You can’t really blame the U.S. Chamber of Commerce, for instance, for opposing the bill, chivalrous at heart as its members may be. For in addition to the possibility of added costs, there’s this problem: It’s a rare woman, we gather, who doesn’t think she is discriminated against on payday.
Unfortunately, the measure is in some respects ill-considered. It’s constitutionality is by no means certain: if the Federal Government may compel the states to adopt unemployment insurance under the guise of a tax, why may it not similarly compel them to adopt any other sort of legislation
The Form and nature of the old-age insurance plan, is very questionable; the whole matter should have received careful study by an expert commission. It would mean an added tax burden equal to nearly half of the existing total Federal tax burden.
The Social Security Bill will add 6 percent to the labor cost of doing business. No one with the slightest familiarity with economic principals can believe that the total cost of this will be born solely by employers; it must be shared by labor and consumers.
Removing the capital from the hands of the owner and putting it into the hands of the Government is only, in the main, taking it from the live hand and putting it into the dead hand. So the only possible result of extending the scope of confiscation by the dead hand is to limit the amount of productive enterprise and, therefore, the amount that can be paid in wages.
[H]igh inheritance and estate taxes do compel the sale of assets, with consequent changes in ownership, shifts in management and generally dislocating effects.
The fundamental objection to the whole plan is that it is based on the false assumption, not merely that the world owes every man a living, but that employees in industry owe a living to every person who chances to be employed in that or any other industry.
…no matter who pays the unemployment insurance bill in the first instance, it comes out of money available for wages and so is all paid by the workers in the long run. But like other indirect taxes, those who bear the burden do not realize in under such a scheme as the Wagner-Lewis bill proposes. If they did, they would be careful how it was spent and would raise objections if slackers and chiselers attempted to love off it. If they thought it was being paid by employers and by the State, many would be tempted to join the slacker and chiseler class. Any bill which purports to lay the whole burden on management (although it cannot be done) is doubly vicious in tendency.
Such a law would inevitably operate to hold down the number of employees on the pay roll as well as to prevent and minimize increases in the rate of pay, so that the burden of the tax could be reduced to the minimum. These bills, in our opinion, are contrary to the spirit of the Constitution of the United States and inconsistent with the many decisions of the Supreme Court on analogous questions of taxation…
In all probability, however, compulsory unemployment insurance cannot be had without an amendment to the Constitution, probably both state and federal, as such a measure might be attacked on the grounds that it is confiscation of property without due process of law.
