and the Commissioner of Labor and Industry of New Jersey to see if by working together, we can provide a less costly answer to the big worry of intermittent seasonal employment, which has led to the pressure for the inflationary, excessive hourly wage and fringe benefit increases.

I have enjoyed this tour, time consuming though it was during these many months. As for the Secretary of Labor of the United States, I think he would have to agree that he has shown tremendous courage in sticking his neck out on this proposal. This goes far beyond the normal resolution and determination in a collective bargaining dispute. He stuck his neck out, I believe, with his boss, the President of the United States, the Council of Economic Advisers, the many Federal agencies. He stuck his neck out with the construction industry, the employers' associations, the many, many trade unions, as well as the local of operating engineers.

Regardless of what happens to the immediate proposal in New Jersey, and whether it is accepted by the parties, I would hope that among the things this association, and our members individually, would work on in the coming years would be an attempt to follow the Secretary's lead here; to see if we can lead him not out on the limb by trying to attack the habit pattern in this tremendously important industry, but whether using the combined experience of all of the States and of the Federal people here, and of our professional neighbors to the north who have done much more than we have on this, that we might approach it, at least, with a solution that will be helpful to the stabilization of our economy and helpful to the construction that needs doing in our State and in our country. Add a dimension of usefulness to those labor statistics and to those mediation services and to all of those other aspects of a really live labor department that will make major contributions to an important area of our national concern. Thank you very much.

President CATHERWOOD. Ray, we are tremendously indebted to you for a very great added dividend. We have had the opportunity to hear you express not only the specific developments growing out of the operating engineers' case in New Jersey, but tying this in to what some of us are not able to articulate as well as you have the growing significance and responsibility that the State labor departments ought to have and to exercise in what might be characterized as the manpower field, with the issue that you mentioned there, tying into the whole field of activities relating to contracting, training, apprenticeship, etc.

If there are any questions, Ray would be delighted to answer them.

DISCUSSION

Mr. MOTLEY. What would be the next step now? Who would move next on this?

Commissioner MALE. There are a number of next steps. The union has already said, in principle, that it buys the broad outline of this report. It is uneasy about some things. I will spell out one of them. It is uneasy about the facts in setting up a separate entitythis development authority-that would finance the extended work and training opportunities, that, perhaps, some control which has been built into a strong union for assignment and reassignment of the men might be diluted. The contractors, on the other hand, have rejected this and said that this is wild; that this is open end. We do not know what it will cost. We have continued meeting with them back in New Jersey to spell out the loose-end questions, the cents per hour, the cost, and the savings. Now, I did not get into the numbers game of the original contract. But to give you an idea of the size of the problem that we dealt with in just this one local in New Jersey, the contract they almost agreed to, but didn't, would have increased over the 3-year cost for the employment of the men in this local in excess of $20 million.

One thing I did not mention is that the wage and fringe increase per hour for the men in all skilled groups in this local would have been greater than the total earnings of the workers that I hope I will share in the meeting tomorrow-the migratory farmworkers. This gives you some idea of another paradox in this situation. A proposal of the Secretary and the Commissioner would finance this major breakthrough at the least total cost in the current year and in succeeding years without reducing rates of pay. By increasing them, it would have reduced it over the wages and fringe costs that were admittedly inflationary and would have gone nowhere.

The next steps specifically are these. Only the two major parties are studying, questioning, and asking clarification. Those answers have to be worked out. The Government is going to make a special study of all bidding and contracting practices of capital improvement of all State-related agencies. The Secretary of Labor of the United States is doing the same.

Another step if this is agreed upon: The Director of Development Authority would be appointed by the Governor of New Jersey and the Commissioner of Labor. The Secretary of Labor of the United States would appoint an advisory board, made up of labor, management, and public representatives who would advise, but not control, the deliberations of the director.

Another step includes convening sometime in the coming months, or within a year, of a national meeting. Out of this would come a

coordinated effort on exploring some new technology-making information of existing breakthroughs in other countries better known in our own, working through a communication network to get labor, management, and Government agencies working together.

These are some of the next steps as we see them. If they are rejected, I think it will be a temporary rejection. I think both parties seem to feel that this is a big thing to swallow. We are already in the second year of the contract. They want a year to study it.

In my session with them last week, I proposed a temporary escrow fund: taking some of the money that would have been used for fringe benefits under the old agreement and putting it into a temporary bank account out of which this effort could be financed, once they have completed their study, and once we have worked it out.

Frankly, what I would like to appeal to you as a next step would be—and I am sure most of you are in close touch with the contractors and the union in the construction industry-that I think we need a lot more discussion of this whole question of seasonality. Maybe this solution is crazy; but it is a proposal that we think merits serious concern. If somebody comes up with a little better one, we would be happy to hear it. I would like to close what I call the Hoover works gap—that long period in which nobody seriously addressed themselves to this problem.

CONFEREE. A proposal should come from this group, a resolution, to suggest that your type of presentation be made to a national conference to alert Governors and States that have this problem so we could have an impact not only through the appointed commissions and the legislature, but also through this.

Commissioner MALE. I am not sure that that resolution is necessary. We might discuss this Thursday. If there is some informal way for the executive board to pass this on to our bosses, the Governors, and to bring it more directly to their attention, I think it would be a useful thing. Even they said that it is ridiculous. I would like them to know about it.

During the time that Secretary Wirtz and I have been studying and working on this, there have been settlements in construction trades which have been nationally publicized-Florida, Chicago, San Francisco. I might remind you that one of the major issues in this dispute in our airline problem is the disparity between the rate of a skilled jet airplane mechanic and the settlement recently made for plumbers in the San Francisco-Oakland area. We cannot hide from this problem of rates, of seasonality, and of the stabilization aspects of this major industry. I am impressed that we have here now for the first time the thoughtful concern, not just public aid agencies

at all levels of government, but I detect in Local 825, International Union of Operating Engineers, a regulation that this is bigger than all of us. In fact, Peter Webber, the president of the local, told me that he felt part of the answer to seasonality the next couple of years might well be teaching, for example, in South Vietnam. While the weather is too bad in New York and New Jersey to build, we can show them how to build roads, schools, and harbors and things they need for their great society.

Now, coming from a labor leader, who is putting this national problem in that kind of international context, I think, shows a breakthrough of tremendous proportions. Some Governors should grab that interest. We can really move on this now while the iron is hot and we can accomplish something that would be rather historic.

Director ROUMELL. I would observe, Mr. Chairman, that Ray was not impressed or enthused by the concept of the guaranteed annual wage that the production workers are seeking. When you really get down to analyzing the seasonality of the construction industry, you are talking about the guaranteed annual wage. Aren't the aspects interrelated in the broad picture of what is attempted here or what is apparently recommended in this report?

Commissioner MALE. Throughout our deliberations, we have sought to deemphasize the use of the word guaranteed wage. There is a big difference between guaranteeing an annual amount and guaranteeing what is carefully spelled out here guaranteed earnings opportunity. We think the big difference here is that nobody in this union would be paid for an hour of anything just as a guarantee. They would be paid for work. They would receive paid training and paid education. It is a human development concept as well as a construction development concept. There is no concept whatsoever built into this or either a dollar or an overall top selling limit. The unions understand that clearly and the contractor knows it clearly. So we should be careful to distinguish this. If we mislabel this as guaranteed annual wage, we will get involved in other debates that we cannot handle at this point.

President CATHERWOOD. Thank you.

Are there any other questions or observations?

Mr. KEIM. Ray referred to the system in British Columbia for alleviating the seasonal problem in construction. I believe this is probably a Dominion program of public works which operates throughout the Dominion. It occurs to me that all of our labor commissioners should know about this program and to see what is in it. that may be helpful to them in their construction industry.

President CATHERWOOD. That is a good suggestion. Thank you.

Are there any other questions or observations?

Commissioner MALE. I want to disassociate this report from the Canadian example. The Dominion program takes the form of taxsupported grants to match payrolls during certain off-season parts of the year. Mr. Wirtz and I both rejected that kind of appropriation route to this. This is a self-finance-within-the-construction-industry approach to it. The cents-per-hour fund would be based entirely on things under construction rather than out of Federal or State tax policies. So there is a big difference there. I would agree with you, yes, we ought to study the Canadian experience and, indeed, the successful experience of many Europeans and other nations, but I am not sure that I want to confuse the two, because this took a slightly different route.

President CATHERWOOD. May I say that with our programs yesterday and today, I feel a little guilty at not seeing to it that we had more opportunity for discussion. We have had substantial discussion of some sectors. But on other sectors, we have not had as much as we would want. But I do not feel guilty at all about introducing into the program Ray Male's presentation, which in turn gives rise to discussion. It is really a challenging exploration of a problem and of an effort at solution; however, many headaches and obstacles may be encountered in the path. But all ultimately leading toward the resolution of a problem that is a bit archaic in our present industrial society.

[The Tuesday afternoon session recessed at 4:20 p.m.]