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"*** the payment of maternity benefits as such is completely eliminated." The railroad member of the Board states:

"The spirit of the law should never have contemplated that:

66* * * an employee coming under maternity provisions should, in effect, receive special benefits, since maternity involves neither hazard of railroad employment or involuntary illness or gain, without contributing a single penny to the fund ***”

The soundness of his position is demonstrated by the facts in the case set out below.

THE PERCENT OF EMPLOYEES WHO MAY POSSIBLY RECEIVE MATERNITY BENEFITS

There are currently some 22 million women in the labor force of the United States. Of this only some 100,000, less than one-half of 1 percent, are in railroad work. Of this one-half of 1 percent only a portion are married and of childbearing age. Only this tiny fraction of women in the railroad industry plus the small percentage falling under the Rhode Island system are covered by Government maternity-benefit systems. Obviously, the railroad system is inconsistent with the general social-security programs respecting maternity protection.

Women comprise about 6 percent of the railroad labor force and probably less than half of these are married and of childbearing age. Even of these, some cannot bear children for one reason or another.

Of the nearly 4 million births in the United States, only 3,900-about one in every thousand-were by mothers who were recipients of benefits under the railroad system with a comparable number of beneficiaries under the Rhode Island system. These represented the extent of Government maternity beneficiaries in the United States. Obviously maternity protection is not a general public policy.

PUBLIC POLICY AND PUBLIC INTEREST

In view of the fact that only a tiny fraction of births are covered by maternity benefits, it can hardly be said that provision of maternity benefits has been recognized as an appropriate part of social-security policy or has been found necessary in the public interest.

Thus, there is no merit in the criticism of the labor members of the Board that failure to pay maternity benefits for the one-in-a-thousand cases where they are presently paid "would be unmistakably against the best interests of railroad employees and public policy."

As a matter of fact, even as limited to railroad employees, only a very small fraction are protected—only about six in a hundred are women, probably less than half of these are married women of childbearing age. Maternity benefitscovering a happening which is generally voluntary rather than involuntary, and a hazard to which only a minor fraction of the work force is subject, can hardly be required "by the best interests of railroad employees"-over 90 percent of them cannot possibly qualify for the benefit.

In contrast with the maternity “hazard" 144,000 railroad employees of both sexes and all ages, received sickness benefits in 1955-56, averaging $360 per case, under the railroad system-including some women who also received maternity benefits. In addition, 3,900 women received maternity benefits averaging $913 per case. This latter was not protection against a hazard common to railroad employees. It was a special benefit to a small, selected group.

If the remaining 991⁄2 percent of all working women had received the same protection some 850,000 would have received an aggregate of around three-fourths of a billion dollars in benefits. There is certainly no national policy or special need justifying this special privilege under law.

No one has attempted to explain why the railroads should be required by law to provide this special system of benefits for the 1 in 200 working women who happen to be working for the railroads. Certainly they present no special situation requiring benefits not provided similarly situated women under social programs.

Whatever may have been the viewpoint when maternity benefits were first added to the railroad social-security system, it has become increasingly apparent

over the years that this addition to social security is not consistent with American needs, viewpoint or social policy.

EQUAL PAY, EQUAL PROTECTION, EQUAL JOB OPPORTUNITIES

A basic principle is involved in the provision of maternity benfits. Unions and management have properly agreed that a job should provide the same pay regardless of its incumbent. This is likewise the proper rule for fringe benefits. This principle is important not only in establishing the equal pay for equal work, regardless of sex; it is important in providing women job opportunities. Their employment at equal pay is destroyed if they receive some added special benefit, like maternity benefits, which others doing the same work cannot hope to receive.

Thus the doctrine of equal pay affords a strong reason for not providing special benefits to certain women employees which no other employee can possibly qualify for. It is not to the interest of women of childbearing age that their &employment involves extra labor costs. It not only is inconsistent with the equal pay principle, it tends to result in discrimination against their employment.

DISQUALIFICATION ON DISCHARGE FOR MISCONDUCT

Even the International Labor Organization in framing its Standards of Social Security in 1952, provides for suspending benefits payable on the contingency of unemployment "where the contingency has been caused by the willful misconduct of the person concerned."

The model State unemployment laws prepared by a special staff of the President's Committee in 1935, approved by representatives of labor, employers and the public, and submitted to the Senate Finance Committee by William N. Leiserson, then chairman of the National Mediation Board, provided for disqualification from benefits of persons discharged for misconduct connected with his employment.

Like refusal of suitable work or vol

Every State law has such a provision. This disqualification is not a penalty. untarily quitting a job without good cause, the individual concerned has removed himself from his job by his voluntary act, and unemployment insurance is intended to cover only involuntary unemployment of an individual occurring without fault on his part.

Furthermore, it is absurd to have a system which does not pay a person who quits without good cause but pays him if he gets himself fired by misconduct connected with his 'work.

Individuals denied benefits because their employment is terminated for misconduct connected with their work are fully protected against any possible abuse. The grievance machinery pays them full wages retroactively if their discharge or suspension is found unwarranted under grievance procedure rules. Their protection is particularly effective under railroad grievance procedures.

The railway labor executives' spokesman had only this to say against the proposal: "The railroads also propose to disqualify employees who are discharged for cause. Such a disqualification was contained in the original act in 1938 but was removed almost immediately thereafter. The reason for its removal was recognition of the fact that what is proper cause for discharge is usually highly controversial and is often the subject of sharp conflict between the carrier and the organizations representing employees. Furthermore, under the Railway Labor Act the National Railroad Adjustment Board is the tribunal established for the solution of such controversies. It was considered most undesirable that the Railroad Retirement Board should resolve such controversies incidentally to the adjudication of unemployment insurance claims or that it should delay the payment of claims pending resolution of the controversy by the National Railroad Adjustment Board. Nothing has occurred since that time to cast any doubt upon the wisdom of Congress in removing that disqualification."

The fact is that only in a minor percentage of cases is there any contest at all on the discharge or suspension-the facts are too clear and the employee concerned knows it.

This argument ignores all the basic reasons leading to the universal adoption, except for the railroad system, of this disqualification.

It fails to point out a single case where injustice has resulted under the State systems.

Certainly "discharge for cause" involves no more difficulties administratively than the other disqualifications.

The Board report to the committee does not support the railway labor executives' contention.

EXTENDED UNEMPLOYMENT INSURANCE BENEFITS

THE ISSUE

Apparently in recognition that the present maximum of some 26 weeks of unemployment benefits is as long a duration as can be defended under common unemployment insurance principles, the Railway Labor Executives' Association bill provides what are termed "extended benefits"-which would continue benefits for periods of various lengths for employees who at some time in their lives had some railroad employment in each of 60 or more calendar months. The issue is whether the proposed extended benefits should be adopted.

BURDEN OF PROOF

The supplementary statement of Mr. Lester P. Schoene on behalf of the Railway Labor Executives' Association as to the burden of proof is: "That burden with respect to a radical overhauling of the Railroad Unemployment Insurance Act cannot be met except by a demonstration from experience that the actual operation of the system is so unsatisfactory that radical revision is required."

GENERAL DESCRIPTION OF PROPOSAL

As stated by Mr. Schoene in his principal testimony, the railway labor executives' bill proposes that persons with 60 or more months of service, "unemployed beyond the 26 weeks of normal payments should receive further benefits proportionate to their years of service * * * graduated from *** approximately 18 months to 41⁄2 years ** *the maximum is $13,260."

ARGUMENT FOR PROPOSAL

Mr. Schoene argued that as "productivity increases and we either handle more business with the same number of employees or handle the same business with fewer employees *** at least some part of that improved productivity should be directed to alleviating the hardship of those who are permanently displaced from the industry *** people with many years of service, with skills not readily transferable to other industries, are being laid off and there is no job for them *** In other words, these people with long service *** have a claim in excess of 26 weeks of unemployment insurance * ** I am interested in these people who get displaced from their jobs after many years of service." He stated that the proposal in relating extended benefits to prior service was based on "The Washington job protection agreement * * * a collective bargaining agreement *** negotiated *** in 1936. It deals with a small phase

of this problem * * * permanent displacement of employees through mergers and consolidation."

He also stated that: "Further, it is a very definite purpose of the bill to provide an incentive to all railroad employers to employ experienced railroad men that have been permanently displaced somewhere else in preference to going out and hiring new men *** we have a very definite objective of making it expensive enough to the railroads not to employ these people so they will employ them."

Mr. E. L. Oliver, who appeared with Mr. Schoene, stated his conclusion that "unemployment figures establish a very grave problem of the displaced older railway worker for which the current unemployment compensation provision is clearly inadequate."

He also stated "The problem has been aggravated greatly by employment policies of the railroads; part of the remedy lies within the control of the carriers themselves."

STATISTICAL EXHIBITS

Mr. Oliver's arguments based on his statistical exhibits fail to demonstrate his thesis of special hardship of older workers. For example, he said: "Among unemployed workers between 40 and 45 years of age unemployment increased from 76 days average in 1948 and 1951 to 95 days average for 1956." He did not mention that for the same period, unemployment for all unemployed workers increased from 74 days to 90 days.

He further stated "in the last benefit year 137,600 railway employees drew unemployment benefits. Nearly 54,000, 39 percent of them were 45 years or more of age." He did not mention that almost 50 percent of all workers who qualified for unemployment benefits were 45 years or older, and hence that unemployment among the age 45 and older group was much less than among younger employees.

SENIORITY

Under seniority rules employees have job rights which carriers are obligated to respect under collective bargaining agreements. The general effect of seniority rules is to give superior tenure to 5-year service employees-the ones who would have extended benefit rights under the railway labor executives' proposal-over employees with less than 5 years' service. The proposal would give the additional protection to those who because of seniority need it least. The exception to this general rule usually exists because of the labor union's insistence on the way the seniority rules shall operate as applied to specific areas covered by the union agreements. These rules account for the great mass of hardship situations.

The alleged hardship cases of older workers, on analysis, will typically fall into two categories—

(1) Cases where the individual concerned is unwilling to take a job in another seniority district even though his experience might entitle him to that job-this usually because he would be classed below the youngest employee in that seniority district;

(2) Cases where because of his union's seniority rules he cannot take a position which might otherwise be made available.

Thus the basic situations of long-service employees which are presented as a reason for extended benefits for long-service employees are not attributable to railroad management, but rather to the seniority rules insisted upon by railroad labor.

The statistical argument that overall average railroad employment has declined some 30 percent in 12 years-averaging about 21⁄2 percent per year-even if a correct analysis, does not lead to a conclusion that persons are thereby necessarily thrown out of work as the normal attrition-quits, deaths and retirement-far exceed this percentage.

The statistical argument, presented by the brotherhoods' representatives based on the number of new employees, that old employees are involuntarily being replaced by railroad hiring policies is likewise without substance when it is remembered that under the seniority rules a new employee cannot be hired for any position to which any old employee has seniority rights, unless that employee waives these rights.

Even a casual inspection of the median age of railroad employees as compared with employees in general, makes clear that the highly organized railroad industry has far less problem than outside industry with respect to displacement of older workers. As previously mentioned, nearly half of the qualified railroad employees are 45 or older.

SUPPLEMENTARY BENEFITS

A series of privately negotiated supplementary benefits were presented as precedents in the course of the argument. These fundamentally differ from a social program enacted by law.

Even so none of the several plans referred to by Mr. Oliver afford a precedent. At the most, they extend the normal 6 months' benefit period an additional 6 months-usually at a lower benefit rate, and their payment is conditional on a

series of contingencies, financial limitations, etc., utterly lacking in the railroad unions' legislative proposal.

WASHINGTON AGREEMENT

As indicated above, the Railway Labor Executives' Association points to only 1 precedent-the negotiated Washington agreement of 1936-over 20 years ago. That agreement dealt with a radically different situation than does the pending proposal-railroad mergers.

As stated by Mr. Schoene, "recognizing the difference between that kind of displacement and the kind of displacement we are dealing with here, we could reasonably say we won't get into the extended benefits at all unless there is 5 years of service. * * * There is further the fact that the two situations differ fundamentally in that in the kind of displacement we are dealing with here it is impossible to identify the particular saving, or, in fact, to determine whether there is any saving."

Thus the pending proposal for extended benefits

(1) Is without precedent;

(2) Is contrary to all recognized unemployment insurance principles; (3) Would involve tremendous costs;

(4) Has not been justified by any showing of a compelling situation peculiar to the railroad industry; and

(5) If there is any serious situation, it manifestly stems largely from collectively bargained seniority provisions, established at the instance of the unions. There is not justification for legislation imposing on railroads the burden of supporting victims of union prescribed seniority rules.

WHAT THE PROPOSAL REALLY MEANS

Table D-7 of the 1955-6 annual report of the Railroad Retirement Board shows that in 1954 there were some 1,680,000 persons in railroad work at sometime during the year. Over a hundred thousand were 65 or older. Approximately 170,000 had worked in less than 12 months in their lifetimes in railroad service. Only some 307,000 of the remainder had service in less than 5 years. For the year, there were some 1,482,000 "qualified employees" who could draw benefits if unemployed. Of these over 1,200,000 appear to have had service in at least 60 calendar months. Thus some 6 out of 7 qualified railroad employees would come within the proposal for extended benefits-including some 100,000 past normal retirement age.

Thus in effect, for 6 out of 7 railroad employees, the proposal is to extend the maximum period of unemployment benefits from a present 6 months to periods of from 2 to 5 years-or longer in exceptional cases. This is indeed a radical change in concept of the purposes and limits of unemployment in

surance.

PRECEDENTS

There are certainly no legislative precedents for this radical change. The normal maximum benefit period is 6 months. Only 1 State is as long as 30 weeks, and many are less than 6 months, 26 weeks.

THE DOLE

At one time in England as a depression measure, the unemployment benefit system was substantially extended-and lost its former dignity and became known as the "dole." This was legislatively corrected so it affords a precedent against rather than for extending benefits under any public unemployment system.

The CHAIRMAN. Are there any others present who desire to submit any further information for the record? We will give you that permission. You can hand it to the clerk.

Mr. Staggers, do you have any questions?

Mr. STAGGERS. No, sir. Thank you.

The CHAIRMAN. The committee will stand adjourned, then.

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