Should Workers Be Compelled to Contribute?

Abstract

In the country-wide movement for unemployment compensation or insurancenow given added impetus in the Federal Social Security Act-one of the principal controversial issues is whether or not the wage-earner should be required to make contributions to the reserve funds from which unemployment benefits are to be paid. With ten unemployment compensation laws already enacted, this important question of social policy has yet to receive a decisive legislative answer.' Five states-Massachusetts and New Hampshire in New England, Alabama in the South, and California and Washington on the West Coast-have adopted systems that compel the worker to contribute. On the other hand, New York, with the largest industrial population of any state; Congress, acting for the District of Columbia; Wisconsin, in its pioneer American unemployment compensation law; and Oregon and Utah, representing the West, have enacted measures which require no employee contributions. Within the next few months, other states will find it necessary to choose which of these examples they will follow-with far-reaching consequences to their wage-earners and to social insurance in America. In enacting America's first unemployment compensation law in I932, after ten years of consideration by its legislature, the progressive State of Wisconsin adopted the principle that the cost of unemployment compensation, like the cost of workmen's accident compensation, should be made an expense of doing business, with employers alone contributing. At the same time, through the device of establishment accounts in the reserve fund, employers were afforded the greatest possible opportunity to reduce, or even eliminate, this cost through efficient management in providing steady work. This plan has been recognized as a distinctively American approach to unemployment insurance. The basic provisions of the Wisconsin act were immediately and vigorously attacked, not only by conservative employers who sought to prevent the adoption of such legislation by other states, but also by certain proponents of social insurance