Experience Rating: Operations in 1945 and Future Trends

CONTRIBUTIONS to the unemployment trust fund on 1945 wages are estimated at $1.05 billion, 1 or about 1 1 percent below the previous year's total of $1.17 billion. Although the end of the war in August 1945 caused taxable wages for 1945 to decline from *Prepared in the Program Division, Bureau of Employment Security. 1 Except for the discussion on page 16, the effect of war-risk provisions (including the special postwar reserve tax of 0.5 percent in Wisconsin) is excluded from all figures shown in this summary. In 1945, 12 States had war-risk provisions in the 1944 total, the major cause of the decrease in contributions was the drop in the average employer-employee tax rate from 1.93 percent to approximately 1.8 percent. Of the $1.05 billion contributed on 1945 wages, $970 million came from employers and $80 million from employees. Experience rating caused a decline in revenue from the preceding year of about $630 million, or 38 percent. Employers in the 45 States with experience rating paid contributions on 1945 wages at an estimated average rate of 1.6 percent. As a result of the reduced tax rates, employer contributions in these States were approximately 41 percent below what they would have been at the standard