"In addition to the displacement of natural fibers by synthetics, the textile industry has suffered from the substitution of nontextiles in various household and industrial uses. Plastic film has made major inroads in the upholstery fabric market and in automobile seat covering and door paneling. When added to the earlier displacement in window and shower curtains and tablecloths, these developments assume major importance. "WOOLENS AND WORSTED IN BAD SHAPE "Failure of the woolen and worsted branch of the industry to protect its competitive position stands in marked contrast to the success of the cotton interests in improving their styling, finishing, and merchandising. With Government aid in studying the properties of cotton and its potential uses, growers and manufacturers cooperated in developing new processes and staging an effective propmotion campaign. Research is needed in the wool field to improve its qualities with respect to shrinkage and mothproofing. Fabric design has lagged behind the times as domestic mills generally gave up the initiative to foreign producers. While many woolens have been styled to meet the shift in consumer preference toward casual wear worsteds have not yet been adequately adapted to this trend. Many mills are also unable to compete because of obsolete plant and equipment. The woolen and worsted industry will have to bestir itself to meet the growing challenge of the newer synthetics. Creative answers must be forthcoming to the problems posed by product design, technology, merchandising, and sales promotion. "MILL LIQUIDATIONS "The rate of mill liquidations increased substantially in the last 2 years, leaving a train of ghost towns and some 50,000 jobless workers. Management deficiencies which had been glossed over in the textile booms that followed World War II and the Korean war were glaringly exposed by intensified competition. Companies whose stockholders enjoyed a bonanza in dividends from highly profitable operations in 1946-48 and 1950-51 found that their failure to plow back sufficient funds to modernize plant and equipment left them at a serious disadvantage in 1952–53. The necessity of cutting costs posed finanial problems for which they had not prepared themselves and many mills were forced out of business. "FINANCIAL MANIPULATIONS CAUSED SOME CLOSINGS "A number of mills were liquidated as a result of deliberate schemes by management to achieve maximum financial gains. The welfare of the workers who had devoted the major portion of their lives to these mills was ignored in the ruthless drive of a few men to profit from loopholes in our tax laws, under which capital gains (such as a gain from the sale of a plant) are taxed at only 26 percent compared to a maximum rate of 92 percent on ordinary income. No consideration was given to the fate of communities whose entire economic life depended upon the operation of these mills. Instead, every opportunity was seized to exploit communities in other parts of the country through acquisition of new plants and equipment paid for by industry-hungry towns which used their tax-exempt authority to float municipal bonds. ***The pressure for cost reduction in the last 2 years resulted in the expenditure of over $500 million for plant improvement and expansion. The bulk of the postwar expansion program had been completed by 1951 so subsequent capital expenditures were concentrated in improvement of existing facilities. Altogether the industry has spent more than $31⁄2 billion on new plant and machinery since the war. By the end of 1953 more than half the gross value of the industry's capital assets was made up of postwar installations. 66 "INDUSTRY HAS MODERNIZED 'Along with improved technology the textile industry has transformed its methods of operating along the lines of the most modern American industries. Centralized controls have been instituted over scheduling and production, and systematic checks imposed on quality. Plant layouts have been revamped to provide a straight-line flow of production. Materials handling has thereby been reduced to a minimum and, where actually necessary, mechanical means have been substituted for labor. Technically trained supervisors and time-study engineers have combined to tighten labor standards. Man-hour output has been substantially increased. With the decline in activity at the end of 1953 many companies pared their overhead and work force. Demands for higher machine assignments for workers were more numerous than ever. "FAILURE TO SECURE TARIFF RELIEF "To protect the industry from further destruction TWUA in 1953 requested the United States Tariff Commission to implement a provision of the Ĝeneral Agreement on Tariffs and Trade which authorized raising tariff rates on woolen and worsted fabrics when imports exceed the trigger point of 5 percent of production. This request was rejected on a technicality. Early in 1954 the union again urged the commission to raise the tariff rate from 25 to 45 percent as soon as imports in any weight category reach 5 percent. "While woolen and worsted imports have been rising, exports of cotton goods (the only textile item which the United States exports in substantial quantities) have been dropping sharply. Shipments of cotton fabrics declined from 802 million square yards in 1951 to 762 million in 1952 and 630 million in 1953, a drop of 21 percent in 2 years. Foreign markets for cotton goods have been contracting as domestic textile industries have been built up in the underdeveloped areas of the world. Japan and India have expanded their capacity to a point where their exports exceed those of the United States. Great Britain's industry is also geared to supply a larger portion of the world cotton goods market. The United States therefore faced a shrinking foreign market. "VIGOROUS ACTION BY GOVERNMENT NEEDED "The economic problems faced by the textile industry call for vigorous action by the Federal Government to aid in making the necessary adjustments. In the 1952 presidential election campaign, General Eisenhower made specific promises to aid distressed areas and to effectuate other policies leading toward a recovery in textiles. "In Lawrence, Mass., where more than 20 percent of the labor force of 53,000 was unemployed as a result of woolen-mill closings, the President had promised preference for distressed areas in obtaining Government contracts. The Truman administration's policy of setting aside parts of contracts to be let in distressed areas had not been sufficient because of the requirement that the lowest bid be matched. At the end of 1953 President Eisenhower announced he favored strengthening the set-aside program to assist distressed areas, but withdrew his support before any alleviation could be worked out. He explained that it was not his intention to offer special assistance to any area, but rather to improve conditions throughout the Nation; the only result was continued unemployment in Lawrence and other hard-hit cities." We wish to offer herewith the most recent statistical compilation made by the research department of the Textile Workers Union of America, showing levels of employment and weekly man-hours worked in 23 principal textile States. This compilation gives the figures on employment in the industry at about the high point in February 1951 as contrasted with the situation in April 1954. We can say to this committee that since April the drop has continued. According to these data, there has been a reduction of employment in textiles in the United States between February 1951 and April 1954 of 21.2 percent. The drop in average weekly man-hours in that same period has been even more severe. The decline in man-hours is 28.2 percent. Although the economic blight which has overtaken textiles is nationwide, it is painfully clear that certain geographical areas are suffering much worse than 48088-54-18 others. The fact that the drop in employment and man-hours worked in the six In the New England States employment has dropped 39.7 percent between In the 9 most important textile-producing States in the Southeast there has Employment and average weekly man-hours in textile mill products industry by 1 Data includes States not shown separately. 2 Maine and Vermont are not included in man-hour data because they are not available. 3 Not availa ole. 4 Employment and man-hour area totals are for those States for which data are available. Maryland 5 April 1954 figures are not available. Figures shown are for March 1954. Employment and man-hour totals are for those States for which such data are available 7 Area totals are for California, the only Far West State which reports such data. Source: State departments of labor and U. S. Bureau of Labor Statistics. One other statistical table which we believe to be of considerable importance in connection with this testimony dealing with the general problem of unemployment in textiles is appended herewith. This table illustrates the wide variations in the different States in the average contribution rate for unemployment insurance in the textile industry. We have used the latest data available in each case. Whereas in Rhode Island the rate was 2.7 percent, in such competing States as Alabama, Georgia, and South Carolina, average employer contribution rates were respectively 1.02 percent, 1.21 percent, and 1.23 percent in 1952: Average contribution rates for unemployment insurance in the textile mill products industry Source: U. S. Bureau of Employment Security; from table published on p. 111 of Senate Finance Committee hearings on Employment Security Administrative Financing Act, March 1954, and typewritten table dated Apr. 9, 1954. The "textile mill products industry" is as defined in Industry Code No. 22 of the Standard Industrial Classification Code. Our purpose in presenting this table is to emphasize our point that in an industry which is as competitive as textiles, the need for substantial standardization of taxes collected from all establishments, irrespective of location, should be very evident. Moreover, we feel strongly that the great disparity in amount benefits and duration of benefits between the textile States is socially unsound and economically harmful both locally and nationally. THE HUMAN ASPECT In all of the above materials dealing with broad statistical trends and the basic economic difficulties of this widespread industry, we have not mentioned the human aspect of this problem. The committees of Congress can so easily fall into the habit of forgetting that back of all these tables and sets of figures, which must be part of testimony such as this are men women and children, each of whom has special needs and problems which cannot actually be portrayed by any set of statistics. In Rhode Island, in the past few months, a well-known institution of learning has made a careful sample study as to what is happening to the men and women who were thrown on the labor market due to the closing of textile mills. TWUA has been privileged to see the preliminary findings of this survey which will be officially released in the next couple of weeks. The facts we summarize here will be borne out by the formal report. The investigators interviewed 131 individuals who were laid off over a year ago as a result of mill closings. Of this number only 29 percent have found new jobs. This investigation did not inquire into the type of employment or the rates of pay obtained by this group of workers. But from past experience in similar situation, we can be positive that most, if not all, of these workers are now employed in less desirable jobs and at a lower scale of wages than they earned when they lost out in their former place of employment. Eighteen percent of the 131 persons in this group have retired from the labor market and are not looking for work. This does not mean that none of these individuals no longer need jobs; it simply means that they have given up the search for reemployment. Fifty-two percent of the total are today unemployed after having been laid off for longer than 12 months. Thirty-six percent of these 131 men and women have not been able to find a paid job of any kind for even 1 day during this period of over a year. All of the 52 percent that are still jobless are actively looking for work and have done everything possible to find jobs during all these long, weary months since their plant went out of business. What these figures mean is that a small proportion of the 52 percent that are today idle have picked up occasional jobs during the past year, but that the bulk of those who are seeking work have not earned a cent from any kind of paid employment since they were first thrown on the labor market more than a year ago. DURATION OF BENEFITS MUST BE INCREASED Surely the members of this committee must see from these figures, which certainly apply to similar situations in other textile States, that the average duration of employment benefit payments must be increased. Maximum duration of benefits in Rhode Island is 26 weeks. Textile States elsewhere do not even pay for that number of weeks. Therefore, it is painfully evident that practically all of these 52 percent who lost their jobs have had no income whatever, except possibly from relief for a period of at least 6 months. Even assuming that some of these families had savings, it is certain that by now these accumulations have been completely exhausted. How are these people living? Frankly, we do not know. We do know that there is suffering and deprivation among this group despite their diligent search for work. The community suffers also from the fact that these people have no purchasing power. Moreover, friends and relatives of such individuals must be stinting themselves and possibly even going into debt to share with those who are absolutely without funds. Results of this Rhode Island survey are in line with an earlier report along the same lines appearing in Business Week for March 6 of this year. We quote from this article: "When a New England textile mill closes its doors, what happens to the uprooted workers? That's a big question throughout New England today, and one that so far has never been adequately answered. "Unemployment figures tell only part of the story. That is clear in Lawrence, Mass., which many more textile jobs have been wiped out in recent years than are shown by jobless data and figures on expanded employment in other industries. What happened to the rest? "Tracking them down.-The Bureau of Business and Economic Research of Northeastern University, in Boston, is trying to find out in a survey of displaced workers in Lawrence-part of a broad study launched about a year ago that's now beginning to show some interesting results. "Under the direction of William H. Miernyk, the bureau has so far interviewed 756 workers from 3 liquidated mills in 3 cities—a woolen mill in New Hampshire, a cotton mill in Fall River, Mass., and a cotton mill in Lowell, Mass. "The general picture. First findings, which later case studies probably will confirm, show: "Most of those laid off were still in the labor force, either employed or actively seeking employment, though a few of the displaced workers-mostly young married women or very old workers-dropped out within a year. |