Address in Miami
at the Opening of the AFL-CIO Convention.
December 7, 1961
Mr. Meany, Reverend Clergy, Governor Bryant, gentlemen, ladies:
It's warmer here today than it was yesterday!
I want to express my pleasure at this invitation. As one whose work and continuity of employment has depended in part upon the union movement, I want to say that I have been on the job, training for about 11 months, and feel that I have some seniority rights in the matter.
I'm delighted to be here with you and with Secretary of Labor Arthur Goldberg. I was up in New York stressing physical fitness, and in line with that Arthur went over with a group to Switzerland to climb some of the mountains there. They all got up about 5 and he was in bed--got up to join them later--and when they all came back at 4 o'clock in the afternoon, he didn't come back with them. They sent out search parties and there was no sign of him that afternoon or night. Next day the Red Cross went out and they went around calling "Goldberg--Goldberg--it's the Red Cross." And this voice came down the mountain, "I gave at the office."
Those are the liberties you can take with members of the Cabinet. But I want to say it's a pleasure to be here. This is an important anniversary for all of us, the 20th anniversary of Pearl Harbor.
I suppose, really, the only two dates that most people remember where they were, were Pearl Harbor and the death of President Franklin Roosevelt. We face entirely different challenges on this Pearl Harbor. In many ways the challenges are more serious, and in a sense long-reaching, because I don't think that any of us had any doubt in those days that the United States would survive and prevail and our strength increase.
Now we are face to face in a most critical time with challenges all around the world, and you in the labor movement bear a heavy responsibility. Occasionally I read articles by those who say that the labor movement has fallen into dark days. I don't believe that, and I would be very distressed if it were true.
One of the great qualities about the United States which I don't think people realize who are not in the labor movement, is what a great asset for freedom the American labor movement represents, not only here but all around the world. It's no accident that Communists concentrate their attention on the trade union movement. They know that people--the working people-are frequently left out, that in many areas of the world they have no one to speak for them, and the Communists mislead them and say that they will protect their rights. So many go along.
But in the United States, because we have had a strong, free labor movement, the working people of this country have not felt that they were left out. And as long as the labor movement is strong and as long as it is committed to freedom, then I think that freedom in this country is strengthened. So I would hope that every American, whether he was on one side of the bargaining table or the other or whether he was in a wholly different sphere of life, would recognize that the strength of a free American labor movement is vital to the maintenance of freedom in this country and all around the world.
And I am delighted that there are here today, I understand, nearly 150 trade union leaders from nearly 32 countries around the world. I believe--and I say this as President-that one of the great assets that this country has is the influence which this labor movement can promote around the world in demonstrating what a free trade union can do.
I hope that they will go back from this meeting recognizing that in the long run a strong labor movement is essential to the maintenance of democracy in their country. It's no accident that there has not been a strike in the Soviet Union for 30, or 35, or 40 years. The Communists who in Latin America, or Africa, or Asia say that they represent the people, cannot possibly--under any rule of reason or debate--say that a labor movement is free when it is not able to express its rights, not only in relationship to the employer but also to speak out and recognize the limitations of governmental power. We are not omniscient--we are not all-powerful--this is a free society, and management and labor, and the farmer and the citizen have their rights. We did not give them their rights in government. And I hope that those who go from this hall to Latin America, to Europe, to Africa, will recognize that we believe in freedom and in progress in this country, that we believe that freedom is not an end in itself, but we believe that freedom can bring material abundance and prosperity. And I want you to know that I consider this meeting and the house of labor vital to the interests of this country and the cause of freedom in the coming days.
What unites labor, what unites this country, is far more important than those things on which we may disagree. So, gentlemen and ladies, you are not only leaders of your unions but you occupy a. position of responsibility as citizens of the United States; and therefore I felt it most appropriate to come here today and talk with you.
First, I want to express my appreciation to you for several things. For example, I appreciate the effort that those of you who represent the interests of the men and women who work at our missile plants have made. The fact that you have given and that the men and women who work there have lived up to the no-strike pledge at our missile and space sites has made an appreciable difference in the progress that we are making in these areas--and the country appreciates the effort you are making.
Secondly, we have for the first time a Presidential Advisory Committee on Labor-Management Policy which for once did not break up on the passage of the Wagner Act in 1935, but instead meets month by month in an attempt to work out and develop economic policies which will permit this country to go forward under conditions of full employment. And I want to thank you for the participation you have given that.
Third, as I said, I want to thank the labor movement for what it is doing abroad in strengthening the free labor movement, and I urge you to redouble your efforts. The hope, as I have said, of freedom in these countries rests in many parts with the labor movement. We do not want to leave the people of some countries a choice between placing their destiny in the hands of a few who hold in their hands most of the property and on the other side the Communist movement. We do not give them that choice. We want them to have the instruments of freedom to protect themselves and provide for progress in their country, and a strong, free labor movement can do it--and I hope you will concentrate your attention in the next 12 months in that area--in Latin America and all around the world.
The fact is that the head of the Congo-Adoula--who has been a strong figure for freedom, came out of the labor movement. And that's happening in country after country. And this is a great opportunity and responsibility for all of us to continue to work together.
And finally, I want to take this opportunity to express my thanks to the AFLCIO for the support that it gave in the passage of our legislative program in the long session of the Congress. We did not always agree on every tactic. We may not have achieved every goal, but we can take some satisfaction in the fact that we did make progress toward a $1.25 minimum wage, that we did expand the coverage for the first time in 20 years; that we did pass the best housing act since 1949; that we did, finally, after two Presidential vetoes in the last 4 years, pass a bill providing assistance to those areas suffering from chronic unemployment; that we did pass a long-range water pollution bill; that we did pass increased Social Security benefits, a lowering of the retirement age in Social Security from 65 to 62 for men, temporary unemployment compensation, and aid to dependent children.
And we are coming back in January and we are going to start again.
The Gross National Product has climbed since January from $500 billion to an estimated $540 billion in the last quarter, and it's a pleasure for me to say that the November employment figures received this morning show not only two million more people than were working in February, but we have now an all-time high for November, 67,349,000 people working. But, more importantly, unlike the usual seasonal run in November, which ordinarily provides for an increase in unemployment of about a half a million, we have now brought the figure for the first time below the 7 percent where it's hovered down to 6.1 percent, and we're going to have to get it lower.
I would not claim we've achieved full. recovery or the permanently high growth rate of which we are capable. Since the recession of '58, from which we only partially recovered, and going into the recession of 1960, too many men and women have been idle for too long a time and our first concern must still be with those unable to get work. Unemployment compensation must be placed on a permanent, rational basis of nationwide standards, and even more importantly those who are older and retired must be permitted under a system of Social Security to get assistance and relief from the staggering cost of their medical bills.
The time has come in the next session of the Congress to face the fact that our eider citizens do need these benefits, that their needs cannot be adequately met in any other way, and that every Member of the Congress should have the opportunity to go on the record, up or down, on this question-and I believe when it comes to the floor--as I believe it must--they are going to vote it up and through before they adjourn in July or August.
Now there are six areas that I believe that we need to give our attention to if the manpower budget is to be balanced. First, we must give special attention to the problems of our younger people. Dr. Conant's recent book only highlighted a fact which all of you are familiar with, and that is the problem of those who drop out of school before they have finished, because of hardships in their home, inadequate motivation or counseling or whatever it may be, and then drift without being able to find a decent job.
And this falls particularly heavily upon the young men and women who are in our minority groups. In addition to that, 26 million young people will be crowding into the labor market in the next 10 years. This can be a tremendous asset because we have many tasks that require their talent. But today there are one million young Americans under the age of 25 who are out of school and out of work. Millions of others leave school early, destined to fall for life into a pattern of being untrained, unskilled, and frequently unemployed.
It's for this reason that I have asked the Congress to pass a Youth Employment Opportunities Act to guide these hands so that they can make a life for themselves. Equally important, if our young people are to be well trained and skilled labor is going to be needed in the next years, and if they are to be inspired to finish their studies, the Federal Government must meet its responsibility in the field of education. I'm not satisfied if my particular community has a good school. I want to make sure that every child in this country has an adequate opportunity for a good education.
Thomas Jefferson once said, "If you expect a country to be ignorant and free, you expect what never was and never will be." It's not enough that our own home town has a good school, we want the United States as a country to be among the best educated in the world. And I believe that we must invest in our youth.
Secondly, we need a program of retraining our unemployed workers. All of you who live so close to this problem know what happens when technology changes and industries move out and men are left. And I've seen it in my own State of Massachusetts where textile workers were unemployed, unable to find work even with new electronic plants going up all around them. We want to make sure that our workers are able to take advantage of the new jobs that must inevitably come as technology changes in the 1960's. And I believe, therefore, that retraining deserves the attention of this Congress in the coming days.
And the third group requiring our attention consists of our minority citizens. All of you know the statistics of those who are first discharged and the last to be rehired too often are among those who are members of our minority groups. We want everyone to have a chance, regardless of their race or color, to have an opportunity to make a life for themselves and their families, to get a decent education so they have a fair chance to compete, and then be judged on what's in here and not on what's on the outside. And the American labor movement has been identified with this cause, and I know that you will be in the future.
And we are making a great effort to make sure that all those who secure Federal contracts--and there are billions of dollars spent each year by the Federal Government--will give fair opportunity to all of our citizens to participate in that work.
Fourth, we want to provide opportunities for plant re-investment. One of the matters which is of concern in maintaining our economy now is the fact that we do not have as much re-investment in our plants as we did, for example, in 1955, '56 and '57' And we want this economy and this rise to be continuous. And I believe we have to give as much incentive as is possible to provide reinvestment in plants which makes work and will keep our economy moving ahead.
And therefore I have suggested a tax credit, which I'm hopeful the American labor movement has not placed on its list of those matters yet that it has not supported, but it will consider this proposal as a method of stimulating the economy so that this recovery does not run out of gas in 12 months or 18 months from now, as the 1958-59 recovery, after the recession of 1958, ran out in
Fifth, to add to our arsenals of built-in stabilizers so we can keep our economy moving ahead, it's my intention to ask the Congress at its next session for stand-by authority somewhat along the lines of the bill introduced by Senator Clark of Pennsylvania, to make grants-in-aid to communities for needed public works when our unemployment begins to mount and our economy to slow down.
Sixth and finally, we must expand our job opportunities by stimulating our trade abroad. I know that this is a matter to which the labor movement has given a good deal of attention. Mr. Meany made an outstanding speech on this matter several weeks ago, and it's a matter which is of concern to this administration. I'm sure you wonder, perhaps, why we're placing so much emphasis on it, and I would like to say why we are, very briefly.
The first is, this country must maintain a favorable balance of trade or suffer severely from the point of view of our national security. We sell abroad now nearly $5 billion more than we import. But unfortunately that $5 billion goes abroad in order to maintain the national security requirements of the United States.
We spend $3 billion of that in order to keep our troops overseas. It costs us nearly $700 to $800 million to keep our divisions in Western Germany, and $300 million to keep our troop establishments in France. And what is true in France and Germany, which are outposts of our commitments, is true in other areas.
So that if we're not able to maintain a favorable balance of trade, then of course we will have to do as the British have had to do, which is begin to bring our troops back and lay the way open for other actions. So that this is a matter which involves very greatly our security, and unless you believe that the United States should retreat to our own hemisphere and forget our commitments abroad, then you can share with me my concern about what will happen if that balance of trade begins to drop.
Now the problems that we face have been intensified by the development of the Common Market. This is our best market for manufactured products. What I am concerned about is that we shall be able to keep moving our trade into those areas; otherwise what we will find is that American capital which cannot place its goods in that market will decide, as they are doing now, to build their plants in Western Europe, and then they hire Western European workers-and you suffer, and the country suffers, and the balance of payments suffers.
So this is a matter of the greatest importance to you--in fact, to all Americans. It is, for example, of the greatest importance to American farmers. They sell $2 billion of agricultural commodities to Western Europe. We bring in $80 million of agricultural commodities from Western Europe. In other words, we make almost $2 billion of our foreign exchange from that sale of agricultural commodities, and yet Western Europe has great agricultural resources which are increasing, and we are going to find it increasingly difficult unless we are able to negotiate from a position of strength with them. So this matter is important.
The purpose of this discussion is to increase employment. The purpose of this discussion is to strengthen the United States, and it is a matter which deserves our most profound attention.
Are we going to export our goods and our crops or, are we going to export our capital? That's the question that we're now facing.
And I know that those of you who have been concerned about this know this to be a major problem. Last year, 1960, we invested abroad $1,700 million, and we took in from our investments abroad $2,300 million-which sounded like it was a pretty good exchange. But if you analyze these figures you will see that we took in, from the underdeveloped world, which needs capital, we took in $1,300 million and we sent out in capital for investment $200 million. And yet this is the area that needs our investment. While in Western Europe we sent out $1,500 million and took in $1 billion. So that if this trend should continue and more and more Western Europe became the object of American investment, it affects us all and affects the people who work with you.
We are attempting to repeal those tax privileges which make it particularly attractive for American capital to invest in Western Europe. We passed laws in the days of the Marshall Plan when we wanted American capital over there, and as the result of that, there are provisions on the tax book which make it good business to go over there.
Now we want it all to be fair, and we have stated we are not putting in exchange controls, which we will not. But we recommended in January the passage of a bill which would lessen the tax privileges of investing in Western Europe and which would have given us $250 million in revenue and in balance of payments.
The tax privileges or the attractions should be in the underdeveloped world, where we have been taking capital out rather than putting it in, and not in Western Europe where the capital is sufficient and which does not serve that great national purpose. So this is a matter of concern for all of us and it is a matter which we must consider in the coming months.
The Common Market is a tremendous market. It has more people than we do. Its rate of growth is twice ours. Its income is about three-fifths of ours, and may some day be equal to ours. This can be a great asset not only to them but to us--a great strength tying Western Europe, the United States, and Latin America and Japan together as a great area of freedom. And I think that it represents one of the most hopeful signs since 1945. It is one place where the Free World can be on the offensive. And I'm anxious that the United States play its proper role to protect the interests of our people and to advance the cause of freedom. And I ask the careful consideration of the American labor movement in this area.
One of the problems which we have is to recognize that those who have been affected by imports have received no protection at all for a number of years from the United States Government. When I was a Senator in 1954, I introduced legislation to provide assistance to those industries which are hard-hit by imports. I am going to recommend in January a program which I hope the Congress will pass, which will provide a recognition of the national responsibility in the period of transition for those industries and people who may be adversely affected.
I am optimistic about the future of this country. This is a great country, with an energetic people, and I believe over the. long period the people of. this country and of the world really want freedom and wish to solve their own lives and their own destiny. I'm hopeful that we can be associated with that movement. I'm hopeful that you will continue to meet your responsibilities to your people as well as to the country. I hope that we can maintain a viable economy here with full employment. I'm hopeful we can be competitive here and around the world. I'm hopeful that management and labor will recognize their responsibility to permit us to compete, that those of you who are in the area of wage negotiations will recognize the desirability of us maintaining as stable prices as possible, and that the area of productivity and stable prices--that your negotiations will take adequate calculation and account of this need for us to maintain a balance of trade in our favor. In the long run it's in the interests of your own workers.
Let me repeat: If we cannot maintain the balance of trade in our favor, which it now is, of $5 billion, and indeed increase it, then this country is going to face most serious problems. In the last 3 years, even though the balance of trade in our favor has been $5 billion, we have lost $5 billion in gold; and if this trend should go on year after year then the United States, as I have said, would have to make adjustments which would be extremely adverse to the cause of freedom around the world.
The solution rests with increasing our export trade, with remaining competitive, with our businesses selling abroad, finding new markets, and keeping our people working at home and around the world.
And it is a fact that the six countries of the Common Market who faced the problems that we now face, have had in the last 4 years full employment and an economic growth twice ours. Even a country which faced staggering economic problems a decade ago--Italy--has been steadily building its gold balance, cutting down its unemployment and moving ahead twice what we have over the last 4 years.
So what I am talking about is an opportunity, not a burden. This is a chance to move the United States forward in the 1960's, not only in the economic sphere but also to make a contribution to the cause of freedom.
And I come to Miami today and ask your help, as on other occasions other Presidents of the United States, stretching back to the time of Woodrow Wilson and Roosevelt and Truman, have come to the AF of L and the CIO--and each time this organization has said yes. Thank you.
Note: The President spoke at the Americana Hotel in Miami. In his opening words he referred to George Meany, President of the AFL-CIO, and Farris Bryant, Governor of Florida. In delivering the address the President virtually discarded the prepared text, portions of which were released by the White House, as follows: Exerpts of Remarks by the President at the Fourth Convention of the AFL-CIO, Miami Beach, Florida, December 7, 1961
. .. Today is the twentieth anniversary of Pearl Harbor. The memory of that day is so immediate to so many that it is hard to realize that today's college freshmen were not even born on that day of shock and infamy.
It is a memory that should serve us well, not to renew old rancor, but to reaffirm our more ancient conviction that history belongs to the free, and the free must ever be vigilant. We cannot turn back to the days before Pearl Harbor when we believed our destiny was in our own hands, without regard to the fate and the ambitions of others. We cannot turn back to the days when a surprise attack was only the prelude to a long struggle--when there was always, s time to rearm, time to retool our industry, and time to gear up our economy, protected by two oceans.
America's Role. --The world is very different now, and so is America's role.
We are committed to supporting freedom of choice in any nation that wants it. We are committed to assisting the new and developing nations to stand straight and sturdy in the family of nations. And we are committed to providing the great bulwark of freedom's defenses, here and around the world.
At the same time, we are required to show by example that freedom and economic growth go hand in hand, to show by our achievements--including those of science, space, and industry--that this Nation is a leader, a teacher, and a doer of unsurpassable deeds.
All this requires more than arms and know-how. It requires an economic system strong enough to underwrite each of the goals we seek--competitive enough to hold its own in every world market--and dynamic enough to make the fullest use of every able hand and mind, of every willing citizen.
Labor's Role. --In these endeavors, the efforts and cooperation of organized labor have been essential. Permit me to cite a few examples:
(1) First, I can unequivocally state that all phases of our missile program are now on or ahead of schedule as a result of your unprecedented cooperation in giving me a voluntary "no-strike" pledge at our missile and space sites. Had the number of man days lost because of work stoppages at these sites continued at their previous rate, this Nation could not face the future with such confidence in its own strength. On behalf of all Americans, I thank you and congratulate you.
(2) Secondly, we have for the first time a Presidential Advisory Committee on Labor-Management Policy which--instead of breaking up in bitterness and frustration--has recognized the responsibilities which all of us have for achieving a higher growth rate, a competitive posture in world markets, and increased price stability and human well-being. I am not looking for a pale unanimity of view from this important committee, but I am looking for their constructive advice and counsel. If each segment of our society were to pursue only its own goals, we would soon have no society at all. But with responsibility comes progress--as your own history so dramatically shows.
(3) Third, the AFL-CIO has strengthened the cause of freedom around the world by strengthening the free union movements of other countries. It is not surprising that so many of the new political leaders in Asia, Africa, and Latin America began their careers as labor leaders. It is not surprising that in many of these countries the single most dynamic and democratic force for change has been the forces of organized labor.
And it is not surprising to find that so many of these organizations have been nurtured and encouraged by material and moral support from the greatest free labor movement in the world.
(4) Finally, I want to take this opportunity to express my personal thanks to the AFL-CIO for its tireless support of my legislative program in this last long session of the Congress. We may not have agreed on every tactic. We may not have achieved every goal. But we can take some satisfaction in the passage of the $1.25 minimum wage, with the first expanded coverage in history--from the passage of the Area Redevelopment Bill to help those long-neglected communities with chronic unemployment-from the passage of a water pollution bill and an unprecedented housing bill, both of them far stronger than those which had previously been vetoed--and from the passage of numerous other bills, improving Social Security, temporary unemployment compensation, aid to the dependent children of the unemployed, and meeting other essential needs.
Economic Progress. --Those of us who fought for many years to secure this legislation--to get this country moving again--can take some satisfaction from the progress we are making. The American economy has begun to move, and move strongly, out of the lassitude's of recession. The gross national product climbed from 500 billion in January to an estimated 540 billion in this last quarter. Industrial production increased more than 10 percent. The number of substantial unemployment areas has fallen from 101 to 60. Average earnings and real earnings are both at an all-time high. And finally, I am able to announce with great pleasure that the November employment figures received this morning not only show a new high of 67,349,000 jobs-an all-time high for the month of November--but, more importantly, show that the rate of unemployment has fallen below the 6.8 percent level for the first time in a year to 6. 1 percent.
I would not claim that the recovery measures of this Administration were solely responsible for these improvements. Our task was to give stimulation and confidence to an economy inherently strong by virtue of the breadth of its purchasing power, the wide variety of its enterprise and the skill of its labor force. But neither would I claim that we have achieved either the full recovery or the permanently high growth rate of which we are capable. Since the recession of 1958--from which we only partially recovered before sliding back into the recession of 1960--too many men and women have been standing idle in the shadow of unused plants at the very time our national goals are unfulfilled.
Our first concern must still be with those unable to work. Unemployment compensation must be placed on a permanent, rational basis of nationwide standards. And, even more important, those who are "too old to work and too young to die" must be protected through Social Security system against the staggering costs of medical care. The time has come, in this next session of the Congress, to face the fact that our elder citizens need these benefits-that their needs cannot be met in any other way-and that every member of the Congress should have an opportunity to vote this bill up, or vote it down and tell the people why.
The Manpower Budget. --But it is not enough to help those who are not working. Our success as a nation depends upon our ability to make sure that more men and women are working. I have pledged a balanced Federal budget for the coming fiscal year. But equally important is a balanced manpower budget. Four million unemployed men and women is as deplorable a deficit as any deficit of dollars. And there is only one place to balance the manpower budget--at full employment. For men hard at work are taxpayers--men out of work are tax users. And the best way to balance the national dollar budget is to balance the manpower budget at full employment.
I want to stress briefly six areas that need our attention if the manpower budget is to be balanced:
(1) First, we must give special attention to the employment outlook for young people. Twenty-six million will be crowding into the labor market in the next ten years. This ought to be a tremendous asset--for we have many tasks that require many talents.
But today there are already one million young Americans under the age of 25 who are both out of school and out of work. Millions of others are leaving school before completing their education's, destined to fall into the same harsh patterns of the untrained, the unskilled, and eventually the unemployed. It is for these reasons that I have asked the Congress to pass a new Youth Employment Opportunities Act--to guide these youthful hands toward constructive work instead of idle habits or mischief. It is equally important, if our young people are to be well-trained, and if they are to be inspired to finish their studies, that the Congress enact Federal aid for public school construction and teachers salaries. To handicap our Nation's youth is to handicap our Nation's future. Let us instead invest in our youth--and see that investment pay off in the future.
(2) Secondly, we need a program to train and retrain unemployed or under-employed workers in new skills and in new positions. I have seen unemployed textile workers in Massachusetts standing idle on the streets while great new electronics companies were advertising for men. I have seen the waste of able-bodied men in West Virginia who have dug coal all their lives, and who can only sit and wait and hope for the mines to some day re-open. We can use these men--they want to work--and the least we can do is show them how and where to work.
(3) The third group requiring attention, if we are to balance our manpower budget, consists of our minority citizens. Too often they are the last to be hired and the first to be fired. Too often they lack the equal education or the equal opportunity to do the kind of job they could otherwise do. This kind of discrimination makes no sense at all.
It is a blot on our democracy and a drag on our economy. The policies of this administration are now fully on the side of righting this wrong. And as we move forward in the realm of public policy, it is essential that the private policies of management and labor meet this common obligation to human dignity.
(4) Fourth, to provide new job opportunities in more modern and competitive industries, I am renewing my recommendation to the Congress for tax incentives to encourage capital plant expansion and improvement.
I know this proposal has not thus far enjoyed your support. But I want you to know that I am deeply convinced that this proposal is as essential as the other tax reforms submitted with it--that we must be able to produce more goods more efficiently if we are to achieve a full and lasting recovery. (5) Fifth, to add to our arsenal of built-in-stabilizers in the event of a recession, it is my intention to ask the Congress in its next session for standby authority, somewhat along the lines of the bill introduced by Senator Clark, to make grant-in-aid to communities for needed public works. We do not intend to go back to the days of leaf raking--but neither do we intend to go back to the days of bread lines. There is no need for this Nation to go through another recession with large pools of manpower in need of work standing around in large numbers of communities in need of public improvements.
(6) Sixth and finally, we must expand our job opportunities at home by expanding our trade with the world.
If we cannot obtain new bargaining power to open up overseas markets, our export industries will wither--and American labor will lose jobs. If American businessmen cannot compete from here for the growing purchasing power of the European Common Market, many more will build their plants over there--and American labor will lose jobs. If we cannot find expanding outlets for the goods of an expanding economy, this Nation's growth will be stifled--and American labor will lose jobs.
In short, we are confronted with a very basic decision: are we going to export our goods and crops--or are we going to export our capital and our job opportunities? Are we going to be the free world's greatest merchant trader--or merely its temporarily wealthiest banker?
This is no time for timid answers or tired solutions. The European Economic community is closing the history books on 2,600 years of divisive and self-centered trading philosophies. The new, once underdeveloped nations are seeking new outlets for their raw materials and new manufactures.
No part of the world market is any longer ours by default. The competition grows keener. Our need to cover military and other expenditures abroad through greater dollar sales grows increasingly urgent. And the Soviet Union's economic and trade offensive grows greater every year. This is the challenge which confronts our Nation in the markets of the world. America must rise to this challenge. Wherever our goods are offered in competition with the goods of other nations-whether at home or overseas--our goods must be offered at competitive prices.
This means that management must intensify its efforts to increase efficiency and thus stabilize or reduce unit costs and prices. This means that labor must demonstrate its responsibility in helping to keep overall wage movements in line with increases in productivity. And this means that the Federal Government must launch a new effort to scale down the barriers to our selling abroad.
When the current Reciprocal Trade Agreements Act expires in June, it must be replaced by a wholly new and bold approach, as revolutionary as the changes now going on in European commerce, as broad as our economic potential demands and deserves, and as challenging as the crisis and opportunity now facing American business and labor.
Import Competition. --There will be those who will oppose our new trade legislation and urge American labor to oppose it. Either they will not recognize, or they will not want you to recognize, five basic facts about import competition:
(1) The fact that we sell $5 billion more than we buy from the nations of the world--with favorable trade balances in Japan and every other major country--and that we need this new legislative authority to keep this balance in our favor, to help pay, among other obligations, for our forces stationed overseas;
(2) The fact that, once needless restraints are removed, the great bulk of American goods, produced by American know-how and with American efficiency, can compete with any goods and any prices anywhere in the world;
(3) The fact that about 70 percent of the goods we import are not produced at all in our own country, or not produced in sufficient quantity to affect many jobs, but must be imported to keep our own industrial wheels turning and our own stores and households supplied;
(4) The fact that those imports which do compete with our own products now represent only 1 percent of our total national production; and
(5) The fact, finally, that as our exports increase along with our imports, many more jobs will be created than lost. For if we cannot secure easy access to the Common Market for our exports, some portions of American industry may choose instead to build plants abroad rather than at home, with an added loss of jobs for American workers. We have no intention, may I add, of imposing controls on the export of our capital; but we have asked the Congress to remove needless tax concessions to investment in industrialized countries which encourage American companies to build their plants abroad and then compete with our own goods both in our own markets and all over the world.
Trade Adjustment Assistance. --Nevertheless it is a fact that what is true for the Nation as a whole may not be true for particular companies, for individual workers. There will be cases in which some communities, some businesses, and some workers will not be able to maintain their footing against increased competition. I do not intend to see them made victims for the national welfare. I do not intend to give them a medal and an empty grocery bag.
Just as our Government helped in the readjustment of men from military to civilian life--just as it helped in the re-conversion of our economy from wartime to a peacetime basis--so, too, does it have an obligation to help those who must adjust to a national trade policy adopted for the national good.
We could, of course, give those who claim injury what they mistakenly believe to be more absolute protection--raising our tariffs, driving potential trading partners into the arms of the Soviets, denying competitive prices to our consumers and industry, and shutting off the export markets abroad on which our own job and growth opportunities depend. That is one alternative--and in the long run, it only postpones or prolongs the agony of those who seek it.
But there is another alternative, I first proposed it in 1954 and I shall propose it to the Congress again next year. And that is to include in our trade proposals a program for adjustment assistance--a program to help those few communities, industries and workers who may actually be injured by increased import competition.
Such a program will supplement and coordinate, not duplicate, what we are already doing or proposing to do for depressed areas, for small business, for investment incentives, and for the retraining and compensation of our unemployed workers.
This cannot be and will not be a program of permanent Government paternalism. It is instead a program to afford time for American initiative, American adaptability, and American resiliency to assert themselves. Temporary tariff relief may be a part of the prescription in individual cases.
Whatever is required, we will make certain that no community suffers unduly from trade. For, on the contrary, America must trade--or suffer.
These are all, to be sure, new and untried concepts-but our challenges are new as well. America did not reach its present greatness by standing still, by refusing to try, to dare, to move ahead across uncharted seas. Now we must dare and do and move again--for the gain of the free spirit and for the profit of our souls.