I want to congratulate the AFL-CIO for convening this Conference on Unemployment. We have been conferring on the subject of unemployment up on Capitol Hill this week, also – especially those Republicans who face the prospects of unemployment in November. They have tried to take heart from the President’s many declarations, the Vice President’s optimism, and the statements of their other leaders – but they realize that when all has been said and done, much has been said.
My only regret is that you have to listen to four more speeches on the ways to end the recession before you can get back to work. A Senator should not admit it – but there are times when I think that what this country needs most is fewer politicians telling us what this country needs most.
Because what we need is action – vigorous, forthright, decisive, imaginative action. Exactly twenty-five years ago, the nation needed that kind of action – and the nation got it through Franklin Roosevelt. Twenty-five years ago this month, Franklin came to Washington. He was figuratively watched, with hope and fear, by millions of unemployed workers – dispossessed farmers – panicky bankers – and pessimistic businessmen. The nation was in a state of collapse. His predecessor insisted that everything that could be done had been done – that "the major difficulty is in the state of public mind" – that the primary need was for "confidence" – and that the new President-elect could best secure this through balancing the budget and abandoning his schemes for public works, mortgage guarantees, and assistance to jobless workers.
But Franklin Roosevelt brought down to Washington with him something more than confidence. He brought imagination and ideas. He brought determination and action. He brought leadership – articulate, thoughtful, visionary, resourceful leadership; and he brought a program.
Some parts of that anti-depression program were enacted immediately – other parts were passed in the years that followed. The nation was armed with new weapons to battle recession, depression, and unemployment – new floors under our purchasing power – minimum wages, social security, farm supports, bank deposit insurance and all the rest. One of the most important was the enactment of a comprehensive program for unemployment insurance.
Franklin Roosevelt did not wait for the states to pass unemployment insurance laws, even though he had urged such action as Governor of New York. He knew that no state would take the lead on its own since that would only put that state’s industries at a further tax disadvantage. So Franklin Roosevelt did not mark time pleading with the various state legislatures to take action. He requested the Congress to act – and the Congress did act.
That is the kind of leadership we need in Washington today – and we need it on the issue of unemployment insurance. Unemployment has passed the five million mark. Millions of others are working only a few days a week. Still others are moving from the farm to the city. Over one third of our major industrial centers are officially classified as areas of substantial labor surplus. The slump is not confined to any one industry – it is hitting textile workers in Massachusetts, auto workers in Michigan, steel workers in Ohio, aircraft workers in California, oil workers in Texas, coal miners in West Virginia, farm equipment workers in Illinois, machinery workers everywhere – workers in every kind of industry in every part of the country.
This is the situation that the unemployment insurance program was intended to meet. It was intended to provide benefits to workers that were large enough and long enough to enable them to pay their rent, their grocery bills and their doctor bills until new work could be found. It was intended to put back into the community at least 50% of the loss in wage payments.
But the tragic fact of the matter is that our unemployment insurance program today is too weak and outmoded to do the job. It replaces less than 20% of these lost wages. In some hard-hit areas where benefit rights have been exhausted, it is putting back into the community as little as 10% of lost wages. The average worker finds his unemployment check to be only one third as large as the pay-check on which his family depended – as did the merchants in his neighborhood. He cannot pay his bills – the merchants cannot meet their expenses – more cutbacks, layoffs and shutdowns follow.
The question is: what are we going to do about it?
1. The first suggestion is that we ignore unemployment compensation and concentrate on public works. I do not deny the value of a sound public works program – although I do not think we need two billion dollars in new post offices as much as we need 200,000 new public school classrooms – 838,000 hospital beds – or new homes for the 17 million Americans whom Fortune Magazine says "live in dwellings that are beyond rehabilitation – decayed, dirty, rat infested, without decent heat or light or plumbing." That’s what we need more than post offices. Our Republican friends keep saying: "It’s time to quit running America down." I say it’s time to start building America up.
But public works are not enough. A new super highway in Oklahoma will not give work to the unemployed textile workers in Lawrence. A new reclamation dam in Utah will not help the unemployed auto worker in Detroit pay his landlord. Even new schools, hospitals and housing projects will not give enough help to the right people in the right places at the right time. Let us have the right kind of public works, by all means – but let us not forget that part of the public which is not at work.
2. The second approach recognizes the need for improving our unemployment insurance system but relies on the states to take action. Let’s face it – the states are not going to act. They would not act on their own in 1935 – they are not, with a few admirable exceptions, going to act now. The President has urged them to improve benefit standards for the past several years. Not one state legislature has met the standards he requested. Twenty years ago, the unemployment insurance program meant something – most states paid a maximum benefit higher than two-thirds of average weekly wages. But that ratio has declined in every state. In some states, the most a worker can get is less than one-third of the average wage in his state. The founders of this program intended that unemployed workers would draw a benefit equal to at least 50% of their own regular earnings. This is what the program once provided – this is what the President requested the states to do – this is what they have been unwilling to do – and this is what the Congress must now do and do promptly.
3. The third approach to the inadequacies of unemployment compensation recognizes the necessity of Federal action – but calls simply for Federal payments to supplement those provided by the individual states. I would not oppose the enactment of any measure which would ease the hardships presently faced by our unemployed workers. And I recognize the importance of immediate action which may require some compromise such as this.
But let no one think that Federal supplementation provides any full or final answer to the problem. What would it do for the hundreds of thousands of unemployed workers who are not covered by the present law? Nothing! What would it do for the hundreds of thousands of other workers now without employment who have been disqualified from receiving benefits by the patchwork of harsh and inconsistent state eligibility requirements? Nothing! How much good will simply extending the time period do a worker receiving a benefit of less than $18 a week? And even if benefits are supplemented, is it enough to add 13 or 16 weeks to the worker’s benefit period if he is only eligible to draw benefits for less than 6 weeks to begin with?
I am delighted that the Administration finally realizes that Federal action is necessary to bolster the unemployment insurance program. But a temporary emergency measure for supplementation is not the answer. It encourages the state legislatures to do nothing as long as they know that Congress will bail them out every time there is a downturn. It encourages the Congress to do nothing on a long-range program as long as they can provide a stop-gap, patchwork measure when the need arises. In some forms, it rewards those states which have lagged behind the most, by giving their unemployed workers larger Federal payment to bring them up to the national standard. It ignores the role our permanent unemployment insurance system was intended to play and establishes instead, a precedent for falling back on temporary remedies whenever the system is really needed. It abandons the concept of social insurance, whereby each state’s employers pay the cost of the program – and instead doles out unemployment funds from the Federal Treasury like so many relief checks. Finally, the Federal supplementary approach ignores the existence of more than 8 billion dollars presently held in reserve for payment of unemployment benefits by the states – 8 billion dollars that should be flowing into our economy today if we could get benefit standards up and coverage extended.
4. The fourth and final approach to improving our unemployment compensation program is contained in the bill which Gene McCarthy has introduced in the House and which I have introduced in the Senate, along with Senators Douglas, Payne, Clark, McNamara, Mansfield, Murray, Proxmire, Green, Neuberger, Humphrey, Morse, Jackson, Chavez, Pastore, Kefauver, Magnuson, and Carroll.
Our bill would enact nationwide standards which all state programs would be required to meet. Every worker would draw a benefit equal to at least 50% of his own regular earnings, up to a maximum of two-thirds of the average wages paid in his state. Every worker would be able to draw benefits for a uniform period of 39 weeks instead of being cut off at the end of five, ten, fifteen or in many cases, 26 weeks as he is now. Every legitimately unemployed worker would be eligible to receive his unemployment insurance payment, regardless of the size of his shop and without harsh and discriminatory eligibility requirements. It is this kind of approach, I am convinced, that we need today to assist our unemployed – those receiving inadequate benefits, those who have exhausted their benefit rights, those unable to draw any benefits at all – men and women who have exhausted their inflation-eaten savings, who must conceal their pride and turn for assistance to their relatives, or to private charity, or to the public assistance roles.
This bill gives state legislatures time to adopt these standards. But it does not wait for that, in the face of the current recession. It provides for the immediate payment of these benefits to all unemployed workers, with the Federal government making up the difference. This is Federal supplementary action to be sure. But it is action which depends upon, instead of encouraging, long-range, permanent action by the Congress and the state legislatures.
There is no need, in short, for the Administration to introduce a new bill to increase unemployment benefits immediately. We have such a bill now. It is sponsored by 18 Senators. It is pending before the Senate Finance Committee. What we need now is not more bills, more studies or more speeches – what we need now is action on S. 3244.
Until we act, several million unemployed must somehow get by on benefits averaging less than $33 a week. More than a million others must somehow get by without any unemployment insurance benefits at all.
I do not say unemployment compensation constitutes the entire program necessary. We must shore up our other weakened anti-recession weapons such as our minimum wage laws with their inadequate coverage. We must take prompt measures to aid our areas of chronic labor surplus. We must restore the purchasing power of our hard pressed small farmers and small businessmen. We must take a variety of steps which your other speakers will outline to you this afternoon – giving help where help is needed – raising the nation’s standard of living instead of the cost of living.
It is your job to help us secure that kind of program – to get results, not promises. Those of us who are engaged in this battle are confident that you will not fail us. You may be equally assured that we will not fail you.
Source: Papers of John F. Kennedy. Pre-Presidential Papers. Senate Files, Box 900, "AFL-CIO Unemployment Conference, Washington, D.C., 12 March 1958." John F. Kennedy Presidential Library.