By the Social Security Act of 1935, the states were forced to adopt and to finance systems of unemployment compensation. Since expert opinion regarding the principles which should control in designing such systems was divided, the national government left to the states wide latitude for the exercise of independent judgment. As a result each state, Alaska, Hawaii, and the District of Columbia has its own unemployment compensation law. No two laws are alike, and in many instances there are great differences with respect to basic principles.
The effort in this chapter will be to describe these systems briefly and to bring out the major differences and issues with respect to policy. The first section will deal with the historical developments prior to the passage of the Social Security Act, and the second with the provisions and requirements of that act. Then the essential elements of unemployment insurance will be taken up as they have developed in the several states and territories. An effort will be made to describe existing provisions and practices and to bring out the variations with respect to both philosophy and practice. Detailed discussion of the issues will come in Part III, where unemployment insurance will be considered as one of the essential parts of a universal, comprehensive, and co-ordinated social security system.
Practically no use of evaluative statistics will be made in this chapter, because unemployment compensation has been in effect for too short a time to produce really significant figures. Almost all the experience with it to date has been under the defense and wartime economy, which has reduced unemployment to lowest terms. Hence evaluations of unemployment compensation systems in the United States must rest more on theory and philosophy than on experience.