worked in employment covered by OASI at least 5 years during the 10-year period preceding the disability, including at least 1%1⁄2 years in the 3-year period preceding the disability. The amount of disability benefit depends on the worker's previous earnings; it is the same as the amount of old-age insurance benefit to which the worker would be entitled if he were 65 or over. However, the Federal OASI benefit is reduced by the amount of any other Federal benefit the worker receives based on disability, and by the amount of any State workmen's compensation benefit. Payments under the Federal program will be made from the OASI fund, described above. About 400,000 persons are expected to receive such benefits in 1957. The Federal OASI law also provides for the payment of benefits to permanently disabled children of either retired workers receiving OASI benefits, or deceased workers who were insured for OASI benefits at the time of death, provided the child is over age 18 and unmarried, and was disabled before reaching age 18. Benefits are also provided to mothers of disabled children of a deceased worker.

Benefits are provided for all Federal Government workers who become permanently disabled, regardless of age. Employees retired on account of disability receive benefits which are equivalent to the pension which the employee would have earned if he had served to age 60, or 40 percent of the average annual salary for the employee's 5 consecutive years of highest earnings, whichever is less. In July 1956 (before this formula was used), an average monthly benefit of $93 was paid to 61,000 permanently disabled Federal workers. The new law will raise the amounts paid. Benefits are paid from the Civil Service Retirement Fund.

Railroad workers are eligible to receive monthly benefits if they become permanently disabled. In July 1956, there were 88,200 permanently disabled railroad workers; they received an average monthly payment of $95.

Temporary Disability. In general, workers receive compensation for periods of temporary disability only when the disability results from their occupation. The benefits are received through the State programs of workmen's compensation, described in the preceding section, and are related to former earnings, up to a maximum, generally $32 to $45 per week. At present, benefits for job-connected temporary disabilities compensate for about one-third of the wages lost. In 1954, about 400,000 persons received benefits for such job-connected disabilities.

Federal and many State and local government employees continue to receive their regular pay during periods of temporary disability, regardless of cause.

In addition to government workers, short-time nonoccupational disability (under 6 months) is compensated for in 4 States-California, New Jersey, New York, and Rhode Island-and by the railroads. Over 11 million workers in these 4 States and more than 1 million railroad workers are eligible to receive cash payments for limited periods of unemployment due to nonwork-connected illness or accident. Benefits are paid from government funds financed by payroll or wage taxes or through State-approved private arrangements. In 1954, benefits were paid to about 1,100,000 persons, workers in the 4 States or on the railroads. Under all temporary disability insurance laws, an individual's benefit rate is determined by his past earnings, but ranges between fixed minimum and maximum amounts. Except for government and railroad workers, and employees in the four specified States, individuals are not compensated under governmental programs for short-time nonoccupational disability. Thus nonoccupational disability represents the greatest gap in social insurance coverage. The gap has been partially filled by private sickness and injury plans, mostly established through the agency of strong unions or progressive employers. Perhaps one-third or even more of all wage and salaried workers are now covered, at least for short-term disability, by such plans. (See Private Supplementary Wage and Personnel Practices, p. 141.)

PUBLIC ASSISTANCE

Public assistance is a general term applied to a whole battery of public programs that help to fill the gaps left by the insurance systems. Eligibility for assistance or relief is based upon proof of need, and payments are intended to cover minimum needs.

Assistance is administered by State and local governments rather than by the Federal Government. Nevertheless the Federal Government at present pays a large part of the cost, through Federal-State programs of aid for four special groups. State and local public assistance, and numberless varieties of private aid, provide with varying degrees of adequacy for the remainder of the need. Necessary medical expenses are usually provided.

The millions who receive public assistance include people who have not been protected by the insurance systems, or whose protection under the systems is inadequate for their needs, or who have special needs such as medical care which are not otherwise provided for.

The Federal Government helps the States to support four dependent groups: (a) needy persons over 65 who have not had opportunity to build up enough credits in a retirement fund; (b) blind persons; (c) totally disabled persons; and (d) dependent children.

The Federal Government aids in the support of the first 3 groups by contributing four-fifths of the first $30 of the State's average monthly payment per recipient, plus one-half the remainder, up to a maximum of $60 a month per recipient. The State is free to increase the payments to individuals by adding more on its own part, and many States do so. For children, the Federal Government pays $14 of the first $17 of the State's average monthly payment per recipient, plus half the remainder, up to a maximum of $32 for the relative caring for the child, $32 for the first child, and $23 for each additional child in a family. (The Federal Government also helps the States to provide maternal and child health services, and special aid to crippled children.)

General Assistance is considered a branch of public assistance. It is a name under which are grouped all sorts of State and local government aid to persons who are in need but are ineligible for (or inadequately supported by) other types of public insurance and assistance. General assistance is usually administered by local government units within the State. The State may pay the entire cost, a part, or nothing at all; on the average the States pay more than half. With so much local responsibility it is not surprising that eligibility conditions and adequacy of aid vary infinitely.

The number of persons receiving the various types of Federal, State, and local public assistance in May 1956, and the average amounts they received, were as follows:

1 General assistance frequently supplements other forms of public assistance. The total number of recipients is therefore somewhat less than the sum of the items shown.

Source: U. S. Department of Labor; U. S. Department of Health, Education, and Welfare, Social Security Administration; Civil Service Commission; and Railroad Retirement Board.

People who are forced to depend on public assistance, including general assistance, can hardly be called a group. They are a great number of scattered individuals and broken families, many or most of whom are entirely outside the labor force. They are deserted wives and children; aged individuals who never had an opportunity

TABLE 62A.-Payments Under Public Social Insurance, Public Assistance, and Related Programs, 1955

1 Includes payments under Old-Age and Survivors' Insurance and also under special funds for railroad workers, Federal civil servants, veterans, etc.

TABLE 62B.-Public Expenditures for Health, Vocational, and Other Welfare Services, Year Ending June 30, 1955

Note. For further information see source: U. S. Department of Health, Education, and Welfare, Social Security Bulletin, 1955 Annual Statistical Summary (pp. 8-9 and 49-52).

For purposes of comparison: the value of all goods and services produced in the United States in 1955 (the gross national product) was estimated at $390,900,000,000.

to build up credits under OASI; migratory farm workers out of a job; some workers in depressed areas who have exhausted rights to unemployment benefit by reason of long unemployment; workers of marginal ability; invalids; and defectives. If these people have no relatives on whom to depend they must look to some form of public assistance or institutional care. Among them are many persons unconnected with any gainful occupation. Expenditures for public assistance are expected to decline somewhat, as workers accumulate

more insurance credits; but there may always be many who cannot be brought into any income insurance system, for whom continued special provision will be necessary.

Wage and Hour Legislation

The Federal Fair Labor Standards Act, or Wage-Hour Law, puts a "floor under wages and a ceiling over hours." That is, with a few exceptions it prohibits payment of wages below $1.00 an hour, and sets 40 hours a week as the limit beyond which wages rise 50 percent ("time and a half for overtime").

The law applies to wage and salary earners who work in interstate commerce or in producing goods for interstate commerce, unless they are specifically exempt. (See page 157 for note on interstate commerce.) Among those exempt from the law are farm laborers, many retail employees, government employees, and administrative and professional workers. Many more, including workers in domestic and various other types of service, are not protected because they are not engaged in interstate activities. About half of the Nation's 50 million nonagricultural wage and salary workers are protected by the law.11

The law applies to male and female workers, whether employed in factory or office and without regard to the number of employees in the establishment. The law does not, however, put a limit on the number of hours of work in a day or a week, provided the employer pays the premium rate for overtime. It does not require a different rate of pay for work on Saturday, Sunday, or holiday; it does not require payment for days or hours not worked, such as holidays, vacations, or sick leave. Such provisions are generally obtained through collective bargaining, or as the custom of the industry or area.

Through the same law-the Fair Labor Standards Act-and through State laws, the employment of young workers is regulated. All States prohibit the employment of children (individuals under age 14). Generally speaking, those 14 and 15 years of age may be employed only in a limited number of nonmanufacturing jobs, outside of school hours and under specified conditions. Minors 16 and 17 years of age may be employed full time and in a wider range of occupations, provided the occupation is not hazardous. (Hazardous occupations include, for example, coal mining and logging.) Young workers are found mostly in agriculture and in the service industries-sales clerks, dishwashers, baby sitters, newspaper carriers.

11 Federal, State, and local government workers are included in the group not covered, but Federal and State legislation establishes pay scales with salary minimums for these workers. Special legislation provides minimum wage scales and premium pay for overtime to employees of private companies performing work for the Federal Government, including construction workers on projects financed in whole or in part by Federal funds.