Governor THOMSON. Yes; we do. For example, one of the big exporting businesses with us is Centronics. We have Digital Corp., the world's largest manufacturer of minicomputers, now moving into our State. They are big exporters.

Mr. VANIK. As Governor of the State, do you have any figures as to the relationship between jobs created through imports compared with the jobs lost through the effect of exports?

Governor THOMSON. I don't have any figures on that. I can say with a degree of accuracy that up to the last year or two when a number of companies started moving in, the ratio was on the adverse side in terms of the loss of jobs. There just weren't that many businesses exporting.

Mr. VANIK. Now that may be adjusting itself better?

Governor THOMSON. I would think so.

Mr. VANIK. Do you feel in a problem like shoes or any other related commodity that there is a need, perhaps, to determine a limit of penetration? We are buying about 45 percent of our shoes through imports now.

I think what occurs to me is what industry wants and what importers want is some firm idea of what the rules are going to be. They want them to be constant. They would like to know at least for a period of years things might be fixed so industries can stay in place and workers could stay in place and so that productive practices could stay in place.

Would you believe that some kind of idea of putting a limit on the penetration of the market might be a solution?

Governor THOMSON. If we are thinking of the shoe industry

Mr. VANIK. We will have to talk about all industries. If we adopt a principle, it may work two ways on you.

Governor THOMSON. As far as penetration of industry is concerned generally, I am one who favors protecting as much of our industry as possible and keeping our jobs for the American working man. This is just my personal feeling. It is a feeling that I think is shared by a great number of my fellow citizens in New Hampshire.

I think that the trend has been too much in the other direction. I am one who does not believe that we have prospered by following that trend. I think the time has come for us to do just as you have indicated-take a new look and consider whether there is at least a point at which we can put a brake on some of the intrusion.

Mr. VANIK. To date, only nine petitions for worker adjustment assistance have been filed in New Hampshire of which five have been certified, covering about only 600 workers. Fewer than 800 will have applied for and received trade adjustment allowances in the past. 2 years. Doesn't the small number of workers involved draw a small proportion of the total New Hampshire State unemployment insurance payments?

: Governor THOMSON. Yes, they would.

Mr. VANIK. What is your total unemployment compensation payments in numbers to people?

Governor THOMSON. Per year, I would not be able to tell you, sir. We have a total unemployment compensation fund of $30 million. What the average payment for the year to all unemployed

Mr. VANIK. How many people are receiving benefits?

Governor THOMSON. Right now we have approximately 18,000 out of a work force of 300,000-some.

Mr. VANIK. So we are talking about the 800.

How does New Hampshire compare with other States in terms of unemployment insurance paid to workers receiving trade adjustment. assistance as a share of unemployment insurance payments for all workers? Is your burden relatively larger?

Governor THOMSON. I would not be able to answer that. My guess would be the answer would be no.

Mr. FRENZEL. Mr. Chairman, when Mr. Cleveland testified before a different subcommittee on unemployment, I think his showing was that New Hampshire had a disproportionately large share of this kind of problem because of its size and the size of the industries involved that were either harmed or threatened to be harmed by imports. I think that those records would be available from his testi

mony.

Mr. VANIK. I was just making a comparison of the 800 versus the 18,000. We will be very happy to have the correct figure. I know you can't anticipate this being in the line of questioning, but we will certainly leave the record open so you can provide for us the figures as of the present time.

sir.

Governor THOMSON. That I will be very happy to do. Thank you,

Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, Washington, D.C.:

Since May 24, 1971, 21 companies and 24 plant locations have been certified for assistance under the Trade Act. At the present time employees of nine of these companies are eligible for and are receiving trade adjustment allowances. Since Oct. 3, 1974 six companies and their employees have been certified for allowances involving 1,481 employees. Two additional shoe companies have pending petitions which I believe will be certified involving 1,150 employees. During the last 2 years (Jan. 1, 1957 to Dec. 31, 1976) 1,595 claimants were paid trade adjustments on the basis of 10 different petitions. At the present time active petitions (9) involve 2,062 workers.

It is our experience that not less than 85 percent of eligible workers apply for trade allowances, and that of those applying over 80 percent exhaust all potential benefits. One of the petitions still involved with active claims in New Hampshire had an expiration date of Nov. 23, 1974. Another had an expiration date of Dec. 24, 1976. In both instances payments will continue because valid claims were established before the expiration date.

At the present time we have 29 full functioning shoe factories. In 1947 shoe factory employment equaled 25 percent of all manufacturing employment in New Hampshire. From 1971 through 1976 over 6,000 jobs were lost due to shoe imports. During that period Federal funds in TRA allowances amounted to $6,269,000. In 1968 shoe wages in New Hampshire exceeded $84 million. That figure had slumped to $53 million in 1975. In 1975 New Hampshire shoe employment was estimated as 5.2 percent of the total for the United States, at which time it was 9.9 percent of New Hampshire manufacturing employment, considerable decrease from its predominant position in 1947.

During the last available period for benefit payments, Trade Act payments on six petitions amounted to 1 percent of total benefit payments. I am not able to draw a comparison between present TRA payments in New Hampshire and other States with a significant amount of boot and shoe industry. I do know that in Georgia TRA payments are in excess of $6,000 per week in State

funds, and in Ohio in excess of $2 million per month in State funds. What portion of the Ohio payments are attributable to the shoe industry I do not know.

I am advised by the commisssioner of the department of employment security that further statistical information was submitted to the international economic policy subcommittee in April of 1975. I believe statistical information from Pennsylvania and other shoe States was submitted to that committee at that time.

New Hampshire's payments in 1975 equaled 1 percent of the present total amount in the State unemployment trust fund. In a State the size of New Hampshire, with small businesses scattered through small communities, the enforced closing of a business employing 200 to 300 people is a catastrophe. To further burden the remaining businesses in New Hampshire with a cost of Trade-Act-created unemployment is to rub salt in the wound.

Mr. VANIK. Mr. Steiger?

MELDRIM THOMSON, JR., Governor, State of New Hampshire.

Mr. STEIGER. I have no questions, Mr. Chairman.

I want to compliment the Governor for the fact that he is here in person. He did not send in a statement, but he came down to testify before the subcommittee. It is indicative of his very deep interest in and very deep concern for his State and the problems within his State with which he is faced. I am grateful that you would take the time out of your schedule to come down to testify and give us the benefit of your thinking.

Governor THOMSON. Thank you. I may just say the interest on my part stems from the fact that I have visited almost every shoe plant in our State in the course of the past several years, and have seen the deep concern of those who do work in that industry to preserve their jobs.

Mr. VANIK. Thank you.

Mr. Frenzel?

Mr. FRENZEL. I want to say "Amen" to Mr. Steiger's comments. It is far more impressive to us when the chief executive officer of a State appears, rather than sending someone else. I sure appreciate the time that you are taking, Governor. I will yield the balance of my time.

Mr. VANIK. Do you have any other suggestions, Governor?

Let's suppose you had the problem of dealing with this shoe decision. You must be mindful of the fact that the situation of the shoe manufacturers throughout the world is pretty much the same all over the world, with our trading partners as it is in America. It is something that settles in one community. Very often it is the total industry of the community, so its threat creates a widespread problem.

Then we are dealing in a world in which we are trying to have an intercommunication with the other states of the world. We are trying to develop a relationship of commerce and trade and understanding. I think all of us want the people of the world to have the goods of the best quality. We want some competition both from the standpoint of quality and price. We want to preserve as broad a base of jobs in our own country as we can, but yet we realize the pitfalls of protectionism and isolationism. We cannot separate ourselves from the world.

What would you suggest if you were writing and dealing with this issue of shoes? How would you treat the whole subject? Do you have any ideas on that?

You are now making the decision, and we have this problem. What two or three philisophical tenets would you say should govern our action?

You come from a State where you have a high level of citizen participation. Your voters are among the best informed in the country. They are not really people who live in a shell. They have great influence on the world. You have a great many authors, writers, teachers, and professors. You have a highly sophisticated, intellectual climate.

In that framework, what would you think would be the solution. to this problem?

Governor THOMSON. I have given a lot of thought to that in the past. I have visited, for example, shoe plants in Tokyo. This was back about 6 years ago. I saw there the conditions under which they worked, which I would describe as much worse than these workers that we have in our plants. Their pay was far under that of ours. I have seen in Taiwan on two trips what capitalization blended with a labor market whose reward is much less than that of the workers in our State can do, such as in taking over the textile industry, which was one of the plants I visited; trade names like Bud's and that sort of thing.

It occurred to me that if we in this country through the Congress, through our State legislatures, are going to set minimum wages that are far superior to the wages paid in many of the other countries, then we must encourage the free enterprise system, the ingenuity and the imagination of the American working man to reach out to find better ways to produce at a faster pace.

One thing I think the Congress has overlooked, and I come back to the shoe industry, is that many of our plants here are not modernized. They are not as good as plants as you will find in some of the competing countries; and instead of waiting until the hammer has fallen and the business goes into recession, I think it would be smart on the part of the Congress to find ways, just as you have with small business, for example, to encourage the building of better plants, the equipping of better shoe plants, the training of shoe workers.

In fact, I have taken the initiative in my State. My first executive order this year was to create a shoe industry committee of the Governor's. On that I have half of the personnel who are manufacturers of shoes and half are labor leaders or representatives of labor. They have been working with me on our shoe problems.

One of the things that we are going to try to do is retrain and bring on young people, because the shoe people tell me it is very difficult to find young people who will join the industry at their present wages. What they are relying upon is older workers. As I say, this idea of trying to make it possible for American working men and women to use their imagination and their initiative and even though their prices are high, produce good shoes and produce them faster than they can be produced in some other countries, is one that we should foster.

I think the same thing applies in other industries. What I have said about shoes, you know far better than I exists in many other industries. The electronics industry is a good example.

Following World War II, out in your State, for example, many of your manufacturers of dishes went out of business because of competition from foreign countries.

I am not saying that we must build a wall around America, but we must find a way to keep our people

Mr. VANIK. To keep up with the competition.

Governor THOMSON. To exceed the competition. That is in the best spirit of the American free enterprise system.

Mr. VANIK. Thank you very much, Governor. We appreciate your statement and we very much appreciate you being here.

Governor THOMSON. Thank you, sir.

We will now hear from Mr. Mark Richardson, president of the American Footwear Industries Association.

Mr. Richardson, we are very delighted to have you here. The same principle applies to you. You can submit your statement and have it printed as submitted, or comment on it, or you may read from it, whichever you desire. We have a long list of witnesses, so we would like to proceed as rapidly as we can and have the maximum time for questions. You may proceed.

ACCOMPANIED

BY

STATEMENT OF MARK E. RICHARDSON, PRESIDENT, AMERICAN
FOOTWEAR INDUSTRIES ASSOCIATION,
STANLEY NAMER, ECONOMIST

Mr. RICHARDSON. Thank you, and good morning Mr. Chairman and members of the subcommittee. I do have a rather extensive statement which I have submitted to the subcommittee, and I understand, Mr. Chairman

Mr. VANIK. Without objection, it will be printed in the record. Mr. RICHARDSON. I will try to keep my summary remarks quite brief.

Since I have spoken at one time or another to most of the members of the subcommittee, I will try at this time to give you an update on the situation with respect to the footwear industry.

I heard you during the questioning, Mr. Chairman, discuss with Governor Thomson the fact that at year-end 1976 the average for 1976 imports came to approximately 45 percent. Unfortunately, I must also tell you that that was an average and did not reflect the conditions as they evolved during the course of the year.

As you know, in April of last year, President Ford saw fit not to put forward any import relief under a unanimous decision of the ITC on an escape clause decision. As a result, imports which had been running at the rate of approximately 42 percent gained, and throughout the year we saw the import rate accelerate, ending in December with an import penetration of approximately 48 or 49 percent and averaging, as you pointed out, 45 or 46 percent.

In January, Mr. Chairman, and members of the subcommittee, imports went over the magic number of 50 percent in most of the trading nations of the world, it is recognized that, once the 50 per