E.S.C. quarterly

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North Carolina State Library
Raleigh
f THE U.C.C. QUARTERLY
VOLUME I, NO. 1 SUMMER, 1942
OCT 5 !942
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A mica processing plant in Spruce Pine. N. C. North Carolina is the nation's largest producer of mica.
PUBLISHED BY
* NORTH CAROLINA UNEMPLOYMENT COMPENSATION COMMISSION
.'PAGE 1 THE U. C. C. QUARTERLY Summer, 1942
The U. C. C. Quarterly
Volume I ; No. 1 Summer, 1942
Issued four times a year at Raleigh, N. C , by the
NORTH CAROLINA
UNEMPLOYMENT COMPENSATION COMMISSION
Commissioners: Judge C. E. Cowan, Morganton; C. A. Fink,
Spencer; Mrs. F. L. Fuller, Jr., Durham; R. Dave Hall,
Belmont; Hon. T. Clarence Stone, Stoneville; Dr. Harry D.
Wolf, Chapel Hill.
State Advisory Council: Capus Waynick, High Point, Chair-man;
Willard Dowell, Raleigh; Marion W. Heiss, Greens-boro;
H. L. Kiser, Charlotte; Dr. Thurman D. Kitchin, Wake
Forest; Robert F. Phillips, Asheville; Mrs. R. J. Reynolds,
Winston-Salem; Mrs. Emil Rosenthal, Goldsboro; W. Cedric
Stallings, Charlotte.
WILLIAM R. CURTIS Acting Chairman
R. FULLER MARTIN Director
MRS. FRANCES TREADWELL HILL Editor
Regular Contributions in each issue from the
united States employment Service for
north carolina
MRS. GERTRUDE K. CLINTON Director
Cover illustrations represent typical North Carolina industries
under the unemployment compensation program. Cover for
Summer, 19//2—Mica Mine at Spruce Pine. Photograph by
courtesy of the North Carolina Department of Conservation
and Development.
For the past several years North Carolina has mined and pro-cessed
about 60 percent of all sheet mica produced in the
United States. Now, with supplies from India and Mada-gascar
being cut off, the Government is making a determined
effort to increase production, and is looking to this State
for a considerable additional output of this mineral vital to
several phases of war production.
Sent free and upon request to responsible individuals, agencies,
organizations and libraries. Address: V. C. C. Informational
Service, Raleigh, N. C.
CONTENTS
Foreword 2
Editorials 3
Unemployment Compensation in North Carolina,
Maj. A. L. Fletcher 4
Taxable Employment in Unemployment Compen-sation,
Ralph Moody and W. D. Holoman 6
Industrial Distribution of Covered Workers,
Silas F. Campbell 9
Notes on Operations 11
1. The Trend in U. C. C. Operations
2. Time Study of Appealed Claim Cases
3. Recovering Overpayments
4. Interstate Benefits.
A Study of the Duration of Benefit Payments,
Benton Bray 14
Survey of Priorities Unemployment 18
The Mica Industry in North Carolina 21
Analyzing State's Labor Supply and Demand,
Benton Bray 22
The Place of the Employment Service in the War
Program, M. R. Dunnagan 24
Business Activity in North Carolina, Silas F.
Campbell 26
Employer Experience Rating 28
New Claims Manual 30
CHAIRMAN'S FOREWORD
Unemployment Compensation During the War
Period
W. R. Curtis
At the present time employment in North Carolina
is at the highest levels in history, and there is now
every reason to expect that it will continue at these
high levels, at least for the duration of the war.
Because of the high levels of employment—and, as a
consequence, relatively little unemployment—there
may arise in the minds of some a question as to the
need for unemployment compensation at this time.
As a benefit-paying program, unemployment com-pensation
is, of course, relatively unimportant dur-ing
a period of full employment. It is expected,
therefore, that relatively few benefits will be paid
during the war period while jobs are plentiful. This
does not mean, however, that the unemployment
compensation program will not be functioning;
rather, the decline in benefit payments will be an
indication of its proper functioning.
For unemployment compensation to function as a
benefit program, it is necessary that reserves be
built up in good times out of which benefits may be
paid when unemployment becomes general. Today,
therefore, the Unemployment Compensation Com-mission
is accumulating that necessary reserve
against the day when employment begins to decline.
No one can accurately foretell what the post-war
period will bring. It is obvious, however, that, as
a nation, it will be necessary to shift from a pre-dominantly
war economy to a predominantly peace
economy. At the same time, presumably, large
numbers of men will be released from the armed
forces. If the shift from a war to a peace economy
can be made with a minimum of dislocation, and if
the demobilized members of the armed forces can
be absorbed readily, we might encounter only short-term
unemployment. If the adjustment is not made
without far-reaching dislocations, we might face a
large volume of long-term unemployment. It seems
reasonable to assume, therefore, that the post-war
period will bring unemployment, the exact character
of which will depend on conditions at that time.
It is a major responsibility of the Unemployment
Compensation Commission during the war period to
prepare for the problems it will face in the post-war
period. A part of that preparation is the accumu-lation
of reserves out of which to pay benefits. These
reserves are accumulated by collecting contributions
from employers subject to the Unemployment Com-pensation
Law. At the present time these reserves
are accumulating very rapidly due to the high level
of employment. Beginning in 1943, experience rat-ing
becomes operative in this State, and its effect
will be to reduce contributions. However, even with
experience rating, the reserves should continue to
increase, although at a reduced rate.
Another part of the preparation for the post-war
period is the perfecting of administration. The
Commission during the war period should prepare
(Continued on Page 3)
Summer, 1942 THE U. C. C. QUARTERLY PAGTE .3
THIS PUBLICATION . . .
The Unemployment Compensation Commission's
former monthly publication, North Carolina Employ-ment
Security Information, was discontinued with
the December 1941 issue, at the time the Employ-ment
Division was withdrawn to the federal service.
This new Quarterly has been planned not only to
continue but to somewhat expand the scope of the
former monthly, although there will be four rather
than twelve printings each year.
Following the six-month lapse in publication of
any similar material by the Commission, many of
the articles in this first issue of the Quarterly are
intended to be historical as well as introductory. It
is contemplated that they be followed up in subse-quent
issues with more detailed discussion of factual
material and current problems.
country's welfare. Let us then, with increased devo-tion,
reaffirm our pledge to do our jobs to our very
best—for the sake of everything our country has
at stake.
WE, THE COMMISSION . . .
In these days of national stress when everyone
feels called upon to do what he can in behalf of our
country, let us take stock of ourselves as a body of
workers in the service of the state and federal gov-ernments.
As personnel of the Unemployment Com-pensation
Commission of North Carolina, we are a
group of 300 persons charged with the administra-tion
of a considerable public program. There is a
fund of over forty million dollars in our care, in-suring
more than 750,000 North Carolina workers
against employment hazards of the present and
future. We are an integral part of our country's
broad plan of social security—a function which
President Roosevelt has declared essential to the
whole war effort. After all, our belief in the right
to social security is one of the reasons we are in-volved
in this war.
Our part here may be less glamorous and less
noticeable than the accomplishments of men in the
fighting forces, but we hold, nevertheless, a definite
share of our nation's responsibility to its people.
We are answerable to the public, now more than
ever, for an understanding and efficient operation of
our agency, to the end that people look to us always
with confidence and respect.
In the conduct of affairs of any organization, the
individual contribution of each man and woman is
also an essential part of the whole.
"For want of a nail, a shoe was lost;
For want of a shoe, a horse was lost;
For want of a horse, a rider was lost;
For want of a rider, a battle ivas lost;
For want of a battle, a kingdom tvas lost;
All for the want of a horseshoe nail."
This is no frivolous ditty, but the poetic embodiment
of a sound idea. For without the devotion of each
one of us to our particular job within the U. C. C.
group, not only might the activities of the Commis-sion
suffer, but its character and reputation as well —carrying with them a reflection upon our country's
Government.
Each one of us in the Commission bears on his
own shoulders a share in the promotion of our
ACCORDING TO LAW . . .
"... the public policy of this State is declared
to be as follows : Economic insecurity due to unem-ployment
is a serious menace to the health, morals,
and welfare of the people of this State. Involuntary
unemployment is therefore a subject of general in-terest
and concern which requires appropriate
action by the Legislature to prevent its spread and
to lighten its burden which now so often falls with
crushing force upon the unemployed worker and his
family. The achievement of social security requires
protection against this greatest hazard of our eco-nomic
life. This can be provided by encouraging
employers to provide more stable employment and
by the systematic accumulation of funds during
periods of employment to provide benefits for
periods of unemployment, thus maintaining purchas-ing
power and limiting the serious social conse-quences
of poor relief assistance. The Legislature,
therefore, declares that in its considered judgment
the public good, and the general welfare of the citi-zens
of this State require the enactment of this
measure, under the police powers of the State, for
the compulsory setting aside of unemployment re-serves
to be used for the benefit of persons unem-ployed
through no fault of their own."
*N. C. Public Laws 1936, C. I, Sec. 2.
CHAIRMAN'S FOREWORD
(Continued from Page 2)
itself adequately to meet whatever volume of unem-ployment
appears after the war. This preparation
requires the holding together of an organization in
the face of high personnel turnover due to with-drawals
by the Selective Service and resignations to
accept more lucrative employment elsewhere. It re-quires
also that administrative techniques be per-fected.
A further responsibility of the Unemployment
Compensation Commission is the examination of the
substantive aspects of the unemployment compensa-tion
program for the purpose of recommending
needed changes to the Governor. Such matters as
the adequacy of reserves, the adequacy of coverage,
and the adequacy of benefits will be particularly im-portant
in the post-war period.
It should be borne in mind that not all unemploy-ment
will disappear during the war period. The
transition to a war economy has already produced
considerable unemployment and will likely produce
more. In addition, there will be an irreducible min-imum
of unemployment occasioned by such factors
as seasonal layoffs, transfers from one job to
another, repairs, and the like. It is expected that
the unemployment will be short-term, but its char-acter
will probably depend largely on the indi-viduals
affected.
PAGE r4 THE U. C. C. QUARTERLY Summer, 1942
Unemployment Compensation in North Carolina
By A. L. Fletcher, Chairman^
The history of unemployment compensation in
North Carolina goes back to 1933. In the General
Assembly of that year, Senator W. O. Burgin, now a
member of Congress, of Davidson County, introduced
an unemployment insurance bill, modeled after a
similar bill pending at the time in the Ohio Legis-lature.
Senator Burgin's bill met with considerable
favor and it was before the Senate with a favorable
committee report, when he withdrew it and intro-duced
a bill providing for a Commission, to be named
by the Governor, to make a study of the question.
The bill further provided that, if the Commission
found it wise, it would prepare a bill for presentation
to the 1935 session of the General Assembly.
Senator Burgin's substitute bill passed, and this
Commission began its work in 1934. Its membership
was composed of Senator Burgin as Chairman and
Senator John Sprunt Hill, of Durham ; Thurmond
Chatham, Winston-Salem ; T. Austin Finch, Thomas-ville
; Dr. W. H. Glasson, Duke University ; P. R.
Christopher, Shelby; T. A. Wilson, N. C. Industrial
Commissioner, Raleigh ; Mrs. W. T. Bost, State Wel-fare
Commissioner, Raleigh ; Mrs. May Thompson
Evans, State Director, Employment Service, High
Point; A. L. Fletcher, Commissioner of Labor,
Raleigh.
The Commission engaged Professor Harry D.
Wolf, a nationally recognized authority in the field,
and a member of the faculty of the University of
North Carolina, as executive secretary. A grant of
E. R. A. funds provided for a staff of workers and
several months of intensive study followed. The
Commission held hearings in several of the cities of
the State. Prior to the meeting of the General As-sembly
of 1935 the Commission had completed its
work, had drawn up and signed its report, and had
drafted a law which, in the judgment of the experts
of the President's Committee on Social Security, was
sound throughout and would meet the requirements
of the Federal Social Security Act, which at that
time was practically completed.
Neither the study made by the Commission, nor
the bill prepared by it, was ever presented to the
General Assembly. One impediment was the failure
of Congress to reach a decision on the Federal Social
Security Act, which did not become Law until August
14, 1935. In the face of the uncertainty as to the
Federal Social Security Act, Governor Ehringhaus
was opposed to the introduction of the Commission's
bill until Congress had acted. The General Assembly
adjourned on May 11, 1935, with Congress far from
agreement, and in the last hours of the session,
Governor Ehringhaus sought to save the day by
framing and introducing the so-called "enabling act,"
Chapter 492, Public Laws of 1935, authorizing the
Governor and the Council of State to set up an un-employment
compensation program, provided that
Congress passed the Federal Social Security Act,
which was then pending. The Governor's bill was
passed without opposition.
When the Federal Social Security Act finally be-came
law on August 14, 1935, the North Carolina
statute was presented to the Social Security Board,
established under the Social Security Act, for ap-proval.
The North Carolina statute was found to be
defective in that it did not require contributions to
a state unemployment compensation fund by em-ployers,
but provided simply that the administrative
agency might receive contributions. As a result of
this defect in the North Carolina statute, it became
necessary for additional legislation to be enacted if
North Carolina was to receive any benefits from the
unemployment compensation provisions of the
Federal Social Security Act.
The Federal Social Security Act itself levied a tax
on employers of eight or more engaged in certain
types of activity. It provided that, if the various
states enacted laws levying taxes for unemployment
compensation, employers could offset as much as 90
percent of the tax levied by Congress. If the States
failed to enact acceptable legislation the tax imposed
by Congress under the Social Security Act would be
collected by the Federal Government and go into its
general fund. The Social Security Act itself did not
establish an unemployment compensation system but
merely provided an incentive for state action in the
form of this tax offset.
The federal tax became operative with respect to
payrolls in 1936. If North Carolina was to benefit
from the payroll taxes paid by employers in 1936,
the Social Security Act required that the state law
be in force and effect by the end of the year. If
North Carolina was to have legislation in effect by
this time it was necessary that Governor Ehringhaus
call a special session of the General Assembly. No
action was taken by the Governor until the latter
part of the year, but a special session of the General
Assembly was finally called in December 1936. This
special session acted speedily and the North Carolina
Unemployment Compensation Law was passed on
December 16, 1936. It was approved by the Social
Security Board on December 19, 1936.
The Unemployment Compensation Law provided
for an administering body, the Unemployment Com-pensation
Commission, consisting of three members,
two of these appointed by the Governor and the third
was the Commissioner of Labor. The Governor
designated one of the members of the Commission
as Chairman.
In accordance with the provisions of the law,
Governor Ehringhaus appointed Mr. Charles G.
Powell, Chairman, and Mrs. J. B. Spilman, member,
of the Unemployment Compensation Commission,
which was charged with administering the Law.
A. L. Fletcher, the Commissioner of Labor, became
ex-officio third member of the Commission. (On
September 12, 1938, Mr. Fletcher resigned as Com-missioner
of Labor and was succeeded on the Com-mission
by Mr. Forrest H. Shuford). The members
of the Unemployment Compensation Commission
took their oath of office on December 21, 1936.
tMajor Fletcher is absent on leave for military service.
Summer, 1942 THE U. C. C. QUARTERLY PAGE 5
The Commission had the duty of administering
the Unemployment Compensation Law and, in order
to carry out its duty, was given power to take what-ever
action it deemed necessary or suitable to that
end.
The three-member Commission provided in the
Unemployment Compensation Law as originally en-acted
continued until July 1, 1941. The General
Assembly of 1941 amended the Unemployment Com-pensation
Law by enacting a reorganization bill
which was ratified on March 15, 1941. The reorgani-zation
bill abolished, effective July 1, 1941, the three-member
Commission that had been operative since
the passage of the Unemployment Compensation
Law, and authorized the Governor to appoint a Com-mission
consisting of seven members, one of whom
was to be designated as Chairman. The Chairman
was to serve full time and be paid a salary fixed by
the Governor with the approval of the Council of
State. The other members of the Commission were
to be paid $10.00 per day and actual travelling ex-penses
while discharging their duties as Commis-sioners.
Meetings are held at least once every sixty
days, and at any time upon call of the Chairman or
of any three members.
The Governor appointed as Commissioners : A. L.
Fletcher, Chairman ; Dr. Harry D. Wolf, Professor
of Economics at the University of North Carolina;
Mrs. Frank L. Fuller, Jr., of Durham, civic leader;
Cecil E. Cowan, Morganton, former Judge of the
County Court; R. Dave Hall, Belmont, industrial
leader and past Commander of North Carolina's De-partment
of American Legion ; C. A. Fink, Spencer,
President of the State Federation of Labor; and T.
Clarence Stone, of Stoneville, wholesale grocer and
veteran member of North Carolina General Assem-bly.
Commissioners Wolf, Cowan, and Fuller were
appointed for four-year terms, and Commissioners
Hall, Fink, and Stone for two-year terms. The new
Commission assumed office on July 1, 1941.
The purpose of the Unemployment Compensation
Law will become clearer if the functions which it
authorizes are brought together. First of all, it
provides for the accumulation of funds during periods
of normal or of expanding business activity out of
which benefits may later be paid to workers who
become unemployed. The benefits paid to unem-ployed
workers are paid as a matter of right. Un-employed
workers are not required to show need in
order to receive benefits. Thus, none of the stigma
of poor relief attaches to unemployment compensa-tion
benefits.
In the second place, the Unemployment Compen-sation
Law provides that an adequate system of
public employment service offices be maintained in
North Carolina. These employment offices are free,
and their primary purpose is to assist workers in
finding suitable jobs and to assist employers in find-ing
suitable workers. Looking at these two phases
together, the unemployment compensation program
means that the State of North Carolina, through the
Unemployment Compensation Commission, provides
a system whereby every effort is made to find a job
for workers when they become unemployed and
whereby, if it is impossible to find them a job, those
workers are paid benefits during their unemploy-ment.
In the third place, the Unemployment Compensa-tion
Law requires that the Commission make every
effort to promote the stabilization of employment in
the State. It has been demonstrated already that
the payment of benefits during periods of unemploy-ment,
by maintaining the purchasing power of those
who are out of work, will tend to bolster business.
Thus, one automatic effect of the payment of benefits
is greater stability of employment. In addition to
this automatic action, however, the Unemployment
Compensation Law contains an experience rating
provision, the purpose of which is to modify tax rates
in accordance with employer experience with unem-ployment.
This provision provides an incentive to
employers to stabilize employment through per-mitting
lower contribution rates for those who have
little unemployment.*
To carry out its functions, the law authorizes the
Commission to establish two coordinate divisions.
One of these divisions was the Unemployment Com-pensation
Division and the other was the North
Carolina State Employment Service Division. This
latter division had existed as the North Carolina
State Employment Service in the State Department
of Labor prior to the passage of the Unemployment
Compensation Law, which transferred the State Em-ployment
Service to the Unemployment Compensa-tion
Commission.
On December 19, 1941, the President of the United
States sent each of the State governors a telegram,
requesting them to turn over the State Employment
Services to the United States Employment Service
for the duration of the war. This State, along with
all others, complied with the President's request, and
as of January 1, 1942 the Employment Service ceased
to be a part of the Unemployment Compensation
Commission. However, the Employment Service still
performs certain functions for the Unemployment
Compensation Commission, the most important of
which is acting as claims taker in the various com-munities
throughout North Carolina.
North Carolina is now passing through a period of
expanding employment. Business activity in the
State is at the highest levels ever attained ; unem-ployment
claims are the fewest known. However,
there will always be an irreductible minimum of un-employment
resulting from normal business failures,
and normal labor turnover. In addition, considerable
unemployment, mostly of short duration, was and
will be produced by raw material shortages and con-version
to war production.** The big job toward
which the Unemployment Compensation Commission
must now focus its attention, however, is the period
which will follow the war effort. The unemployment
compensation fund will accumulate at a slower pace
as soon as employer experience rating takes effect
in 1943, and it may be none too large for the unem-ployment
problem that the Commission will meet at
the end of the war.
*See article, Employer Experience Rating, infra, p. 28.
**See article, A Survey of Priorities Unemployment, infra.
p. 18.
PAGE 6 THE U. C. C. QUARTERLY Summer, 1942
Taxable "Employment" in Unemployment Compensation
By Ralph Moody, Chief Counsel, and W. D. Holoman, Senior Attorney
The general topic or subject of coverage under the
Unemployment Compensation Law is a broad topic
or subject and it embraces such a wide variety of
questions that it will be impossible to elaborate, to
any extent, within the scope of this article on the
general topic of coverage.
An "employing unit" under the North Carolina act
does not necessarily constitute an "employer", but
an employing unit means any individual or type of
organization, company, partnership, or corporation
which has in its employ one or more individuals per-forming
services for it within this state. All indi-viduals
performing services within this state for any
employing unit which maintains two or more sepa-rate
establishments within this state shall be deemed
to be employed by a single employing unit for the
purposes of this act. For an employing unit as de-fined
by the act, to be or become an employer within
the contemplation of the law, said employing unit,
shall employ as many as eight or more individuals
for as many as twenty different weeks within either
the current or the preceding calendar year. These
weeks do not have to be consecutive weeks and
neither does the employment of the eight or more
individuals have to be simultaneous. If in any week
an employing unit has as many as eight individuals
in its employ irrespective of whether they were em-ployed
simultaneously or not, then, that particular
week is counted for the purposes of determining
whether or not there have been or were as many as
twenty different weeks within a calendar year in the
contemplation of Sec. 19 (g) (1) of the Unemploy-ment
Compensation Law, which defines employer.
In determining whether or not a person or an in-dividual
is engaged in employment under the act
several things must be taken into consideration:
first of all, "employment" under the act means
service, performed for remuneration or under any
contract of hire, written or oral, express or implied.
"Wages" is defined as meaning all remuneration
for services from whatever source. Wages include
commissions, bonuses and the cash value of all re-muneration
in any medium other than cash. There-fore,
under the law for a person to be engaged in
employment he must be performing services for re-muneration.
If he is performing services and not
receiving any remuneration of any nature for said
services, then, with respect to tax liability, said per-son
is not deemed to be in employment within the
contemplation of the statute. Likewise if a person
is receiving remuneration from an employing unit
and is not rendering or performing any service or
services for that employing unit, then, that person is
not deemed to be in employment within the con-templation
of the statute. It should be borne in
mind, therefore, that for one to be in employment
one shall be performing or shall have performed
services for remuneration.
For the purposes of this discussion it is necessary
that Sec. 19 (g) (6) (A), (B) and (C) of the Unem-ployment
Compensation Law be quoted and we quote
herewith below said section with its subheads:
"19 (g) (6) Services performed by an indi-vidual
for remuneration shall be deemed to be
employment subject to this act unless and until it
is shown to the satisfaction of the commission
that:
"(A) such individual has been and will con-tinue
to be free from control or direction over the
performance of such services, both under his con-tract
of service and in fact; and
"(B) such service is either outside the usual
course of the business for which such service is
performed, or that such service is performed out-side
of all the places of business of the enterprise
for which such service is performed; and
"(C) such individual is customarily engaged
in an independently established trade, occupation,
profession, or business."
It will be seen from the above section that services
performed for remuneration shall be deemed to be
employment unless and until the Commission is satis-fied
that the conditions set out in subsections (A),
(B) and (C) have been met. These provisions place
the burden of proof upon the employing unit to
establish the conditions set out in subsections (A),
(B) and (C). It will be noted that these subdivisions
or standards are written in the conjunctive and not
in the disjunctive. The employing unit must prove
the existence of all three of the above conditions and
its case fails if any one of the above standards can-not
be shown to the satisfaction of the Commission.
The Supreme Court of North Carolina in comment-ing
upon the above statute in the case of Unem-ployment
Compensation Commission v. Jefferson
Standard Life Insurance Company * stated as fol-lows:
"The burden of showing these matters of ex-emption
is placed by statute on the defendant, for,
since they are stated conjunctively, all three of
these elements must be shown in order that ex-emption
from the act be secured."
Excerpts could be quoted herewith from court
opinions for practically all of the jurisdictions in the
nation relative to this particular statute. However,
the North Carolina Supreme Court has interpreted
this section fully. It must be borne in mind in con-struing
this section of the statute that any person
performing services for remuneration is deemed to
be in employment subject to the act until the pro-visions
of subsections (A), (B) and (C) are proven
to the satisfaction of the Commission. The Com-mission
is the primary party to be satisfied in mat-ters
of fact with reference to factual elements con-tained
in the test or statutory standards. This is
not a new thought. If an employing unit does show
these three things to the satisfaction of the Com-mission,
then such person or persons who meet these
requirements are not engaged in employment and
are, therefore, not covered by the act.
*215 N. C. 479, 485 (1939).
Summer, 1942 THE U. C. C. QUARTERLY PAGE 7
This section of the statute; namely, 19 (g) (6)
(A), (B) and (C) which has been quoted above is the
section of the statute by which the Commission
determines the liability or nonliability of quite a few
different types of employing units. For instance in
the Jefferson Standard Life Insurance Company case
the question before the court was whether or not
certain agents of the company who were on a com-mission
basis strictly, were engaged in employment
within the contemplation of the law, and the court
held that they were engaged in employment as the
employing unit was not able to show to the satis-faction
of the Commission that those persons who
were in question met with the three requirements as
set out above.
This brings us to the question of the scope of
judicial review. Sec. 11 (m) of the act gives the
Commission the power to determine the status of
employing units and employers and also gives the
Commission the power to make findings of fact and
conclusions of law subject to review by the Judge of
the Superior Court and by the Supreme Court. Sec.
19 (g) (6) (A), (B) and (C), as quoted heretofore,
gives the standards which the Commission is to apply
in measuring or determining whether certain types
of services are exempt or not exempt under the law.
The legislature gave this power to the Commission,
an administrative body, and its findings of fact are
conclusive if supported by competent evidence. If
there is sufficient evidence upon which the Commis-sion
can base its findings of fact, then said findings
of fact by the Commission are conclusive and it be-hooves
the Court only to determine whether or not
there was sufficient evidence upon which the Com-mission
can base its findings. If the Commission
has sufficient evidence upon which to base a determi-nation,
then, the Commission's decision should stand.
This is not a new doctrine but is one which is sup-ported
by precedent. It represents a proper state-ment
as to the extent to which courts may review the
determination of facts of administrative agencies.
The United States Supreme Court has often ex-pressed
the view that it could not properly substitute
its own judgment for that of an administrative body,
and that where it could not be said that it was
impossible for a fair-minded board to come to the
result which it reached, the judgment of the adminis-trative
body would not be disturbed. The courts
merely require that there be some reasonable basis
or conclusion reached by an administrative tribunal
in applying the valid statutory test to the evidence.
Applying, therefore, the scope of judicial review to
Sec. 19 (g) (6) (A), (B) and (C), it can be said that
services performed by an individual for remuneration
shall be deemed to be employment unless and until
it is shown to the Commission's satisfaction that the
provisions of subsections (A), (B) and (C) have
been met, and if there is a sufficient amount of com-petent
evidence upon which the Commission finds
that the provisions of subsections (A), (B) and (C)
have or have not been met then said findings of fact
of the Commission and its conclusions of law cannot
be disturbed by the courts.
This is an important section of the law as so many
different types of employing units are affected and
their liability or nonliability is determined thereby.
If the full significance of this particular section of
the law can be made clear, both these, as well as this
Commission, will benefit.
It should be stated that the majority of the courts
of last resort have held in substance that the statu-tory
definition of employment and its accompanying
standards of exclusion as contained in the (A), (B)
and (C) clauses do not confine taxable employment
to the relation of master and servant, or employer
and employee. The statutory definition of employ-ment
and its rules of exclusion are not to be looked
upon as rules for determining the difference between
the master and servant relationship and independent
contract, as if the choice must be confined to one or
the other of these alternatives. These statutory de-finitions
define and fix the boundary lines of "employ-ment"
or status with respect to which payroll taxes
can be legally demanded. These statutory boundary
lines will of course include the employer and employee
relationship and also various other relationships not
included in the restricted employer and employee
status. As Paul said when he discussed the resur-rection
of the dead before Agrippa, "Why should it
be though a thing incredible with you . . . ." There
are no vested rights in common law relationships and
the power of the General Assembly to broaden and
to restrict common law concepts is recognized by all
courts. As said by the Supreme Court of North
Carolina in Unemployment Compensation Commis-sion
v. Jefferson Standard Life Insurance Com-pany
:
*
"The economic and social evil of unemployment
in its broad sweep frequently disregards man-made
geographic and political boundaries; perhaps it
follows that former boundaries must be surren-dered
in seeking a remedy for such an evil. If
new evils produce as counterforces, new ideas of
control of these evils, and ideas are brought to us
from the legislative forum, we must guard against
falling victims to that suspicion which is born of
the mere novelty of things."
The risk of unemployment arises from the de-pendency
of an individual upon receipt of remunera-tion
from the continuance of a relationship with the
business of another. This risk of unemployment
should not be decreased or increased by virtue of an
employer's authority or lack of authority to control
or supervise a particular detail of an individual's
activity. These statements are not to be construed
as a criticism of the legal rules applied in so-called
tort cases or negligence cases. In cases of this type
the issue is usually resolved upon the authority or
control the employer exercised, or had a right to
exercise, over the individual at a certain point or
instant of time. Usually if control exists at the time
of the happening of such injury, the existence of
such control justifies a decision that the employer is
liable. The absence of such control over the instru-mentality
or acts concerned justifies a decision that
*215 N. C. 479, 487 (1939).
Carolina State Library
PAGE 8 THE U. C. C. QUARTERLY Summer, 1942
the employer is not liable. When the employer can-not
be present to supervise every detail connected
with the operation of a given instrumentality, then
it is certainly proper for him to create a relationship
that will relieve him of liability from injuries flowing
from a negligent use of the instrumentality. No one
has any quarrel with these rules when applied to
their proper spheres or fields, but they do not belong
to, nor are they standards for determining taxable
employment under unemployment compensation
laws.
Coverage under unemployment compensation laws
cannot change from moment to moment, or in ac-cordance
with the choice of management to exercise
control over some of its workers or to not exercise
control over others. Unemployment compensation
coverage is interested in the flow of time element in
employment, and is not interested in what happens
at a point of time or instant of time. In determining
the meaning of "employment" under unemployment
compensation statutes, the inquiry is directed to-wards
the person or firm on whose behalf or for
whose account the services are being performed.
Such inquiries are : "Are the services in question
being performed as an integral part of the business
of the employer?" "Whose business is this man
promoting?" "His own?" "The business of
his employer?" Under these circumstances, there-fore,
the coverage provisions of unemployment
compensation laws are more concerned with an in-dividual's
economic status in his employer's organi-zation.
This has been very aptly stated by Mr. John
C. Gall, Counsel for the National Association of
Manufacturers, when he said:**
"A payroll tax ... is a tax imposed upon an
economic relationship which has escaped legal defi-nition.
At common law the relationship of master
and servant was marked out under the law of con-tract
and tort. Well established delineations
carried us into the law of principal and agent, or
succeeded in creating a new relationship of inde-pendent
contractor. Under modern statutory law
the emphasis has shifted from contract to status,
and delineation of the employer-employee relation-ship
has been controlled by the impact of public
policy represented in modern legislation. ... It
is obvious that under unemployment compensation
laws these relationships must be even further de-fined
to reflect the new social responsibilities im-posed
upon the employer."
**3 Law and Contemporary Problems 127 (1936).
The Federal Government pays all expenses for
administering the North Carolina Unemployment
Compensation Law, through the central agency of
the Social Security Board. Appropriations for the
work of the Board during the fiscal year 1942-43
were provided in the Labor-Federal Security Appro-priations
Act, 1943, signed by the President on July
2. With regard to unemployment compensation ad-ministration
throughout the nation, including opera-tion
of employment office facilities and services
essential to expediting the war program, the act has
provided $79,650,000.
UNEMPLOYMENT COMPENSATION BENEFITS
DENIED STRIKER
In two instances, one of which has just been set-tled,
cases involving disqualifications for unemploy-ment
compensation benefits because of stoppage of
work due to labor disputes have gone to the North
Carolina courts. In each case, the decision of the
North Carolina Unemployment Compensation Com-mission
disqualifying workers from benefits was
affirmed.
The second case, conducted by W. D. Holoman,
attorney for the Commission, has just been tried
in the August term of the Gastonia Superior Court
when John C. Puett, an employee of the Gastonia
Full Fashioned Hosiery Mill, lost his claim for un-employment
compensation. Judge J. A. Rousseau,
presiding, ruled on August 3, 1942 that the peti-tioner
had been without employment because of
stoppage of work due to a strike from which he
might have benefited and instigated by a group of
employees among whom he worked, and that under
the Unemployment Compensation Law, compensa-tion
is thereby prohibited.
This case started back in 1941 when part of the
Gastonia Full Fashioned Hosiery Mill was unionized
and part was not. Because certain demands of the
union were not met, a strike was called on Septem-ber
22, 1941. The plant did not close down at this
time, but production was curtailed 70 percent. On
September 26, 1941, the plant closed.
The employees of the mill then filed for unem-ployment
compensation. The case was tried before
a claims deputy who denied benefits to all of the
workers. The workers appealed. The case was
then tried before the full Commission, and the Com-mission
affirmed the decision of the claims deputy
and also denied benefits. John C. Puett was the only
worker who appealed further to the Superior Court,
and his claim was disallowed this week. In his case,
ample facts were introduced which showed that the
difficulty arose out of a labor dispute, and the Unem-ployment
Compensation Commission denied compen-sation
to the employee according to law.
The first court case involving a labor dispute in
which the Commission's decision was affirmed was
the George J. Steelman et al, claimants, employees,
and the Nebel Knitting Company, Inc., employer.
This test case went to the Supreme Court in 1941
where the decision of the Commission was upheld.
The North Carolina Unemployment Compensation
Law states in Section 5 (d) concerning labor dis-putes
: "An individual shall be disqualified for bene-fits
for any week with respect to which the Commis-sion
finds that his total or partial unemployment is
due to a stoppage of work which exists because of
a labor dispute at the factory, establishment, or
other premises at which he is or was last employed,
provided that this subsection shall not apply if it
is shown to the satisfaction of the Commission that:
(1) He is not participating in or financing or
(Continued on Page 23)
Summer, 1942 THE U. C. C. QUARTERLY PAGE 9
Industrial Distribution of the North Carolina Labor Force,
With Respect to Covered Employment
By Silas F. Campbell, Senior Statistician
The release of 1940 census figures for North Caro-lina
makes possible some study of the geographic and
industrial distribution of its labor force. The three
physiographic divisions of the State known as the
Mountain Region, the Piedmont Plateau, and the
Coastal Plain mark well defined changes in its indus-trial
characteristics. Specialized agriculture, food,
lumber, and fertilizer production predominate in the
Coastal Plain ; textiles, non-ferrous metals, furniture,
machinery, and staple crops lead in the Piedmont
Plateau ; while mining, paper, leather, textiles, furni-ture,
fruit, cattle, and dairy farming are most im-portant
in the Mountain Region.
Of a total population of 3,571,623 in 1940,
2,491,830, or 69.8 percent, were 14 years of age and
over. Of these adults, however, only 1,333,773, re-presenting
53.5 percent of the adults and 37.3 percent
of the total population, were considered as a part of
the labor force. Of the 1,158,064 remaining adults,
664,784 were engaged in house work, 236,058 were in
school, 119,782 were reported as unable to work,
25,684 were in institutions, and 111,756 were un-classified.
DISTRIBUTION BY MAJOR
INDUSTRY DIVISIONS
When the distribution of the labor force is shown
in tabular form by regions, employment office areas,
and counties, classified according to major industry
divisions, it is noted that 158,580 are not accounted
for by industrial classification. Of this number,
15,395 employed in interstate railroad transportation
were purposely omitted in order to make the data
usable for unemployment compensation analysis,
since these workers are covered by the Railroad Un-employment
Insurance Act and not by the North
Carolina Unemployment Compensation Law. The
remainder, 143,185, were presumably unemployed at
the time. (87,152 were registered in local employ-ment
offices when the census was taken in April
1940.)
A fact that immediately stands out is that, despite
the great strides the State has made in manufacture
during recent years, agriculture still predominates as
far as employment is concerned, 35.0 percent of the
labor force being so employed, compared to 27.6 per-cent
in manufacture. Agriculture, distribution, and
service industries together accounted for 66.2 per-cent
of the total labor force. This ratio fluctuates
greatly in the three industrial divisions of the State,
being 65.7 percent in the Mountain Region, 57.7 per-cent
in the Piedmont Plateau, and 82.1 percent in the
Coastal Plain. The lowest ratios of agricultural and
service employment are found in the Burlington and
Asheboro areas with 6.0 percent and 6.1 percent re-spectively.
The highest ratios are found in the
Greenville and Kinston areas with 89.8 percent and
88.3 percent, respectively. More than half of the
labor force (56.7 percent) is within the boundaries
of the Piedmont Plateau which also embraces 51.9
percent of the total population.
Of the total labor force, 35.0 percent is employed
in agriculture, 10.6 percent in distribution, 20.6 per-cent
in service industries, 27.6 percent in manufac-ture,
4.0 percent in construction, 2.0 percent in trans-portation
(other than interstate railroad), communi-cation,
and public utilities, and 0.2 percent in
mining. Significant possibilities of development are
seen in the fact that, notwithstanding the pressing
demand for many of the minerals of which the State
has rich deposits, only 2,914 workers, or one-fifth of
one percent of the labor force, are employed in
mining.
GEOGRAPHIC DISTRIBUTION OF
POPULATION, LABOR FORCE,
AND COVERED WORKERS™
Another set of calculations has been made showing
the total population, labor force, and number of
workers covered under the Unemployment Compen-sation
Law by regions, employment office areas, and
counties, with ratio of labor force to population and
ratio of covered workers to labor force. It is a sig-nificant
fact that only 39.9 percent of the working
population of the State is protected against unem-ployment,
30.9 percent in the Mountain Region, 49.6
percent in the more highly industrialized Piedmont
Plateau, and 22.0 percent in the Coastal Plain.
Within each of the three industrial sections, the
ratio fluctuates considerably among the various
counties, indicating somewhat the extent of indus-trialization
in each. In the Mountain Region the
lowest ratio of covered employment is found in
Madison county where two-thirds of the labor force
is engaged in agriculture, and less than 2.0 percent of
the total working population enjoys the benefit of
unemployment compensation protection. Other
counties in the area with less than 10.0 percent cover-age
are Ashe, 3.0 percent; Alleghany, 5.2 percent;
Clay, 5.0 percent; Swain, 7.9 percent; Yancey, 8.0
percent ; and Watauga, 8.4 percent. A striking con-trast
among these rural areas is found in Transyl-vania
County, with a total labor force of 4,402, 26.0
percent of which is employed in agriculture and
other non-subject activities; yet 58.2 percent of the
labor force and 78.4 percent of those employed in
eligible industries have the benefit of protection
afforded by the Unemployment Compensation Law.
In the Piedmont Plateau the general average of
covered employment is 49.6 percent, 24.3 percent
1. Copies of the additional statistical tables on which this
article is based are available for distribution in mimeo-graphed
form.
2. Coverage figures are based on monthly reports of the
average number of covered workers; they do not represent
the total number of different workers who have established
wage credits in covered employment. See The Trend of
U. C. C. Operations, infra, at p. 11.
PAGE 10 THE U. C. C. QUARTERLY Summer, 1942
above the state average, and 60.5 percent higher
than the Mountain Region, yet the coverage is less
than 10.0 percent in the counties of Caswell with 1.7
percent, Stokes with 1.7 percent, Yadkin with 1.7
percent, Franklin with 8.6 percent, and Warren with
9.7 percent. The highest coverage in the State is
found in Cabarrus County. It had a labor force as
reported in 1940 of 27,685 ; yet for the last half of
1941, 30,050 workers in the county were protected
by the Unemployment Compensation Law. This
represented 8.5 percent more than the total labor
force reported a year before, and reflects the rapid
increase, not only of employment in manufacture,
but also the rate of increase in the number of
workers capable of gainful employment. This has
resulted both from immigration of workers and in-plant
training of learners, as well as vocational train-ing
in outside agencies.
It is particularly significant that, whereas, the
manufacturing labor force in 1940 was reported in
the census as 325,539, there were actually employed
in manufacture, and covered by the Unemployment
Compensation Law during the last half of 1941 a
total of 364,544 workers, 12.0 percent more than the
total visible supply a year earlier. (Table A.) The
effect of the step-up in manufacture is especially ap-parent
in textiles and apparel manufacture in which
196,301 workers were employed in 1940; whereas
238,598 covered workers in this group were reported
to the Commission in 1941. It is apparent, there-fore,
that the actual number of workers employed in
textiles increased by 21.5 percent within a year.
In the Coastal Plain, where 53.2 percent of the
working population is employed in agriculture, and
82.1 percent in either agriculture, distribution, or
service industries, only 22.0 percent have the benefit
of unemployment compensation ; and in 16 of the 40
counties8
, the coverage is less than 10.0 percent, and
in four it is less than 1 percent.4 The highest ratio
of covered employment in this area, 55.7 percent, is
found in New Hanover County, which now has the
highest ratio of urban population of any county in
the State. It is also of interest to note that 43 of
the 100 counties have no urban population, that is
no towns of 2,500 or more.
NEARLY TWO-THIRDS OF THE
LABOR FORCE WITHOUT PROTECTION
Table A develops information as to the extent of
unemployment compensation coverage in subject in-dustries,
and also total non-covered employment.
While manufacture as a whole appears to be more
than 100.0 percent covered, for reasons already
stated, there are several branches of it in which
coverage is incomplete because establishments em-ploying
fewer than eight workers are not subject to
the law. Notable examples are lumber manufacture
in which only 76.0 percent of those employed are
covered, printing and publishing, 62.2 percent,
chemicals, 78.6 percent, and iron and steel, 73.9 per-cent.
In industries other than manufacture the lack of
coverage against unemployment is even more strik-ing,
the end result of which is that there are 178,548
workers employed in industries in which they would
be entitled to unemployment compensation benefits
but for the fact that the establishment has less than
eight persons employed. There are 646,352 workers
in the State engaged in types of activity which do
not come under the provisions of the Law, and con-sequently,
have no protection against unemployment,
making a total of non-covered workers of 824,900, or
61.8 percent of the total labor force, in which are in-cluded
26,995 government workers.
INDUSTRIAL DISTRIBUTION
BY SEX AND COLOR—URBAN STATUS
The industrial distribution of the labor force has
been further classified by sex, color, and urban
status. Urban population represents inhabitants of
towns of 2,500 or more, which accounts for less than
one-third of the state's labor force, and only 40.8 per-
( Continued on Page 23)
TABLE A.—INDUSTRIAL DISTRIBUTION OF N. C. LABOR
FORCE (CENSUS OF 1940) AND OF COVERED WORKERS,
JUNE 30, 1941 TO DECEMBER 1941.
3. Bertie, Gates, Camden, Currituck, Dare, Hoke, Sampson,
Duplin, Greene, Jones, Pamlico, Northampton, Hyde, Bruns-wick,
and Pender.
4. Camden, Greene, Jones, and Hyde.
Industry
Total
Employ-ment
Census
1940
I
Per-cent
of
Total
Em-ployed
II
Average
Covered
Workers
6-30-41
to
12-30-41
III
Per-cent
of
Cover-age
IV
Non-
Covered
Employ-ment
in
Subject
In-dustries
V
Percent
of Total
Subject
Non-
Covered
VI
Total
Non-
Covered
Employ-ment
VII
Agriculture, Forestry and
409,050
2,914
46,971
33.8
.2
3.9
409,050
2,571
27,692
88.2
59.0
343
19,279
.2
10.8
343
19,279
325,539 27.0 364,544
Food 13,498
189,979
6,322
6,142
27,452
24,383
5,244
5,403
9,184
1,319
4,250
2,142
1,430
2,933
25,858
14,831
230,998
7,600
112.3
121.5
Saw and Planing Mills 25,532
26,718
6,793
3,359
7,219
1,597
4,721
1,583
1,357
2,708
29,528
76.0
109.6
129.5
62.2
78.6
121.1
111.1
73.9
94.9
92.3
114.3
Printing and Publishing
Stone, Clay and Glass
AllOther
Transportation, Communica-tion
and Utilities (Total) .
.
41,123 3.4 19,724 *76.3 6,118 3.4 *6,118
15,388
7,990
5,799
4,525
7,421
107
5,428
1,854
,315
7,020
Trucking
Other Transportation
67.9
32.0
117.5
94.6
2,562
3,945
1.4
2.2
2,562
3,945
401 .2 401
Wholesale and Retail Trade
(Total) 126,712 10.5 79,142 62.5 47,570 26.6 47,570
17,778
25,155
12,963
19,744
51,072
25,511
6,273
2,971
8,047
36,340
74.0
Eating and Drinking Places 22.9
40.8
Other 71.2
Finance, Insurance and
15,416
13,371
81,412
34,021
5,717
63,684
26,995
15,765
1,208,690
1,333,773
125,083
1.3
1.1
6.7
2.8
.5
5.3
2.2
1.3
100.0
11,005
3,780
71.4
28.3
4,411
9,591
2.5
5.4
4,411
Business and Repair Service.
^Domestic
9,591
81,412
^ Laundries
Amusement and Recreation.
13,924
3,592
1,578
5,055
532,607
40.9
62.8
2.5
.0
20,097
2,125
62,106
11.3
1.2
34.8
20,097
2,125
62,106
26,995
10,720
Total Employed 32.0 178,548 100.0 699,817
1 125,083
Total i 824,900
39.9 13.4 61.8
•Excludes 15,281 R. R. employees covered by R. R. Retirement Act.
Summer, 1942 THE U. C. C. QUARTERLY PAGE 1 1
Notes on Operations
THE TREND OF U. C. C. OPERATIONS
The establishment of the Unemployment Compen-sation
Commission in North Carolina contemplated
the performance of two distinct, though inter-related,
functions. Primarily, the Commission is
concerned with paying weekly benefits to workers
who have been insured against loss of their pay under
the unemployment compensation program, when it
is found that they are without work through no fault
of their own. To that end the Commission is also
charged with the collection from employers of the
money which constitutes the unemployment compen-sation
trust fund.
The number of workers protected by this program
has increased since the beginning of unemployment
compensation in this state, until today the total
number who have established wage credits and might
apply for benefits is well over 750,000. However,
because of the tendency of many workers to come
and go between covered and non-covered employ-ment,
the trend in the average number of covered
workers from month to month is probably a more
consistent index of the application of unemployment
compensation to the state's labor force. This
monthly average of workers covered by the law has
risen from 452,112 in 1937 to 532,607 in 1941, or an
increase of nearly a fifth.
To those who are out of work, the Commission has
been paying benefits since January, 1938. The pay-ments
are made only under certain conditions. Be-side
being unemployed, either totally or partially, in
order to receive unemployment compensation pay-ments,
an individual worker has to be registered for
work in an employment office, has to be both able
and available for suitable work, and has to have
earned at least $130 in wages in a previous calendar
year from an employer who contributes to the unem-ployment
compensation fund. The sums paid to
workers meeting the requirements have fluctuated in
response to economic conditions and to legislative
changes in the authorized size of the weekly benefits.
For instance, on the basis of the original benefit
formula, the average weekly payment was $7.25 for
total unemployment in 1938. After the 1939 Legis-lature
had reduced the scale, the average weekly
amount paid fell below $5.00, and North Carolina in
this respect then ranked lowest among the states in
aid to its unemployed workers. But since the action
of the 1941 Legislature in liberalizing the provisions
of the benefit schedule, the average weekly payment
in this State has been growing. In 1941 it came to
$5.90, a gain of 26 percent over the 1940 figure,
although still the lowest in the country. It has in-creased
further in 1942, and is now becoming fairly
well stabilized around the current figure of $7.40.
With regard to the extent of unemployment from
time to time, the best measure among covered
workers is the number of benefit checks issued from
the Commission. On this basis, the accompanying
chart graphically illustrates unemployment trends in
North Carolina over the last three and a half years.
It may be seen at once that June 1942, when the
number of benefit checks issued each month dropped
below any point to which it had previously fallen,
marks the first time on record when so few covered
workers have been out of work. Estimated on a
weekly basis, this would mean less than 7,000
workers without jobs, and not as many as one in a
hundred of those protected by the unemployment
compensation program.
The significance of June 1942 benefit checks, which
were actually 29,317 in number, becomes more ap-parent
by comparison with the peak of 114,413
checks for August of 1940, or the average number of
checks issued monthly from 1938 through 1941
which was 68,874.
NUMBER OF BENEFIT CHECKS ISSUED BY MONTHS
1939-1940-1941-1942
uu r a* 11 OiK like ffr ^TMS
Sums paid to unemployed workers during the same
period covered by the chart averaged $422,206.55 a
month, but in June 1942, the shrinking number of
checks withdrew only $214,521.19 from the fund.
Collection and administration of the unemploy-ment
compensation fund represent the other side of
the commission's responsibility. A broad survey of
operation to date shows that the fund has been
steadily growing despite claim loads which occasion-ally
have made extensive drains from it. How this
general trend may be affected in the future by re-duced
payroll taxes under the plan of employer
experience rating which is just beginning in this
state remains to be seen. 1
Between the passage by the North Carolina Legis-lature
in December 1936 of the Unemployment Com-pensation
Law, and January 1938 when unemploy-ment
benefits first became payable, payroll taxes and
interest for two years yielded a fund of $9,361,765.99.
This constituted the reserve with which the Com-mission
began its administration of payments to
workers who had lost their jobs.
It so happened that 1938 was a year of nation-wide
business recession and the first claim loads the Com-
1. See article on Employer Experience Rating, infra p. 28.
PAGE 12 THE U. C. C. QUARTERLY Summer. 1942
mission had to face were heavy ones. While contri-butions
to the fund continued regularly, for five
months that year these amounted to less than the
Commission was called upon to pay out in benefits,
and for the three months of June, July, and August,
it was necessary to dip into the initial reserve. How-ever,
this is the only occasion to date when such a
situation has occurred. Economic conditions gradu-ally
improved, and by the end of 1938, the fund could
show a net excess of contributions received during
the year over benefit payments made, of $1,564,-
691.74, or 19 percent.
Following years have added wider margins to the
reserve. In 1939, contributions exceeded benefits
paid by $6,752,428.71 and in 1940 the excess was
$6,719,347.92; or 154 and 147 percent respectively.
At the end of 1941 the fund had accumulated
$1,103,334.43 for the protection of railroad workers
specifically. This amount was then withdrawn and
transferred from the Unemployment Compensation
Commission to the Railroad Retirement Board,
through which unemployment benefits to railroad
employees are now administered. Nevertheless,
during 1941 contributions continued to be greater
than benefit payments by $8,528,014.22 or 243 per-cent,
and now for the first six months of 1942, con-tributions
received have been more than benefits
paid by $6,900,133.41, or as much as 362 percent.
Another way of reviewing this picture is to look
at the progressively decreasing ratios of benefits to
contributions. For instance, in 1938, benefit pay-ments
absorbed 84 percent of contributions ; in 1939,
39 percent; in 1940, 41 percent; in 1941, 29 percent;
and for the first half of 1942, only 21.5 percent.
From the beginning, benefit payments have averaged
about a third of the sums the Commission has
collected.
Thus, in the six and a half years since the law
became effective, employers of this state have put
into the unemployment compensation fund on behalf
of their workers a total of $61,242,191.60, exclusive
of the amount transferred to the Railroad Retire-ment
Board. The unused reserve on deposit with the
United States Treasury has accumulated interest
amounting to $2,152,316.46. After deducting
$22,591,468.45 for all benefits paid through June
1942, there remains a total of $40,803,039.61 against
which workers in this state may draw in the future.
Yet such a reserve must be regarded as an in-dispensable
bulwark against that day when post war
readjustments may result in a higher benefit load
than has yet been experienced. It is easily con-ceivable
that unless a post-war economy is carefully
planned, this entire reserve might be required to
carry through a period when unemployment may be
not only widely spread but long lasting.
TIME STUDY OF APPEALED CLAIM CASES
With the load of claims for benefit payments the
lowest in its history, the Unemployment Compensa-tion
Commission, even with its own staff reduced by
the withdrawal of personnel to military service, is
making use of the opportunity to examine adminis-trative
procedures and make special analyses of
operations. One such study by W. F. Renfrow and
Zeb V. Gambill, Appeals Deputies, deals with the
time involved in handling appeal cases.
Each individual worker protected by unemploy-ment
compensation is given a chance, when he files
his claim for benefit payments, of expressing any
dissatisfaction he may have with the handling of his
particular case. The State program is designed to
give special attention to workers who make such an
appeal.
Since the time involved is an important factor in
administration, and especially for the individual
worker who has to do the waiting, the results of this
recent analysis of cases on appeal is of consequence
in that it shows that the average length of time
between the date a record is received by an appeals
deputy and the date the final decision is mailed is
20.9 days during a month with a normal case load.
This is just under the three weeks which it is
thought should be sufficient time allowance.
Of 172 cases mailed during the months of May and
June, 112 were concerned with the issue of avail-ability
for work. These arose, in practically every
instance, under Commission Decision No. 278, Sec-tion
4 (c), Able and Available: "A female claimant
must have made some definite arrangements with
some definite person to care for her children or per-form
other necessary domestic duties in the event
claimant is offered suitable employment, and these
arrangements must be made prior to the filing of
claimant's claim for benefits in order to make clai-mant
able and available for work within the meaning
of the Law."
Issues involved in the cases studied were grouped
as follows: in May there were 49 appeals on avail-ability
for work, 17 voluntary leaving work, 10 on
misconduct, 5 on refusal of work, and 2 on antedating
of claims; in June there were 63 on availability for
work, 13 voluntary leaving work, 9 on refusal of
work, and 4 on misconduct. As there were more
appeal opinions to consider in June than any prior
month, disposal of the cases required slightly more
than the average time allowance.
Six claimants appealed from the deputies' de-cisions
during May. The Commission in each in-stance
affirmed the decision of the appeals deputy.
Of 13 such appeals to the Commission in June, 12
have been settled with the deputies' decisions af-firmed
; one was reversed.
Before a worker is paid benefits, he is given a
chance to accept or protest the statement, known as
an initial determination of his claim. If he is dis-satisfied
with it and believes that it should be
changed in his favor, he has the right to ask for an
adjustment. This is his right of appeal. Or, if after
a preliminary hearing by a claims deputy, he is
notified that he has been disqualified for payments
for certain weeks and does not believe the decision is
just, he may also make an appeal. Appeals must be
made within five days. Claimants make an appeal
by applying to an appeals deputy for a hearing and
decision. If claimant is still dissatisfied with this
decision, he must file his second protest within ten
days. This serves as a request for a review and
redetermination of his case by the Commission. A
further protest of appeal made within ten days from
SUMMER, 1942 the u. C. C. Quarterly Page 13
a decision by the Commission, goes to the Superior
Court. In connection with appeals, the Law also
recognizes the right of other interested parties in a
case, such as claimant's employers, to be represented
and heard.
CLAIMANTS ANALYZED
The worker who remains without work today in
North Carolina is most likely to be a woman, in her
early thirties, formerly engaged in textile manufac-turing.
This is indicated by the findings from a
special analysis of the unusually small number of
claims being received for unemployment benefits by
the Unemployment Compensation Commission.
Of the 3,146 initial claims filed during the two
weeks ending June 30, 1942, it was also found that
close to a fourth of them were for partial unemploy-ment.
In the recent past nowhere nearly such a
large proportion of the claim load has been concerned
with partial lay-offs.
Among the claimants filing for benefits during this
period, 82 percent had been employed in the manu-facturing
industry, of which 2,570, or 69 percent
were in the textile group. Almost three-fourths of
all the claims were presented by women, and the
median age reported was 32. More than 60 percent
gave as the cause of separation, non-availability of
work, while a very small number had had no work
since filing previous claims.
Under the State law, benefit payments for partial
unemployment are paid to covered workers when
their working time within the plant where they are
employed has been reduced below a certain mini-mum.
For instance, if in any week due to lack of
work, a man works at his job for less than 60 percent
of the usual full-time hours for his industry or plant,
and earns less than six-fifths of the amount he
would be entitled to if totally unemployed, he be-comes
eligible for partial benefit payments. In
dollars, these will equal the difference between the
amount he would get if totally unemployed and five-sixths
of the amount he earned in the part-time
week.
COLLECTION OF OVERPAYMENTS
One of the Unemployment Compensation Com-mission's
constant worries is how to prevent
fraudulent claims and to recover money paid out on
them. Although the amount in any one year is
relatively small compared with the total value of
benefits paid—it was less than a third of one percent
in 1940—the Commission pursues the irregular clai-mants,
usually through the courts, to the end that a
considerable proportion of overpayments are even-tually
returned to the unemployment compensation
fund. Because of the necessary time lag in effecting
final settlements in many of the cases, figures which
have been prepared to show the results of this work
following the discovery of overpayments are based
on occurrences in 1940. Due to claimants not re-porting
earnings while receiving unemployment
benefits, there were 615 irregular claims on which
$15,414.57 was paid out. Since then, investigations,
followed by 203 cases prosecuted, have brought in a
return of $4,406.23—or well over a quarter recovered.
INTERSTATE BENEFIT PAYMENTS
Fewer workers coming into North Carolina feel
the pinch of unemployment than do those leaving the
State. This is the picture revealed by figures com-piled
on interstate claims from 1940 to date, showing
that North Carolina receives more claims from other
states for unemployment insurance payments than
it refers out of the State for jobless workers who
have come here.
However, this picture is probably more suggestive
than significant of North Carolina's favorable posi-tions
as regards its unemployment record, since the
whole question of industrial migration, even in
normal times, is a complicated one. In September,
1940, the Social Security Board estimated* the num-ber
of industrial workers crossing state lines each
year for reason of employment at between one and
two millions, adding that if it were possible to
measure interstate movement for reasons of unem-ployment,
the figure would be much higher. During
1940, North Carolina received 8,860 initial claims and
46,110 continued claims from other states for pay-ment
of unemployment insurance to workers on the
basis of previous N. C. earnings; while referring to
other states, 6,924 initial claims and 45,289 con-tinued
claims.
In 1941, when the effects of priorities unemploy-ment
due to lack of raw materials and conversion of
plants were beginning to be felt, the Commission re-ceived
7,262 initial claims and 49,448 continued
claims from outside North Carolina, and referred to
other states only 5,543 initial claims and 31,903 con-tinued
claims—a substantial difference.
For the first half of 1942, while discussions were
being heard as to the mobility of labor for war pro-duction,
North Carolina has received 3,371 out-of-state
initial claims and 26,849 continued claims, and
has referred elsewhere but 3,158 initial and 20,044
continued claims.
The fact that the number of initial claims for
reference out of state, which sometimes varies con-siderably
from one month to the next, increased in
*Migratory Labor (Sept. 1940) 3 Social Security Bulletin
No. 9, at p. 6.
(Continued on Page 23)
INTERSTATE CONTINUED CLAIMS PAID OUT BY NORTH
CAROLINA AND REFERRED TO OTHER STATES FOR
PAYMENT BY MONTHS—1940-1941-1942
HUNDREDS
PAGE 14 THE U. C. C. QUARTERLY Summer. 1942
A Study of the Duration of Benefit Payments
By Benton Bray, Senior Statistician
For the purpose of determining, if possible, the
extent to which the duration provisions of North
Carolina's benefit formula carry the number of
authorized payments through periods of unemploy-ment
as experienced by workers in this State, the
Bureau of Research and Statistics of the Unemploy-ment
Compensation Commission has studied a sam-ple
of 23,790 claimants whose benefit years ended in
1941. The cases chosen represented approximately
one-fourth of all such claimants.
The most important finding from the sampling
was that 41 percent of the claimants drew the maxi-mum
number of benefits allowable, that is compen-sation
for the full 16 weeks. The average duration
of payments was for ten weeks. While there were
29 percent of the claimant cases in which less than
five weeks compensation was received, over half the
claimants, or 56 percent, received ten or more weeks
unemployment compensation.
Furthermore, almost three-fourths of those who
exhausted their benefit rights did so in one spell of
unemployment. This meant a time lapse of about
eight months before they were eligible to file another
claim in a benefit year. For instance, the time
elapsing between the date of the last week compen-sated
and the end of the benefit year, for the clai-mants
exhausting their benefit rights, was five
months or longer for 89 percent of the claimants.
Thus the indication seems clear that in spite of a
labor market favoring the replacement of workers,
a much higher proportion of the unemployed than
might have been supposed, tend to remain out of
work for considerable periods.
The study also revealed the tendency of claimants
in the lower income brackets to draw unemployment
compensation benefits longer than those eligible for
larger weekly amounts. As an example: 48 percent
of the claimants with weekly benefit amounts of less
than $6.00 drew all 16 weeks compensation, as com-pared
to a third of the group in the $6.00 to $10.00
bracket. Only 27 percent of the claimants in the
$11.00 to $15.00 class exhausted their benefit rights.
Claimants with benefit years ending in 1941 had
either 1938 or 1939, depending on which half of the
year of 1940 the claim was filed, as their base period.
Despite a local business index indicating business
conditions as being better in 1939, the weekly benefit
amount based on the 1939 base period was lower
than on the base period of 1938. As the 1940-41
benefit year was under the reduced 1939 benefit
formula of the Unemployment Compensation Law,
these cases came at a time when the average weekly
payment was between $5.00 and $5.50.
BENEFIT CLAIMS CLASSIFIED BY DURATION
Of the 23,790 benefit claims studied, less than half,
or 43 percent, received all 16 weeks compensation and
four percent were compensated for less than one full
week, indicating either partial or part-total unem-ployment
or deductions for other remuneration. The
following table summarizes the duration of payments
of the sample.
TABLE 1.—NUMBER OF WEEKS COMPENSATED.
Weeks Compensated Number
Percent of
Total
Cumulative
Percent
Less than 1 week. _ . _ _ _____ 996
2,008
1,481
1,287
1,019
876
790
695
669
571
602
520
480
467
525
701
10,103
23 , 103
4.2
8.4
6.2
5.4
4.3
3.7
3.3
2.9
2.8
2.4
2.5
2.2
2.0
2.0
2.2
2.9
42.6
100.0
4.2
12.6
2 weeks, less than 3 weeks 18.8
24.2
28.5
32.2
6 weeks, less than 7 weeks 35.5
38.4
41.2
43.6
46.1
48.3
50.3
52.3
54.5
57.4
100.0
Whereas 43 percent of them received all 16 weeks,
almost as many claimants, 41 percent, received fewer
than nine weeks compensation. Based on the
sample, the average duration of payments for clai-mants
with benefit years ending in 1941 was ten
weeks.
SPELLS OF UNEMPLOYMENT
If a claimant had only one period of unemploy-ment,
this indicated no interim spells of employment
and was classified as one "spell" of unemployment.
A spell of unemployment interrupted by work and
then resumed as another spell of unemployment, was
classified as two spells of unemployment. The fol-lowing
table reveals the various spells of unemploy-ment
for those claimants receiving compensation for
eight weeks and more.
TABLE 2--CLAIMANTS CLASSIFIED
UNEMPLOYMENT.
BY 3PELLS OF
Spells of Employment
Weeks Total 1 2 3 4
No.
Per-cent
No.
Per-cent
No.
Per-cent
No.
Per-cent
No.
Per-cent
16 weeks
14 weeks.
10,103
525
480
602
669
100.0
100.0
100.0
100.0
100.0
7,349
328
298
397
455
72.8
62.6
62.2
65.9
68.0
2,243
143
121
143
164
22.2
27.2
25.2
23.8
24.5
436
27
40
39
30
4.3
5.1
8.3
6.5
4.5
75
27
21
23
20
0.7
5.1
4.3
10 weeks .
8 weeks
3.8
3.0
It will be noted that those claimants receiving the
maximum duration of payments, 16 weeks, had a
slightly higher percentage of cases with no interim
period of employment, 73 percent as compared to the
next highest, 68 percent for claimants with eight
weeks compensation. Claimants receiving 14 weeks
compensation had the highest relative number of
spells of unemployment ; five percent had four or
such spells. However, the lowest relative number
of cases in this group, less than one percent, were
those claimants receiving 16 weeks compensation.
TIME LAPSE—EXHAUSTED CLAIMS
In the sample of 23,790 claimants studied, there
were 10,103 of them who drew all 16 weeks compen-sation.
This majority, who exhausted their benefit
rights during the benefit year, were further ex-
Summer, 1942 THE U. C. C. QUARTERLY Page 15
amined as to the time elapsing between the last
benefit check and the end of the claimant's benefit
year, to see how long he must wait, as far as unem-ployment
compensation benefits are concerned,
before again becoming eligible to receive benefit pay-ments.
Table 3 shows this time lapse for all clai-mants
and by the size of weekly benefit amount.
TABLE 3—TIME ELAPSING BETWEEN THE DATE OF
LAST WEEK COMPENSATED AND END OF BENEFIT
YEAR—MAXIMUM DURATION CASES.
Total
Less than
$6.00 $6 -$10 $11-$15
Time Lapse
No.
Per-cent
No.
Per-cent
No.
Per-cent
No.
Per
cent
Total 10,103
277
884
1,593
7,349
100.0
2.7
8.7
15.9
72.7
7,474
205
717
1,256
5,296
100.0
2.7
9.6
16.8
70.9
2,253
62
138
270
1,783
100.0
2.7
6.1
12.1
79.1
370
10
29
67
270
100.0
2.7
7.7
17.8
71.8
It appears that 73 percent of all the claimants
received the full 16 weeks compensation in four
months, meaning there were eight months elapsing
between the date of the last compensable week and
the end of the benefit year. Only three percent of
the claimants drew benefit payments over a period of
as long as ten or more months. There were no great
differences between the three groups tabulated as to
weekly benefit amounts. In the less than $6.00 group,
71 percent had a time lapse of eight months; 79 per-cent
had a time lapse of eight months in the $6.00
to $10.00 group; and 72 percent were in the $11.00
to $15.00 group.
Such a time lapse classification of less than eight
months indicates either breaks in the period of total
unemployment or partial employment. But, in three-fourths
of the exhausted cases, once the claimant
registered for work and established his right to un-employment
compensation benefits, he continued to
draw them for 16 weeks of total unemployment.
BENEFIT CLAIMS ACCORDING
TO SIZE OF CHECKS
The claims studied in this sample were based on
the benefit formula adopted by the State Legislature
in February 1939. Certain fundamental features of
this particular formula were: the base period for
claims filed prior to July 1 was the next to last com-pleted
calendar year; for claims filed subsequent to
July 1, the last completed calendar year; the mini-mum
weekly benefit amount was $1.50; and the
maximum weekly benefit amount was $15.00; the
minimum base period wage for the $1.50 weekly
benefit amount was $130.00, and for the $15.00
weekly benefit amount was $1,461.00.
The average weekly benefit amount of the sample
was $5.42 as compared to a $5.31 average payment
for total unemployment during the fourth quarter of
1939, to a $5.09 average payment for total unemploy-ment
in the third quarter of 1940, and to a $5.00
average payment for total unemployment in the first
quarter of 1941. In March 1941, the benefit formula
of the Unemployment Compensation Law was
amended, and by the first quarter of 1942 the average
payment for total unemployment had reached $7.20.
But in the sample study over half, 52 percent, of
the claimants had weekly benefit amounts of less
than $5.00. Only eight percent of the 23,790 cases
had weekly benefit amounts of $10.00 or more, as
may be seen in the following table.
TABLE 4.—DISTRIBUTION OF SAMPLE BY WEEKLY
BENEFIT AMOUNT.
Benefit Amount
Number of
Claimants
Percent of
Total
Cumulative
Percent
$ 1.00-$ 1.99 1,162
4,989
3,271
2,856
3,276
2,425
1,754
1,267
880
512
296
214
180
124
584
23,790
4.9
20.9
13.7
12.0
13.8
10.2
7.4
5.3
3.7
2.2
1.2
.9
.8
.5
2.5
100.0
4 9
2.00- 2.99 25 8
3.00- 3.99 39 5
4.00- 4.99 51 5
5.00- 5.99 65 3
6.00- 6.99 75 5
7.00- 7.99 82 9
8.00- 8.99.
9.00- 9.99
88.2
91 9
10.00- 10.99 94.1
11.00- 11.99 95.3
12.00- 12.99 96.2
13.00- 13.99 97.0
14.00- 14.99 97.5
15.00 100
Total
Table 5 below points out what Chart I illustrates
—
the tendency of the claimant drawing small weekly
benefit checks to remain unemployed longer, at least
draw more weeks compensation, than those with
larger weekly benefits.
TABLE 5.—CLAIMS COMPENSATED CLASSIFIED
DURATION OF PAYMENTS AND BY WEEKLY
BENEFIT AMOUNT.
BY
Weekly Benefit Amount
Weeks Compensated Total
Less than
$6.00 $6-$ 10 $11 $15
No.
Per-cent
No.
Per-cent
No.
Per-cent
No.
Per-cent
Total 23,790
7,667
3.327
2,693
10,103
100.0
32.2
14.0
11.3
42.5
15,554
4,002
2,235
1,843
7,474
100.0
25.7
14.4
11.8
48.1
6,838
2,976
901
708
2,253
100.0
43.5
13.1
10.4
33.0
1,398
689
191
142
376
100.0
Five weeks or less. .
6 to 10 weeks. _ _
1 1 to 15 weeks .
16 weeks.
49.3
13.6
10.2
26.9
Whereas 48 percent of the claimants with weekly
benefit amounts of less than $6.00 drew the full 16
weeks compensation, one-third of the claimants with
weekly benefit amounts of $6.00 to $10.99 drew 16
weeks, and only 27 percent of the claimants with
weekly benefit amounts of $11.00 to $15.00 drew the
limit, 16 weeks.
Chart II reveals the relative number of claimants
receiving the maximum number of benefit payments
as compared to all claimants by each weekly benefit
amount class was in the $2.00 to $2.99 class. The
smallest percentage, 23 percent, was in the $14.00 to
$14.99 class.
Claims studied with benefit years ending between
January 1 and June 30, 1941, had the base period
1938; and those claims with benefit years ending
between July 1 and December 31, 1941, had the 1939
base period.
The following table compares the weekly benefit
amounts of the two sets of claims.
PAGE 1 6 THE U. C. C. QUARTERLY SUMMER, 1942
TABLE 6.—COMPARISONS OF BASE PERIODS BY WEEKLY
BENEFIT AMOUNTS.
Weekly
Benefit
Amount
Number of
Claims
Percent of
Total
Cumulative
Percent
Base
Period 1938 1939 1938 1939 1938 1939
Total 14,223
611
2,607
1,910
1,765
1,987
1,473
1,126
870
617
352
188
149
108
74
386
9,567
551
2,382
1,361
1,091
1,289
952
628
397
263
160
108
65
72
50
198
100.0
4.3
18.4
13.4
12.4
14.0
10.4
7.9
6.1
4.3
2.5
1.3
1.0
0.8
0.5
2.7
100.0
5.8
24.8
14.2
11.4
13.5
10.0
6.6
4.1
2.7
1.7
1.1
0.7
0.8
0.5
2.1
% 1.00-$ 1.99 4.3
22.7
36.1
48.5
62.5
72.9
80.8
86.9
91.2
93.7
95.0
96.0
96.8
97.3
100.0
5.8
2.00- 2.99 30.6
3.00- 3.99 44.8
4.00- 4.99 . 56.2
5.00- 5.99 69.7
6.00- 6.99 79.7
7.00- 7.99 86,3
8.00- 8.99 90.4
9.00- 9.99 93.1
10.00- 10.99 94.8
11.00- 11.99 95.9
12.00- 12.99 96.6
13.00- 13.99. 97.4
14.00- 14.99 97.9
15.00 100.0
TABLE 7.—CLAIMS FOR UNEMPLOYMENT COMPENSA-TION
CLASSIFIED BY INDUSTRY AND BY PER-CENTAGE
DISTRIBUTION OF DURATION.
Despite various business indices indicating in-creased
business activity in North Carolina in 1939,
the weekly benefit amount for those cases based on
1939 business activity are not above, but rather
slightly below 1938 weekly benefit amounts. There
were 63 percent of all claimants with 1938 as the
base period with weekly benefit amounts of less than
$6.00, but 70 percent of the claims having 1939 as
the base period had weekly benefit amounts of less
than $6.00. Of those claims filed between July and
December, thereby having the 1939 base period, only
seven percent had weekly benefit amounts of $10.00
or more. There were nine percent of the claims hav-ing
1938 as the base period with weekly benefit
amounts of $10.00 or more. The average size benefit
payment for total unemployment based on 1938
wages was $5.65 as compared to an average of $5.09
based on 1939 wages.
A composite business index prepared in the Com-mission's
Bureau of Research and Statistics 1
, shows
95 for 1938, as compared to 111 for 1939. This in-dex
included such items as cotton consumption,
active spindle hours, electric energy production,
gasoline sales, bank debits, but the amount of to-bacco
processed was not included. North Carolina
has each year many claims from seasonal tobacco
processing workers in the low weekly benefit
brackets. Possibly the samples were not sufficiently
large to reach the direct effects of the up-turn in
business in 1939.
INDUSTRIAL CLASSIFICATION
The claimants were studied again as to the in-dustry
of their last employer as shown on the notices
of separation from the last covered employment. By
far the largest number of claimants were formerly
employed in the manufacturing industry division.
Of the 23,790 cases studied, 17,873 belonged in this
group. This was three-quarters of all the cases
taken. The next largest number, 3,746, or 16 per-cent
was in the trade division. Table 7 summarizes
the basic data in this report.
Industry
Total
Mining
Construction
Manufacturing
Food
Tobacco
Textiles
Wearing Apparel
Basic Timber Products
Furniture
Other Products
Transportation, Comm. and Public Utilities
Trade, Wholesale and Retail
Finance, Insurance, and Real Estate
Service
Establishments, n.e.c.
5 weeks 6-10 11-15
Total or less weeks weeks
100.0 32.2 14.0 11.3
100.0 17.6 30.4 20.6
100.0 29.2 20.2 16.1
100.0 37.4 14.2 10.9
100.0 27.8 16.3 14.6
100.0 8.1 8.5 8.5
100.0 42.0 14.4 10.4
100.0 45.6 16.1 6.4
100.0 31.7 20.8 13.2
100.0 43.3 12.6 14.9
100.0 29.4 17.1 16.5
100.0 23.9 15.8 13.5
100.0 11.9 10.2 10.7
100.0 20.5 19.7 16.7
100.0 15.7 11.8 13.4
100.0 12.5 37.5 12.5
16
weeks
42.5
31.4
34.5
37.5
41.3
74.9
33.2
31.9
34.2
29.2
37.0
46.8
67.2
43.1
56.7
37.5
1. See charts, infra p. 26.
By far the largest industry group in the manu-facturing
division was textiles, where 70 percent of
the 17,873 claimants show manufacturing as their
last employment. In fact, the 12,489 claimants
showing textile work as their last employment repre-sented
53 percent of all claimants studied.
According to industry division, the largest relative
number—67 percent—of claimants that received the
full 16 weeks were in trade. Service was second with
57 percent of the exhausted cases. The transporta-tion,
communications, and public utilities; and the
finance, insurance, and real estate groups, followed
with relatives of 47 percent and 43 percent respect-ively.
Within the manufacturing division, the tobacco
group showed the largest percentage of exhaustions,
nearly three-fourths. Ordinarily the tobacco in-dustry
experiences few unusual economic changes.
However, the large number of tobacco-processing
workers, usually Negro men and women, are classi-fied
under tobacco manufacturing and wholesale dis-tribution.
There is little or no seasonality in the
work of a regular tobacco-products manufacturer,
but the tobacco-processing workers are employed
only during a few months of the calendar year to
handle the tobacco crop as it is auctioned, redried,
stemmed, and packed.
The fact that 42 percent of the textile employees
received less than six weeks compensation testified
to the increasing production of the cotton and hosiery
mills of the state in the last part of 1940 and in
1941.
When the 23,790 claimants were examined as to
their weekly benefit amount by industry divisions
and by industry groups in the manufacturing di-vision,
they were grouped into three classes, less
than $6.00; $6.00 to $10.50; and $11.00 to $15.00.
For all claimants, 65 percent of the cases had weekly
benefit amounts of less than $6.00. However, in the
industry division of establishments, not elsewhere
classified, 87 percent of claimants had benefit pay-ments
of under $6.00. This division is made up pri-marily
of small loggers and saw mills. Only 16 cases
were studied. In the trade division there were 84
percent of the claimants, and in construction, 71 per-cent
of former employees, with weekly benefit
amounts of less than $6.00. As would be normally
Summer, 1942 THE U. C. C. QUARTERLY PAGE 17
CHART 1.—A SAMPLE OP CLAIMS COMPENSATED DUR-ING
1941 CLASSIFIED BY DURATION OF PAYMENTS
AND BY WEEKLY BENEFIT AMOUNT.
WEEKLY BENEFIT AMOUNT
ALL
CLAIMS
5.99 OP
LESS
6.00 TO
10.99
11.00 TO
15.00
100
80
60
40
20.
o_L
42.5 48.1 3 3.0 26.9
II TO 15 WEEKS
6 TO 10 WEEKS
5 WEEKS OR LESS
CHART 2.—A SAMPLE OF CLAIMANTS RECEIVING MAXI-MUM
DURATION OF PAYMENTS DURING 1941 CLAS-SIFIED
BY WEEKLY BENEFIT AMOUNT.
PERCENT OF ALL CLAIMANTS
RECEIVINC MAXIMUM DURATION
«0
56
52
48
32
28
24
20
5=z===r
I 2 3 4 5 6 7 8 9 10 II 12 13 14 13
BENEFIT AMOUNT IN DOLLARS
expected, the smallest percentage, 49 percent, was
in the finance, insurance, and real estate group.
TABLE 8.—CLAIMS FOR UNEMPLOYMENT COMPENSA-TION
CLASSIFIED BY INDUSTRY AND BY PERCENTAGE
DISTRIBUTION OF WEEKLY BENEFIT AMOUNT.
Weekly Benefit Amount
Industry
Total
Less than
$6.00
$6.00 to
$10.50
$11.00 to
$15.00
Total 100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
65.4
63.7
70.9
61.2
63.4
76.3
57.1
78.1
77.4
61.0
65.2
60.4
S3.
8
49.2
72.0
87.4
28.7
30.4
19.8
32.9
27.8
21.7
36.4
20.5
18.3
34.1
27.0
31.9
12.4
23.5
21.1
6.3
5.9
Mining. _. _
Construction _ .
Manufacturing
Food
Tobacco
Textiles
Wearing Apparel
5.9
9.3
5.9
8.8
2.0
6.5
1.4
4.3
Furniture
Other Products
Transportation, Comm. and Public
Utilities
Trade, Wholesale and Retail
Finance, Insurance, and Real Estate..
Service..
4.9
7.8
7.7
3.8
27.3
6.9
6.3
As shown here 27 percent of claimants in the
finance, insurance, and real estate division received
$11.00 or more per week for total unemployment,
whereas only four percent of the claimants in the
trade division received benefits in this higher weekly
benefit amount bracket.
In manufacturing, where 61 percent of the clai-mants
had weekly benefit amounts of under $6.00,
the smallest relative number of claimants, 57 per-cent,
were the former textile workers. From the
wearing apparel group of industries comes the
highest percentage, 78 percent, of claimants in the
lower weekly benefit amount class. Tobacco pro-cessing
workers were evidently among the tobacco
group which had 76 percent of claimants in the less
than $6.00 bracket and only two percent in the
$11.00 to $15.00 bracket.
There are now over 400 Advisory Council mem-bers
for the central and local offices of the United
States Employment Service in North Carolina.
Two-thirds of the personnel of the central Raleigh
office of the N. C. Unemployment Compensation
Commission are women. This is is an increase of
ten percent over the proportion of the Commission's
women workers two years ago.
From New Jersey's Director of Unemployment
Compensation—"I am not shedding tears in advance
of the occasion for them, but we must grant that the
source of our present flood of employment is the
war, and that when the war ends, millions of jobs
will end with it. So far as we can make ourselves
heard over the joybells of overstuffed payrolls, we
cannot let the nation forget that this cannot last
forever. So far as it is possible for us to do so, we
must make ready for the coming let-down. It may
be that we can contribute to the formation of plans
which will be preparation for the end of war em-ployment—
some ready shock-absorber to cushion
the economic blows of demobilization in the field and
in the factory."
North Carolina State Library
Raleigh
PAGE 18 THE U. C. C QUARTERLY Summer, 1942
Survey of Priorities Unemployment in North Carolina
At the present time with the State's industries
already geared to war production and with fewer
workers without jobs than ever before, a study of
priorities unemployment in North Carolina may be
somewhat academic. Yet the story is well worth
recording as an example of the resourcefulness of
this State's employers in converting their plants
—
programs, machinery, operations, products and all
so quickly and smoothly that dislocations among the
working forces never developed to the serious extent
that was expected.
Relatively few plants were forced to close entirely,
or for long. Change-overs were accomplished with
scarcely noticeable disruptions. No unemployment
compensation claims-taker was ever dramatically
faced of a morning with a pile of thousands of appli-cations
for benefits heaped on his desk overnight.
Nevertheless, what has actually taken place in this
State with regard to meeting the hazard of priorities
unemployment, together with the migration of in-dividual
workers and their reabsorption by industry,
is of greater significance than anything which has
so far met the eye or ear.
Back in 1941 when it became apparent that short-ages
of raw materials might seriously affect the
operation of certain North Carolina industries, as
for instance the lack of silk used in the manufacture
of hosiery, official concern over the fate of mill
workers involved caused the Unemployment Com-pensation
Commission to undertake a survey of the
extent of priorities unemployment here, by means
of a close study of the situation in some of the
important industrial centers where it was likely to
be felt most severely. Investigations proceeded
through the early months of this year, and while
much of the material considered was of a confiden-tial
nature, conclusions to be drawn from the indi-vidual
surveys, coupled with other information
which has come to light, form the basis for this
discussion. If the known experience in two or three
places is used by way of illustration, it must be
remembered that the situation in others throughout
the State must have been similar, to have resulted
in the present low level of unemployment evidenced
by the current number of benefit checks being issued
by the Commission.
However, certain dislocations which do not appear
in the over-all picture of employment and unemploy-ment,
must not be overlooked, since the effect on
special classes of business and the individuals con-nected
with them has been severe. If quantitatively
such situations have not been large enough to dis-turb
the general level of unemployment, qualita-tively,
the upheaval in the working lives of the
persons concerned has undoubtedly been catastro-phic.
Such dislocations are reflected in the Com-mission's
records, not by the number of benefit
payments, but by the reports on employers who have
ceased operations. For instance, it is significant
that during three recent months, the 183 covered
employers going out of business have included 39 in
the industrial classification of local building con-tractors
and such as deal with "frozen" building
materials; 29 saw mill operators squeezed out be-tween
ceiling prices and rising labor costs; 19 auto-mobile
dealers, including garages and supply and
repair shops; 19 wholesale jobbers, chiefly bulk oil
companies; 13 manufacturers of textile specialties,
including hosiery ; 9 retail stores handling groceries,
hardware, electrical appliances, etc. ; 8 hotels and
restaurants, presumably in inaccessible locations.
Many plants, rather than laying off employees,
temporarily reduced working time as their usual
production was curtailed. During the first half of
this year, while unemployment was decreasing, the
Commission has compensated for a higher propor-tion
of weeks of partial unemployment, out of work
weeks lost, than it was called upon to do for the
same period in 1941.
When the survey was made, it indicated that re-duced
supplies and orders in the hands of manufac-turers
would in many cases carry them for only a
few weeks. Plants in the textile and wooden furni-ture
industries particularly, were planning future
operations on a much restricted basis, looking ahead
only from one month to the next, or even from week
to week. But shutdowns that might have been ex-pected
never quite developed. The storm clouds of
unemployment overshadowing many workers, for
the most part blew over and away.
The reasons are various and difficult to trace in
detail. On the one hand, were the energetic efforts
of employers to mobilize their resources toward
meeting military requirements and satisfying only
a minimum of civilian needs. On the other, has
been a considerable amount of migration among
workers away from threatened industries, and their
infiltration into different fields of activity. (1) While
it is known that many personnel shifts occurred,
between plants and places both within and without
the State, the migration of workers has been largely
the sum of voluntary individual movements, rather
than mass turn-overs.
Many men workers have been withdrawn to the
armed forces; especially from the hosiery mills
where the age level more nearly coincided with
service specifications, and from the wooden furni-ture
industry as well. For instance, one large
furniture factory has recorded that one man out of
every twelve workers had been called to military
duty. Many more have left their usual work for
employment in war industries in other states, or to
take up work on military construction projects in
North Carolina. Working wives departed to follow
husbands. Secretaries and clerks went to Washing-ton.
Thus many plants have had their working
force automatically pruned without the necessity of
lay offs ; and as small orders and shipments of
materials continued to be received were able to
maintain some operations along with conversion.
1. See Bray, Analyzing the State's Labor Supply and Demand,
infra p. 22.
Summer, 1942 THE U. C. C. QUARTERLY PAGE 19
Surprisingly enough, as time went on, some plants
which expected severe priorities unemployment,
have been in the position of seeking additional help
as often as of letting it go.
While the war effort promised to disrupt the
State's economy and has upset certain types of com-mercial
enterprise dealing with articles subject to
emergency regulations, at the same time it brought
new business to North Carolina into which many of
the workers have been absorbed who might other-wise
have remained unemployed. There are shell-loading
plants, an airplane factory, and expanding
ship-building enterprises on the seacoast which cur-rently
keep over 20,000 local workers busy. Military
installations such as the large army camps, marine
barracks, aviation training centers, and supply
depots, have also claimed many workers formerly
connected with the State's industries. As one project
nears completion, they move on to others still under
way or just breaking ground. Furthermore, with
more soldiers and marines training in North Caro-lina
than in any other Southern state, workers in
trade in the communities adjacent to the military
centers have plenty to do. (2)
Meanwhile, the great tobacco processing factories
continue to thrive, despite restrictions on the uses
of certain materials. The making of Ecustia cigar-ette
paper has become one of the State's most flour-ishing
and vital industries. Wooden furniture plants
which expected to be more adversely affected by war
than they have been still keep most of their em-ployees
occupied producing desks, cabinets, files and
other equipment formerly made of metal. Although
some small specialty mills have been hard hit, their
workers have found employment elsewhere. The
textile mills able to produce material for the Army
and Navy have gained sufficient orders to keep them
running at full capacity in spite of necessary altera-tions
and the retraining of employees.
So far, however, nothing has been found that a
hosiery mill can do except make ladies' stockings.
And North Carolina's extensive hosiery mills re-main
largely unconverted as to product, although
they have had to change over most of their machin-ery
to accommodate different types of thread. (3)
During the last year, the industry experienced a
series of major operations, as silk, nylon, rayon,
vital chemicals and dye stuffs, packaging materials,
cellophane, styles and colors, and new machinery all
underwent various degrees of curtailment or elimi-nation.
Yet Taylor R. Durham, Secretary of the Southern
Hosiery Association, speaking from Charlotte, has
recently told (4) how the draft and war work solved
the unemployment problem which was facing 35,000
to 40,000 hosiery operatives, since today virtually all
of those laid off are now occupied.
2. From Office of War Information. See Raleigh Times, July
20, 1942.
3. See article by O. F. Smetana, of Concord, N. C, Changing
Over From Silk To High Twist Rayon (June 1942) 6
Southern Knitter 8.
4. A. P. press release, July 12, 1942.
This industry which once used 30,000,000 pounds
of silk annually, was left with only such supplies as
were on hand when the embargo on raw silk went
into effect last July. Consequently, full-fashioned
and seamless hose manufacturers began conserving
available silk and nylon by using substitute mate-rials
for the tops and feet of stockings. Then pro-ducers
of nylon notified the industry in February
not to expect further regular shipments as their
output was needed by the Government. But little
by little, the industry received increased allotments
of rayon yarn and at present receives some 17 per-cent
of the Nation's production, after all govern-ment
orders are filled and four percent reserved for
export. By adding an extra twist to the rayon, a
new sheer has been developed which looks almost
as well as silk or nylon when worn. Present rayon
supplies are far below average, however, and most
cotton is unsuited for the industry's precision
machinery, which requires a very fine strong thread
of the type made from scarce long-staple cotton.
As a result of conversion from silk to nylon, to
improved rayon in ever-diminishing quantities, to-day
the southern industry, which used to employ
100,000 workers, operates at less than 60 percent of
capacity and still seeks some sort of war assembly
work for its unused floor space.
Unemployed hosiery workers in the northeast
were readily absorbed by war plants, but in the
more agricultural south, there was little work at
first to which these skilled hands could be turned,
though experienced women hosiery operatives were
taken into cotton textile plants as war orders in-creased
their operations. Other workers, not called
up by the draft, have gone elsewhere. In fact, some
of the hosiery mills have been faced with an employ-ment
problem of their own, since highly-skilled
knitters who are apt at learning mechanics left them
in large numbers to take better-paying war jobs.
Vacancies have had to be filled from among the less
experienced operators previously released.
From the cotton textile manufacturing group
come two other specific illustrations of conversion
and its effect on the employment of workers. Some
time ago, a manufacturer of specialized cotton
goods, one of the largest employers covered by the
unemployment compensation program, reported
how the remaking of his looms for the production
of bagging, cartridge belt yarn, and osnaburgs, was
expected to result in further restricted employment.
Over 20 percent of his looms were being made over
at that time and many other textile plants were
engaged in the same type of conversion, each of
them working with only a certain amount of yard-age.
All towel, flannel, and sheeting looms were
subject to conversion order, and these, after being
changed over to bagging, must be operated continu-ously
for three shifts. Since labor requirements for
the manufacture of coarser and heavier goods are
not so great as for the finished consumer products
previously made, and since less than a fourth of the
usual number of workers would be required on
Christmas packaging this year, it was feared that
working hours would have to be cut for many more
Page 20 THE U. C. C. QUARTERLY Summer, 1942
of his women employees engaged in such finishing
processes as the mill no longer needed.
Large groups of his employees could have been
affected adversely by the impact of war on his
normal production; nevertheless this employer's
success in keeping most of his workers at work is
clearly shown by the relatively few claims for un-employment
benefits referred by them to the Com-mission.
Of all his workers, less than four percent
have suffered from unemployment and registered
claims for benefits since the first of the year. Prac-tically
all of these have been claims for partial,
rather than for total unemployment. Furthermore,
the cases have been spread out over the months, and
the claim load has been decreasing since January
and February. By careful management, including
a system of in-plant training for loom fixers to meet
the emergency and by the transfer of some workers
to other departments or other plants, this employer
has been able to avoid the development of any dras-tic
situation among his working force. In the face
of necessary conversion and limited supplies, the
lay offs from his plant have been negligible and re-duced
working time has had to be made effective for
a very small proportion of the workers.
Perhaps less significant in the number of persons
concerned, but more impressive with respect to the
speed and completeness of conversion within one fac-tory,
is the story which comes out of Roxboro. In
this town, the Collins and Aikman Corporation em-ployed
well over half of all the covered workers in
Person County. They made pile fabrics and velours,
spending four-fifths of their time over the past ten
years producing plush for automobile upholstery.
With the end of automobile production, all orders
for automobile fabric were cancelled. The plant had
224 highly specialized looms of the dipper, overhead,
and pick style, which had been built by the company
to meet their own special weaving problems. For
this reason and because of the highly experienced
skills developed among the workers, it was thought
that the company could not compete on the open
market for the manufacture of ordinary woven
goods in demand, such as tent ducking, serge, and
worsted shirting.
During the week of September 6, 1941, a full
quota of 1,595 employees were busily at work in the
plant. Then as loom after loom had to cease run-ning,
workers were laid off. By the middle of
January only 982 were still reporting and more than
half of these were expecting their employment to
end within a few weeks. As many as 40 percent of
the workers had been released during the fall
months, the majority of them married and carrying
an average share of dependency. Roxboro became a
sad place with so many of its inhabitants facing
desolation. The Collins and Aikman Corporation
looked like a typical civilian war casualty, and a
hopeless case. (5)
Officials of the company, however, felt that war's
disruptions offered them two alternatives, not one.
They could try to save the situation before giving
it up for lost, and the problem was put up to the
engineering crew. Could they possibly remake those
looms to turn out tent duck and serge? Competitors
told them it could not be done, but the Corporation
determined to try anyway, even though it meant
retraining operators as well as rebuilding machin-ery.
So the plant's machinists studied manufactur-ing
processes in other mills and set about converting
the Roxboro equipment to new uses.
The plant's first order was for only 20,000 yards
of duck on a sub-contract. Then came another
50,000 yard order, and they delivered. Although
some of the early runs produced imperfect material
that was rejected by our War Department, the Rus-sian
purchasing agent bought it up. By the middle
of February, the Corporation had 48 of its looms
that had been condemned to idleness weaving serge,
and 160 more turning out tent duck. Since then, all
224 looms have been put into operation making
material for the armed forces—a proud ending to
another priorities unemployment problem.
The future may, and likely will, bring dislocations
which will produce unemployment. Judging by past
experience, however, the ingenuity of North Caro-lina
industry may be expected to keep abreast of any
developments that lie ahead.
LIABILITY OF OIL DISTRIBUTOR
Whether or not certain employees of filling sta-tions
and those of a central bulk plant controlling
them may be protected by the unemployment insur-ance
program of North Carolina is the issue in-volved
in the case of In re: W. T. Green, T/A The
Green Oil Company settled out of court recently by
U. C. C. attorneys. The settlement by which the
bulk plant operator is held liable for taxes on leased
station payrolls may affect the future welfare of a
considerable number of workers.
In this case which was scheduled to come for trial
before Judge Clawson L. Williams of the Superior
Court, a distributor which previously contributed to
the Unemployment Compensation Fund on behalf of
employees in its bulk plant and local filling stations
recently had refused to do so, claiming that having
leased out some of the stations it no longer came
within the terms of the U. C. Law, because the cen-tral
bulk plant and a single station which it retained
operated with fewer than eight workers. However,
the Unemployment Compensation Commission has
maintained that any such plant or employer con-trolling
a number of local stations or leased branches
must be considered as employing the workers in
those branch units as well and therefore be subject
to the state law. The final settlement made follows
the Commission's opinion rendered after an earlier
hearing.
5. See Roxboro Times, February 19, 1942.
Canada's Unemployment Insurance has been mak-ing
a direct contribution to the war effort by invest-ing
its fund, at the rate of about a million dollars a
week, in Victory Loans and similar Government
bonds.
Summer, 1942 THE U. C. C. QUARTERLY PAGE 2
1
The Mica Industry in North Carolina
In view of the present widespread interest in
North Carolina mica, a picture of one of this
industry's plants has been chosen as the cover
feature for this issue of the Quarterly. An addi-tional
word about the industry as a whole in this
State is therefore timely.
For the last 25 years, 75 percent of the world's
supply of mica has come from India. Due to recent
events in the Pacific which have deprived the United
States of that source of supply and to the increasing
demand for sheet mica of high quality for radios,
spark plugs, transformers and generators, the
strategic position of mica in the United States has
become quite pronounced. In view of the fact that
North Carolina has produced 60 percent of the
domestic sheet mica of the United States, for 25
years, the importance of the State in the war effort,
in this respect, is quite apparent.
It is generally believed that the quality of domes-tic
mica is equal to that of the imported variety.*
Apparently there is no geologic or mineralogic
reason why domestic mica should be of inferior
quality. The main reason for the failure to develop
the mica industry in the United States has been
given as the inability to compete with foreign labor
costs.
The mica producing areas of North Carolina may
be grouped in three major fields. Two of these lie
close to the Blue Ridge Range, while the third is
southeast of the mountains in the foothills and Pied-mont
area. In the southwestern part of the State,
the mica mines in Macon, Jackson and Haywood
counties constitute one field. Eighty miles to the
northeast, paralleling the trend of the mountains,
there is another mica producing area, in the coun-ties
of Yancey, Mitchell and Avery. This field really
extends northeastward, into Watauga and Ashe
counties, where numerous dikes of economic value
occur. The Piedmont field is confined principally
to parts of Rutherford, Cleveland, and Lincoln coun-ties.
Regarding each of the three fields designated,
it should be said that there are many commercial
occurrences of mica outside of the counties men-tioned
above. In fact 20 counties in the State have
reported a production of mica during recent years.
Its unique combination of physical properties
make mica so exceptionally well adapted for certain
uses that it is practically indispensable, while for
others it is employed simply because it is at the
same time the best and cheapest available material,
although others may be substituted. The chief uses
for mica center around its high insulating and
dielectric properties, inertness to high temperatures,
low heat conductivity, flexibility, cleavage tough-ness,
and transparency. While there are some places
where it is used for its mechanical properties alone,
probably 90 percent of the modern uses of sheet and
*For detailed analysis of North Carolina mica, see T. G. Mur-dock,
Production of Mica in North Carolina, N. C. Dept. of
C - 3r/iticn cnCi Development Bulletin, I. C. 2 (March,
1942),
punch mica are in the electrical industry ; as an
insulator against high voltages, especially at high
temperatures, there has been no known substitute
for mica.
The purely mechanical uses include lamp chim-neys
and shades, windows or peep-holes in ovens,
furnaces, stoves and stereopticons, eye protectors,
gas masks, and other similar uses where transpar-ency
is required in combination with resistance to
heat and shock. Mica diaphragms have been used in
phonograph reproducers and telephone headsets, but
these are now usually of metal. The major elec-trical
uses require flat insulation in a wide variety
of shapes and sizes, both as straight insulation,
such as separators for commutator bars, discs,
washers, and bushings, and as a form on which to
wind heating elements of irons, toasters, and numer-ous
other items of domestic and industrial heating
equipment. The small shapes are made from punch
mica, and the larger ones from sheet.
Former insulation may be made from sheets if the
shape is not too large or complicated and the cost is
justified, but a large proportion of the special
shapes, such as plates, tubes, rods, cones and large
bushings, are formed by cementing splittings to-gether
under pressure, making a product known as
micanite. In this way all sorts of complicated
shapes may be formed, with results not greatly in-ferior
to sheet mica, and at a much reduced cost.
Another important electrical use of mica, of a
slightly different character, is as a separator be-tween
the leaves of an electrical condenser; this re-quires
an exceptionally high quality of mica, abso-lutely
without flaws, but makes a condenser with
better characteristics than any other dielectric. The
development of the radio and of the internal com-bustion
engine for the automobile and airplane have
made an enormous increase in the demand for con-densers.
High grade mica is also used as a support
for the elements in certain types of radio tubes.
There are no specific military uses for mica, but
war demand greatly increases the ordinary electri-cal
uses; many military requirements are identical
with specific industrial requirements, as for exam-ple,
radio sending and receiving sets, airplane spark
plugs, motors and generators. The Army and Navy
carry large stocks of mica of both the natural sheet
and the micanite type, in addition to hundreds of
cut-to-shape parts, all furnished to them under very
strict specifications.
Because of the acute need of mica by the Army
and Navy, the government is furnishing a large
amount of equipment for the mining of mica in this
State. Mines located in Buncombe, Avery, Mitchell,
Yancey, Transylvania, Cleveland, and Stokes coun-ties
have applied for government equipment and ex-pect
to begin work at an early date. As soon as this
equipment can be distributed there will be a need
for a large number of workers. It is necessary for
a mica worker to be 18 years old ox- more, to pass a
(Continued, on Page 31)
PAGE 22 THE U. C. C. QUARTERLY Summer, 1942
Analyzing the State's Labor Supply and Demand
By Benton Bray, Senior Statistician, U. S. E. S.
Due to the present war conditions, there naturally
arise daily in the minds of the citizens of this State
very definite questions as to our State's supply and
demand of labor. Is there now any unemployment?
If so, why and where does it exist? Are women
being hired today? Are there more Negroes in
manufacturing industries than before Pearl Harbor?
What are the demands for special skills in this State?
Is our Employment Service functioning to the fullest
extent? Are persons being trained to go into de-fense
jobs? These are only a few of the many
questions the public and the administrators of
the Unemployment Compensation Commission and
the Employment Service, face daily. In order to at-tempt
some satisfactory answers for such questions
the Reports and Analysis Section, which is part of
the Planning Division of the United States Employ-ment
Service for North Carolina, has set up definite
ways of attempting to answer the pertinent labor
supply questions of North Carolina.
Realizing the employment offices are near North
Carolina's industry and that these offices are spread
over the entire State, the managers of these offices
have been designated as the agents to gather most
of the labor supply data that are secured. After the
local offices have reported the various economic con-ditions
in their areas to the central office in Raleigh,
the central office, in turn, summarizes the State's
labor conditions for state, regional, and national ad-ministrative
levels. Weekly, monthly, or bi-monthly
the local offices render to the central Raleigh office
reports having to do with almost every type and
phase of North Carolina's industries, occupations,
and training facilities. The various local offices have
standardized reports for rendering the data, but in
turn the reports are so devised as to allow the
managers plenty of freedom for economic interpre-tation
of their areas.
Each week the central office receives from those
areas in the State that have agricultural labor
problems or that foresee immediate agricultural
labor problems detailed reports on the expected farm
crop activities, the anticipated peak activity dates,
the anticipated labor needs, the present labor supply,
and other pertinent information relative to the farm
wage scale, to transportation, and to housing facili-ties.
With this information, the Reports and Analy-sis
Section prepares weekly a farm-labor activity
report showing state-wide farm activities, areas of
labor shortages, and labor surpluses, as well as future
anticipated labor needs. At the beginning of every
week, the local offices report to Raleigh any confi-dential
data applying to the areas that might be of
interest and of use to the other managers of the
State in facilitating the servicing of employers,
especially those with war contracts, and the farm
placement program. The data received are sum-marized
in a short confidential letter and mailed to
each manager for his individual use. This type of
report gives each manager a better insight into why
certain clearance has not been made or when a large
project will get under way. Such "inside facts" aid
the local office managers at a distance from the pro-ject
in recruiting for the labor demand.
No local office can hope to function effectively with-out
a keen and comprehensive economic picture of
the area that is being served. The managers are
able to crystalize their economic thinking each
month as well as present to the State Employment
Service a composite economic picture of the area by
preparing comprehensive labor market reports of
their areas. These reports are made up into two
sections. Section A deals generally with the area.
Such items as these are included in Section A: de-creases
in employment during the month by firm
name, types of industry, number of people laid off,
occupational skills of those laid off, and the reason
for lay off. The offices also show in Section A the
type and amount of training in defense courses, the
migration out of the area and into the area relative
to actual number and points of destination and origin.
Section A also shows any unusual changes that have
taken place in the local office area that will aid those
interested, outside of the immediate area, in inter-preting
labor problems. Section B of the monthly
labor market report deals specifically with the vari-ous
important industries that are located within the
office area. For example, the Greensboro Office re-ports
on the hosiery industry, the cotton goods
industry, and the iron and steel industry. For each
of these important Greensboro industries such items
are discussed as: (a) the relationship of supply and
demand ; (b) the employer labor specifications ; (c)
the use of the local labor supply ; and (d) recruitment
problems. With these various local reports the Re-ports
and Analysis Section in the state office prepares
a summarized labor market report for the entire
State along the same general lines as reported by the
individual offices.
Each local office in the State secures bi-monthly
from employers, representing approximately half of
the employed people of the office area, reports on the
trends of employment. These individual establish-ment
reports indicate the amount of war production
;
the trends of employment over a six months' period
a breakdown of current employment by occupational
skills, by women, and by non-whites ; and the listings
of essential occupations in which the demands are
stringent and are not being met. These reports serve
as a means of summarizing: (a) the proportion of
war production to total production in the State ; (b)
the general trends of employment, the demands for
labor by industry, by occupations, by geographic
location, and the anticipated lay offs; and (c) as a
picture of the drastic labor needs that require im-mediate
attention.
The local offices make a survey six times a year of
their active files. The survey indicates by broad oc-cupational
skills the number, the sex, and the color of
people seeking jobs, and for the registrants with
Summer, 1942 THE U. C. C. QUARTERLY PAGE 23
professional, managerial, skilled, and semi-skilled
occupations, a breakdown by each occupation as to
available qualifications is made. Also, bi-monthly
the central office secures from each local office a re-port
of the defense training being conducted in the
area. This report covers all defense training by the
Vocational Education Division, the National Youth
Administration, the Engineering Science Manage-ment
Division, the Out-of-school Youth program, as
well as by private schools. The managers in pre-paring
these reports on trainees show not only cur-rent
enrollment by classes and by type courses but
also anticipated enrollments for the next six months
and capacity enrollment possibilities.
Monthly the Reports and Analysis Section pre-pares
a state summary of the placements that have
been made in the State. These placement reports
indicate the occupation, the industry, the age, the
sex, and the color of the new job holders. State
records are made of the placements, whether by the
Employment Service, National Youth Administra-tion,
or Works Project Administration, of trainees
coming from the defense courses.
All these reports tend to fit one into the other to
make a total labor picture. Weekly farm reports and
monthly general labor market reports serve to paint
an over-all economic back-drop of each local section
as well as the State's economic picture. From the
strategic establishments, especially the establish-ments
having large war contracts, located over all
the State, current and future demands of labor are
secured. By actual count of the active files of job
seekers, the offices and the State realize the points of
available supplies of labor. The central office also
secures from each area information as to the pro-gress
of defense training, an added labor supply
factor. Thus the Employment Service is able to view
each local office separately and the state-wide service
as a whole in the progress of matching men and jobs.
North Carolina as of July 1, 1942 had 60,000
people registered for jobs with the Employment
Service. This was a new low in applications for jobs,
but despite this "low" our State is still regarded as
one of the important Eastern Seaboard sources of
labor. Excepting the construction of large Army
and Marine cantonments and the shipyards, this
State has had relatively little extra defense work.
Training programs had to be arranged, generally,
for out-of-state labor demands. The North Caro-linians
out of jobs due to priorities and war con-versions
had to become more mobile than ever before
in our labor history to find new defense jobs. All
these problems have tended to add to the adminis-trative
job of the Employment Service.
The summation and analysis of the state's labor
supply and demand has tended to diminish the
problems of the Service on the local and state levels.
The local offices have definite economic data for com-paring
their sections with the entire State. Each
manager is more able, by having a composite labor
supply picture, to guage his activities in the war
effort. He knows what is happening in Edenton as
well as in Morganton.
The central administrative officials know the dis-tress
demand areas. They know by actual data the
points for the recruitment of labor. The clearance
of job orders is thereby accelerated. The adminis-tration
can plan more intelligently, with complete
state-wide trainee and potential-trainee supply data,
training programs. In fact, the questions con-tinually
being asked by Mr. John Q. Public are
answered, maybe not as fully as he some times de-sires
because much of the labor data are confidential,
but Mr. Public gets a frank, factual answer.
( Note.—The Reports and Analysis Section of the United
States Employment Service for North Carolina plans to pre-sent
in subsequent issues of this magazine factual, current
data on North Carolina's supply and demand of labor.
—
The
Editor. )
UNEMPLOYMENT COMPENSATION BENEFITS
DENIED STRIKER
(Continued from Page 21)
directly interested in the labor dispute which caused
the stoppage of work ; and
(2) He does not belong to a grade or class of
worker of which immediately before the commence-ment
of the stoppage, there were members employed
at the premises at which the stoppage occurs, any
of whom are participating in or financing or directly
interested in the dispute."