In July 1936, the would-be Employment Development Department (EDD) was created through an act of the California Legislature. The new law charged the Department with administering the Unemployment Insurance (UI) program and helping people find employment. Even before that, California had been helping people find jobs through statewide publicly funded employment offices. The EDD has undergone many changes over the years – in its role, responsibilities, and size – and will continue to grow and change in its effort to build California’s economy.

Early Public Employment Services

• 1869 – The earliest public employment office in California was a California Labor Exchange established in San Francisco. The office was funded by a bond issue voted by the Board of Supervisors and a $500 two year allocation from the State Legislature. Further funding was not available, so the office existed for a time on private support before it closed.

Public Employment Bureau – Los Angeles

Early Job Service Counter – 1930s A Los Angeles Job Counter in the 1930s. Job openings, including a Sea Captain, Bee Man, Handy Man, and Carpenter, are written on the chalkboard.

Public Employment Bureaus

• The Public Employment Bureau was enacted by federal legislation approved on May 18, 1915. The bill was authored by the Commissioner of the Bureau of Labor Statistics and established free bureaus nationwide to serve the unemployed. The bureaus were created to fill jobs with the idea that "no citizen should be obliged to part with any portion of his earnings for sake of finding work." Prior to this, the person who had the most money to pay a private agency (in some cases, 6-10 percent of the first year’s salary), and not the person best qualified, was often sent to the job.
• On February 1, 1916, bureaus in San Francisco, Oakland, Sacramento, and Los Angeles opened for business. During the first month, 5,200 names were placed and 269 positions were filled. On March 11, 1916, the employment bureaus made headlines in San Francisco’s The Bulletin: "Job Hunting by the State; New Employment Bureau Begins Work of Helpfulness" and stated "The new institution is a department of the public service; just like schools, free to those who need its services, but in no sense a public charity."
• Additional free offices were opened as follows: Fresno, 1917; San Jose and Stockton, 1918; Bakersfield, 1922; Oakland, 1929, a women’s office in Los Angeles, 1930; and a women’s office in San Francisco, 1930. Placements in these offices reached a peak in 1923 of 279,029 dropping to 141,911 in 1930. By 1933, there were 15 offices in the State, some of which were municipally financed but affiliated with the State Free Employment Service. During the existence of this system, which lasted until 1933, the State Director was on the United States Employment Service payroll.

Department of Employment

• More than 12 million people found themselves out of work after the stock market crash of 1929. In response, Congress enacted the Wagner-Peyser Act of 1933, which called for the administration and establishment of state employment offices (e.g., job services) throughout the country. As part of the legislation, the offices were part of the federal-state partnership with the United States Employment Service, a new branch of the Department of Labor.
• Funding for these offices was provided by the federal Social Security Act of 1935 (signed by the President on August 14, 1935), that also established the Unemployment Insurance (UI) program. UI offered, for the first time, an economic line of defense against the effects of unemployment – assisting not only the individual but also the local community. In July 1936, California enacted the Unemployment Reserves Act, and the Department of Employment opened for business.
• Beginning in August 1936, both employers and employees began paying into the Unemployment Fund so that benefits could be paid to the unemployed when benefits became payable on January 1, 1938. One third of the cost of the program was borne by the workers and two-thirds by employers. Today, employers pay the entire cost.
• By 1937, more than 20 million American workers were covered by unemployment compensation laws. All states, Alaska, Hawaii, and the District of Columbia had unemployment compensation laws. Wisconsin was the first, and Illinois was the last.
• By the time benefits became payable to eligible unemployed workers in January 1938, the Unemployment Trust Fund had reached to $72 million. This was a result of the contributions that had been made by 25,000 employers and 1.3 million workers since August 1936.




Unemployment Insurance - Los Angeles, 1938
Governor Frank F. Merriam (Right), presents the first unemployment checks
to Los Angeles residents Anna Dougherty and Albert Kruse on February 14, 1938.


• During January 1938, there were 140,144 unemployment claims filed at 62 Department of Employment offices throughout the State. Unemployed individuals registered for unemployment at the nearest office, and were instructed to return to the office weekly to certify as the status of their unemployment. When the four-week waiting period was over, and the individual had certified at the end of the fifth week that they had been totally unemployed, benefits were due. No benefits were payable for the four-week waiting period. Benefits ranged from $7-15 per week. A Department employee remembers it this way:

Unemployment Insurance - San Francisco, 1938
A line of men inside a State employment service office, waiting to
register for benefits on one of the first days the office was open.
San Francisco, January 1938. Photo by: Dorothea Lange

Cash Payments - Los Angeles, 1948 Unemployment Insurance payments were paid in cash.

Unemployment Insurance/Job Service Counter - 1940s

The 1940s brought television, nuclear reactors, and the first all electric computer. The outside world was moving full speed ahead, and EDD was changing too. During World War II, our country needed to find enough people to manufacture airplanes, ships, and other goods to aid the war effort. When our country went to war, women entered the workplace in great numbers. The Department’s role expanded during this time, going from a place that provided only UI benefits, to a place where people also went to join the workforce. Special services for veterans, older workers, and people with disabilities were developed in the post-War period. California population: 6.9 million.

• 1942 – As a result of Pearl Harbor and a Declaration of War, the nation shifted to a wartime economy. In January, the State’s employment services were federalized by executive order and transferred to the United States War Manpower Commission. The goal of the War Manpower Commission was to "stabilize" employment and bring about a full utilization of the labor force by "placing a man on a job where he will use his highest skill in furtherance of the war effort, and keeping him there." With the end of the war in 1945, the War Manpower Commission was dissolved, and employment services were returned to the State in November 1946.
• 1943 – New legislation created the California Unemployment Insurance Appeals Board to review and decide appeal matters relating to disputed unemployment and disability benefit determinations and employer tax liability. Three commission members made up the UI Appeals Board, another Commissioner was Chief of the Division of Accounts and Tax Collections and Commissioner Bryant was Chief of the Division of Public Employment Offices and Benefit Payments. James G. Bryant was originally one of five members of the California Employment Stabilization Commission formed in 1943. Then, in 1947, the administrative structure of the Department of Employment was changed from the commission system to the present form, and Bryant was appointed Department Director serving from October 1947 to November 1953.
• 1944 – The position of the Veteran’s Employment Representative was designated in each office. Its function was to assure that veterans received priority of service and that disabled veterans received preference over all others.




Department of Employment


• 1946 – Under Governor Earl Warren, California became the second state to provide a Disability Insurance (DI) program to protect workers against loss of wages due to non-job-related illness or injury. In May 1946, California employees ceased paying into the Unemployment Fund, all workers covered by UI became covered by DI, and $70 million in worker contributions was transferred from the Unemployment Fund to the Disability Fund.
  
  Benefit payments began in December of 1946, and by the end of 1947, about 4.2 million wage earners were covered by the DI program, and 125,000 claimants received $20 million in benefits. Governor Earl Warren personally delivered the first benefit check to a hospitalized worker. The maximum weekly DI payment was $20. All of the benefit checks were hand typed in the issuing office, and all were hand signed with a fountain pen.





Disability Insurance – 1940's



1947 – The Governor’s Committee for the Employment of the Handicapped, which was composed of a group of various state agency employees, was appointed by the Governor to promote the employment of people with disabilities and to act as a liaison with the President’s Committee on Employment of the Handicapped.



1949 – The minimum wage was raised from 40 cents an hour to 75 cents an hour.
The maximum weekly UI payment was increased to $20 in 1943 and $25 in 1947.

Cash Payments “Cage” - Los Angeles, 1948 Unemployment Insurance payments were paid in cash.

Cash Payments - 1948 Unemployment Insurance payments being paid in cash.