In order to produce one ton of sugar in Puerto Rico we need 85 manhours, against 24 in Louisiana; 18 in Florida; 10.5 in Hawaii and 18 in the beet sugar areas.

This situation explains the low wages we have to pay in Puerto Rico, against those paid in the domestic areas of the United States we have just mentioned; and despite those low wages our production costs double, approximately, those in said other regions.

Another reason which made the mechanization of the industry in Puerto Rico imperative is that this labor force of 16,000 workers now remaining in the sugarcane field, aside from reducing itself year after year, is of advanced age and it has no replacements among our youth.

DISBURSEMENTS DURING THE PROGRAM'S FIRST YEAR

The total disbursements of the Program for the Rehabilitation of the Sugar Industry for reason of all aids extended to sugar colonos and producers will, by December 31, 1970, amount to $12,389,429. Total disbursements as of October 31st last had been of $10,026,037.

FINAL ANNOTATIONS

1. The sugar cleaning stations installed with the aid of this Program are the most modern in the world. As with every new installation, naturally, some mechanical adjustment and changes must be made according to the condition of the sugarcane upon its delivery at the mill, the amount of rain, the drought, and other factors.

2. We trust, of course, that our government, with the intervention of its Planning and Zoning Board, will protect the sugarcane farming areas, the same as the other agricultural areas, not allowing the use of these lands for the establishment of industries, urban and semi-urban developments and other uses, as long as there are other non-agricultural lands which can be used for these industrial and residential purposes.

From now on the protection of the sugarcane lands is essential to the final success of the Program for the Rehabilitation of the Sugar Industry.

3. At no time has there been any official opposition to the incentive of 90 cents per hundredweight of sugar produced by the sugarcanes of colonos of up to 300 cuerdas. The official standing on this matter has always been that no additional legislation was necessary in order to offer this incentive, since the Law which rules the Rehabilitation Program allows powers and discretion to offer said incentive.

The official standing, however, opposed granting the incentive on the basis of ton of sugar, instead of hundredweight of sugar produced, since the main interest was that the cane delivered to the mills was one with the highest yield. Respectfully submitted.

JULIO RODRIGUEZ CHACÓN, Administrator.

Mr. DENT. Mr. Keith Terpe? Not here yet?

Well, the next witness then would be Mr. H. C. Barton, Jr., president of Puerto Rico Development Group, Inc.

STATEMENT OF H. C. BARTON, JR., PRESIDENT, PUERTO RICO DEVELOPMENT GROUP, INC.

Mr. BARTON. I would like to leave some charts, Mr. Chairman, before you, while I speak.

Mr. Chairman, my name is H. C. Barton, Jr., I am president of the Puerto Rico Development Group, Inc. I am appearing in my personal capacity and I thank you for this opportunity. My purpose is to present the basic data on Puerto Rico human resources and indicate to you the gravity of our manpower development and how can we even approach absorbing such an abundance of labor.

On Monday of last week, according to press reports, Congressman Badillo made an important statement in the House. According to my rather free translation of the Spanish, his words were as follows:

It is an economic fact that the Puerto Rico economy has not been able-and is still not able to absorb the large continually growing population. The supply of jobs simply cannot absorb the growing and mainly untrained labor force.

What follows is an attempt to explain to you the actual size of this job deficiency in Puerto Rico, and the extent to which our existing labor force is unskilled and untrained. I also want to point out some of the difficulties that are involved in slowing the growth rate of the labor force and improving its quality.

The first table before you is an attempt to measure the calculated employment deficiency in Puerto Rico. I would like to point out that these figures are different from our official figures on unemployment. I used, in these calculations, basic data from our regular employment services.

Mr. DENT. May I ask you one question, so I understand the figures a little better?

How do you separate who you would get in the labor force, and who you would set aside? How do you establish how many in the 14 to 19 group are housewives, how many are in the labor force? You have 1,845,000, and that is certainly a large amount for your total population.

Mr. BARTON. That would be exactly the same amount. That amount is calculated on the basis of the labor force participation rate in the States, by each age and sex group. In other words, if Puerto Ricans were working, were looking for work, regardless of each age group and each sex group, exactly the same relationship, if they are in the States this would be the size of our labor force.

Mr. DENT. Using the State's figures or your own figures?

Mr. BARTON. The U.S. figures.

Mr. DENT. How would you be able to establish that as a bona fide figure when in this calculation of yours not as many women seek employment as they do stateside?

Mr. BARTON. In this connection, Mr. Chairman, women in the rural areas, particularly do not seek employment because there are no jobs available. When jobs are available women here seek employment the same as in the states. We know that as early as 1960, that we pointed out here, there are two concepts of labor force. In our official statistics here, and in the States, the way it is handled, an enumerator goes to a household, he asks a series of questions, the first question— did you work last week?-if the answer is yes, the person is enumerated as employed. If the answer is no, a further question is askeddid you look for work last week?-if the answer is yes, he is in the labor force. If the answer is no, he is outside the labor force. That is the way in which the official employment and unemployment statistics are collected here, and by the Federal Department of Labor, both using exactly the same methods.

Now, in Puerto Rico in this economy we have many, many people who don't look for work every day, every week, because they know there are no jobs available, which they can fill-they know that no suitable work is obtainable. If his older brother has been looking for work and can't find it, the younger brother does not bother to look for work. The woman in the country does not bother, there is no work available. There are many people able and willing to work who

are not actively seeking work, and therefore they are not counted as unemployed. There are therefore two concepts of unemployment, the able and willing to work concept, the one I am using, and the official concept of actively seeking work. I used the third column, these percentages actually represent for the United States as an indication of what the employment, the labor force, would be here, and applying those percentages to our actual population, is what determines this labor force of 1,100,000 people.

In other words, if we extract our actual employment from this calculated labor force, we see we have a job deficiency of about 360,000 jobs, about one-third of our total labor force is idle. Our total potential labor force. This is high. It is extremely important for us to consider the nature and the size of this unutilized body of people. It is very large. It is also very young. About one-half of them are under 25 years of age. In other words, about one-half of the new jobs we need are for young people, both men and women, and another large part of the jobs we need are for women, particularly in the rural areas.

Mr. DENT. We will accept your figures now that we understand how you got them. Please give your reasons for appearing here in your capacity with regard to the legislation, so we can understand your point of view.

Mr. BARTON. My first reason is to show that we need many, many more jobs. We have in Federal legislation a criteria that minimum wages should not be increased to an extent that would create undue unemployment. This, I think, is an inappropriate criteria in Puerto Rico. Puerto Rico's problem is that it must create many, many more jobs. We have to have a reduction of our minimum wages which will enable us to increase employment very rapidly and provide jobs for these people. If, in the long run, there are reasons to make that ultimately less urgent, we have a great deal of effort going into education, we have a family planning program that the Government recently supported. Our birth rate has actually declined 25 percent in the last 5 years. But it will be a good many years before this has an impact on the size of our labor force. In other words, we have short-run measures that we must look for to take care of this 33 percent of our human resources that are not employed.

Those short run measures are only on two bases, one is migration and one is job creation. Now, the jobs that, on most migration, you have a final chart before you that shows migration is very responsive to labor market conditions in the States. In other words, when in the Korean war, when unemployment was at a low in the 1950's, migration from Puerto Rico was at a peak. In the recessions of 1954, 1958, 1961, it was high in the midsixties; migration to a large extent apparently up to the last 3 years, was a reflection of the demand for labor in the United States. This is a factor about which Puerto Rico can do nothing. Migration has been an extremely important safety valve for our economy.

About as many jobs have been created in the United States for Puerto Ricans during the last 10 or 20 years as have been created in Puerto Rico. For Puerto Ricans at home, we have to rely on job creation because most of the people that need those jobs are young, uneducated and untrained. That means the jobs that we need are the semiskilled jobs for which a training period is very short. The jobs that these young people can fill. And these unskilled new entry jobs are precisely the ones on which minimum wages bear most heavily.

The higher paid jobs are not affected by minimum wage legislation at all. The minimum wage legislation affects the new jobs, the entry jobs, the low level jobs. We need to use our unutilized human resources. I have a text of this paper which says perhaps a little more clearly what I have just said now.

I had copies of that paper. I have a copy left which I will leave with the secretary and perhaps somebody will make some more copies, and if you have any questions I would be happy to answer them.

(The document referred to follows:)

CALCULATED EMPLOYMENT DEFICIENCY IN PUERTO RICO, FEBRUARY 1971

1 "Employment and Unemployment in Puerto Rico," February 1971, Commonwealth Department of Labor.

2 1970 average civilian labor force participation rates in the United States.

* U.S. participation rates applied to corresponding age-sex groups in the Puerto Rican population.

2 Data for February 1971.

* Professional and semiprofessional; managers, officials, and proprietors, except farms; clerical, sales, and kindred

workers.

Craftsmen, and foremen; operatives and kindred workers; nonfarm laborers.

$ Private household workers; protective services; and other services: personal, commercial, maintenance, etc. Farmers and farm managers; farm laborers and foremen.

Note: Unemployed in Puerto Rico include 97,000 reporting previous occupation, 7,000 reporting no previous work experience plus 258, 000 potential workers assumed to have had no previous work experience.