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Mr. Chairman, from our research we have lost roughly 1,800,000 jobs in the United States attributable exclusively to American multinationals abroad. And that should mean something, shouldn't it? It would reduce our unemployment by roughly 2 percent. And it would create taxpayers who would be able to pay in $28 billion per yearthat is the figure that we lose---$14 billion in tax revenues for every 1 percent of unemployment.
What would that do for our budget? And we have figured with some research that we have done, based on some research that HEW has done, that is getting no attention at all, that for every 1 percent of unemployment, HEW pays out, in a variety of programs, $6 to $9 billion. So we would save there anywhere from $12 to $18 billion for the 2 percent of employment that we have lost by multinational actions.
Quickly, as I know that you are pressed for time, but is it all right to take a couple more minutes, Mr. Chairman?
Senator HARTKE. That is fine.
Senator HARTKE. I might say we have an executive committee meeting going on in Commerce, which I may have to leave for at any moment.
Mr. CLAYMAN. Then I will simply make one quick point. The Bureau of Labor Statistics (BLS) is the source of one of the few Government statistics we have. That is one of our problems, our Government is not requiring multinational corporations to tell us much. The BLS made an inventory of jobs in the electronics and electrical industries on September 1, 1969, and repeated the inventory on September 1, 1972. And in those two industries they found there was a job loss in those 3 brief years of 450,800 jobs. Fantastic.
Now we know those industries are owned lock, stock, and barrel with modest exceptions by American multinational corporations. We know what has happened to the electronics industry, what is happening to the TV industry. We know that TV's are manufactured abroad by American multinational corporations and shipped back into the American market. And there is no savings to consumers.
The series of examples that we have described, in our judgment, demonstrate corporate irresponsibility. Many of these shortcomings can be reformed by changing the existing laws.
I point to the National Labor Relations Board situation, and J. P. Stevens. Multinational corporations, I told you, are not required to provide meaningful information and statistics.
There are a couple of bills pending in the Senate in this issue. We have been urging, providing, so far with no success, to require multinational corporations to provide more facts to the Government. And so in the absence of sound information multinationals have free reign to allege what they will.
And the interesting fact is that you will find it difficult to disprove them. And so these corporations adamantly fight any effort to require an itemization of that is transpiring in their corporations, country by country, to the U.S. Government.
That, Mr. Chairman, is a brief, I think, somewhat sordid, picture of some of the things that are happening in America in our time, today, on the part of some of our corporations.
In our humble judgment if we don't learn to control them, they will control us, and indeed the argument can be made that that has already happened.
Thank you, Mr. Chairman.
Let me ask you this: Some European countries have added labor representatives to the boards of directors.
Do you feel that that would in any way be of benefit to a better understanding of some of the needs, and would it provide for any type of relief?
Mr. CLAYMAN. Some of us have looked at the European experience, and principally it has been happening in Germany and Sweden. Our people are not as excited about it as the Europeans are. So far we don't see it giving the unions the kind of meaningful voice in the serious corporate decisions that we think are necessary.
Now it may be one of the palliatives. It may add something to the total scene. Generally the American labor movement has not pressed in this area. The feeling is that we want to maintain our independence of action and cozying-up that closely to the corporate management, without really meaningful powers, may not be the way for the future.
But I must say I think we have to look closely at this new development and I would guess that the American labor movement would be open-minded about it, although not as involved in the meaningfulness of that approach as the German labor movement, for example, seems to be.
Senator HARTKE. You stated that you have more difficulty dealing with a large conglomerato, like Litton, for example, than with the large single-industry firms.
Can you explain why that is so?
Mr. CLAYMAN. Well, our experience, you know, goes beyond conglomerates. Conglomerates obviously are much more impersonal. They have facilities all over the country, all over the world, and it is simple for them to close up one, send the product or the machinery to another, and it is simpler for them to behave in this impersonal way.
It is much more difficult for a smaller operation that can't afford to do this. If it moved, it would have to probably make a large investment in the process and probably couldn't afford to do it.
So the smaller operations generally are owned-not always—but generally are owned on the local level and this makes a difference.
If you live in New York and you make a decision that affects Owensboro, Ky., you know, it is an impersonal thing.
Senator HARTKE. In other words, what you are saying is the effect on the community or even upon a smaller unit of concern, State government, for example, they would have the same difficulty the labor movement would have in dealing with conglomerates, isn't that true?
Mr. CLAYMAN. Oh, they have the same problems. The fact is tha they are more readily pushed out of business and are being pushed out of business every day by the larger corporations.
Senator HARTKE. You cited a case of violation of the National Labor Relations Act.
I think this is at the heart of it. In other words, there is a difference in how some of these people feel you should approach this matter.
For example, some people feel that what you should do is provide for specific laws, such as reported out of the Banking and Currency Committee yesterday, a new law dealing with the question of utilization of bribes to foreign officials.
Others feel that the responsibility lies really in organizing the corporate structure in such a fashion that there would not necessarily need to be those specific laws directed to the specific instances, but the corporate officials would be held responsible to a standard of conduct which would encompass those ideas.
Which of those two views do you feel has the most merit, or do you think we need both?
Mr. CLAYMAN. We in AFL-CIO have no policy on this issue which is relatively new. But it is entirely possible, and I am just ruminating now, it is entirely possible both can be used.
I don't think I would want to wait, for example, for the Federal chartering of J.P. Stevens, because I think it will take years before you promulgate a set of standards that you could put in that law which sets up chartering, so we would be certain it would be an effective law.
I would want to move in terms of J.P. Stevens more specifically through the reform of the National Labor Relations Act.
Senator HARTKE. Let me put it this way: I understand that instead of coming up with specifics, that there could be a removal of a director, or some type of imposition on the directors for failing to follow the law. Perhaps even their corporate charter would be revoked.
My judgment is that considering the law which came out of Banking and Currency as an example, to them a fine or penalty, even a fine or penalty against the directors, might not be nearly as effective as the threat of actually having their corporate charter revoked, so they couldn't do business any longer.
Under the antitrust laws in the State of Texas, for example, if a corporation is found guilty of violation of the State or Federal antitrust laws, they are prohibited from doing business in the State for a period of 5 years.
Now that is a very effective remedy. And it has much more salutary effects upon the people involved than merely going ahead and assessing $50,000 or $100,000 or a big fine against the individuals.
STATEMENT OF JACOB CLAYMAN, SECRETARY-TREASURER,
INDUSTRIAL UNION DEPARTMENT, AFL-CIO My name is Jacob Clayman, I am Secretary-Treasurer of the Industrial Union Department, AFL-CIO. The IUD is composed of 58 national and international unions which represent over six million working men and women. We appreciate this opportunity to present our views on the role of the modern corporation in our society.
As the most economically significant form of business in this country, the corporation has a profound impact on our individual and collective lives. Many of the laws that cover corporations date back many years—to times when seemingly unlimited economic growth characterized our economy and our society was not nearly as complex as it is today.
Most union members work for a corporation. Not surprisingly, the bulk of them work for that handful of giant corporations that exercise great control over the affairs of our society.
Today, there are many Americans who are reexamining the role of corporations in this country. They wish to know who runs the corporations and for what purposes. They are examining the role of the federal government in governing corporations. Some are suggesting that the historic role of the states in chartering corporations is now archaic. They are wondering if minimum federal standards are needed to guarantee that corporations function as responsible elements of economic production, and discussing whether corporations should be held accountable for their social role as well as their economic role in our lives.
As trade unionists we feel that corporations must be held to more stringent standards, particularly insofar as their activities have a social impact on those who interface with them as citizens, employees and consumers. Given the nature of competition in this country, it is unlikely that even the most willing of corporations would be in a position to unilaterally change its approach in social areas. The demands of business competition are such that the progresssive corporation would find itself in an untenable economic situation relative to its competitors.
Thus, we feel there is validity to increasing the role of the federal government in regulating corporate activities. This does not mean that the federal government should or would take over businesses. Rather, we look to strong policing by existing regulatory agencies such as the SEC, and strict enforcement of laws designed to prevent the development and perpetuation of monopolies within our economic structure. Where needed, of course, legislation should be updated so that enforcement officials can cope with modern corporations. Although there are close to two million small to moderate size firms that could be impacted by such approaches, we are primarily concerned with the 750–1,000 giants that directly or indirectly control most commerce in this country.
The power of corporations exhibits itself to working people in many ways. All workers are consumers, many of them are shareholders, and so on, but it is in their role as employees that the economic strength of the corporation is most frequently brought to bear on them.
The National Labor Relations Act was intended as a bill of rights and protections for working people in this country. Recently, we have witnessed substantial violations of that Act by firms that, in effect, feel free to operate beyond the law. Section 7 of the Act expressly guarantees employees the right to organize themselves and to bargain collectively through representatives of their own choosing. The subversion of the Act in recent years has become so commonplace that we feel we must seek new and more substantial protections from corporate power. The most notable of such cases involves the J. P. Stevens Company.
Over the past eleven years, J. P. Stevens has been cited for violating the National Labor Relations Act in fifteen different cases before the National Labor Relations Board. Almost all of these cases have been affirmed by the United States Court of Appeals. In addition, on five separate occasions, the National Labor Relations Board has gone before federal Courts of Appeals seeking to adjudicate Stevens in contempt of existing Court decrees. Over this period of time Stevens has paid approximately $1.3 million in backpay to approximately 300 workers.
The Stevens record speaks for itself :
1. J. P. Stevens and Co., Inc., 157 NLRB 869, enfd. as modified 380 F. 2d 292 (2nd Cir. 1937), cert. denied 389 U.S. 1005 (1967).
2. J. P. Stevens and Co., Inc., 163 NLRB, enfd. as modified 388 F. 2d (2nd Cir. 1967) cert, denied 393 U.S. 836 (1968).
3. J. P. Stevens and Co., Inc., 167 NLRB No. 37, enfd, as modified, 406 F. 2d 1017 (4th Cir. 1968).
4. J. P. Stevens and Co., Inc., 167 NLRB No. 38, enfd. as modified, 406 F. 2d 1017 (4th Cir. 1968).
5. J, P. Stevens and Co., Inc., 171 NLRB 1202, enfd. 417 F. 2d 533 (5th Cir. 1969).
6. Black Hawok Corp, 177 NLRB No. 120, enfd. in part and denied in part, 431 F. 2d 900 (4th Cir. 1970).
7. J. P. Stevens and Co., Inc., 179 NLRB 254, enfd. 441 F. 2d 514 (5th Cir. 1971), cert. denied 404 U.S. 830 (1971).
8. J. P. Stevens and Co., Inc., 181 NLRB No. 97, enfd. in part and denied in part, 449 F. 2d 595 (4th Cir. 1971).
9. J. P. Stevens and Co., Inc., 183 NLRB 25, enfd. 461 F. 2d 490 (4th Cir. 1972). 10. Black Hawk Corp., 183 NLRB No. 34 (19).
11, J. P. Stevens and Co., Inc., 186 NLRB No. 34, aff'd. F. 2d 78 LRRM 3116 (5th Cir. 1971).
12. J. P. Stevens and Co., Inc., 190 NLRB No. 139, enfd. 475 F. 2d 973 (D.C. Cir. 1973).
13. J. P. Stevens and Co., Inc., 217 NLRB No. 90 (1975). 14. J. P. Stevens and Co., Inc., 219 NLRB No. 156 (1975). 15. J. P. Stevens and Co., Inc., 220 NLRB No. 34 (1975).
CONTEMPT CASES 1. NLRB v.J. P. Stevens and Co., Inc., 464 F. 2d 1326 (2nd Cir. (1972).
2. NLRB v. J. P. Stevens and Co., Inc., Civ. Ac. No. 26 246 (5th Circuit) (Settled November 1, 1971).
3. NLRB V. J. P. Stevens and Co., Inc., Civ. Ac. No. 73-3175 (5th Cir.)-Master's Recommendation (1975), decision pending.
4. NLRB v. J. P. Stevens and Co., Inc., Civ. Ac. Nos. 30–914, 30-591, 31-245, 31-164 (2nd Cir.)-Master's Recommendations pending.
5. NLRB v. J. P. Stevens and Co., Inc., Civ. Ac. Nos. 31-914, 30–391, 31-245, and 31-164 (2nd Cir. Filed February 24, 1976).
Although the above legal history of Stevens' propensity to violate the law is dramatic, it does not truly reflect the magnitude of the lawlessness here involved. Neither does it reflect the inhumane attitude of Stevens toward its workers' attempts to organize.
It is tragic, but J. P. Stevens has accomplished what it set out to do that is, to destroy the attempts of Stevens' workers to organize. With one notable excep tion, Stevens has basically succeeded in precluding the holding of fair elections.
Amid the hundreds of unfair labor practices committed since 1963, eleven elections have been held. The results have been as follows:
1. Roanoke Rapids, N.C. (1965)--Union loses, files objections, election is set aside.
2. Greenville, S.C. (1965)—Union loses, files objections, election set aside (Dunean plant).
3. Piedmont, s.c. (Estes) (1965)—Union loses, files objections, Board overrules objections.
4. Greenville, S.C. (1966) --Union loses, files objections, election set aside (Dunean plant).
5. Statesboro, Georgia (1968)—Union loses, files objections and unfair labor practice charges, election set aside NLRB orders company to bargain with the Union.
6. Black Hawk Corporation, Greenville, S.C. (1969) Union wins election, but Court disqualifies certain voters resulting in union loss. Election set aside.
7. Turnersburg, N.C. (1972)—Union loses, files objections. Region has not yet ruled.
8. Walterboro, S.C. (1973)—Union loses-files objections—Board overrules objections.
9. Aberdeen, N.C. (1973)—Union loses—files objections—Board overrules objections.
10. Roanoke Rapids, N.C. (1974)—Union wins election and is certified.
11. Wallace, N.C. (1975)—Union loses election, files objections and unfair labor practice charges-Board files motion for contempt adjudication on some of the charges, refers rest back to region. Region has not yet ruled on objections.
All told, J. P. Stevens has paid over $1,300,000 to employees illegally discriminated against, $50,000 for settlement of an eavesdropping suit and countless tens or hundreds of thousands of dollars on legal fees involved in fifteen NLRB unfair labor practice cases, twelve Court of Appeals cases, five contempt cases, three petitions for certiorari to the Supreme Court and numerous other NLRB investigations which did not result in issuance of a complaint.
If you think these "expenses" will in any way deter Stevens you are wrong. At the most recent shareowners meeting of J. P. Stevens held in New York on March 2, 1976 a share owner raised the issue of the high cost of the company's anti-union campaign. This issue was officially raised as a written proposal in the J. P. Stevens & Co., Inc. "Notice of Annual Meeting of Shareowners." The company's official response was simple and to the point:
"The Company costs directly or indirectly attributable to the union organizing and related activities are not material in the Company's overall operation. ..."
In other words, to Stevens, the cost of destroying worker attempts to organize and the cost of busting the union through vicious, contemptuous conduct is merely viewed as a ininor cost of doing business.