…in regard to the ultimate consequence of this legislation, that is leaving aside the effect that might be produced this year or next year, on pay rolls, we wish to point out the added incentive it creates for the more rapid introduction of labor-saving machinery for the definite purpose of reducing the total taxable pay roll and thus add to the unemployment....Further there is always a maximum labor cost that any industry can meet and there will be a definite increased tendency for employers to consider this tax as a part of the wages of their employees and keep the direct wage paid as low as possible to reduce such wage by the size of the tax itself; I am indicating that only as a natural business tendency.
This bill will cause further migration from the farm areas to the industrial areas and will invite the transfer of workers from the class of those not gainfully employed in order to share in the unemployment benefits…Unemployment insurance, which in many instances places a premium on indolence, would unquestionably defeat this proposed plan of the administration to place workers in the areas of lower living costs and keep them gainfully employed.
…to impose this burden at this time, when industry is just struggling to get on its feet, is going to still further retard the very recovery which is necessary to create these reserves. That is the basis of our opposition to these provisions.
It [this bill] would increase unemployment by aggravating the very conditions which it is attempting to correct, by crippling the agencies which furnish opportunities for employment, by discouraging efforts to relieve unemployment, and by placing a premium on idleness.
It would result in further and unnecessary intrusion of the Government into the domain of private enterprise, thus aggravating the hardships which have already been caused industry by extensive government regulations, restrictions, and competition.
The fact is that one of the reasons why our business leaders, large and small and in almost every kind of business, are fearful of the future is because of the well-defined campaign of a very few people to foist upon this country a complete scheme of compulsory social insurance. The little group—and it is astonishingly small in numbers, though tremendously vocal—is largely of foreign origin, a substantial part of the advocates of this system coming from Germany and from countries lying further east.
In all probability, however, compulsory unemployment insurance cannot be had without an amendment to the Constitution, probably both state and federal, as such a measure might be attacked on the grounds that it is confiscation of property without due process of law.
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