General Nature of Plan.
The first fundamental policy question is whether the allowances
shall be in accordance with a uniform national pattern or in accordance
with the varying patterns developed under the 51 State, Territorial,
and District unemployment compensation laws. Since the payments
are to be made as a result of Federal military service, it is assumed
that a uniform national pattern is desired so that benefits shall
be calculated in the same manner, regardless of where the ex-serviceman
makes application or where he lives.
Amount, Character and Duration of Benefits.
Another fundamental question is whether the amount of allowance
should be a flat amount and for a fixed period of time, or whether
it should be related to the amount of the serviceman's base pay
or the length of his service. It is assumed that a flat allowance
is desired regardless of the amount of base pay or length of service.
A $12-a-week or a $15-a-week allowance for a specified number of
weeks of unemployment during the 12 months immediately succeeding
the period for which a "mustering-out" payment would be made might
be considered reasonable for a person without dependents. It should
be noted that only 3 State unemployment compensation laws pay benefits
uniformly for more than 20 weeks, and most States pay for a considerably
shorter period. Payment for a maximum of 26 weeks during a 12-month
period or payment for all weeks of unemployment during a 12-month
period might be considered. This 12-month period would be required
in many cases for a serviceman to develop new benefit rights under
a State unemployment compensation law.
Another fundamental question is whether the amount of the allowance
should be varied in accordance with the number of dependents. While
only the District of Columbia unemployment compensation law provides
dependents' allowances, it is assumed that it is desirable to take
account of dependents, especially since provision is made for dependents'
allowances for persons while in service. However, a secondary question
is whether the amounts allowed for dependents should be the same
as (or be related to) the allotments and allowances now being provided
or whether a separate schedule of dependents' allowances should
be established. Either approach would be feasible administratively;
however, if the dependents' allowances are to be related to the
allotments and allowances now being received several questions would
have to be decided. To mention only the more important, is it desired
to pay to dependents only the allowances or both the allotments
and allowances in addition to the unemployment allowance that the
man himself would receive? Is it desired to pay to Class B dependents?
Is it desired to consider a working wife to be a dependent? Is it
desired to fix a maximum amount on dependents' allowances?
If a separate schedule of dependents' allowances is established
the amount of the basic allowance may largely determine the number
of dependents who may be taken into account because of the desirability
of establishing a maximum allowance. For example, if the basic weekly
allowance were made $12, a dependent's allowance of $6 a week for
each dependent, up to a maximum of two or three dependents, might
be considered reasonable. If the basic weekly allowance were made
$15, a dependent's allowance of $7.50 a week for each dependent,
up to a maximum of two dependents, could be considered.
All but two State unemployment compensation laws provide for compensation
for partial unemployment--that is, when a person works so little
in a week that he earns less than his weekly benefit amount. It
is assumed that allowances should be paid to ex-servicemen for partial
unemployment on a basis which would encourage them to accept part-time
work. Such a formula might exempt the first $3 or $6 of weekly earnings,
in making deductions for earnings from the total weekly allowance.
Another question is whether allowances should be paid on a daily
or weekly basis. All but one State law provides for compensating
for unemployment in units of a week, although the method of paying
on a daily basis has certain advantages.
Payment During Disability.
Another fundamental question is whether unemployment allowances
should be paid regardless of whether the unemployment is due to
lack of work or physical disability. There are six possibilities:
(a) Pay unemployment allowances regardless of whether the unemployment
is due to lack of work or physical disability;
(b) Pay no unemployment allowances if the person is physically
unable to work;
(c) Pay unemployment allowances if the beginning of the period
of unemployment was due to lack of work, even though after the period
started the person became physically disabled;
(d) Pay unemployment allowances if the beginning of the period
of unemployment was due to lack of work, even though after the period
started the person became physically disabled, except when the individual
fails to accept suitable work offered to him through the employment
(e) Pay unemployment allowances if the beginning of the period
of unemployment was due to lack of work, even though after the period
started the person became physically disabled, so long as he would
have been held to be "available for work" under the State unemployment
compensation law of the State in which he is residing.
(f) Pay unemployment allowances if the beginning of the period
of unemployment was due to lack of work, so long as the extent of
any period of unavailability within a week is not such as to preclude
a finding under Federal regulations that he was available for work
"for the week." As indicated in (e), this is in accordance with
the present practice of some States.
At the present time one State is paying disability benefits. Other
States administer their laws in the manner indicated in (b), (e)
or (f). Alternatives (c) and (d) are intermediate suggestions. In
part, the decision as to whether to pay allowances during periods
of disability will depend upon the decision as to the effective
date of the program since administrative considerations must be
weighed with respect to any inclusion of disability benefits. There
can be no doubt as to the social desirability of providing the ex-servicemen
and their families protection during periods of sickness and disability.
With an appropriate allowance of time to get ready it would not
be impossible to administer disability benefits. It would be comparatively
simple if disability benefits are payable only for disability occurring
within periods of unemployment. If benefits are payable for disability,
regardless of whether it occurs within a period of unemployment,
the administrative task is more difficult and of a different character,
since it would be necessary to have Nation-wide facilities to determine
the fact of disability in individual cases. On the other hand, payment
of benefits for disability occurring within periods of unemployment
and failure to pay benefits for disability not occurring within
periods of unemployment will cause some anomalies and may be difficult
Another fundamental question is whether there shall be uniform provisions
relative to disqualification for the receipt of benefits or whether
the disqualification provisions in the various State, Territorial,
and District unemployment compensation laws shall be applicable.
The most important of the disqualifying conditions in these various
unemployment compensation laws relate to discharge for misconduct,
voluntary quitting, or unreasonable refusal to accept suitable employment.
The laws vary in defining the type of discharge, quit or refusal
which disqualifies and in the extent of the attendant disqualification.
It is assumed that specific and uniform disqualification provisions
are desired. It is also assumed that refusal or failure without
good cause to attend a training course as directed shall be one
of the causes for disqualification.
A related question is whether the interpretations of the disqualification
provisions and other provisions of the law shall be in accordance
with rules and regulations promulgated by a Federal authority or
whether they shall be in accordance with rules and regulations promulgated
by the various State unemployment insurance agencies. There is considerable
variation between the States in their interpretation of identical
language. It is assumed that the provisions should be interpreted
in accordance with rules and regulations promulgated by the Federal
Relation to Existing State Legislation.
Final decisions as to what the allowances should be,
what the disqualification conditions should be, and who should be
responsible for interpretations are dependent to a considerable
extent upon the relationship envisaged between the ex-servicemen's
unemployment allowances and the regular unemployment insurance benefits
payable under the various State, Territorial, and District unemployment
compensation laws. All but three States have enacted legislation
to freeze any unemployment benefit rights which persons entering
the armed forces may have possessed at the time of such entrance.
It is estimated that probably 50 percent of the persons entering
the armed forces had benefit rights in varying degrees under some
State law. Twenty of the States which provide for freezing the benefit
rights of persons entering the armed forces have included a proviso
to the effect that the benefits frozen shall not be payable until
unemployment allowances payable under a Federal law to such persons
are exhausted. Six additional States provide that the frozen benefits
payable for a given week shall be reduced by the amount of the Federal
benefits. There is likewise a general provision which is found in
most State laws to the effect that benefits are not payable for
any period for which unemployment benefits are payable under an
unemployment compensation law of another State or of the United
States. Therefore, it is doubtful whether a Federal statute could
be drawn to supplement for each week the benefits otherwise payable
under State unemployment insurance laws which would not require
amendment of the majority of existing State laws in order to make
certain that ex-servicemen actually could receive combined State
and Federal benefits up to the desired amount.
The States could be compelled to amend their laws to pay the frozen
benefits through the insertion of sanctions in the Social Security
Act relative to Federal grants for the administration of State unemployment
insurance laws and the approval of State unemployment insurance
laws which is necessary in order that employers may qualify for
the 90 percent offset against the 3 percent Federal unemployment
tax. However, this would undoubtedly be resented by the States.
Even if the States were compelled to pay these frozen benefits,
the determination of the respective State and Federal obligation
in individual cases would be complicated.
Administration. Even though the States were not required
to pay the frozen benefits first or were not required to share any
financial responsibility for the payment of allowances to ex-servicemen,
it would still be possible to utilize the State unemployment insurance
agencies for the administration of Federal unemployment allowances.
However, it is assumed that in order to assure administrative flexibility
and adaptation to changing circumstances it is desired to make it
optional with the Federal agency as to whether the allowances will
be paid directly by the specific Federal agency designated to administer
the law or by other cooperating Federal or State agencies.
In any event, it seems that there should be a specific requirement
that applicants for allowances shall register at an office of the
United States Employment Service. That Service is now being operated
by the War Manpower Commission but is being utilized by the State
unemployment insurance agencies. The United States Employment Service
is required by the Wagner-Peyser Act (48 Stat. 113) to "maintain
a veterans' service to be devoted to securing employment for veterans."
Prior to January 1, 1942, the United States Employment Service consisted
of 51 separate services maintained by the various unemployment insurance
agencies although almost 100 percent financed by grants from the
Federal Government. On that date all of the State agencies, at the
request of the President, consented to the transfer of the employment
offices to the Federal Government for direct operation by the Federal
Government. In consenting to this transfer practically all of the
Governors and other State officials specified that they considered
this transfer temporary and justified only because of the war emergency.
Regardless of whether the employment offices are returned to the
States or directly operated by the Federal Government, it should
be possible to administer this program simply, and in practically
all cases to have local offices pay allowances without referral
to either State or Federal central offices, since the schedule of
allowances would be uniform and the ex-servicemen's discharge papers
would contain all the information necessary to process the individual's
Effective Date of Plan.
Finally, there is the question of when such a program should become
effective. Already thousands of individuals have been discharged
from the service and it is possible that there may be some demobilization
of the armed forces before complete victory over both Germany and
Japan. Consequently, the effective date should be determined in
relation to possible military developments and possible demobilization
plans. One alternative is to begin payment of allowances upon a
specified date; another upon occurrence of a specific event, such
as an armistice or a substantial demobilization; another is to provide
that the President shall determine the date by proclamation, taking
due account of certain factors specified in the law.
Terminal Date of Plan.
It is also necessary to decide for how long a period after the termination
of hostilities the program will be in effect. The period for which
such a program should be in effect depends in large part upon the
length of time it takes to demobilize the armed forces and the economic
conditions prevailing during the post-war period. It is possible,
in view of the fact that our forces are distributed all over the
world, that it may take some time for demobilization to be nearly
complete. Provision could be made for the program to operate for
a specified time after the termination of hostilities, say 3 years.
If the Congress should decide later on that this was not long enough
to permit individuals to take advantage of the provisions of the
law because of a slower process of demobilization, the Congress
would have sufficient time and opportunity to amend the law to extend
the duration of the program, or if experience should so indicate,
to shorten the duration of the program.