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Improving National Productivity Hearings 570 IMPROVING NATIONAL PRODUCTIVITY LIBRARY COF (PLEASE RETU.. ) 7 WOINT ECONOMIC CTrE. X X33 NEW SENATE OFF. BLDG. HEARINGS BEFORE THE SUBCOMMITTEE ON PRIORITIES AND ECONOMY IN GOVERNMENT OF THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES NINETY-SECOND CONGRESS SE00ND SESSION APRIL 25, 26, AND 27, 1972 Printed for the use of the Joint Economic Committee wstR1 OF-. sPLEASE RETU ) POINT ECONOMIC CT, $ 133 NEW SENATE OFS'. U.S. GOVERNMENT PRINTING OFFICE 80-864 WASHINGTON: 1972 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington. D.C. 20402 - Price $1.25 Stock Number 6270-01564 JOINT ECONOMIC COMMITTEE (Created pursuant to sec. 5(a) of Public Law 304, 79th Cong.) WILLIAM PROXMIRE, Wisconsin, Chairman WRIGHT PATMAN, Texas, Vice Chairman SENATE HOUSE OF REPRESENTATIVES JOHN SPARKMAN, Alabama, RICHARD BOLLING, Missouri J. W. FULBRIGHT, Arkansas HALE BOGGS, Louisiana ABRAHAM RIBICOFF, Connecticut HENRY S. REUSS, Wisconsin HUBERT H. HUMPHREY, Minnesota MARTHA W. GRIFFITHS, Michigan LLOYD M. BENTSEN, JS., Texas WILLIAM S. MOORHEAD, Pennsylvania JACOB K. JAVITS, New York WILLIAM B. WIDNALL, New Jersey JACK MILLER, Iowa BARBER B. CONABLE, JR., New York CHARLES E. PERCY, Illinois CLARENCE J. BROWN, Ohio JAMES B. PEARSON, Kansas BEN B. BLACKBURN, Georgia JOHN R. STARK, Executive Director LOUGHLIN F. McHURG, Senior Economist ECONOMISTS Lucy A. FALCONE Ross F. HAMACHEK - JERRY J. JASINOWSRI JOHN R. KARLIK .. RxICHARD F. KAUFMAN COURTENAY M. SLATER Minority: LESLIE J. BANDER GEORGE D. KRUMBHAAR, Jr. (Counsel) WALTER B. LAESSIG (Counsel) SUBCOMMITTEE ON PRIORITIES AND ECONOMY IN GovERNMENT WILLIAM PROXMIRE, Wisconsin, Chairman SENATE HOUSE OF REPRESENTATIVES JOHN SPARKMAN, Alabama WRIGHT PATMAN, Texas HUBERT H. HUMPHREY, Minnesota MARTHA W. GRIFFITHS, Michigan CHARLES H. PERCY, Illinois WILLIAM S. MOORHEAD, Pennsylvania JAMES B. PEARSON, Kansas BARBER B. CONABLE, JR., New York CLARENCE J. BROWN, Ohio (XI) '.sa Cj~Xy Jfa CONTENTS WITNESSES AND STATEMENTS TUESDAY, APRIL 25, 1972 Proxmire, Hon. William, chairman of the Subcommittee on Priorities and Page Economy in Government: Opening statement -1 Percy, Hon. Charles H., member of the Subcommittee on Priorities and Economv in Government: Opening statement- 3 Peterson, RIon. Peter G., Secretary of Commerce, and Chairman, Na- tional Commission on Productivity - 7 Nader, Ralph, consumer advocate, accompanied by Mark Frederiksen --- 44 WEDNESDAY, APRIL 26, 1972 Proxmire, Hon. William, chairman of the Subcommittee on Priorities and Economy in Government: Opening statement -71 Percy, Hon. Charles H., member of the Subcommittee on Priorities and Economy in Government: Opening statement --- 73 Grayson, Hon. C. Jackson, Jr., Chairman, Price Commission, accom- panied by Louis Neeb, Executive Secretary; and W. David Slawson, General Counsel -74 Denison, Edward F., senior fellow, the Brcokings Institution -114 Rosow, Jerome M., director, manpower planning and policies, Standard Oil of New Jersey -123 THURSDAY, APRIL 27, 1972 Percy, Hon. Charles H., member of the Subcommittee on Priorities and Economy in Government: Opening statement -195 Burnham, D. C., chairman, Westinghouse Electric Corp -196 Strasser, Gabor, director of planning, Battelle Memorial Institute, and former Executive Director, President's Science and Technology Poliec Panel ----------------------------- 205 SUBMISSIONS FOR THE RECORD TUESDAY, APRIL 25, 1972 Nader, Ralph, et al.: Addendum to statement -48 Changes in productivity from 1963-67 49 Response to Chairman Proxmire's request to supply for the record the letter from the Price Commission regarding the average productivity increases for the big four auto companies _ 66 Peterson, Hon. Peter G.: Prepared statement -11 Number of staff personnel with the National Commission on Produc,-, tivitv: .-- 22 Extract of a speech by Thomas W. Benham, presiaent, Opinion Re- search Corp., at the Sheraton-Park Hotel, Washingtor, D.C., February 7, 1972, for the White House Conference on the Industriy World Ahead: A Look at Business in 1990, entitled "Trends in Public Attitudes Toward Business and the Free Enterprise System" 31 (m) IV WEDNESDAY, APRIL 26, 1972 l Denison, Edward F.: Page Prepared statement-- _------ _-- ---- _118 Response to an additional written question posed by Chairman Prox- mire- 193 Grayson, Hon. C. Jackson, Jr., et al.: Prepared statement -76 Response to Chairman Proxmire's request to supply for the record the average weighted productivity gains reported by the four auto makers --------------- 89 Response to additional written questions posed by Chairman Prox- mire _-- ______________--_---- ___-- _____--_------___ 108 Percy, Hon. Charles H.: Article entitled "Beyond Phase 2," from the Wall Street Journal, April 26. 1972 -- 107 A series of articles from the Washington Post, by Haynes Johnson and Nick ]xotz, entitled: "The Unions-I: Unrest Amid Rank and File" - -143 "The Unions-II: Today's Worker: 'Idealism's Gone' " 147 "The Unions-III: For Young Workers, Old Leaders" 151 "The Unions-IV: Politics and Labor's 'Machine' " 155 "The Unions-V: Presidents Come and Go, But Labor's Might Stays" - 160 "The Unions-VI: Business Takes Aim at Labor's Power" -- 165 "The Unions-VII: Building Trades: Fueling Inflation" -- 169 "The Unions-VIII: Labor's Violent World: Big Money, Cor- ruption" - ------------------------------- 175 "The Unions-IX: Union Ratio of Workers Falls as Economy Rises" - -180 "The Unions-X: A Basic Problem: Work Attitudes Chang- ing" _ _--------------186 Rosow, Jerome M.: Prepared statement _------ 125 THURSDAY, April 27, 1972 Buruham, D. C.: Prepared statement - 198 Percy, Hon. Charles H.: Extracts from a speech by Hunter Wharton, General President, In- ternational Union of Operating Engineers, at the 29th convention of the International Union of Operating Engineers, April 24, 1972, Washington, D.C - 236 Proxmire, Hon. William: Statement of John W. Kendrick, professor of economics, George Washington University - 243 Strasser, Gabor: Prepared statement -210 APPENDIX Statement of- Strasser, Gabor, director of planning, Battelle Memorial Institute, on reconciling our productivity-related concerns with recent economic indicators which don't "look so bad" - -247 Strackbein, 0. R., president, the Nation-Wide Committee on Import- Export Policy, on productivity and full employment -247 Weiskotten, Robert F., president, North American Division, H. B. Maynard & Co., Inc., management consultants, on productivity--_ 253 IMPROVING NATIONAL PRODUCTIVITY TUESDAY, APRIL 25, 1972 CONGRESS OF THE UNITED STATES, SUBCOMMrjrrEE ON Pioirrn=s AND ECONOMY IN GOVERNMENT OF THE JOINT ECONOMIC CoxraTrE, Wa8hington, D.C. The subcommittee met, pursuant to notice, at 10:05 a.m., in room 1202,. New Senate Office Building. Hon. William Proxmire (chairman of the subcommittee) presiding. Present: Senators Proxmire and Percy; and Representative Brown. Also present: John R. Stark, executive director; Loughlin F. Mc- Hugh, senior economist; Courtenay M. Slater, economist; Lucy A. Falcone, research economist; George D. Krumbhaar, Jr., minority counsel; and Leslie J. Bander, minority economist. OPENING STATEMENT OF CHIRMIAN PROXMIRE Chairman PROXmIRE. The subcommittee will come to order. I should be replaced this morning as chairman by Chuck Percy, because he has been much more responsible for these hearings than I have been, and I am delighted to cooperate with Senator Percy in scheduling these hearings. He graciously accommodated us to post- pone them a week; they were scheduled to take place last week, but we postponed them until this week, because we did not want to have the hearings on the anti-inflation program I am going to do something that I have not done. The staff prepared an opening statement for me and I will use part of it, but this morn- ing when I came in, I decided to write my own opening statement and I di1n't start until so late that I didn't get a chance to reread it, so 1 may have to interrupt and edit it as I go along. In my judgment, we are as far from solving the inflation problem as we have ever been. A planned, premeditated slowdown of the economy to squeeze inflation out of it beginning in January of 1969 was about as counterproductive as any economic program that I have seen since I have been here as a Senator. Did the rise in prices slow down? On the contrary, in 1969-70, in- flation speeded up. What was worse, the slowdown almost doubled unemployment. It shoved 21/2 million more Americans out of work. It took all of us, the Congress, the President, Democrats, Republicans, too long to recognize this failure. To President Nixon's great credit, he did sca. He recognized the fail- ure on August 15. He wisely froze prices, and for 3 months the rise in prices stopped. (1) 2 Then he put into effect a poorly conceived and poorly executed anti- inflation program. The brave testimony of administration witnesses claimed a victory before this committee last month were about as con- vincing as the battle reports we get from Saigon these days saying they have stopped the North Vietnamese. These are the wrong kind of controls, at the wrong time, for the wrong kind of reasons. They're doing more harm than good. But even if they were perfectly conceived and perfectly adminis- tered, they would not solve the basic inflation program. The guts of our problem is that working men and their representa- tives want higher wages and no higher prices. I have been to meetings in Milwaukee where they have signs saying that: freeze prices, not wages. Well, it cannot be done. Well, no, I can't quite say that, and that is why we come to our hearings this morning. It cannot be done unless we can improve the production of each of these workers. If the worker produces more. his employer can pay him more and the cost to the employer does not go up. A worker who earns $3 per hour and produces 100 units of a product can be paid 3 cents per unit. If he improves his productivity and produces not 100 units per hour, but 120, he can get a whopping 60 cents per hour or 20-percent pay increase.
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