them, would be made of materials that would be available in those countries. We are in a different situation there. Mr. GUARINI. Ms. Hughes, were you the one that mentioned about the $2 billion that the consumer would save Ms. PADDUCK. No, it was the cost to the U.S. consumers of $2 billion dollar per year if this bill were implemented. Mr. GUARINI. You are talking about the shoe industry itself? Mr. GUARINI. Did you do any studies on what it means to the taxpayer if in this bill 2 million jobs are put at risk as far as unemployment, training, relocation, payment of public assistance and social services? Did you do a study in that regard? The consumer is still the taxpayer and when you have 1 percent unemployment, approximately a million people, it would make a difference of $20 billion to the American public through tanks because these are people that we would have to sustain so that there is also an offset to the consumer as to what we will have to pay people, and we had 142,000 people according to the reports that were put out of work since 1980, and I am wondering whether or not you figured that into how it would affect the consumer, the taxpayer? I will accept if you do not have any figures, but I think we should have both sides of the equation in order to fully understand the problem we have on the table. Ms. PADDUCK. According to the studies that we do have here there would be a net loss of 52,000 retail jobs in the textile and apparel and footwear industries. Mr. GUARINI. That is approximately, if you are talking Ms. PADDUCK. Those are retail jobs. Mr. GUARINI. That would be one-twentieth of 1 percent unemployment if my figure is right, the $20 billion, so it- Ms. PADDUCK. It would be $2 billion. It was a cost of $2 billion over a period of 10 years. So you are saying $20 billion over theMr. GUARINI. Per year. Ms. PADDUCK. $2 billion per year, that is correct. Mr. GUARINI. Let's get this straight. You say that the cost to the consumers would be $2 billion per year? Ms. PADDUCK. Yes. Mr. GUARINI. What is the 10 year? Ms. PADDUCK. Over a period of 10 years? Mr. GUARINI. $2 billion per year? Ms. PADDUCK. Right. Mr. GUARINI. For a 10-year period? Ms. PADDUCK. That is right. Mr. GUARINI. Okay. Ms. HUGHES. The study we were involved in, referred to, compared the job increases that might be sustained by the textile and apparel and footwear industries and compared them only to job losses in retailing, which was the only sector we could quantify there was a net job loss. In retailing, more jobs were lost in retailing than would be created in the other industries. So that that is the way that the comparison works in this one study that we have been referring to. Mr. GUARINI. What I am trying to get to is that we also have associated cost of closing down plants, not just manufacturers or to the retailers that would be dealing with the domestic products, but we have hundreds of thousands of people involved. We have an industry of textiles and footwear of 2 million people. Of course, if these jobs are at risk, I am asking if you know what it costs to the consumers, would you know what the taxpayer-did you execute a study to find out what the cost would be for every 100,000 jobs we lose in these industries? What is the offset or is the social security greater than the consumer costs because the consumer is the one that pays taxes and if 1 percent unemployment amounts to $20 plus billion, you have got to figure that into your equation if you are being fair in the kind of statistics you are giving the committee. Ms. HUGHES. I think that we could come back to the committee and talk about what would be the cost to the taxpayer per job loss, but I think that no one on this panel would agree that every job in the textile and apparel and footwear industry will be lost, that none of those people could find another job in another industry. We would be glad to meet with the committee and share with you some Mr. GUARINI. You would have to find out what kind of jobs they would do, and you have cities and towns that will be seriously impacted and dislocated. You can refer to the cities nationwide, but I think when you break it down to states and communities, you may find that there are some communities that could be wiped out by major industries, footwear and textile and apparel are closing down. I know my area in Hudson County, NJ, has a tremendous number of shutdowns in the apparel industry, and they are very seriously affected. So when you give me nationwide statistics, it really doesn't help that much, because we are not relating to specific families and people.. Thank you very much. Ms. PADDUCK. I am sorry, I was just going to say that the Footwear Group of the AAEI supports a trade adjustment assistance program Mr. GUARINI. Which is another cost. All of these things cost money, so that when a person goes out of work because of foreign imports, then the public picks up the check and pays them unemployment, pays them trade assistance they get up to a year and a half-and they also get different forms of SSI and food stamps and social services and medicaid, and so many other things that come into the equation that our preference is to keep people productive and paying taxes instead of putting them out of work and have the public expense for social services. That is my point. Thank you. Mr. FRENZEL. Mr. Harari, you indicated you are going to be subjected to new quotas under H.R. 1154? I wasn't sure I understood why. Is it because the hard 100 percent applies to everything where today you are not subject to quotas on every item in the lines? Mr. HARARI. I think your understanding is correct. There are quotas on selected categories from selected country suppliers. However, there are also many other country suppliers that are not at this point subject to any quotas. There are also specific products རྩྭ made from certain textiles-bags and luggage products-that are exempt from any restraints under the MFA. However, H.R. 1154 would place those under import control with a 1-percent-growth limit. Mr. FRENZEL. Contrary to its self description, H.R. 1154 does expand coverage and all kinds of textile coverages. Is that correct? Mr. HARARI. That is absolutely correct, and this is also in an area in which there were no quota controls until 1984. 1984 was the first year in which quotas were placed on luggage products. Mr. FRENZEL. Thank you very much. Mr. Mueller, you indicated you stopped the production of women's shoes. What induced you to come back into it? Mr. MUELLER. From our point of view we feel it is a new dimension for our business today with the working women and their need for quality comfortable footwear. We are going to make an attempt to satisfy them. Mr. FRENZEL. You are looking at a new or different market? Mr. FRENZEL. And you tried to do it at home? Mr. MUELLER. We are trying awfully hard, and that is contrary to everything that is happening. I hope we never have to be out of manufacturing here. We are planning to stay in for a long time. Mr. FRENZEL. You are the largest manufacturer of men's footwear, dress footwear? Mr. MUELLER. Dress letter quality footwear, we think we are. Mr. MUELLER. It can. Mr. FRENZEL. That is sort of a stunning indictment, I would think. Mr. Rowland, you indicated that the bill in order to save some jobs for some people was going to cost other jobs for other people. We also heard one of the other witnesses indicate that in her opinion, there would be more jobs lost than saved. Do you have a study or an opinion on that? Mr. ROWLAND. No studies, sir. An opinion on everything about the footwear business. It is very likely that as prices increase as a result of the effects of this bill, that jobs will be lost in the United States, by everybody associated with imports, and they will notthere will be very little offsetting of jobs created in domestic industry. This has become an extremely competitive industry in which prices have actually gone down over a period of 6 or 7 years. The quality of the product being imported at a low price in the volume market, which is aimed at the poorest of Americans, is an incredible value, and so I think that—I have no study to back it up-but I think it is very fair to say that price increases are already happening due to changes in the exchange rates. That we have hit the bottom of the market from such supplying, from almost all supplying countries. Taiwan, Korea, Spain, Portugal and Italy, and Brazil, in its own chaotic situation-all are shipping fewer shoes at higher prices and that the bottom of the U.S. market is being affected already. If this bill were to pass, I think it would largely disappear. I think almost the entire net effect would be at the bottom of the market. Domestic manufacturers never served the kind of quality for value that we are talking about and they do not now have the capacity to do it, even if they had the will. Mr. FRENZEL. So all of these limitations of the bill always have to beggar a few others who may be in the way in order to save a certain favored few. And it is up to the political tinker to decide whose friend is going to be protected, and which of the people who aren't friends are going to have to pay the cost of protection? Mr. ROWLAND. I believe that that is true with any quota. I think it is absolutely so in terms of footwear. Mr. FRENZEL. I would like to ask you and Mr. Mueller to address the effect quotas have on upgrading imports. When we did a voluntary restraint agreement with Japan, the very clever Japanese car manufacturers, having a certain volume to play with, knew they had to sell a little fancier car. They simply put more gadgets on them to get the price up, and then they could command a price that held an umbrella over U.S. producers who let their prices. come up as well. You indicated that there would be a similar phenomena in footwear. Can you describe that to me a little better? Is it going to be that kind of parallel? Mr. MUELLER. If I can. Mr. FRENZEL. Since they only can sell so many shoes, are they going to put tassels on them and whatever? Mr. MUELLER. From our standpoint that is an assumption. If I may, before I give a full answer, getting back to the other points we were discussing, we are a large producer, maybe the largest of quality dress men's shoes, but we are also a marketing company of a much broader line of quality footwear, including many segments of product that we do not manufacture, and cannot manufacture. The upgrading of the product on the more limited basis is in terms of quotas, it would be our assumption that that is what would happen. The marketplace, of course, would dictate the success of that. Mr. FRENZEL. Mr. Rowland, have I described that correctly? Do you agree? Mr. ROWLAND. Yes sir, I certainly agree that I think there are very few people in the footwear business in the United States or overseas who make shoes because they want to make shoes. I think they are in the business to make money. If you restrict the quantity, it is very likely that in order to maintain income they would have to produce better footwear at a higher price. Mr. FRENZEL. What will the U.S. producer of the same shoe do? Mr. ROWLAND. We are talking about a limited area of maneuverability now for the domestic producer and I think they would then have direct competition in products for which they have now relatively little competition. I think it would hurt. I think everything about quotas for footwear would hurt the domestic industry. Mr. FRENZEL. Tell me about sport or athletic footwear. As I understand it, we don't make enough of that in this country to shoe a high school track team, do we? Mr. ROWLAND. I think that is true. I think it is. The impact of athletic footwear-and Ms. Padduck represents an athletic footwear company-was largely imported from the beginning. What you and I might call sneakers was in part an American product, but performance athletic footwear I think is certainly now almost entirely Mr. FRENZEL. What is the effect if those are frozen under 1154? Do we have to develop an industry in the United States, or do we all go back to habits of indolence? Mr. ROWLAND. I think it would be very hard to predict what would happen, because that is now such a very large part of the market. Mr. FRENZEL. I have the feeling that as foreign sources developed the athletic shoe and the sports shoe or the informal shoe for reasonable prices, we started wearing a lot of them, and the market was really developed by that particular trend. The U.S. shoemakers never had a corner or that market, never knew how to develop it, and that market came from abroad? Mr. ROWLAND. It did. I think when it began, I think that people didn't believe that the American consumer was ready to pay $25 for a pair of sneakers and while we had a disbelieving industry, foreign manufacturers were saying yes, and I think that—— Mr. FRENZEL. So we're protecting an industry that doesn't exist if we quota those shoes? Mr. ROWLAND. I think that is very true. Not just those shoes, but also the bottom of the market. I think much more important are the very inexpensive shoes that were never made. Mr. FRENZEL. If Mr. Jenkins passes his bill, maybe you and I ought to get into the shoe manufacturing business. Mr. ROWLAND. Or quota brokering. Mr. FRENZEL. I thank the panel. Chairman GIBBONS. All right, well, thank you very much for coming. Ms. DuBrow, would you like to introduce the president? Members of the committee, I would like to introduce Jay Mazur, the president of the International Ladies' Garment Workers' Union, and I want to thank you for the opportunity to testify before the subcommittee on H.R. 1154. Chairman GIBBONS. Ms. DuBrow is our friend and a very effective voice here. STATEMENT OF JAY MAZUR, PRESIDENT, INTERNATIONAL LADIES' GARMENT WORKERS' UNION, AFL-CIO, ACCOMPANIED BY EVELYN DUBROW AND HERMAN STAROBIN Mr. MAZUR. Let me echo those sentiments, Mr. Chairman. I am Jay Mazur, I am president of the International Ladies' Garment Workers' Union. As you know, I am joined this afternoon by Evelyn DuBrow, who rightly deserves our highest praise, and equally praiseworthy is Herman Starobin, our research director, who has devoted a great deal of time and effort in this undertaking and represents us with the Government in negotiations with foreign countries on trade. I also want to thank you, the committee, and particularly you, Mr. Chairman, for the opportunity to be here this afternoon and to |