Letter to the President of the Senate and to the Speaker of the House on the Unemployment Compensation System.

Dear Mr.___________:

The imminent expiration of the Temporary Extended Unemployment Compensation program at a time when unemployment is still high and there are large numbers of long-term unemployed makes enactment of the permanent improvements I have recommended in the existing federal-State unemployment system especially urgent. This legislation is a vital part of the programs I believe essential to assure sustained prosperity and to strengthen our manpower base.

Although the February unemployment figures showed a heartening decline in the number out of work there are still 4,543,000 workers who need help. The number of long-term unemployed--those who have been jobless for 15 weeks or longer--totals 1,400,000. Unless prompt action is taken workers who exhaust their regular benefits after March 31, 1962, will no longer be able to receive any unemployment compensation. The serious crisis which compelled Congressional action last year has not abated for these workers, but the protection provided by the law will shortly expire unless the Congress acts.

Twice in recent years, in 1958 and again in 1961 the Congress has taken steps to provide unemployment compensation benefits for the long-term unemployed. As temporary stop-gap measures these Acts served a valuable purpose. They have also proven the need for a permanent modification in the system of benefits.

The merits of the proposals for permanent legislation I have recommended are well-established. The wider coverage, extended benefit periods and increased benefit amounts will lessen the hardship and suffering that accompany unemployment and will, at the same time, provide a stimulus to business.

When enacted, the legislation will exert a stabilizing effect upon our economy, helping to maintain consumer purchasing power and cushioning any economic reverses. It will make unnecessary the temporary stop-gap legislation sought each time a crisis develops, and modernize the system to better meet the needs of the worker, the community and the nation. Today, weekly benefits are often too low in relation to lost wages to enable the worker to meet his basic and non-deferrable expenses. Incentives to the various States to establish basic minimum payments equal, in most cases, to one-half the wages lost, would be provided. An additional 3,000,000 workers not now covered would be brought within the system. The burden of excessively high unemployment compensation taxes that exist in several States would be removed. The financial soundness of the system would be strengthened by increasing the amount of wages subject to taxation-the first increase in the history of the program. And finally, workers would not be denied benefits simply because they sought to develop another marketable skill through retraining.

It is estimated that 150,000 workers will exhaust their regular unemployment insurance in April 1962. The number will exceed 100,000 in all but one of the remaining months of the year. Many of these have a long work history but, because of automation or other technological developments, will find it difficult to obtain re-employment. We cannot, with the expiration of the present Temporary Extended Unemployment Compensation program, abdicate our responsibility to these workers. Adequate provision should be made for them.

I urge that early consideration be given to the legislation calling for permanent improvement of the federal-State unemployment insurance system.

Sincerely,

JOHN F. KENNEDY