I cannot conceive of the CISC being anywhere near a permanent solution to this problem unless we are ready to give up the free enterprise system, because it is strictly a system of Government control of collective bargaining, or at least, that is what it is supposed to be.

I find it inconceivable that the Under Secretary of Labor or that the industrial of unions would advocate this, as a permanent solution to the problems of collective bargaining in the construction industry. Senator BROCK. I fully agree. As a matter of fact, I am not so sure but what their activities are not acting to the disadvantage of the

economy.

Mr. THOMPSON. I think the manner in which they have been allowed to follow their own course as opposed to the Pay Board's course is highly discriminatory against workers, and businessmen in other industries.

Senator BROCK. Do you feel that the existing labor legislation and the acvitities of the Department of Labor, which Mr. Silberman described, do allow for use of new technology? I am asking you a baited question, obviously.

Mr. THOMPSON. Well, I think the best measure of any problem like that, is to look at the facts. It is one thing for them to tell us what they are doing and what great progress they are making, but if you look at the facts, such as the gentlemen before me presented, they are not making progress in productivity in the construction industry. I question the progress they claim to be making on the racial scene.

My observation from being down on the local scene, as well, is that the local building trades unions, perhaps, as opposed to their national leaders, are fighting tooth and toenail to hold back any progress in race relations in the construction field.

Senator BROCK. I have noticed some evidence of that, myself. I know you heard, also, Mr. Hails testify about the new technology that is coming in from overseas; the use of techniques, even the cranes which are imported from Europe.

It is my, perhaps biased, evaluation of this field to the effect that this is probably the least advanced area of our entire industrial economy. It has been less responsive to changes, less responsive to new technology, and less responsive to new productivity opportunities than any other single industry with which I have any experience.

Mr. THOMPSON. I would agree with you 100 percent. I think the building trades unions have fought harder to resist technological change and increases in productivity than any other significant segment of organized labor.

Senator BROCK. I would not put it on the trade unions. Let us look at the fact that our building codes are written by local officials, and they are not always members of the building trades unions. As a matter of fact, they rarely are.

But they are playing a little game, too, in writing codes which are terribly restrictive of new technology.

Look at the example of the electric wire facilities we have available, the opportunity for plastic pipe that Mr. Hails mentioned.

I can cite you a hundred, and I imagine you can come up with 5,000 examples of restrictive codes at the local level which simply are not addressed, and there is no opportunity for them to be addressed today.

This is not just a one-sided problem. We all share, I think, in the burden of resolving it.

There is one statement that you made which I would like to turn around on you. You quoted a figure that every $100 decrease in cost enlarges the market by 15,000 families, the cost of a house, and then the reverse would also apply, any increase in price would decrease the market by something close to that.

Mr. THOMPSON. I would guess, Senator, as you go up the income scale, the number of people who would be eliminated by each $100 would increase, because there are fewer people, as you go up the income scale. I have no figures on that.

I think, certainly, it would have to be said that it would be no less than the 15,000.

Senator BROCK. Well, you have gone from approximately $12,000 to $14,000 in 1949 and 1960, to $27,000 average cost per home in some of the communities in this country. In Boston, for example, the elimination from the marketplace of huge numbers of families is just obvious.

There is no question about it. I think it is tragic. I think it is also tragic that there simply are not resources here in the Federal Government to respond to this problem.

We have passed enormously advanced and, in some areas, progressive housing bills, to try to resolve this problem. We cannot increase subsidies as fast as the cost is going up. That is the size of it.

Mr. THOMPSON. I commend both Senators on their efforts to attack this problem in what looks to me to be a very effective way. The great tragedy, I think, is that a law which was passed in 1931 to protect relatively weak unions and their wage scales, is now being used to protect very strong unions and exorbitant wage scales, to the detriment of poor people who need housing.

Senator TOWER. The politically, and economically, most powerful segment of our society as a matter of fact. We had Walter Reuther to testify one day, and he said the American people were getting Chevrolet houses at Cadillac prices, about the only time I ever agreed with Walter Reuther and he supported our breakthrough amendment.

So, I would say there is no unanimous union opposition to what we are doing here.

Mr. THOMPSON. I do not always find myself in conflict with Mr. Reuther. I think the industrial union leaders recognize this problem, as evidenced by Mr. Abel's telegram that I quoted in my talk.

Senator BROCK. I thank you for your testimony. It has been excellent and very helpful.

The CHAIRMAN. Thank you, very much, Mr. Thompson. We appreciate it.

Tomorrow's witnesses will be Congressman Blackburn, from Georgia; Richard Van Dusen, the Under Secretary of HUD; and Mr. Newbould, of the National Clay Pipe Institute.

The committee stands adjourned until 10 o'clock tomorrow morning. (Whereupon, at 1:45 p.m., the hearing was adjourned to reconvene at 10 a.m., on Wednesday, June 21, 1972.)

IMPROVED TECHNOLOGY AND REMOVAL OF PREVAILING WAGE REQUIREMENTS IN FEDERALLY ASSISTED HOUSING

WEDNESDAY, JUNE 21, 1972

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, SUBCOMMITTEE ON HOUSING AND URBAN AFFAIRS, Washington, D.C.

The subcommittee met, pursuant to adjournment, at 10:12 a.m. in room 5302, New Senate Office Building, Senator John G. Tower presiding.

Present: Senators Cranston and Tower.

Senator TOWER. The committee will come to order. We will continue our hearings on S. 3373 and S. 3654.

The first witness this morning is our very distinguished and able colleague from the great Southern State of Georgia, Representative Ben Blackburn.

Congressman, we are delighted to have you here this morning. You may read your statement in full, if you like, or you may submit it for the record and give a summary of it. You may proceed in any way that you choose.

STATEMENT OF BEN B. BLACKBURN, REPRESENTATIVE IN

CONGRESS FROM THE STATE OF GEORGIA

Mr. BLACKBURN. Just for the sake of being complete, I will choose to read the statement.

Senator TowER. That is quite all right, any way you want to pro

ceed.

Mr. BLACKBURN. Mr. Chairman, I appreciate this opportunity to testify before the Subcommittee on Housing and Urban Affairs today in support of S. 3373, introduced by Senator Bill Brock.

As a member of the House Committee on Banking and Currency, I have been urging the inclusion of a measure identical to S. 3373 in the housing legislation now pending before the Committee on Banking and Currency.

If necessary, I intend to present my amendment to the full House when it considers the Housing and Urban Development Act of 1972. Without exception, commissions and panels which have examined the housing industry conclude that there is a dire need for good, lowcost housing.

For example, the Department of Commerce Technical Advisory Board's panel on housing technology reported that in 1970 over 10 million families were housed in unacceptable conditions and that to

meet this need a production rate of 2.5 million units per year is needed in the decade of the 1970's. This is an increase of 65 percent over the annual production rate of the previous 10 years.

Unfortunately such statistics as these are meaningful only to those of us concerned with planning on a national basis.

What is important to the prospective home buyer is the amount of this downpayment and his monthly mortgage payments, both controlled in large part by the cost of that house.

The compelling statistic comes from the National Association of Home Builders who report that for every $100 increase in the cost of a house, another 14,000 families cannot afford to purchase that house. By eliminating unneeded construction costs, the price of a house can be cut substantially. The unrestricted use of prebuilt and prefabricated products is an available means of doing this.

First, manufacturing in a factory lessens dependence on favorable weather conditions and insures fewer work stoppages.

Second, prefabrication cuts total construction time which means a saving in overhead and interim financing costs.

Third, assembly line production requires lower skills than if the same work is completed on the job site and, thus, decreases unit labor costs.

My amendment and Senator Brock's bill both are designed to make prefabricated products available on a mass basis by limiting the dual deterrents of restrictive union work rules and outmoded building code provisions, the latter often union-instigated.

By inclusion of provisions in collective bargaining agreements, the building trades unions have assured themselves that they will not have to handle or install specified products or materials or if they do, that they will be paid reparations.

Although Congress intended to outlaw such conduct in the TaftHartley and Landrum-Griffin Acts, the National Labor Relations Board and the courts have limited the effectiveness of the congressional intent.

Building codes also restrict the use of modern construction technology. As pointed out in the 1967 Battelle Memorial Institute research report for the Building and Construction Trades Department, AFL-CIO, patchwork building codes discouraged volume production that could be obtained from serving a wide geographic area.

The Department of Housing and Urban Development has exercised leadership in this area by requiring the local governments to update their codes as a condition for approval of workable programs.

HUD has stepped on many toes in carrying out its program and all of us in Congress have heard the resulting anguished cries of pain.

I wish I could compliment the Department of Labor in the same manner for its efforts to end restrictive work practices. I believe we would have stronger support for our measures from Under Secretary Van Dusen of HUD today if the Department of Labor took a realistic look at the effects of our measures on the labor movement.

Certainly it cannot be said that our bills are anti-labor since most industrialized housing products are produced in union-organized plants.

When one considers that a significant part of the residential housing industry is nonunion, the mass production of industrialized housing projects will actually increase the number of union jobs.