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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.


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.

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“More men than women had been reemployed, and workers over 45 years of age were having a particularly hard time finding new jobs. Among the job seekers, 80 percent were drawing unemployment compensation when interviewed.

“Most of those with new jobs were in other textile mills, in nonmanufacturing work, or in established, relatively static ‘nongrowth' industries; comparatively few had found their way into newer, expanding growth industries-machinery, electronics, and the like.

“The majority of the reemployed were earning less than before, and many had been downgraded-from skilled to semiskilled, or from semiskilled to unskilled classifications.

“Most told interviewers they were unhappy in new jobs, in part because of the lower pay and rating, but also because they had lost seniority and saw little opportunity for advancement.

Shattered illusion-According to Miernyk, these findings explode a myth that has gained currency among New England businessmen and many economists in the last few years: that growth industries, particularly electronics, have been taking up a lot of the textile slack in unemployment. That's not the way it looks, Miernyk says, commenting:

'In view of the recent public statements that New England will gain by the * * * diversification of industry, we feel that these findings are timely * * *. Statements by persons in important positions have created the cruel illusion that new jobs are to be provided for the displaced textile workers.'

“Diversification helps, but new industries evidently are filling jobs with newcomers in the labor market instead of with displaced textile workers, according to the bureau's findings. Of the first 756 workers checked, only 5 percent found jobs in growth industries.

"Variations-Along with these general conclusions each of the first mills surveyed turned up some interesting sidelights.

"In Lowell, younger male workers found new jobs, but those over 45 years of age still were largely unemployed after a year; women in all age groups were having a harder time getting new jobs than men were.

"In New Hampshire, the woolen mill closed in a one-factory town with a population of 1,500, miles away from any fair-sized city. The mill closing idled 200 workers. A leather products firm moved into the mill building, and reemployed part of the textiie jobless. But 2 years after the shutdown, almost a third of the 200 laid off in the woolen mill were still out of work. For the other two-thirds, who got jobs, the average period of unemployment was about 5 months.”

The picture of what is happening in the textile industry which we have given here is not a pretty one. Indeed, it is an alarming situation and one that, in the view of the workers in the industry, cannot be further ignored.

The Congress will be utterly delinquent in meeting its responsibilities, if it fails to take at least the one important step to aid unemployed workers, which is embodied in H. R. 9430.

Mr. KEAN. Are there any other questions?
Mr. SADLAK. Mr. Chairman.
Mr. KEAN. Yes, Mr. Sadlak.

Mr. SADLAK. Mr. Carey, on page 4 of the copy of your testimony given to us in the second paragraph you say:

The Reed bill itself is directed toward changing some of the Federal provisions which affect the States such as coverage and reduction of taxes.

However, in the next sentence you say:

The Truman administration recommended a Federal standards bill which was introduced in the House by Congressman McCormack.

What became of that bill?

Mr. CAREY. My purpose in placing that in the testimony was to show that there was general agreement, regardless of party for some improvements in social-security legislation. The bill that was presented by Congressman McCormack was not acted upon in a fashion that would have incorporated the changes that that bill suggested.

Mr. SADLAK. One other question here. Do you interpret the Forand bill to this extent: That it would pay benefits to those employees who are out of work because of the removal of industries, say, from Rhode Island, Mr. Forand's State, down into Mississippi? •

Mr. CAREY. If we establish Federal standards in a proper StateFederal unemployment compensation program as suggested in the Forand bill we would eliminate or at least reduce the ill effects of the runaway programs that are now in operation in several industries, like textile, and unfortunately even in the most profitable industry in the Nation, the industry I am privileged to represent, the electrical, radio, and machine industry.

We have corporations that are using Federal concessions to establish plants in rural, remote, and southern areas, corporations like General Electric taking work out of Pittsfield, Mass., and opening plants in Rome, Ga., at extremely lower wage rates.

Unemployment takes place in Pittsfield, Mass., as a result of that effort.

Of course, the corporation contends that there are only 2 percent less people employed this year than last year, but they fail to present the case in the proper light: that raising employment levels in one area and at the same time reducing them in another still means that there is unemployment in that situation. One of the arguments used is that taxes would be lower in Georgia than in Massachusetts in dealing with the unemployed, so we would contend that the Forand bill does establish some methods by which there would be better standards, and competition on the misery of working people would in part be reduced in this competition that goes on between communities.

The electrical industry should expand. They should open plants in Rome, Ga., and in Anniston, Ala., and elsewhere, but they ought to do it with orderly growth and not for the purpose of reducing the standards, either in unemployment compensation regulations, or in wages, and other conditions of employment.

Mr. SadLAK. Nr. Carey, of course, where the plant is moved, say, to another section of the country, then the other establishments there, such as restaurants and so forth, which will suffer ought also to be looked after; is that not so?

Mr. Carey. Yes, sir. The expansion in our industry should be orderly and it would be desirable for our Nation that the corporations expand in these remote and rural and southern areas, but without creating injustices in the communities they are leaving.

Mr. SADLAK. One more question. Among the bills on which we are holding hearings and having this testimony today is one by my distinguished colleague here, Mr. Baker. He has introduced 8. R. 8585. I read your testimony before you presented it and I tried to go along with you. I did not hear any comment upon that bill.

Mr. CAREY. That is only due, sir, to the limitation of time. I served in Government agencies that dealt with questions of tariff and international trade and the purposes directed in the Baker bill, with which I am familiar in part, are good. The Baker bill does not go far enough in alleviating the conditions that will result if we should secure higher levels of international trade. I would suggest that we consider House Resolution 8585 introduced by Congressman Baker in the light of our reciprocal trade agreements and in the light of several other items.

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I do not think we ought to leave as an example, the certification up to the governor of a State that the unemployment grew out of the international trade or the effects of the importation of goods and services from countries abroad, but I certainly appreciate the interest that Congressman Baker has displayed in that matter, and I think it deserves something more than the limitation imposed by a 10or 15- minute time limit to discuss matters as serious as that.

Mr. SadLAK. Mr. Carey, let me say this: That prior to your coming into the committee room the witnesses who preceded down on their statements and in that way enabled you to get in under the wire this morning.

Mr. CAREY. I appreciate, Congressman, the time that I have, but it would be difficult. There are actually four categories of bills on this subject now before this committee. There is the category dealing with Federal employees, the category dealing with Congressman Baker's bill, and the questions of the Reed bill, and of course there is the Forand bill. There are those four categories. I must say to you that in studying and preparing for this presentation I did not limit myself to 10 or 15 minutes. Mr. KEAN. Mr. Curtis of Missouri.

Mr. CURTIS of Missouri. Mr. Carey, I think everyone here agrees with you in saying that this is one of the most serious problems that faces us.

Our problem today is, as you probably know, that we have the Reciprocal Trade Acts on the floor of the House at 11 o'clock and that is the reason for our situation here. I am particularly sorry that there is not more time because there are many questions I would like to ask you in regard to your statement and other matters, and I shall endeavor to get that possibly by letter or otherwise from you.

There was one thing, though, that I wanted to ask you about now and it is the only thing that I am going to take the time on. On page 7 you point up something that was pointed up yesterday in the testimony.

This has led to most disastrous forms of rate reduction, lowering employers' taxes not because they have actually stabilized employment, but because they have successfully kept former employees from receiving benefits.

I was very alarmed to hear some testimony to that effect yesterday. Have you people made a detailed study of that to know that this is actually going on? That certainly is a violation of the law and the spirit of the law if employers are actually doing that and I do not like to see general charges like that made without the details behind them, and I know you would not make them if you did not have the details.

Is there a study available on that by your organization?

Mr. CAREY. Each of our organizations, of course, has information regarding this matter. We could easily assemble it. For instance, the auto workers have information that I think should be at least presented and put in the record.

Mr. CURTIS of Missouri. Mr. Chairman, I would like to have any information on that subject in the record. Certainly if that is going on it is most reprehensible.

Mr. KEAN. Without objection it is so ordered. (The information referred to follows:)

You say:



The UAW-CIO believes that the recommendations of President Eisenhower that unemployment compensation be extended to cover employers of one or more employees is sound. We also support the recommendations of the President with respect to the need for increasing the weekly benefits and expanding the duration of payments under State unemployment compensation laws. We believe, however, that experience has demonstrated that no substantial action can be expected 'if exclusive reliance is placed on State action. Action by the Federal Government is necessary if the President's recommendations are to be incorporated into State laws.

It must be remembered that unemployment compensation in this country was the direct result of Federal action. Although in the 1920's and 1930's unemployment compensation bills were introduced in most State legislatures, nothing happened until the Congress of the United States passed the Social Security Act of 1935.

It was the passage of this act that led to the enactment of State unemployment compensation laws by all State legislatures by the end of 1936.

At the time of enacting the original Social Security Act, the Congress incorporated certain standards which must be met by State legislation as a condition of permitting a tax offset to employers covered by such law. It was recognized that standards were necessary to assume that State laws were in fact unemployment compensation laws. Justice Cardozo, speaking for the Supreme Court, in upholding these Federal provisions stated:

“An unemployment law framed in such a way that the unemployed who look to it will be deprived of reasonable protection, is one in name and nothing more.

With increased unemployment, the Congress of the United States which was responsible for the birth of unemployment compensation in this country must again exercise responsibility to assure that unemployment compensation laws are more than laws in name only—that they afford workers protection by permitting them to maintain a reasonable and decent standard of living during periods of unemployment and through this maintain purchasing power to prevent further unemployment.

Thé ƯAW-CIO, on behalf of its 1.5 million members and their 3 million dependents, therefore, urges your serious consideration and favorable enactment of H. R. 9430 introduced by Representative Forand and 80 other Members of the House.

Not since its inception has the Federal-State unemployment compensation system been put to the test of meeting a serious economic reverse. Shortly after the benefit payment provisions of State laws became operative, our country embarked on an era during which time unemployment compensation was called upon only to function during infrequent periods of short-term unemployment.

Today, the economic picture is sharply changed. In what is considered one of the most dynamic industries in our economy—we now witness serious, widespread, and prolonged unemployment. This recession in the auto industry is nationwide. Spokesmen for the industry and for the administration in Washington have tried to minimize its seriousness, but the facts cannot be glossed over.

Production-worker employment in the automobile industrv, nationally, had declined to 635,700 by March 1954 (the latest month for which figures are available) from a peak of 830,700 in April 1953, a drop of 23.5 percent.

Of those still employed, a substantial proportion are employed intermittently and on short workweeks.

In the agricultural implement industry, 109,600 were employed in March as compared to 151,600 in March 1953 and 161,700 at the postwar peak in June 1951. The decline from the peak amounts to 32.2 percent.

In the State of Michigan, where the automobile industry is of major importance, the State employment security commission reports 208,000 unemployed in May. In Detroit, alone, there were 132,000 jobless workers.

As of April, the latest month for which data are available, employment in Michigan automobile plants was 446,000, down 19.8 percent from the same month a year earlier.

Projections made by the Michigan Employment Security Commission indicate that automobile industry employment in the State will fall as low as 374,000 later

this year.

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