Committee on Economic Security (CES)

Volume VI. Social Insurance

I. Security for Agricultural Workers

THE PROGRAM OF COMMITTEE ON ECONOMIC SECURITY ON FARMERS AND FARM LABORERS

By
William T. Ham

November 20, 1934

MEMORANDUM TO DR. BEAN

From: William T. Ham

Subject: The Bearing of the Program of the Committee on Economic Security upon Farmers and Farm Laborers.

UNEMPLOYMENT INSURANCE

The difficulties in the way of application of unemployment insurance to farm laborers are too obvious to call for elaboration. On the one hand are the political considerations. Most proponents of such protection for industrial workers fear that inclusion of farm laborers in the scheme would lead to the defeat of any legislation that might be proposed. On the other hand are the economic characteristics of farm employment, e.g., the scattered character of farm enterprises, the small size of the individual units, the highly seasonal character of much agricultural employment, and the comparatively low wages of farm workers. These are such as to raise very real administrative difficulties, so that the fear is expressed that insurance, if applied to agriculture will cost more than its worth.

Despite these difficulties, however, it is desirable that as large a proportion as possible of the agricultural workers be brought within the purview of the plans for unemployment insurance now being formulated. While it would be unwise to jeopardize the success of protective measures designed to be applied to industrial workers for the sake of more limited benefits to farm laborers, it seems likely that certain classes of the latter can be brought under the state laws after a time, if not in the immediate future.

Type of Scheme

A pooled state-wide insurance fund, possibly with a special agricultural branch, is to be preferred to the Wisconsin system of individual company reserves. Even in the case of the few relatively large agricultural concerns, to which the latter plan might be suited, it would be unwise to adopt the reserves plan, since it does so little to distribute either the risks or the burden of unemployment.

Coverage

Dr. Witte's suggestions indicate that in the District of Columbia (or model state), act, coverage should be limited to employers of six or more employees. This would exclude the great body of farm employees. Even if the figure were lowered to three employees, about ninety percent of the agricultural workers would be excluded in most states. Nevertheless, some such coverage seems to be necessary.

It may be deemed sufficient, as a beginning, if the employees of the large scale farms of the country be included in the state unemployment insurance schemes. These farms, according to the Census study of 1929, represent only 0.1 percent of the farms of the country, being some 7,875 in number out of a total of 6, 288,849 farming enterprises. They hire some eleven percent of the total man days of labor. Regionally, they are concentrated in the Southwest and Far West. Over a third are in California. This concentration would facilitate their inclusion in an insurance scheme.

Employees in dairying enterprises and in certain types of intensive farming should be included under this form of protection, at least where the number of employees is more than three.

Exclusions:

Laborers on farms where fewer than four are regularly employed.

Definitely casual farm laborers.

Seasonal laborers, at least in the early stages of the scheme.

Youthful workers, home workers, and members of the employer's family.

Contributions

Owing to the relatively low wages of farm laborers, a special scale of contributions will have to be worked out, with correspondingly low benefits. Both employers and employees should contribute. Political consideration make contribution by the state inadvisable.

Employment Offices

One of the most useful and immediately productive things that can be done is elaboration of the employment exchanges so as to cover farm regions. Whether in harvesting or in general farm work, one of the greatest needs is better and more efficient use of casual farm labor. In this field federal subsidies in aid of state development would seem to be called for.

Ultimately, we must look toward a certain decentralization of manufacturing, bring farms and factories closer together, and improving opportunities for employment.

OLD AGE ASSISTANCE

Here we have need for a two-fold program, one looking toward rapid extension of gratuitous pensions to old people, the other having in view a long-time plan of contributory insurance. Both phases of this program should be developed concurrently. Both farmers and farm laborers should be brought within this scheme.

According to the 1930 census, the numbers of farmers and farm laborers in the upper age are as follows:

	65-69		70-74		75-
	Male	Female	Male	Female	Male	Female
Farmers (owners & tenants) Farm managers & farm foremen Farm laborers Wage workers Unpaid family workers	311,515 2,681 71,697 67,236 4,461	20,945 64 5,189 2,613 2,576	196,736 1,662 43,464 39,308 4,156	13,648 36 2,479 1,355 1,124	119,992 1,141 26,236 22,685 3,551	10,757 20 1,663 937 726

A system of federal subsidies would seem desirable, to apply to such state non-contributory old age assistance schemes as are broadened to include farmers and farm laborers.

HEALTH PROGRAM

It is suggested that there should be further experiment with collective provision for medical aid and services other than health insurance. There would seem to be ample room for extension of public medical facilities, promotion of child welfare and maternal health, promotion of rural housing schemes, and improvement of rural homes.

WORKMEN'S COMPENSATION

There is need for the further extension of accident compensation to farm laborers and casuals. At present, in most states in which compensation applies to agricultural employment, only employers of three or more workers are included, or employment involving the use of machinery. Effort should be made to promote state funds, or mutual insurance funds. More data on farm accidents is urgently required as a basis for rate calculations; this is likely to be acquired only by extension of the systems. All farms on which machinery is used should be brought under compensation.

William T. Ham
Principal Agricultural Economist

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