of the entire group. Thus, a good comprehensive hospital and surgical program of the type studied in New York would actually cost management-if it paid the entire bill-approximately two-tenths of a cent an hour or approximately $4 a year per active worker. This cost is based, of course, on the assumption that it would be paid like group insurance, on a current basis.

The IUE's own estimates-based on experience with various companies and with insurance carriers-indicate that the maximum cost for complete hospitaland surgical care for older persons would be half a cent an hour, if paid for on a current basis.

If these benefits were to be funded-as is done with pensions-the maximum cost would be 2 cents an hour. With productivity in industry increasing at its present rate, even 2 cents an hour is a very small price for the health of older employees of industry.

Even if unions succeed in obtaining good health protection for their older members, however, the number covered will be comparatively small. Millions of men and women who are 65 and over, who never belonged to unions or who are now retired and whom management would not want to include, will be left unprotected.

For this reason, we are concerned that protection for our older citizens should be based on a national insurance approach. We estimate that if organized labor succeeds in protecting all of its retired or about-to-be-retired members, there will still be 13 million persons now 65 and over who would not benefit from our efforts at the collective-bargaining table.

What is the actual extent of labor's progress in this area? Again thanks to Jim Carey's preparation, I will use the IUE as my example.

The biggest corporation with which that union negotiates is General Motors The IUE has approximately 25,000 members in GM's electrical division. In 1955 that corporation agreed to provide coverage of pensioners and their families if the workers would pay for the entire cost. GM's health program is a Blue Cross-Blue Shield arrangement. The cost for coverage of a man and his wife is $11.35 a month for IUE's people in Dayton, Ohio, where the union represents workers in the Frigidaire and the Delco plants.

In 1950, when IUE negotiated its first GM pension plan, the average years of service for workers 65 and older was 15. That meant that many workers had less than 15 years' service. A worker with 15 years' service covered under the 1958 agreement-would be getting $36 a month under the IUE pension plan. Workers with fewer years would get still less. Out of this meager pension, the worker pays $11.35 a month for Blue Cross-Blue Shield protection for himself and his family.

Lest you think that the average of 15 years' service at retirement is unusual, I would like to recall the fact that many older workers secured their jobs during World War II. During the depression years, it was difficult for a man over 35 years of age to get a job, just as age discrimination is again becoming an employment factor. During the war years, the labor market opened up and many older persons, who lost their jobs during depression years, found permanent work.

In

The GM average service for older workers in 1950 was not unusual. IUE's negotiations that year with Westinghouse, it found that a large proportion of the older workers had less than 15 years' service with that corporation. In the electrical industry, many of the plants are comparatively new, and it is not unusual to find the average worker at 65 ready for retirement with anywhere from 5 to 25 years of service. The average service, according to the IUE, is approximately 12 years.

As we all know, when a worker has compartively few years of service, he gets a smaller pension. When he has to pay for his hospital and medical coverage out of his pension, he has next to nothing left.

The largest corporation in the electrical industry is General Electric. In the IUE's 1955 negotiations, GE desiring good relations with the union-unbent and offered to provide a lifetime maximum of $1,500 to cover the hospital and surgical needs of a pensioner and his spouse, if the pensioner had 15 years' service or more at the time of retirement. The company added that once the cost went above $1,000 on a lifetime basis, the pensioner's already reduced life insurance would be further cut by $500. If the pensioner had only 10 years' service, his maximum lifetime benefit for himself and his spouse would be $1,000. GE said there would be a $500 reduction in insurance, once hospital and surgical costs went above $500.

Westinghouse is the second largest manufacturer in the industry. In 1956, it agreed to provide $750 for lifetime hospital and surgical coverage for a pensioner

and his spouse. However, Westinghouse put the following language into the contract: "As such benefits are paid, a corresponding reduction will be made in the amount of your life insurance." Thus, insurance coverage, already reduced on retirement, was further reduced by the amount of money spent on hospital and surgical coverage, up to a maximum of $750 for life.

These two companies are considered the pioneers in this field in the electrical industry. It is true that IUE does represent workers in some companies which provide hospital and surgical coverage for pensioners, but all of these companies can be numbered on the fingers of one hand.

Do persons 65 years of age and over have enough money for comfortable living in their old age? This is an important question. All the information that we can obtain proves that the vast majority do not have such income. The Twentieth Century Fund completed a study a few years ago on income of persons in this age bracket. It found that 36 percent-more than one-third-had absolutely no income whatsoever.

It found that 38 percent had less than $1,000 a year income.

In 1957, the Bureau of Old-Age and Survivors Insurance made a national survey of income for persons on social security. It found that 44 percent of the couples and 60 percent of the single beneficiaries had no independent income at all or received less than $750 a year.

A study published within the last year by the State of Michigan, entitled "Michigan's Older People," states that 82 percent of the older women in Michigan have incomes of under $1,000 a year. Of these, many have no income, an amount which, statistically speaking, is less than $1,000 a year.

Do older people get sick? We all know the answer to that question. Part of the fight to provide adequate protection for older people through volunteer coverage involves the cost. Insurance companies usually charge three to four times as much for the coverage of older persons as they do for active employees. Union social security experts contend that this is a vastly exaggerated charge and that experience with Blue Cross-Blue Shield programs and studies by the New York State Insurance Department indicates a differential of only approximately 4 percent.

Nevertheless, it is obvious that older people do incur illness. The study made by the State of Michigan, referred to above, disclosed that one out of every three older persons in the State has chronic ailments such as heart disease, arthritis, rheumatism, hypertension, arteriosclerosis.

How these persons, afflicted with long-term, expensive-to-treat ailments, can be expected to take care of their problems without some help from society is a problem our Nation can no longer afford to ignore.

Somehow, we seem to forget that the aged receive no dispensation to help them overcome a constantly rising cost of living. We forget that these retired workers-eking out an existence on a small, fixed pension-get no special discounts on soaring food prices, or for the mounting costs of renting an apartment or purchasing a modest home.

The Labor Department publishes up-to-date information on selected consumer prices. According to this information, the rise in the cost of rental units has climbed even faster than that of food and all other items. And food costs, alone, have jumped some 20 percent in the last 12 years.

Retired workers must, of course, live someplace. What older couple does not dream of a place of their own-away from their children and their children's children-where they can enjoy in dignity the late years of life that they have earned. But, what has happened? The cost of residential rent has skyrocketed to about 138 percent of the 1947-49 figures.

The retired worker finds himself trapped. He is powerless to combat higher rents and he has no place to turn. For those who own their homes, the increase in taxes and other cost items necessary to maintain a residence provides only a slight advantage.

Jim Carey had planned to read to this committee a sampling of the letters he has received from retired IUE members who find themselves confronted with an endless stream of new and seemingly insoluble problems.

I would like to read a few of these letters to Jim Carey to this committee. This one is from a man 66 years of age. He writes: "I am drawing social security but I am sorry to say that it is not enough for me to live on. I have expenses to pay and the same price for food and clothing that others pay that work and make good wages.

"I will give you a statement of how I live on it.

"I pay $30 a month for house rent, $16 a month for the fuel bill, $10 a month for the light bill, and $10 a month for the drug bill. That makes $66 a month.

My check is $69.70. The $3.70 is the amount I have left each month, not to say anything about my doctor and hospital bills and food and clothing."

Here are some notes from a GE pensioner in Schenectady, N.Y. He is now 71 years old:

"Pension check-$39.50 a month. Retired 1949. Combined hospital bill so far of $1,800. Live on farm, but can no longer farm it. Sold all stock to meet hospital and doctor bills. Married son provides support."

Here is another from a GE pensioner in Fort Wayne, Ind. :

"Three years ago my wife had a serious operation. She was in the hospital nearly 3 weeks and the bills were close to $1,000. We had all of it to pay except $287, which the public welfare paid.

"I worked at the GE for 24.5 years and get only $42.40 a month pension and $109.77 social security. We pay $55.10 a month on our home, our utilities run $18 to $20 a month, our grocery bill $100 a month, besides our insurance and other small items.

"We had to go to township relief and public welfare for 7.5 months until my wife got back to work. We have a handicapped son 17 and a daughter 14 who is in high school. My wife had to work or I wouldn't make it. I wish she could come home.

"Last fall I had a gallbladder attack and was sick 8 weeks and didn't need surgery. My wife lost a week from work then, and 2 weeks in January from flu and throat infections. My medicine runs $2.60 a bottle and we have a small doctor bill. I am going to have a cataract operation and will be in Parkview Hospital about a week * **""

Here is a summary of hospital bills from a 73-year-old pensioner in Fort Wayne, Ind.: 1955, $896.25 hospital and doctor, part paid by insurance; 1956, $900 heart attack, GE insurance expired during illness; 1957, $1,927 hospital and doctor.

This pensioner writes that "over $1,000 of this last is still due. There is no GE insurance coverage now. Welfare agreed to pick up $200 of bill. Balance will be paid 'as able' at $10 a month. Current medical expenses $15 a month." Other expenses listed by this retiree are interesting. They include auto insurance, $94.43 a year; rent for trailer home, $16.30 a month; heat and cooking gas, $12 a month; electricity, $5 a month; groceries, $15 a week; trailer insurance, $33.90 a year.

Here is a last letter: "Retired 1950, 20 years' service. When I learned what my social security payments and pension would be, I found they would only pay one-half of a living we were used to, so I knew I must make a move. I had a chance for a four-room house and 1 acre, so I thought by raising part of our food I could get by. This was a mistake. Although I had a wonderful garden, it was not enough, so I decided to come back to town.

"I developed cancer and, as soon as I got to a doctor, was placed in Lutheran Hospital. I do not have the figures on this, but I think it cost me $200 for my part, over what the company insurance paid.

"I had help from my family at that time, but 4 months later started working at anything I could find and managed to make ends meet; although at times, wondered.

"However, in 1956, I got a wonderful job that let us live as we were used to; and, although we lost our social security pay for a year, we managed nicely, and were able to save a little until last October, when my wife went into the hospital for a gallbladder operation.

"February 27 I underwent surgery for the removal of an intestinal tumor. Although the bills are not all here yet, it will be over $800. I do not know what the future holds, as I expect to have doctor bills, X-ray and medical expenses and do not know how much, if any, work I will be able to do and if I should have more hospitalization, I sure don't know where the money is coming from. The future isn't very bright."

What a wonderful person this man must be. After a lifetime of work, he's grateful that he can find employment to make ends meet again. He goes through sickness after sickness, trying to hold his head proudly erect and unbowed. What a sad commentary on all of us, that such a man-and millions like him-are forced to live in this manner after a lifetime of productive labor. Your committee has been kind enough to ask me for recommendations and advice. The problems of the older citizens are many. I will be frank to say that I have no pat answers.

I would say that the majority of our older members is concerned with a number of problems. Briefly, they may be listed as follows:

1. Compulsory retirement.—When workers are healthy enough-despite being 65 or over-many of them would like to continue working on a full-time basis. In the majority of pension negotiations, we do not provide for compulsory retirement after 65. In some cases, however, organized labor has been unable to induce the corporations to permit older workers to continue work as long as they are able to produce satisfactorily.

ers.

Work is an integral part of the American way. Our people are hard workSometimes it seems that work is a way of life, not a basic need in order to eat. Many of our workers, in plants where there is no compulsory retirement at age 65, continue to the automatic retirement date or as long as they can work. Of course, one reason for this is that the cut in living standards imposed by retirement is hardly attractive. The other reason, as I have indicated, is that for many of us work is a reason for living. If we suddenly stopped working, we would suffer severe emotional problems.

Increasingly, gerontologists—the men and women who study the problems of the older citizens-have come to believe that the Nation, as well as older people, are the losers if we force everyone to terminate his productive life at age 65, regardless of whether he can continue to make his contribution.

I sincerely believe that there should be no compulsory retirement at age 65. But, this very important decision will not be made on the basis of what you or 1 believe. It will be made on the basis of the health or lack of it in our economy. An economy that drifts with little planning and little central direction-as ours has in recent years-and which develops recessions every few years while permitting the increase in the gross national product to average only about 2 percent, cannot resolve the problem of older people on a rational basis.

Younger workers will feel, since there may well be a shortage of jobs, that the older employees should retire, thereby permitting youth to move up the job ladder. This is the obvious response to a tight labor economy.

I am not interested in talking politics, but the net effect of aimlessness and lack of leadership in the domestic economy has created a different atmosphere with regard to older workers in our plants. In prior years of negotiations, there was little worker opposition to the idea of older workers continuing as long as they could produce satisfactorily. Today, after experiencing several years of a tight labor market and of lost production jobs, we find that many younger workers are raising the question of compulsory retirement.

I am convinced that the problem of providing a job for older workers-beyond age 65-who can work well and who can contribute their share to the wellbeing of the country, will only be possible with a changed attitude on the part of the top political leadership in the United States.

2. Financial well-being after retirement.-We have made giant strides in the last 10 years toward providing our older citizens with substantially larger social-security benefits. The cost of living, however, has continued to rise steadily and a large measure of these social-security increases have been eaten

away.

Despite phenomenal growth in productivity since the depression years, the average person retiring today under social security actually gets a smaller percentage of his before-retirement income than he would have had if he had retired in 1940-the first year social security payments were made.

Gross monthly earnings for factory workers in 1939 were $108. The average social security payment was $22.71 a month, or 21 percent of his earnings. The gross monthly earnings for factory workers today are $350, while the social security average payments in 1958 were $74, or about 20 percent of what the worker earned before retirement.

In the meantime, our gross national product has jumped from $90.2 billion in 1937-the year social security benefits were established-to $437 billion in 1958. The gross national product in terms of current dollars is about five times what it was when social security was put into effect.

If we talk in terms of a stable dollar, and eliminate the rise in prices, the gross national product has jumped 117 percent since 1937, while the real increase in benefits paid to the average person on social security has risen only 75 percent.

Thus, despite the vast potential of this Nation, the position of our older persons under social security has worsened when we consider our potential in 1937 at the time the system was enacted or in 1940 when the first benefits were payable.

As I stated previously, many of today's older persons have very little income. Welfare boards throughout the Nation have time and again shouldered a large share of the cost of supporting these retirees.

3. Health. The Department of Health, Welfare, and Education estimated in the fiscal year 1955-56, that the "public outlay for the medical care of the aged amounted to about $900 million." This represents about 20 percent of the total public outlay for medical care for persons of all ages. The HEW statement continued: "Altogether, if expenditures by private agencies from philanthropic contributions are excluded, public and private expenditures for medical care of the aged were an estimated $2.34 billion ***."

Letters from any of our members, who are now retired, poignantly describe their health problems. Voluntary health insurance is no solution. Neither are cutrate charges by doctors and hospitals, which are not yet in effect but which the AMA is now discussing on a tentative and reluctant basis.

Only one-third of our older people are covered by programs for hospital and surgery and the vast majority of these programs is completely inadequate. In addition, where these senior citizens are covered for surgery they have found— like the rest of us-that doctors charge surgical fees that substantially exceed the amounts allowed by insurance coverage.

The only solution-or approach to a solution-for the health problem of the aged is along the lines of the proposed Forand bill. As I am sure you know, this bill-the subject of recent hearings in the House-would provide for hospital, surgical, and nursing care coverage under the social security system.

Let me read to this committee one more letter recently received by Jim Carey. It is from the daughter of a retired IUE member and emphasizing the need for nursing care coverage. This young lady wrote:

"Am writing for my father. He has been very ill for some time, and is unable to write for himself. The doctor's bills have amounted to a great sum of money. His cleaning bills alone are staggering, caused by the hemorrhoids-one of the different things he suffers from. Nothing to it, but make changes three times a day. The insurance company has refused to do anything about it. The doctor has never advised that he be hospitalized. Since the insurance doesn't do anything concerning compensation for the care of him, I wondered what the union could do in regard to his policy. He is here with my family for the past 2 months."

The Forand bill is not a perfect bill. There are a number of coverage omissions, but it represents an important move in the right direction. Since the insurance industry and the medical profession have not yet been able to devise a fair and adequate solution whereby older citizens may have decent health coverage, it is time for the Government to take this problem under its wing. With the facilities of the social security department, the administrative problem becomes comparatively simple. With the rapid development of actuarial methods and funding procedures, the financial cost is not prohibitive.

4. Housing. Today, our newspapers carry many columns of information about the American fair in Moscow. The highlight of this fair seems to be a model home, with the latest conveniences and appliances. To counteract the home's tremendous popularity, top Soviet officials have attacked it as being beyond the means of the average American. We, for our part, have insisted that such a home is available for approximately $14,000. It is true that many of our union members live in homes costing $14,000. This is a fact that the Communists have tried desperately to hide from their workers.

It is also true, however, that for our older citizens-the men and women who have worked many long years to raise families and who have helped their country in two World Wars-with few exceptions the $14,000 home is as unavailable as it is to the Russian worker.

The vast majority of America's elder citizens would be delighted to live in something a little less sumptuous than the model home displayed in Moscow. How wonderful it would be if we could honestly say that our older people, after a lifetime of work contributing to make this the best country in the world, could-in their last remaining years-relax in the comforts of a modern home, with the best available medical care, and with a minimum of financial worries. In many ways our older citizens are worse off now than they were 100 years ago. One hundred years ago, the majority of our people lived on farms. When the mother and father became too old to work, they remained with one of the children, or with the remaining children, who continued to work the old homestead. They had a roof over their heads, they had sufficient food and clothing, they had affection from their families, and they had as much medical care as the rest of the family and their neighbors.

Today, this is not the case. In community after community, substantial numbers of retired persons have to go on relief. Jim Carey's IUE has a letter