ÆäÀÌÁö À̹ÌÁö
PDF
ePub

Secretary Hodges and Under Secretary Ball have testified at length concerning the negotiating authority sought in the act and the safeguards afforded to industries and firms.

My remarks will be directed to the ways in which the act proposes to assist workers whose employment is adversely affected by import competition.

(a) The reasons for proposing a trade adjustment assistance program.—The United States has traditionally recognized that some protection should be given to American firms and workers who are faced with serious import competition. However, until now that protection has been exclusively supplied by tariffs or other import restrictions which had the effect of restricting foreign competition and generally subsidizing inefficient domestic producers.

As Sec

There are situations where such restrictions are still appropriate. retary Hodges and Under Secretary Ball have testified, the proposed act retains these traditional protective features-the reservation of items from tariff negotiations, the adjustment of imports which threaten national security, and where no other solution is possible, the increase or imposition of duties or restrictions on imports which are found to be causing or threaten to cause serious injury to an industry.

However, such features are no longer adequate as the only or even primary means of responding to import competition. They are inadequate because they do not provide sufficient flexibility in adjusting to changing patterns of international trade. The United States needs the means to assist American firms and workers to adjust to the competition they face. Only in this way can our trade continue to grow to the maximum advantage of ourselves and our trading partners. Only in this way can we adequately assist those Americans who find themselves unable to compete with imports.

The Trade Expansion Act of 1962 would provide the necessary means to assist firms and workers to adjust to import competition. Let me emphasize that such adjustment does not necessarily mean a change of jobs or line of production. It may mean simply increased efficiency or skill in one's present work or business so that foreign competition can be met in the marketplace and not shut off at the port of entry.

Let me also emphasize that the President's program will not involve the creation of a vast Government bureacracy. To a great extent it will utilize the services and facilities of existing programs and agencies throughout the Federal establishment as well as State agencies. Moreover, it will not be a program of permanent Government paternalism. It will be, instead, as the President has stated, "a program to afford time for American adaptability and American resiliency to assert themselves."

The importance attached to affording time for change is illustrated by one of the most significant of the adjustment features-the "staging" requirement contained in section 243. Under this section, in order to enable American firms and workers to adjust to the effects of reductions or elimination of duties or other import restrictions, such reductions or eliminations would be put into effect at a rate no greater than that of equal annual installments over a 5-year period.

As I have indicated, the overall effects of our expanded trade policy will benefit American workers. However, its immediate effects on some industries, firms, and workers may be adverse. Some workers may lose their jobs, and for some of these, their hope of reemployment may depend on their acquiring a new skill, or changing to another industry; some may even have to move to a different location. This occurrence, however, is common in our competitive economy.

We do not expect that many workers will lose their jobs because of tariff concessions in the years ahead. The gradualness with which such concessions will be put into effect will greatly minimize any displacement. While our estimates are quite rough, we believe that an average of less than 18,000 per year would be laid off because of increased imports in the 5 years of the proposed bill's operation. In this connection it must be remembered that increased numbers of workers will find employment due to new export opportunities opened up by the new legislation.

It should be noted that these numbers include not only those who will be affected by tariff concessions under the proposed bill but a substantial percentage who will be affected by concessions already granted.

It should also be recognized that this estimate of the average number who will be adversely affected by imports is only 2% hundredths of 1 percent of the labor force.

Small as this number is, the problems can be serious for some of the individuals affected. Since their problems will have been precipitated by a positive Government policy taken in the national interest, the Government's obligation to assist them is clear.

On of the best ways to help workers who have lost their jobs, who have been put on a part-time basis, or who are threatened with total or partial unemployment is to assist their employer in order that he can fully employ them once again. Only in this way can the seniority, pension, and other accumulated job benefits of workers be fully protected.

This interest in preserving the employment relationship of firms and their workers is manifested in three places in the act.

First, in section 311(b), dealing with assistance to firms, where it is provided that one of the conditions for the granting of such assistance is that the firm gives adequate consideration to the interests of its adversely affected workers. Second, in section 326 (b), concerning training, which requires that to the extent practicable training programs shall be developed which will retrain workers to meet the manpower needs of their employer.

Third, in section 362(b) where the services of an interagency board are made available to the President to advise him "on the development of coordinated programs for adjustment assistance to firms and workers, giving full consideration to ways of preserving and restoring the employment relationship *** where possible, consistent with sound economic adjustment."

As that latter section expressly provides, there is no intention to perpetuate inefficient or uneconomic arrangements. Instead, there is only the very strong desire to assist firms and their employees who face a common hardship to adjust in a way that permits them to progress together.

Secretary Hodges discussed yesterday the specific provisions for direct assistance to firms. The act provides several forms of direct assistance to workers who are totally or partially unemployed or who are threatened with such unemployment as a result of action taken under a trade agreement. Such workers may receive weekly cash payments while unemployed or while being retrained. Training will also be provided where appropriate, following vocational counseling and testing. For those who are heads of families, who cannot find employment in their community and who have received definite job offers elsewhere, provision is also made for payment of the reasonable costs of the family's relocation.

(b) Discussion of the proposed worker assistance program.-There are two general conditions for the granting of adjustment assistance to workers under the act.

First, employment in the firm or subdivision in which they have been working must have been determined to have been affected adversely by increased imports resulting from trade agreements action.

The act provides that the determination of adverse effect will be made by the President on petition by workers in their own behalf or by their union or other duly authorized representative.

In order to find adverse effect the President must conclude that the importation of articles in increasing quantities as a result of a trade agreement has caused or threatens to cause unemployment or underemployment of a significant number of workers in the firm or subdivision.

Once such a determination has been made individual workers of the firm or subdivision in question who have been laid off (totally separated) or who have had their hours of work and earnings reduced substantially (partially separated), will be eligible to apply for adjustment assistance.

To qualify for any of the forms of assistance, a worker must have worked 11⁄2 years, in the 3 years prior to his separation, and have worked one-half year in adversely affected employment in the year immediately preceding his separation. In addition, he must, if he has been laid off, be available for work in accordance with the requirements of his State unemployment compensation law. The disqualification provisions of such law also will apply to him unless inconsistent with the proposed bill.

Primary responsibility for the administration of adjustment assistance for workers will be vested in the Secretary of Labor. As Secretary Hodges has already stated, the Secretary of Commerce, in administering assistance to firms, will work closely with the Secretary of Labor to assure that full consideration

81843-62-pt. 2-10

is given to the interests of workers in any adjustment programs approved for the rehabilitation of such firms.

In providing assistance to workers, the Department of Labor will operate insofar as possible through the existing State agencies. The State employment security agencies, for example, are the agencies now responsible for performing job counseling, testing, and placement and for the payment of unemployment insurance.

Prompt determination of the workers' eligibility for assistance is, of course, of the greatest importance. It does little good to provide a program for assisting those who lose their jobs because of import competition if the procedure for receiving that assistance is so time consuming that no assistance is actually provided until many months after separation.

Our goal is to provide adjustment assistance as promptly as possible so that it can help the individual in his time of need, not merely provide lump-sum compensation after the event.

The determination of injury which must be made before any of a firm's workers can receive adjustment assistance is placed in the President by the bill. Once made, the determination will apply to workers separated within 2 years thereafter.

Of major importance is the fact that a petition can be filed before the workers have lost their jobs. The bill permits the President to find workers eligible for assistance not only if increased imports have caused, but also if they "immediately threaten to cause," unemployment or underemployment of a significant number of the firm's workers.

Under present escape clause procedures, the Tariff Commission requires approximately 6 months in which to make its findings as to whether or not injury due to imports has occurred. It is intended that under the Trade Expansion Act the time required for determination of injury to workers is to be reduced to no more than 2 months. It is for this reason that the act requires that the Tariff Commission gives its advice to the President within 45 days.

You may be sure that the other administrative functions will also be handled expeditiously to assure that assistance is furnished as quickly as possible.

The form of assistance which will be most widely used will doubtless be the cash payments called trade readjustment allowances. These allowances will provide unemployed workers, including those undergoing approved training, with 65 percent of their individual average weekly wages but not more than 65 percent of the average wage in manufacturing.

Generally, a worker who meets the eligibility requirements will be entitled to trade readjustment allowances for 52 weeks of unemployment. There are two circumstances in which a worker can receive trade readjustment allowances for more than 52 weeks. Because older workers usually have a harder time finding new jobs, and thus can expect longer periods of unemployment, the bill provides an extra 13 weeks of allowances for those who are 60 or over at the time of their separation. Also, a worker who has begun a training course while drawing a trade readjustment allowance, and who exhausts his 52 weeks before the course is over, may receive payments for as long as the course lasts or up to 26 extra weeks, whichever is the shorter period.

If a worker entitled to a trade readjustment allowance is also entitled to unemployment insurance for the same week or weeks under a State or Federal unemployment insurance law, his readjustment allowance will be reduced by the amount of the unemployment compensation payable, whether or not he has filed a claim for such insurance.

If the unemployment insurance payable to a worker is less than a trade readjustment allowance to which he would have been entitled for the same period. he shall receive the difference when he does apply but the weeks covered by such payments shall be deducted from the total otherwise payable to him.

Thus duplication and pyramiding will be effectively prevented. Trade readjustment allowances are payable for weeks of unemployment including weeks in which the worker is undergoing approved training. In order to encourage workers to accept work even though full-time work is not available. weeks of unemployment also include weeks in which the individual earns less than 75 percent of his average wage and in which he works less than full time. Only half of the remuneration earned will be deducted from the allowance otherwise payable for such week. A partially separated worker-i.e., one who is still working for the adversely affected firm-must in addition to receiving less than

75 percent of his regular wages have a cut in hours of 20 percent or more, to be eligible.

In no case, however, will readjustment allowances be paid in an amount which, when added to unemployment insurance and wages for the week, would exceed 75 percent of the worker's average wages.

In some cases, as I have already emphasized, the workers unemployed as a result of trade agreements action will have to develop new skills in order to find new jobs. This is fully recognized in the act by section 326 which provides for counseling, testing, and training where appropriate.

The provisions of the act are designed to encourage the individual to enter approved training programs. Not only can those who accept such training continue to receive the weekly trade readjustment allowance, but those who refuse training without good cause will not thereafter receive such allowances unless and until they subsequently do accept training. As I mentioned earlier, readjustment allowances may be extended for as much as 26 additional weeks in order to assist a worker to complete a training program. Also, if the place where the worker is sent for training is not within commuting distance, he may receive additional payments for transportation to the training location, and subsistence costs while he is there.

The bill recognizes that, although every effort will be made to assist workers to remain with their present employers, and failing that, to develop new skills for employment in their area, some individuals will have to look to other areas to find suitable employment.

Single workers, particularly younger workers who have not accumulated much seniority with their former employer, are relatively mobile. However, it is a different matter for the head of a family. Not only does he tend to be older and to have more of a "stake" in his old job and in his community-but the costs of relocation are frequently too great-even when he has a definite job offer.

The act seeks to remedy this situation by providing relocation payments for heads of families who have no reasonable prospects of suitable reemployment where they are, and who have been offered suitable employment with a reasonable expectation of long duration in some other area. The relocation payment will consist of the expenses of moving the worker, his family, and their household goods, and a cash payment of 21⁄2 times the average weekly manufacturing wage-which today would be about a $230 payment.

I would like to emphasize that relocation is entirely voluntary both for the worker and the community into which he might move. Only if the worker voluntarily chooses to move to a place where a job is available will he be offered this financial assistance. Only if an employer in another community has voluntarily made a firm and suitable job offer which is not available in his home community will the worker be assisted.

(b) Comparison of forms of assistance with benefits in existing or other proposed legislation.-There may be some question in your minds about the reasons why this trade bill proposes to set adjustment allowances at 65 percent of the affected worker's individual wage, while the administration's unemployment insurance bill (H.R. 7640) only prescribes a 50-percent benefit level. Let me first point out that there is a basic difference between the administration's general unemployment insurance bill and the Trade Expansion Act.

In the Trade Expansion Act the allowance is a Federal payment and benefit. This allowance should thus provide the amount which the Federal Government considers necessary and adequate to facilitate the adjustment of affected workers to the changed circumstances resulting from the proposed new trade policies. Under the unemployment insurance system the benefits are State benefits, payable out of funds collected through a tax on employers in the States.

In the administration's unemployment insurance bill the Federal Government prescribes only the minimum benefit level which States are to meet. The States may pay a worker a larger benefit than 50 percent of his average weekly wage, the minimum specified in H.R. 7640. In fact, some States now provide benefits of as much as 67 percent of their average weekly wage for the lowest paid workers, or raise the benefit level by providing additional benefits to workers with dependents.

Most affected workers are expected to be in low-wage industries. The amount of trade readjustment allowances to be paid to workers in such industries will be little, if any, higher than the unemployment insurance benefits paid to such workers under some State laws. If readjustment allowances were set at a level equivalent to only 50 percent of a worker's average weekly wage, many workers

would receive a weekly allowance of less than the national average weekly unemployment insurance payment.

The 52 weeks during which workers can receive trade readjustment allowances if they remain unemployed that long is longer than any of the various durations provided by State law for unemployment insurance payments even with the 13 additional weeks of benefits now provided by the Temporary Extended Unemployment Compensation Act or which could be paid under the administration's unemployment insurance bill. In addition, the trade bill provides that workers over 60 can get 13 additional weeks of trade readjustment allowances, and that during training they can get up to 26 additional weeks if they need training for that long a period. Under the manpower development and training bill, the maximum duration of training allowances is 52 weeks. We believe that the worker assistance provided by the trade bill, both in level and duration, is justified and appropriate.

First, we have imposed employment tests which are considerably more strict than those in the unemployment compensation system. These tests will assure that only those with a substantial attachment to the labor force are eligible for adjustment assistance.

We have imposed these tests in part so that eligible workers could be offered enough assistance to make an adequate adjustment. In this connection, it should be remembered that a significant number of the workers who will be adversely affected by imports are older workers who will probably encounter difficulty in finding new employment. We want to be sure that the allowances they receive will not only be sufficient in amount but will also be sufficient in duration while they are being assisted to find other jobs or being retrained for different jobs. We further intend that affected workers will not be denied retraining or job opportunities because they cannot afford the cost of travel to the place where such retraining or job opportunity exists.

The Government has a special responsibility to these workers who suffer hardship because of its own trade policy. Such workers are not casualties of supply and demand, technology, or any other impersonal force. In a very real sense their displacement is the price of our decision to expand trade to improve conditions for our people as a whole. As the President has suggested, the obligation we owe such workers is akin to that we owe to the veteran. have long considered it appropriate to provide special programs for that group which exceed those for the general population. We should do likewise in this

case.

We

I have discussed that part of the act which is the particular responsibility of the Department of Labor and to indicate the care that the administration has taken to insure that those workers who do suffer hardship from our trade expansion program-however few in number-will not be neglected.

As my remarks have indicated the administration has proposed a generous trade adjustment program for workers injured by imports as an integral part of the Trade Expansion Act. As a humane Government we recognize our responsibility to provide adequate assistance to those who may be injured by a deliberately chosen Government trade policy. This does not mean that we believe that an enormous new program will need to be launched. As I have already stated our estimates show that the number of workers involved will not be significantly large.

CONCLUSION

In conclusion may I emphasize that we are comitted as an administration and I hope as a nation to a bold imaginative policy leading to the rapid and extensive liberalization of trade possibilities. This policy is taken in the context not only of the maximum possible benefit to American industry and labor but as a means of achieving economic growth and strength for industry and labor in the entire free world.

As Secretary of Labor I heartily endorse the administration's new trade program and the bill in which it is embodied, H.R. 9900.

I do so mindful of my obligations as Secretary of Labor under the Department's basic charter "to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment."

I am convinced that the administration's proposed program will substantially benefit the Nation's workers, jobs, wages, and prospects for economic growth.

« ÀÌÀü°è¼Ó »