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.

from XP

731

Domestic employment attributable to U.S. exports, 1960, State distribution

1 State distribution of farm employment was made jointly by the U.S. Department of Agriculture, Economic Research Service and the U.S. Department of Labor, Bureau of Labor Statistics. These State distributions were made by using data of the Economic Research Service which took into account regional productivity factors for each of the crops. The resulting estimates of regional employment attributable to exports were allotted to each of the States in proportion to its share of the regional value of production for each of the crops.

2 State distribution of manufacturing employment was prepared by the U.S. Department of Commerce, Office of Business Economics and Bureau of the Census and the Bureau of Labor Statistics. The procedure followed involved use of data on the local origin of exports in 1960 collected in a special survey by the Bureau of the Census and the State data in the 1958 Census of Manufacturers. Each industry was distributed separately; the distributed estimates were then summed to obtain total manufacturing employment in each State.

State distribution of mining employment was based on data prepared by the U.S. Department of Interior, Bureau of Mines and U.S. Department of Labor, Bureau of Labor Statistics. Wholesale trade was distributed by U.S. Department of Commerce, Bureau of the Census using the State distribution of wholesale trade in the 1958 Census of Business. Railroad transportation was distributed by the Bureau of Labor Statistics using data from American Association of Railroads showing State employment of railroad employees. The State distribution of the services industries, banking and finance, transportation, excepe railroad, construction, and all remaining sectors was made by the Bureau of Labor Statistics using tht State distribution of each of these sectors in the 1959 County Business Patterns.

Alaska, District of Columbia, and Hawaii are not shown separately but included in the total.

The CHAIRMAN. Mr. Secretary, I congratulate you, sir, on your advocacy of the legislation, your very logical reasoning with respect to its effect on labor in the United States. We appreciate your having been here.

Are there any questions?

Mr. Curtis?

Mr. CURTIS. Thank you, Mr. Chairman, and thank you, Mr. Secretary, for some very valuable information which bears on this matter. First, in order that history can be of some guidance to us in our study here, I would like to sort of take issue with your interpretation of the Reciprocal Trade Act and the advantages that came from it since its enactment in 1934. I happen to be for the reciprocal trade procedures for many reasons, but certainly one cannot be for it on the basis of the figures you gave of going from a $2.2 billion in 1934 to $20 billion.

Actually, and I am reading from the balance of payments of the United States, 1919-53, U.S. Department of Commerce, and the figures for the various years are found on pages 4 and 5, interestingly enough, the greatest jump in trade was from 1933 to 1934. It was 1.7 to 2.2.

We then go each year, 2.2 to 2.4, to 2.49, to 3.45, and then go down in 1938 to 3.2. The trade went up as a result of World War II. I have tried time and again, with my good Democratic friends, to try to point out that there is a difference between an economy of war and one of peace. We have to learn the distinction. If we take credit for what war does in the field of economics by ignoring the fact that it was a war period, we are entering into a real danger.

As America became the arsenal for democracy, with the trade balances going up, in 1941 it was $5 billion, 1942, $9 billion, 1943, $15 billion, $17 billion in 1945, and then it tapers off and picks up again.

When we get done, the net result is that we start out in 1934 with a 3.38 percent of GNP, and we go up to today, or 1960, to 4 percent. As a matter of fact, if we adjust that figure, as we should for agriculture and other subsidies, it actually has probably been no gain in percentage of the GNP.

I again say there are many reasons why I think the reciprocal trade formula can be defended, but I think we are in error if we try to claim for it the fact that the trade exports and trade balances move forward.

The other area I would like to comment on first is, I don't think there is any real disagreement in this committee, in the Congress, or among the people in this country on the importance of foreign trade. I think we all feel it is good. The issue is around what is fair trade, what is reciprocal trade, and the particular issue that faces this committee is how are we going to delegate, in what manner, with what guidelines, authority to the Executive to do further negotiations.

What concerns me is to be certain that whatever we do here will be that we are actually adopting liberal trade policies. I am very fearful, Mr. Secretary, having listened to the witness this morning, and also the interrogation of Mr. Hodges, plus some other statements that have been made over a period of time, that the people who have put around their shoulders the cloak of free and liberal trade, their

actions and thoughts do not justify it. They simply want to change the methods by which we regulate trade, and to get the governmental side more heavily into this area.

To me, liberal and freer trade is freeing up the marketplace, and the utilization of that mechanism so that any individual, small business in particular, can negotiate and he doesn't have to go through a Federal bureaucracy in order to compete in international trade.

The policies that are being proposed here in my judgment do not lead us to more liberalized trade. I think we possibly can do so by putting in the direct guidelines so that the Executive, as he uses this power, would know. I happen to be in favor of granting some power to the Executive in order to do some negotiations with proper guidelines.

The other comment I would like to make is that I think your presentation with regard to the labor force and the impact on it is more in a sort of black and white situation rather than what it really is as a gray situation.

You talk in terms as if all exports were eliminated and all imports. Granted that that helps us in getting our eyes set on the thing, here is why I think it doesn't present too accurate a picture. Sixty percent, as you pointed out, of our goods that we import are unaffected by tariffs or trade barriers. We are only talking about a 40-percent area. In that area it even breaks down into a much smaller percentage.

So, whatever we did in the way of holding our tariff schedules as they are would not affect a great bit of or a large part of our exports and imports. I think you would agree with that, wouldn't you, Mr. Secretary?

Secretary GOLDBERG. I agree with you that what I painted was the broad picture of what we would come to if we shut everything off. I agree with you that that surely is not contemplated nor desirable. Mr. CURTIS. It becomes important in trying to evaluate this, because, as you point out, the number of the labor force, 18,000 a year, totaling over 5 years about 90,000, we are not talking about a big segment, and probably whatever we did in the way of tariffs here would have not much impact, in my judgment, on the work force in these other areas.

I would like to examine a little bit with you some of these figures on the work force affected by exports.

First of all, I noticed in your figure that you gave something like 900,000 people in agriculture.

Was that the figure?

Secretary GOLDBERG. I believe that is correct.

Mr. CURTIS. It is on page 2 of the tables you placed into the record; 941,000 is the figure.

Mr. Secretary, this committee, back in 1958, I believe it was, had our Subcommittee on Foreign Trade Policy gather together a series of papers on foreign trade policy, and we got a very fine statement from the U.S. Department of Labor, the Bureau of Labor Statistics, September 1957, Employment Wages and Foreign Trade. This is at page 761. It shows U.S. employment attributable to foreign trade in 1956, which, incidentally, has a total figure quite a bit more than your 3.1, and in there they have agricultural workers at only 602,000.