THE CASE FOR EXPERIENCE RATING IN UNEMPLOYMENT COMPENSATION AND A PROPOSED METHOD

by Herman Feldman andDonald M. Smith. Industrial RelationsCounselors, Inc., N. Y,1939. $1.00

Mr. R. C. Davison, an English authority on unemployment insurance, has declared, with reference to the United States, that "merit-rating will prove a waste of ingenuity." Professor Feldman and Mr. Smith do not agree with this point of view. It is their contention that merit-rating—or experience-rating, to use the newer term—need not be either ingenious or wasteful. On the contrary, it can be both simple in operation and fruitful in results.

If employers' contributions to the insurance fund vary in accordance with the amount of unemployment they have, and that in essence is what is meant by experience-rating, the authors believe that the amount of involuntary idleness will be appreciably lessened; that there will be a more equitable distribution of the social costs of unemployment; that certain abuses which now characterize the functioning of some of the unemployment insurance laws will be reduced or eliminated. While in favor of the "reserve-ratio" plan in applying the policy of experience-rating, they advocate, as a means of achieving administrative simplicity, the charging of benefits to the last employer, rather than to the last two or more.

Professor Feldman and Mr. Smith have handled their subject in a scholarly manner. Their analysis is logical, comprehensive, and convincing. Their monograph is a distinct contribution to the literature on unemployment insurance, Q E. DANKERT.

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