I am sure I am voicing the opinion of all the Lake Superior region of the iron and copper mines when I say that we are heartily in favor of some plan of compensation for the workmen of our country which shall be a liberal one.
Mr. Dawson (New York): Nearly every bill which has so far been framed has proceeded on the basis that it is necessary to limit the length of time for which the benefit is to be paid. That is to say, even though a workman has become totally and permanently disabled, the benefit is to be paid for three or four years, and then is to stop. This overcaution grows out of two things; one of them is that we are almost entirely thinking of this as a compensation scheme which the individual employer is going to pay for. It may be that our laws will be passed in that form; but, even if they are passed in that form, experience in every country in the world has demonstrated that almost all employers will be insured, and the loss will be paid by companies which can just as well continue payment so long as it is necessary for it to be continued, and charge premiums and set up reserves accordingly.
It is my personal opinion that we ought not to frame our laws on the basis that employers as a class are actually going to pay these compensations directly. We should frame them with a view to their being insured, and that, therefore, this will not be an intolerable burden upon any individual employer unless he makes a fool of himself by neglecting to insure.
The second reason is ignorance as to the cost. The additional cost when benefits are paid to the disabled as long as disability continues is extremely small. Relatively few persons who have been totally and permanently disabled are living after five years, but the need is greater than ever for those who are. In point of fact, it will add very little to the total cost to give the benefit throughout their disability. You may argue, on the other side, that because there are a few of them, we can as well cut them off; but a scheme that starts out to cure this evil—this economic flaw in our business system, and that, notwithstanding, turns loose a permanently disabled man after five years because he happens to be so unfortunate as still to live—is fundamentally shortsighted and should not be tolerated. I, therefore, earnestly urge those Commissions which have not yet prepared their bills, to make the benefit payable during the entire period of disability.
Mr. McCarthy (Wisconsin): On certain minor injuries, would you say that was true?
Mr. Dawson: Not so true. My impression about minor injuries is that a careful study of the Austrian practice will be of great value. These benefits are not paid as an annuity at all unless the person is injured at least to the extent of 20 per cent. of his earning power. Smaller impairments are compensated by lump sums.
Again, in the matter of widows and orphans there is a whole lot of feeling that you must cut them off at the end of three or four or five years. There is no occasion for that, and every reason why it should not be done. The additional cost of paying during widowhood and minority is not heavy; and you should again, in my judgment, take into account that you are expecting this business to be insured and should encourage its being insured, and encourage the employer to run the risk himself. Of course, in a very large plant, it is quite possible for an employer to insure himself, because he can have an average experience to judge from, but I am not referring to the exceptional case.
James A. Lowell (Massachusetts): The practical difficulty which strikes me is this: In Massachusetts, and everywhere else, for that matter, we have a financial situation to face. I would say, and every man here would say, that it would be much better to have a pension for a person who needs to be pensioned; but we are brought up at once in the very beginning, and this thing comes right up and hits us in the face: How much is it going to cost? It is very well to say, as Mr. Dawson has said, that it won't cost much. Perhaps it won't, but the question is how much. It may be just the turning point in Massachusetts as to whether we can do it as a practical financial measure—to have a lump sum or a pension. I, personally, should be very much in favor of a pension. But there must be some way of ascertaining how much this pension is going to be. It appeals to me that as a practical measure in the beginning of this thing, that although we should like to be able to say to the man who is injured for life: "We will give you so much a month for the rest of your life"; that we cannot do it right off, because we do not know whether he will live five years or whether he will live twenty-five years. The difference between the amount which you will pay if he lives twenty-five and the amount you will pay if he lives five years may be just the difference between a possible scheme and an impossible scheme.
The employer's trouble about this thing is the uncertainty. The amount of it is not so great an objection. It is not that the employer would say, "Well, if I have to pay $5000 for such-and-such a case I cannot do it. I can pay $2000, but I cannot pay $5000." The trouble is he does not know whether he is to pay $2000 or $15,000. That is the difficulty. It strikes me in starting your system here you have got to find something that is certain. If there is to be a pension you have got to put a limit of time on it so that it may be definite.
If we were to pass a law for Massachusetts to-morrow, and contained in that law were those various pensions, we should not know anywhere near how we were coming out; and, I understand, and I will stand corrected on this if I am wrong, that they have not figured those accurately in either Germany or Austria or in England. The amount of the pensions which had to be paid was much greater than was calculated. If they had known at the start they were to pay this greater amount it would not have made so much difference because they could have arranged it, but they did not know it and, therefore, they are getting a higher amount put upon them than they thought they would, which is very unfortunate for a great many reasons.