
rency
Receipts:
Members’ contributions___________________________________________
Subsidies under article 4 of unemployment decree of 1917_____________
Interest__________________________________________________________
Miscellaneous_____________________________________________________
Florins
4,541,079
4,601,107
326,204
471
$1,825,514
1,849,645
131,134
189
Total___________________________________________________________
9,468,861
3,806,482
Extraordinary income (subsidies above 100 per cent in connection with
payments to retiring members)___________________________________
1,600,029
643,212
Total income___________________________________________________
11,068,890
4,449,694
6,522,497
189
1,595,298
2,622,044
76
641,310
8,117,984
3, 263,430
Expenditures:
Benefits__________________________________________________________
Miscellaneous_____________________________________________________
Extraordinary expenditures (payments to withdrawing members)____
Total expenditures______________________________________________
Cost of administration.—The cost of administration of the unem
ployment-insurance associations of the various groups of unions for
the year 1929 is shown in Table 48:
T a b l e 4 8 . — Cost of administration of insurance section of unions, by general trade
group, 1929
[Conversions into United States currency on basis of florin=40.2 cents]
General trade group
Building trades.................. ..................................................................
Diamond industry____________________________________________
Factory industries............................................................................... .
Printing trades_______ ____ ___________________________________
Commercial and office workers_________________________________
Hotel- industry________________________________________________
Woodworking industry________________________________________
Hairdressing industry...........................................................................
Clothing industry................. ........................... ................................. .
Agriculture_____________________________ _____ ________________
Metal industry_______________________________________________
Mining industry______________________________________________
Supervising personnel____________________________ _____________
Tobacco industry..................................................................................
Textile industry......................... ........................................................
Transport trades, fishing and shipping............. ...............................
Foodstuffs industry..............................................................................
Other unions.........................................................................................
Local unions.................. .......................................................................
Total____________________________ _____ ________________
Number
of union
lodges
with in
surance
sections
Cost of administration
Netherlands
currency
United
States
currency
1,282
5
669
276
256
29
248
17
83
863
342
138
169
226
180
297
266
63
28
Florins
96,972.65
8,956.77
60,976.22
17,749.35
28,452.92
1,158.25
15,829.41
1,698.05
5,020.97
48,069.78
49,101.05
9,054. 79
8,430.88
21,645. 54
32,970.85
53,249. 91
19,223.74
3,618.86
6,769.89
$38,983
3,601
24,512
7,135
11,438
466
6,363
683
2,018
19,324
19,739
3,640
3,389
8,702
13,254
21,406
7,728
1,455
2,722
5,437
488,949.88
196,558
326
UNEMPLOYMENT INSURANCE
Present financial condition.—According to official reports the total
amount due to all creditors in connection with advances in former
year is as follows:
Total amount clue the National Government___ 1,866, 836 florins ($750,468)
Amount due the city of Amsterdam and other mu
nicipalities in connection with support of
43,283 florins ( $17,400)
Diamond Workers’ Union___________________
Advances from unions, to be repaid at same time
as debts mentioned above____________________
267,411 florins ($107,499)
Total___________________________________ 2,177, 530 florins ($875,367)
The net assets of all the unemployment insurance sections of the
subsidized unions in the Netherlands at the end of 1929 was 9,978,245
florins ($4,011,254). A statement of the form in which this reserve
is invested was not obtainable, but the unemployment decree of
1917 provides that the minister shall publish annually a list of the
securities which may be considered suitable for the investment of
moneys belonging to the funds of any workmen’s unemployment
insurance association.
Basis of Contribution and Benefits
As has already been stated, the amounts of members’ contribu
tions for the unemployment insurance associations are fixed by the
unions to which the associations belong, and are based solely upon
the unions’ estimates of the amounts required. No information is
available as to the means employed for the calculation of the con
tributions and benefits, but it is stated by members of the various
unions in Amsterdam that actuarial calculations were not actually
employed, but that the experience of the unions themselves and of
the unions in other countries served as a guide in fixing the amounts.
Attitude of Various Groups Toward System
The director of the Bureau of Unemployment Insurance states
that “ the general opinion is that compulsory insurance would be
preferable to voluntary insurance. The workers are of the opinion
that compulsory insurance is absolutely necessary, the benefits re
ceived under the present system being too small. Public opinion is
disinterested.”
In respect to opposition to the present law, the director of the
Bureau of Unemployment Insurance says, “ There is no general
opposition to the principle of unemployment insurance. Employers
object to a system which is administered by the workers’ unions.”
These conclusions bear out those gained by the writer of this
report during his residence of over three years at this post, and the
statements made by a large number of people of all classes who have
expressed their opinion during the investigation. A formal opinion
stated in reply to a direct inquiry is nearly always given in somewhat
guarded language. However, the writer had opportunity to speak
informally regarding the unemployment insurance with workmen
of many different classes, such as diamond cutters, carpenters,
plumbers, chauffeurs, railway workers, seamen, dock workers, ship
yard workers, iron and steel workers, plasterers, commercial em
NETHERLANDS
327
ployees, and many others, and in each case the worker expressed his
opinion that the benefits paid by the insurance associations is entirely
inadequate to maintain anything like a decent standard of living,
and that this condition is likely to continue until a different scale of
benefits is established by law.
With respect to abuses which might arise if larger unemployment
benefits were paid, it was pointed out by the better-informed
workers that even the present law provides that the unemployed
worker must register immediately as in search of work, and that if
he refuses to accept such proper employment as he may be offered, the
benefits stop at once; that the unions themselves are not anxious to
see their funds exhausted by the granting of benefits fraudulently;
and that the workers as a whole will not permit a dishonest workman
to deplete a fund to which they are contributing for their own pro
tection. The operation of the unemployment insurance system in the
Netherlands apparently justifies this opinion, as there is little com
plaint of fraud, and the officers of the union are by no means lax
in their duty in connection with the granting of benefits.
Most workmen feel that the present scale of wages does not permit
them to pay higher contributions, although they agree that with
reasonably steady work they might be able to pay somewhat more.
With respect to the employers, the writer has not encountered
many who really object to the administration of the insurance funds
by the union, and such opposition as was observed appeared to be
based more on innate dislike of social legislation. The objection
was offered that inasmuch as the funds come to a certain extent from
the employers, through taxes, the latter should have a voice in the
expenditure, but it was not alleged that the present system is dis
honestly administered. There are, of course, a certain number of
extremists who would put upon the State the entire cost of maintain
ing the unemployed.
As already noted, the director of the Bureau of Unemployment
Insurance states that no data or opinions regarding abuses are avail
able, but, generally speaking, very few abuses occur under the present
system. This confirms the opinions advanced by the many persons
who were informally consulted by the writer regarding the operation
of the law.
There is constant agitation for an improvement of the system for
the relief of unemployment, and although the questions being con
sidered at the moment concern only measures of relief during the
present depression which can 110 longer be remedied by new insurance
legislation, the ultimate aim is to perfect some system which will
prevent the recurrence of emergencies such as that now existing,
Norway57
Unemployment insurance was inaugurated in Norway in the year
1894 by a printers’ trade-union called the Norwegian Central Asso
ciation of Book Printers. In the year 1900 three other trade-unions
established similar insurance systems, while in 1904 the number in
creased to eight national trade-unions, as well as a few local tradeunions, comprising a membership of approximately 10,000 workmen.
The law of June 12, 1906, and a supplementary law of June 25,
1908, established an unemployment system subsidized by the Govern
ment. This law was originally passed as a temporary makeshift,
but remained in force until August 6, 1915, when a new law on the
subject was enacted. Although several amendments have been made
to the law of August 6,1915, its main features are still in effect.
Type of System
The system of unemployment insurance now in force in Norway is
of the voluntary type, and under the control of the individual tradeunions. In order to qualify for Government subsidies, the law re
quires that the by-laws of the insurance organizations must conform
to certain regulations outlined by the law regarding the amount
contributed by the insured and the extent of relief furnished the
unemployed. The law also provides that relief can be extended only
to workers for whom employment can not be furnished by the tradeunion. In other words, the worker must be willing to accept any
work offered him by his union, otherwise he will not be eligible to
participate in the unemployment funds. The law provides further
that the insurance funds can be used only for the payment of unem
ployment benefits and for no other purpose.
Coverage of System
Table 49 shows the classes of persons or industries covered in the
year 1929, the latest year for which statistics are available, with the
average number of members in that year as compared with the
year 1928:
57 Report prepared by Thomas H. Sevan, American consul general, Oslo, as of Apr. 23,
>31.
328
329
NOEWAY
T a b le
49.— Number of persons covered by unemployment insurance in 1928 and
1929 , by trade-unions
Number of
members
Iron and metal workers............... .
Central Association of Book
Printers......................................
Furniture industry......................
Bakers and pastry makers............
Boot and shoe makers__________
Lithographic trade.................... .
Jewelers and goldsmiths ...............
Molders....................................... .
Hide, leather, and rubber trade_
Bookbinders....................... ..........
1928
1929
10,995
12,743
3,400
1,168
1,746
2,217
544
500
1,661
457
1,344
3,400
1,460
1,780
2,256
552
500
1,800
511
1,391
Number of
members
Name of union
Name of union
1928
Trade and office workers.............
Meat industry.............................
Tobacco workers..........................
Transport workers.......................
Association of Engineers..............
Association of Pharmacists.........
Association of Mates_____ _____
Association of Office Employees.
Bergen’s Merchants’ Association.
Association of Masons.................
4,200
605
855
1,383
2,107
500
300
918
__
1,315
1929
4,200
690
894
1,745
2,141
500
355
907
120
<*>
* Discontinued.
The following important groups of workers are not included:
Number of
members
(approximate)
Building industry_____________________________________ 11,000
Paper and cellulose--------------------------------------------------------11,200
Norwegian Laborers Association (includes miners, construc
tion workers, road, and railroad workers—unskilled la
borers)_____________________________________________ 7,000
Planing-mill workers___________________________________ 3, 700
Chemical industry_____________________________________ 9, 700
Association of Foresters and Farmers______________ ,____ 11, 000
Association of Tailors-------- ------------------------------------------ 2,000
Textile workers_______________________________________ 3,300
Contributions
The contributions vary in proportion to the number of unemployed
persons relieved and the extent of relief granted, but the total thereof
must equal at least one-half of the benefits paid. The contributions
range from 0.15 krone (4 cents)58 to 2 kroner (53.6 cents) per week.
The State subsidy is equal to one-half of the benefits paid, two-thirds
of which are collected through local taxation from the commune
where the persons receiving the benefit last resided for a period of
six successive months. The contribution from the State Treasury,
therefore, amounts to only one-sixth of the amount paid the worker.
Benefits are paid only to persons who are Norwegian subjects or who
have resided in the Kingdom for a period of two years, prior to the
payment thereof. Exceptions can be made to the two years’ residence
rule, in the event that there is a reciprocity agreement with the
foreign country concerned. Employers do not contribute to the funds.
Benefits
In order to receive benefits from the funds the individual in ques
tion must have been unemployed for a period of at least three days
(this varies in certain funds up to 14 days). At least 26 weekly con
68 Conversions into United States currency made on basis of krone at par= 26.8 cents.
330
UNEMPLOYMENT INSURANCE
tributions must have been paid before relief can be allowed. Benefits
are paid for 13 weeks of each year, regardless of the number of con
tributions paid, provided the 26 weekly contributions have been made.
During the period of depression, which lasted from 1918 to 1924,
it was made possible through temporary legislation to extend the
period of relief and to grant Government subsidies to certain funds
amounting to two-thirds of the total benefits paid. Permission to
extend the period of relief, in certain cases to 180 days a year, was
given 11 trade-unions. As an extraordinary Government subsidy, in
excess of the grant of one-half of the relief mentioned in the fore
going, a total of 3,112,135 kroner ($834,052) was paid to 21 unem
ployment organizations during the period 1918 to 1923. The same
temporary legislation contained provisions permitting recently estab
lished funds to begin the payment of relief immediately, without the
stipulated waiting period, which necessitated extra contributions
from the Government and from the organization concerned. The
additional amount paid by the State in the years 1918 to 1921 for this
purpose totaled 470,436 kroner ($126,077) and a similar amount was
paid by the organizations. These temporary measures have long
since been abolished.
The Government and the various municipalities have recently pro
vided considerable relief work for unemployed laborers who do not
hold unemployment insurance. For the fiscal year 1928-29 the
Parliament voted 2,200,000 kroner ($589,600) for this purpose.
Administration
The administration of the various funds is handled by the labor
unions, which in turn are controlled by the State. Quarterly reports
must be furnished to the Government inspector of labor and unem
ployment insurance. This official supervises the local administra
tion of the insurance schemes and in the event of any fraud or other
irregularities immediately suspends all activities of the organiza
tion until a thorough investigation has been made. It is also his
duty to see that all contributions and benefits paid are in accordance
with the law. Contributions to the funds are generally paid in cash,
although certain schemes use the stamp system. This is entirely
optional, however.
Grievances and Disputes
Serious grievances are submitted to the Department of Social A f
fairs for final settlement.
Statistics of Operation
The number of persons covered by the present system totaled ap
proximately 36,000 in 1929, representing about 10 per cent of the
total number of workmen in the country. The union’s total member
ship is about 133,000, whereas the total number of workmen for whom
insurance relief should be provided is about 300,000.
Following is a statement showing the number of persons who re
ceived benefits in 1929, classified according to union. No statistics
331
NORWAY
giving a classification by sex are available, but there are said to be
very few women.
Number of
beneficiaries
Iron and metal workers--------------------------------------------------- 2,660
Central Association of Book Printers-----------------------------(*)
Furniture industry___________________ __________________
280
Bakers and pastry makers----------------------------------------------324
Boot and shoe makers----------------------------------------------------694
Lithographic trade______________________________________
85
Jewelers and goldsmiths_________________________________
51
328
Molders_______________________________________________
Hide, leather, and rubber trade----------------------------------------138
292
Bookbinders-----------------------------------------------------------------Trade and office workers_________________________________
133
Meat industry_________________________________________
62
Tobacco workers_______________________________________
182
Transport workers______________________________________
247
Association of Engineers________________________________
37
Association of Pharmacists______________________________
28
Association of Mates____________________________________
16
Association of Office Employees--------------------------------------35
Bergens’ Merchants’ Association_________________________
2
Total receipts from all sources in 1929 were 1,611,395 kroner
($431,854), whereas expenditures amounted to 1,313,880 kroner
($352,120).
Table 50 shows the number of members, the amount of benefits paid
and contributions received, together with the amount of ordinary
subsidy and extraordinary subsidy granted for the years 1920 to
1929:
T a b l e 50.— Number of members, amount of benefits paid and contributions received%
and amount of ordinary and of extraordinary subsides, 1920 to 1929
[Conversions into United States currency on basis of krone=26.8 cents]
Benefits paid
Year
Num
ber of
insured
1920........... 116,425
1921............. 102,527
1922__......... 80,857
1923............ 62,704
1924........... 41,416
1925............ 41,247
1926............. 38,297
1927-.......... 36,544
1928............. 36,215
1929............ 37,945
Norwe
gian
currency
Contributions
received
Ordinary subsidy
Extraordinary
subsidy
United
Norwe United
Norwe United Norwe United
States
States
States
gian
States
gian
gian
cur
currency currency currency currency currency currency rency
Kroner
1,693,200 $453,778
13, 111, 032 3, 513, 757
6,382, 557 1, 710, 525
2,440,858
654,150
1,613, 659 432,461
1,943,961
520,982
2, 956,692
792,393
1,823,471
488,690
1,188,958
318,641
1,060,309
284,163
Kroner
Kroner
Kroner
1,077,223 $288,696 415,961 $111,478
103,056
4,425,028 1,185,908 5,425,017 1,453,905 2,183,786
844,158 3,395,043
3,149,843
909,872
867,957
1, 520,142 407,398 1,295,163
347,104
150,278
876,664
234,946
874,226
234,293
224,253
198,459
836,765
740,518
852,857
228,566 1,468,887
393,662
806,365
216,106
243,883
910,012
793,240
212,588
536,571
143,801
829,865
222,404
720,896
193,200
$27,619
585,255
232,612
40,275
The various organizations are responsible for the administration
costs. Statistics are not available showing the cost of operating the
Government inspectorate, since this institution is engaged in other
work as well and separate operating statistics are not maintained.
89 Not reported.
65655°— 31----- 22
332
UNEMPLOYMENT INSURANCE
Inasmuch as the contributions vary in proportion to‘the number
of unemployed persons and the extent of relief granted, there is,
as a rule, only a very small balance at the end of each year. Thus at
the end of 1929 there was a surplus of 606,000 kroner ($162,408) for
all the funds in operation.
Calculation on Actuarial Basis
The contributions and benefits are not based on actuarial calcula
tions, because this is said to be unsuitable to the systems now in
operation.
Attitude of Various Groups Toward System
Although there has been general satisfaction with the present
system, at a meeting of the various trade-unions held recently a bill
providing compulsory unemployment insurance was passed, but in
another form than that which was introduced in Parliament last
year by the Liberal (Venstre) Party. The opposition to the bill in
its present form is to the payment of contributions by the work
men, as they maintain that all expenditures should be borne by the
employers and by the State. The employers are naturally opposed
to any system which would entail additional expenditures, although
they are not opposed to the principle of unemployment insurance.
Inasmuch as the bill providing compulsory insurance was introduced
by the Liberal Party, the attitude of the public in general is not
known.
The bill above referred to was introduced in the Norwegian Par
liament last year, but did not come up for discussion before the
closing of the Parliament. There has been an election in the inter
vening time, hence the bill must be presented as new legislation.
Abuses Under System
As the funds which are now in operation are subject to very strict
control there have been no abuses worthy of mention.
Poland60
Compulsory unemployment insurance was established in Poland
through the basic law of July 18,1924, and subsequent minor changes
under which all wage earners (classified in the law as physical work
ers), regardless of sex, in industrial or commercial enterprises
employing five or more workers must be insured against unemploy
ment by the owners or operators of such enterprises. The system was
extended to salaried workers on January 3, 1926.
Agricultural workers, the most extensive group by far in Poland,
are excluded from the State unemployment insurance, as well as
industrial workers in enterprises where less than five wage earners
are employed. The provision whereby all industrial workers, irre
spective of the size of the enterprise in which employed, were to be
included in the compulsory unemployment system effective January
23, 1931, has been suspended for a period of two years from the date
mentioned.
In comparison with most other European countries which have
established compulsory unemployment insurance in various forms or
restricted to certain occupational groups, its introduction in Poland
was comparatively late. This may be explained in part by the much
smaller extent of industrial development when Poland was reestab
lished as an independent State following the war than in 1924; also
the unfavorable currency and fiscal situation was a deterrent in this
connection, it is believed. However, this gave Poland, at the time the
Polish system was devised, an opportunity to refer to the experience
other countries had had with unemployment insurance.
Wage Earners
Contributions
The assessment for unemployment insurance amounts to 3 per cent
of the wages paid the insured workers, of which the employer pays
1y2 per cent, the employee one-half of 1 per cent, and the State the
remaining 1 per cent. In 1929 the rate was reduced to 2.7 per cent,
but on account of the heavy increase in unemployment the rate was
reestablished at 3 per cent, effective April 1,1931, which was the rate
when Polish unemployment insurance was introduced in 1924.
Benefits
In order to be eligible for unemployment benefit, the insured must
have been employed for a minimum of 20 weeks during the 12 months
preceding his notification of unemployment and in an enterprise sub
60 Report prepared by Harry L. Franklin, American consul, Warsaw, as of Apr. 11, 1931,
assisted by T. H. Chylinski, clerk.
333
334
UNEMPLOYMENT INSURANCE
ject to compulsory insurance. His application for benefit must be
filed within one month after ceasing to be employed.
Allowances amount, in the case of unmarried workers, to 33 per
cent of the last wage received; for workers with one or two depend
ents, 38.5 per cent; for workers with two to five dependents, 44 per
cent; and for a workman supporting a family of more than five
dependents, 55 per cent. Prior to July 1, 1929, these rates were 10
per cent less than the present percentages. The maximum daily wage
for computing the foregoing allowances has been set at 10 zloty
($1.12)61 since July 1, 1929, prior to which it had undergone succes
sive increases over the initial maximum rate of 5 zloty (56 cents)
established in 1924.
There is a waiting period of 10 days as unemployed before the
insured is eligible to the benefit. Allowances are paid during a
period of 13 weeks’ unemployment, and may be extended to 17
weeks in exceptional cases. Rights to the unemployment benefit are
forfeited if the insured refuses employment for which he is qualified
except in an establishment involved in a strike. Such proffered em
ployment may also be refused if housing facilities in the neighbor
hood of such establishment are not available. Upon expiration of
the allowance payments after 13 or 17 weeks, as the case may be, the
unemployed worker, if destitute, has to apply to the communal or
municipal welfare agencies for aid.
Administration
The Central Unemployment Insurance Bureau is administered by
a board of management, subject to the final jurisdiction of the Min
ister of Labor. The chairman of the board and two additional
members are appointed by the Minister of Labor; one member repre
sents the Minister of Finance; labor is represented by six members
and the employers by four; and the district and communal governing
bodies furnish four representatives, making a total of 18 members on
the board, including the chairman. The names of labor representa
tives are proposed to the Minister of Labor, who makes the appoint
ments, by the largest trade-unions in Poland, while the employers’
representatives on the board are recommended by the Central
Employers’ Association.
There are 22 district unemployment-insurance offices, correspond
ing with the number and location of the State employment offices, to
assist the Central Unemployment Insurance Bureau in administering
the system. Each district office has a board, whose chairman is the
district director of the State employment office; labor is represented
by 3 members, the employers by 2, and the district and communal
governments also by 2 members.
The district unemployment-insurance offices are assisted by such
municipal and rural communes as have been found qualified to carry
on this character of work, as well as by the higher public authorities,
mayors, etc. Branch agencies, so designated by the central bureau at
Warsaw to assist the district offices, aggregated 446 at the close of
* Conversions into United States currency made on basis o f 1 zloty at p a r= 1 1 .2 2 cents.
335
POLAND
the year 1929, of which 221 represented higher public authorities,
129 municipal communes, 89 rural communes, and 7 sickness insur
ance offices.
Unemployment contributions are paid in cash by the employing
enterprises directly to the appropriate district unemployment-insur
ance office or to the latter’s designated agent. The workers have
nothing to do with these payments, as the employers deduct the share
due from the worker at the time wages are paid.
Recipients of unemployment-insurance benefit are required to re
port in person twice each week at the nearest designated agency of
the district unemployment-insurance office. There are no data avail
able regarding the frequency and extent of fraudulent claims for
benefits.
Disputes and Grievances
Disputes and grievances are adjusted in the first instance by the
appropriate district office, from whose decision appeal may be made
within 8 days to the district appellate commission, which is obliged
to render a decision within 14 days after receipt of appeal. I f the
appeal relates to the payment of contributions, these must be con
tinued pending judgment by the district appellate commission, which
commission is composed of a chairman appointed by the Minister of
Labor upon recommendation by the Central Unemployment Insur
ance Bureau; the other two members represent labor and the em
ployers, respectively. The commission’s decision may be set aside
by the Minister of Labor on request by the central bureau mentioned
on the ground that it is contrary to law, that the principles of court
procedure were violated, or that the district appellate commission
exceeded its legal powers.
Statistics of Operation
Number of persons insured against unemployment.—There has
been a steady increase in the number of persons covered by com
pulsory unemployment insurance following its establishment in 1924,
with the exception of the year 1930, owing to the decline in indus
trial production during that year and the prevailing general trade
depression. The average for 1930 has not yet been compiled, but
it is estimated to be around 900,000. Figures for prior years are
shown in Table 51:
T a b le
51.— Average number of persons insured against unemployment in Poland#
1925 to 1929
Year
1925.................................................................................
1926.................................................................................
1927................................................................................
1928............................................................................. .
1929..............................................................................—
Average
number of
insured
Per cent of
number in
1925
537,171
625,338
774,321
932,637
1,004,913
100
109
135
163
175
The considerable growth in 1927 and 1928 is attributable to the
industrial expansion which took place in those two years, while the
336
UNEMPLOYMENT INSURANCE
less accelerated increase in 1929 was on account of the extremely
severe winter and the beginning of the economic depression toward
the year’s close.
According to the last census, completed in 1921, there were 13,917,060 persons engaged in gainful occupations in Poland, of which
number agriculture accounted for 10,269,867; industry and mining,
1,266,382; commerce and insurance, 518,766; and the remainder in
various smaller groups. Inasmuch as the largest labor group, agri
culture, is excluded from the compulsory-insurance system, it is
estimated that not over 25 per cent of the workers (both skilled
and unskilled) are covered by the State unemployment insurance.
Receipts and expenditures.—Contributions paid in during the past
six years by workers and employers and by the State are shown in
Table 52:
T a b le
52.— Contributions paid by the workers and employers and by the State,
1925 to 1930
[Conversions into United States currency on basis of zloty =11.22 cents]
Contributions
State
Workers and employers
Total
Year
United
United
United
Polish cur States
cur States
cur Polish
cur Polish cur States cur
rency
rency
rency
rency
rency
rency
1925............... ............... ..........
1928....... ......................... .........
1927...........................................
1928 ..........................................
1929...........................................
1930...........................................
Zloty
13, 790,514
15,941,756
25,578,267
32,072,772
34,057,500
31,964,952
$1,547,296
1,788,665
2,869,882
3,598,565
3,821,252
3,586,468
Zloty
6,895,257
7,970,878
12,789,133
16,036,386
17,028,750
15,982,476
$773,648
894,333
1,434,941
1,799,283
1,910,626
1,793,234
Zloty
20,685,771
23,912,634
38,367,400
48,109,158
51,086,250
47,947,428
$2,320,944
2,682,998
4,304,822
5,397,848
5,731,877
5,379,701
The decline in contributions during 1930 was due to the decrease
in the number of persons insured.
Table 53 shows the disbursements for benefits since 1925, together
with the average contribution for each insured person:
T a b le
53.— Disbursements for benefits and average allowance and contribution
per person, 1925 to 1930
[Conversions into United States currency on basis of zloty* 11.22 cents]
Total benefits paid
Average benefit
per person
Average contri
bution per person
Year
Polish
currency
Zloty
1925............................................................. 23,169,140
1926.............................................................. 18,864,368
1927.............................................................. 16,055,170
1928............................................................. 20,680,480
1929.............................................................. 49,794,663
1930............................................................. 104,453,000
1Not yet compiled.
United
Polish United
Polish United
States
States
States
currency currency currency currency currency
$2,599,578
2,116,582
i, 801,390
2,320,350
5,586,961
11,719,627
Zloty
493
507
634
731
887
0)
$55.31
56.89
71.13
82.02
99.52
Zloty
36
38
49
50
53
0)
$4.04
4.26
5.50
6.61
5.95
337
POLAND
The years 1925 and 1926 show only a moderate variation, while
the figures for 1927, curiously enough, disclose an increase in the
average benefits paid, but a still greater increase proportionately
in average contributions per person; this year (1927) appears to be
the most successful one of the system’s operation since adoption.
The steady increase in average contributions per person since 1925
reflects the steady gain in wages which has taken place. During
the present year, however, there is a downward trend in wage levels.
Extremely cold weather (the most severe in over 100 years) accounts
for the unusual increase in disbursements in 1929, while the figure
for 1930 represents more than a fourfold increase over the disburse
ments for 1925 and is attributable to the severe economic depression
and its concomitant of severe industrial unemployment.
Administrative costs.—The development ox administrative costs
during the past six years and their relation to aggregate disburse
ments may be seen from Table 54:
T
able
5 4 . — Administrative costs and per cent of total disbursements, 1925 to 1930
[Conversions into United States currency on basis of zloty =11.22 cents]
Total administrative
costs
Year
1925...................................................................
1926............................. - ....................................
1927...................................................................
1928...................................................................
1929...................................................................
1930...................................................................
Polish
currency
United
States
currency
Zloty
3,150,394
4,424,960
5,254,871
5,422,795
5,768,749
9,081,106
$353,474
496,481
589,597
608,438
647,254
1,018,900
Per cent
of total
disburse
ments
6.59
5.41
6.51
8.10
9.85
7.92
The percentage costs of administration shown above for the years
prior to 1929 do not correspond proportionally with the amount
of disbursements for such years as indicated in the preceding section
of this report. This is due to the fact that considerable sums of
so-called “ emergency relief ” funds appropriated by the State were
distributed through the unemployment insurance administrative
organizations to unemployed persons after the expiration of the
13 or 17 weeks’ regular benefit, such additional disbursements being
added to the total amount of regular disbursements by the Central
Unemployment Insurance Bureau in arriving at the percentage of
administrative costs for the years in question. Emergency unem
ployment relief by the State was discontinued on January 1, 1929.
The heavy increase in total administrative costs in 1930—9,081,106
zloty ($1,018,900), as against 5,768,749 ($647,254) in 1929—was
occasioned by an increase of over 100 per cent in the amount of
disbursements. Administrative costs in the central bureau and dis
trict offices were not greatly augmented, but those by the local
agencies of district offices, which receive 3 to 5 per cent of the
benefits disbursed as administrative costs, gained in the proportion
that disbursements increased.
338
UNEMPLOYMENT INSURANCE
The financial situation of the Polish unemployment-insurance
system is highly unfavorable from the standpoint of self-support.
During 1930 disbursements were over twice the amount of workers’
and employers’ contributions plus the State share fixed by law; this
deficit of over 50,000,000 zloty ($5,610,000) was paid from the
public treasury. During the present year this situation has become
more aggravated, the legal contributions now covering less than
one-fifth of the actual disbursements, according to the Director of
the Central Unemployment Insurance Bureau, on account of the
heavy decrease in industrial employment.
Actuarial Basis of System
When compulsory unemployment insurance was established in
Pol
@FedFRASER