I ask you one question? Has Philadelphia had any recent bond issue in the last year for a public works project? Mayor TATE. We have one underway right now for about $25 million. We are advertising now. Mr. HARVEY. What experience have you had with respect to this bond issue insofar as interest rates are concerned? Mayor TATE. The last one was quite interesting. We got a low rate of, I think, about 3.45 percent. Mr. HARVEY. So you have had no trouble in that connection at all? Mayor TATE. We have had no trouble financing, no. Mr. HARVEY. Thank you. Mr. BLATNIK. Thank you, Mayor Tate. The appendix attached to the mayor's statement, without objection, will be made a part of the record at this point. (The document referred to is as follows:) Major capital projects over and above those scheduled for Philadelphia's 1962 capital budget which could be initiated and completed within 1-2 years1 Airport.. Transit. Health. Water.. Recreation.. Library. Grand total... 20 items of work including such things as fire station, employee Parks and playgrounds; Fairmount Park Zoo; art museum.... 1 No item scheduled in the 1962 capital budget is included in this list. Mr. BLATNIK. I would like to make an announcement. The bright young students we have in the room now come from Washington Irving Junior High School of Springfield, Va., accompanied by their teachers, Mr. Omato and Mr. White. We welcome you here this morning at this public works hearing, where we are having important testimony on the proposed public works program to relieve unemployment in many areas of our country. Our next and, in fact, our key witness, is the distinguished, eminent American leader, and a leader of the great organization of labor, the American Federation of Labor and the Congress of Industrial Organizations. He is not only the leader of this labor organization, but a labor statesman interested in broad national and international issues of great concern and important to our national welfare, as well as dealing with those programs and legislation that affect the interests of labor. Mr. Meany, we welcome you this morning and, if you will take the witness chair, it will be our privilege to hear your testimony on this public works legislation. The record will show that the president, Mr. Meany, is accompanied by our good friend of many years and former colleague, Mr. Andrew J. Biemiller, the legislative liaison director of the AFL-CIO, and may we have the name of the other gentleman to your left? STATEMENT OF GEORGE MEANY, PRESIDENT; ACCOMPANIED BY ANDREW J. BIEMILLER, DIRECTOR, DEPARTMENT OF LEGISLATION; AND STANLEY RUTTENBURG, DIRECTOR, DEPARTMENT OF RESEARCH, AFL-CIO Mr. MEANY. Mr. Ruttenburg, our research director. Mr. BLATNIK. Mr. Stanley Ruttenburg, who is well known to us. Mr. MEANY. Mr. Chairman, I am very happy to appear here today, on behalf of the AFL-CIO, to support a public works program that will in some measure help to relieve the recession that is still with us, as well as those recessions that may lie ahead. We were greatly heartened by the letter submitted to you on Monday by the President, expressing his conviction that short-term publicworks projects-ready to go on short notice are needed immediately. We heartily support the President's position. We are just as sincerely in favor of the concepts contained in the two standby bills pending before this committee-H.R. 10318 and H.R. 10113. Both shortterm and long-term action is needed, and I want to deal with both aspects in this testimony this morning. We in the AFL-CIO have said repeatedly that unemployment is the Nation's No. 1 domestic problem. We said it before the 1960 election, and we have said it since. We are aware that in many respects there has been a substantial economic recovery in the last year. But we have also said that no one can say this recession is over while, as now, some 412 million Americans are out of work. I use the figure of four and a half million because it is the official one for those who are entirely unemployed. There are also, by official count, more than 2 million others who are forced to work part time because full-time work is not available. And these figures would be worse except for an unprecedented development-the failure of the labor force to grow in proportion to the population. Back in 1960, I pointed out to the platform committees of both political parties the challenge that faced our country in terms of employment. In particular, I cited the expected increase in new workers from an annual average of less than a million in the fifties to an average of a million and a third in the sixties. I was not engaging in crystal ball gazing. These figures are the vital statistics of the war-baby boom. For more than a year, that increase in the work force has not shown up in Government reports. There are many learned explanations but no real answer. We can only guess; and the best guess is that a great many people who want to work have been scared off by the lack of jobs. They have just stopped hunting for jobs because they are convinced the jobs just do not exist. I think it is important to consider this question in other terms than mere statistics. The basic issue must be weighed in terms of human lives-million of American lives. There is no need to elaborate upon the light of the four and a half million jobless workers and their families-affected spiritually as well as economically by unemployment. I know the members of the committee have a deep concern for them, and for the 2 million others who can find only part-time work. To these we must now add perhaps a million more in all age groups, so discouraged that they do not even try. What a way for a youngster to start his life after he leaves school. What a fate to impose on a middle-aged man or woman too young to retire, but overcome by hopelessness because so few employers will hire new workers who are as old as 40. The salvation of these millions of lives is the high purpose of the proposals before you; and that purpose makes any reasonable expenditure worthwhile. Yet, and this is extremely important, appropriations under this program should not be looked upon as expenditures at all. You are not considering a huge relief operation. You are not weighing the advisability of a vast boondoggle, what used to be called "leaf raking." No, Mr. Chairman, under the terms of both bills, every project helped by this program would add to the Nation's wealth. You have the opportunity to build a greater America by providing jobs for Americans who desperately need them. These public works are, in the classic sense, "good works" as well; and unlike the good works performed in the name of charity, they carry with them a sure reward. At this point, Mr. Chairman, I want to draw the attention of the committee to an ominous change in the pattern of our economic recovery from this recession as compared to the various recessions that have afflicted us in recent years. I have a table here, which I would like to be inserted in the record at this point. It is a part of my prepared testimony, and you, and all the members of the committee, have it before you. Mr. BLATNIK. Without objection, it is so ordered. (The table referred to is as follows:) Changes in employment and unemployment 1 year after postwar recession low 1 Unemployment rates 12 months after recession low point. Mr. MEANY. This chart here shows the changes in production that have taken place 12 months after the low point of each of the four recessions we have had since 1948. Twelve months after the low point in the 1948-49 recession, production had come up in terms of the gross national product 13.2 percent. This is the low point of the 1949 recession. The low point of the 1953-54 recession, twelve months after that, the gross national product, or changes in production show that production came up 9.8 percent, or almost 10 percent. In 1958, 1 year after the 1958 recession, the gross national product showed an increase of 9.9 percent. In 1961, the gross national product, 12 months after the low point. of the recession, has gone up 8.4 percent. This shows that there is a natural swing back from the low point in the recession which reflects itself in the gross national product. In other words, these are the figures which show roughly that there has been a constant growth 1 year after each recession, or the low point of each recession, of approximately 10 percent. Now, what has happened to employment after each of these recessions? In the 12-month so-called low-point period-12 months after the low point, 1 year after the 1949 low point, the total employment came back 4.9 percent, almost 5 percent. One year after the low point of the 1954 depression total employment came back 5.1 percent. One year after the low point of the 1958 recession, total employment came back much less, 3.3 percent. One year after the low point of the 1961 recession, total employment has come back 1.8 percent, or less than 2 percent. So here we have reflected the picture of more and more being produced with less and less people actually employed. Here is the other side of the picture. Changes in unemployment. Twelve months after the low point of the 1949 recession, unemployment dropped 45 percent. After the 1954 recession, it dropped 26 percent. After the 1958 recession, 1 year after, it had dropped 29 percent. But one year after the 1961 low point of the recession, unemployment has only dropped 20 percent. So this again shows the unfavorable picture in terms of jobs and work for the American worker. The pattern shown by these charts, Mr. Chairman and members of the committee, is very clear. Each recent recession has left a larger number of workers stranded, and this one is the worst of all. This present recession is the worst of all because we have failed by the greatest margin to come back from this recession than in the previous ones. Now, of course, we are aware that the present administration inherited this problem. We were aware of that last May, when we warned that through the application of the programs then in prospect, "by runnnig very hard, we may be able to stand still" in terms of unemployment. Our purpose is not to levy blame, but rather to emphasize the importance of action now, at this session of Congress. If the present upturn is left on its own to run its course, the increase in sales and production will probably slow down in the spring or summer when the building of business inventories slackens and the rise in Government expenditures eases. Various reports over recent weeks indicate that neither consumer spending nor business invest ment will rise fast enough on the basis of present plans, to carry the economic advance forward at a rapid pace. This kind of slowdown will inevitably cause unemployment to level off. Much of the steam will go out of the upturn, while millions of workers remain jobless and many plants and machines remain idle. We believe the present circumstances and the outlook for the rest of the year, require immediate Government action to create jobs, to reduce unemployment, and to stimulate economic activity. Should the Federal Government fail to respond to this urgent need, there is a danger that the pickup from the recession of 1960-61 will be cut short and full recovery will not be achieved. We cannot afford another partial recovery like that which followed the 1958 recession. The time for Government action is now before the present pickup sputters to a halt. Idle men and idle machines should be put to useful work, adding to the public investment of Federal, State and local governments in facilities and services that are needed by a rapidly growing population. Let me briefly outline what we think should be in an immediate program: 1. A $600 million program to accelerate public works, as follows: (a) $200 million to accelerate or initiate Federal programs. (b) $300 million for matching grants-in-aid for State and local governments. (c) $100 million for loans to State and local governments to help them in matching their grants, or as supplements to the above undertakings. 2. Priority in such a program for areas in which unemployment is greater than the national average. 3. Only those public works programs which can be started in 60 days and completed within 12 months should be eligible. With over 4 million unemployed and the danger that high unemployment will persist and even increase, this is a modest program. I do not suggest it is a cure-all for all our troubles. But I urge you to give it your most careful consideration and to make it part of your final bill, as a constructive measure designed to create jobs for the unemployed and to increase economic activity in general. You will note that there is no trigger mechanism for action sometime in the future. This is a proposal for the present. Unemployment is high. It has been over 5 percent in all but 1 month since November 1957-a period of almost 42 years. We cannot afford to wait. A step-up of job-creating public works programs is needed now. As you have seen, we are generally in accord with the administration's proposals, with this exception-we believe the $600 million should be allocated as quickly as possible, in all areas where unemployment exceeds the national average. The creation of more jobs and the reduction of unemployment through a modest step-up of public works, will also make it easier for the manpower retraining program to operate. Retraining can be successful only when there are jobs for the trainees. The immediate public works program I have outlined is a supplement to the area redevelopment program as well. The long-range redevelopment of chronically distressed areas is in progress. In the meantime, however, large numbers of their working population are |