It seems anybody who stands up for America and for a job is regarded as parochial, and somehow a low-class person. The people who stand up for every foreign country that wants to capitalize on our market are considered statesmen. The dedication of the Trade Relations Council of the United States, and the reason we exist, is to compile the facts in one place for all industries and workers, and to try to show what is happening, and it is our hope that someday the Congress will study those facts and have the will to exercise its constitutional responsibilities to advance the general welfare of the people of the United States through an equitable regulation of imports. Mr. DENT. I want to say you put your finger on one of the two equations in this country. One is that labor is organized to protect its welfare, protect its jobs, and its income, in order that the workers receive somewhere near a reasonable wage for their labor, or a condition of living that is satisfactory, equal to our cost of living, and of our economy. Industry is organized to make money, and industry can be excused if it flies to the farthest corner of the earth to make money for its stockholders, and as long as we do not give them protection, labor cannot be excused for its part in fleeing. Industry has to protect itself, and if it does that by fleeing out of the country, and running away from underneath the umbrella of minimum wage in this country. Thank you very much for your fine testimony. Mr. STEWART. Thank you very much. Mr. DENT. The meeting of the subcommittee is adjourned, subject to the call of the Chair. (Whereupon, the meeting was adjourned at 1:20 p.m.) TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938 FRIDAY, MAY 7, 1971 HOUSE OF REPRESENTATIVES, OF THE COMMITTEE ON EDUCATION AND LABOR, San Juan, P.R. The subcommittee met at 9:30 a.m., in the U.S. District Courtroom, fifth floor, Federal Building, San Juan, P.R. Representative John H. Dent (chairman of the subcommittee) presiding. Present: Representatives Orval Hansen, Earl Landgrebe, and Herman Badillo. Also present: Hon. Jorge Córdova, Resident Commissioner from Puerto Rico. Mr. DENT. The hearings of the General Subcommittee on Labor will now come to order. We are holding hearings on bills to amend the Fair Labor Standards Act. We are here to give an opportunity to all interested parties to give us their guidance, advice, and counsel on the proper direction this legislation should take. We are happy to be here, grateful for the opportunity of discussing this problem with you. The first witness this morning is the Hon. Rafael Hernandez Colon, president of the Senate of Puerto Rico. Will you take the witness stand, please? If you have anyone with you they may join you. First of all, let me introduce my colleagues. On my left, Mr. Landgrebe of Indiana, Mr. Hansen of Idaho, Mr. Córdova of the Commonwealth of Puerto Rico, and the gentleman from New York, Mr. Badillo. You may proceed. STATEMENT OF HON. RAFAEL HERNANDEZ COLON, PRESIDENT OF THE SENATE, COMMONWEALTH OF PUERTO RICO Mr. COLON. My name is Rafael Hernandez Colon, and I am the president of the Senate of the Commonwealth of Puerto Rico. I am also president of the Popular Democratic Party, which was the majority party from 1941 to 1968, the period during which the economic development program that has transformed the economy of Puerto Rico was conceived and developed. I am here to testify in relation to the H.R. 7130 whose purpose is to amend the Fair Labor Standards Act of 1938 to increase the minimum wage under the act and to extend its coverage. Both, the Senate of the Commonwealth of Puerto Rico and the Popular Democratic Party, believe in high wages and the protection of the rights of the Puerto Rican workers and of all workers. Our administrative and legislative history gives ample proof of this. Our labor legislation, including the Puerto Rico Minimum Wage Act, is one of the most liberal under the American flag. However, we are also aware of the great incidence and persistence of unemployment among our people and for that reason the creation of an adequate number of jobs by our economy is of the utmost concern to us. The position sustained by our party in regard to the application of the minimum wage provisions of the Fair Labor Standards Act to Puerto Rico has been expressed by our past administrations and legislatures every time that proposals have been made to amend this law. This position can be summarized as follows: We favor increases in minimum wages by law. We also feel that it is imperative for the protection and expansion of our industry and the availability of jobs, that these rates continue to be set through the flexible system. Such a system assures that the economic situation of each and every industry is carefully considered before its particular minimum rates are raised in order to protect the industry and the workers from the evils of unemployment. We reiterate this position again today because we believe that it is the only responsible alternative under the present system. The best proof that it is the only realistic alternative is that the present administration in Puerto Rico has adopted this same policy, which we held for many years, in spite of the promises made to the workers in the 1968 electoral campaign by the leaders of the party presently in power. At that time they said that they would seek the extension of the Federal minimum wage rates to Puerto Rico in the same manner as these apply in the rest of the United States. The last two congressional measures amending the Fair Labor Standards Act have included predetermined percentage increases for most of the covered industries in Puerto Rico, subject to an appeal procedure whereby the industries had the opportunity to prove if these raises would cause them substantial hardship. This was a different approach to the flexible system but it maintained the essential safeguards to our workers and our economy. They also extended the coverage of the law to employees in activities which are almost completely of local interest and in our opinion do not affect substantially or significantly the interstate commerce, mainland workers, or mainland economic interests. The economy of Puerto Rico has been operating under the constant peril that another amendment may eliminate the flexible system altogether and that automatic increases would be applied to Puerto Rico that may cripple our industrial promotion program which is the basis of our economic development, thus endangering the employment opportunities of our workers. This would be a case where a Federal law, conceived from the perspective of the more economically developed society that is the United States, and probably adequate for its particular needs and economic realities would, if indiscriminately applied to Puerto Rico, dislocate the delicate mechanism of the Puerto Rican economy and society. We feel that the time has come for a fundamental revision of the entire minimum wage setup for Puerto Rico. The minimum wage system applicable to Puerto Rico in one of those basic aspects of our life, in the regulation of which, the Puerto Rican people should have meaningful participation. A proposal has been sent to the Governor of Puerto Rico asking him to propose to the President of the United States the joint creating of an ad hoc committee under the Plebiscite law composed of representatives from the United States and from Puerto Rico to discuss this problem as an area for the improvement of Commonwealth status. So far he has taken no action. To close my statement, let me make clear with respect to the proposed amendments to the Fair Labor Standards Act that this honorable committee is presently studying, that the position that I have already stated is motivated by the deep preoccupation of the Senate of Puerto Rico and the Popular Democratic Party for the maintenance of adequate employment opportunities for the workers of Puerto Rico. Thank you very much. Mr. DENT. Thank you, Mr. Colon. Would you consider if this joint commission or ad hoc committee were created, that its primary functions would be to establish a new type of minimum wage here in the Commonwealth? Mr. COLON. A new type mechanism to set the minimum wage. The objection that we have right now to the existing procedures is we don't have representation or participation, voting participation that is, in the Congress which approves the law, nor do we vote for the President. The short answer for some people in Puerto Rico is that we should become a State. That isn't the answer for the members of our party, because we believe that becoming a State would create more problems for Puerto Rico than it would solve. The answer to us is to find a specific mechanism with regard to the applicability of the minimum wages whereby the people of Puerto Rico would have participation in the determination of the minimum wage to be established here in Puerto Rico. Mr. DENT. As I understand the legislative history, the original proposals in the Congress called for wages in Puerto Rico and the Virgin Islands identical to those established on the mainland. I believe there was quite a battle mounted when it was amended, and the present mechanism was enacted which set up the present industry and review committees. This is the only area that has the industry committees which establish the wages and review committees to which to appeal such decisions. We would appreciate having your views on the possibility of establishing a new mechanism for setting minimum wages in Puerto Rico. Mr. COLON. I could venture some thoughts at this moment, but I haven't explored it completely. But I would suggest that this committee look at the problem. Unfortunately, every time the Fair Labor Standards Act is examined again, the proposition is made that the Review Committee, the flexible system should be eliminated with regard to Puerto Rico and, of course, this affects very much. our industrial climate down here. We would like to have something permanent, something that gives us a certain guarantee that we will not be exposed to this situation. And one mechanism which we have |