Nobody likes to talk about death.
So Senate Finance Committee Chairman Robert Packwood (R-Ore.) startled witnesses and congressional staff members alike by asking in a series of trade hearings this month whether some U.S. industries should be allowed to die because they can't compete against the low wages paid in many countries.
Until now, that question rarely has come up on Capitol Hill because of its political sensitivity. Packwood said many witnesses don't even want to address that issue.
"I was very surprised when I heard that question," said C. Michael Aho, former aide to Sen. Bill Bradley (D-N.J.), who now directs the Council on Foreign Relation's international trade project.
U.S. Trade Representative Clayton Yeutter learned the hard way just how sensitive it is to talk about letting industries die. He was jumped on by Sen. John C. Danforth (R-Mo.) and the apparel industry when he said at a hearing on Nov. 14 that two U.S. industries -- shoes and apparel -- should be phased out to a substantial degree because they never will be able to compete with Third World nations where workers earn a small fraction of the American wage scale.
For instance, apparel workers in Bangladesh, one of the world's poorest countries, earn 16 cents an hour compared with $7 for an American holding essentially the same job. Even at 16 cents an hour, the apparel workers are doing better than most people in Bangladesh, however: They earn two to three times the country's average per capita income of $140 a year.
Because the apparel and footwear industries are so labor-intensive, it is impossible for automation and machines to make up for the wide difference in wages between U.S. workers and their foreign competitors.
"The American apparel industry cannot compete with products made abroad at wages that are as low as one-fiftieth of our own," said Herman Starobin, research director of the International Ladies Garment Workers' Union (ILGWU). "Nor can we reduce the already low wages of American garment workers without creating a shameful Third World of our own . . . The question is one of life or death for the American industry and its workers."
Indicating the high degree of emotionalism surrounding the issue, Danforth accused Yeutter of advocating "sink-or-swim Darwinism" and said the Reagan administration is willing to let industries that can't compete internationally "go under without so much as waving goodbye."
The American apparel industry, which is asking Congress to approve sharp cutbacks in imports, was so exercised that it ran a full-page newspaper advertisment Thursday featuring a naked soldier (making the point that most of the soldier's uniform was foreign-made and that foreign-made apparel might not be available in a national security emergency) and calling Yeutter's views "shortsighted, uninformed and dangerous."
The alternative to letting these industries die, however, may be granting them permanent protection from imports.
"We're not talking about just one or two industries. We are talking about three-fourths of the industries in the United States, and we are talking about an entire change of philosophy from what has been our trade position since the end of World War II," Packwood said.
Tackling the low-wage competition could create other problems. It would, in effect, make low wages paid in many developing countries an unfair trade practice akin to illegally subsidizing exports or dumping goods in other countries at prices lower than what it costs to make them.
This is a position advocated by Owen Bieber, president of the United Auto Workers union, who told Packwood low wages should be taken in account when the government considers whether a domestic industry is being hurt by unfair trade tactics.
He said "the abuse of the basic rights of workers" to organize and bargain should also be considered unfair trade practices. But he demurred when Packwood asked if the definition should be extended to include environmental protection, which costs American manufacturers money their overseas competitors don't have to pay.
The issue, moreover, is part of a debate over whether the United States' turn from its smokestack-industry manufacturing sector to a service-based economy hurts the country by trading in high-paying factory work for low-paying jobs at hamburger stands.
Janet L. Norwood, the head of the Labor Department's Bureau of Labor Statistics, calls that assertion false. She pointed out that low-paying industrial jobs -- such as those in the textile, apparel and shoe industries -- are being lost along with higher-paying work in the steel and auto industries.
Norwood argued that protecting the textile, apparel and shoe industries means saving the lowest paid manufacturing jobs in the country.
"The widely held belief that all jobs in the service sector are no good is just not true," she said. "I don't believe we are becoming a nation of hamburger workers as many people think."
The Reagan administration, with its strong market orientation, favors letting the painful process of industrial restructuring, including the phasing out of industries that cannot compete, go forward without government interference.
"I do not believe there is a compelling need for the United States to make everything that exists in the world," Yeutter said. "There are some products that we simply need not produce here in the United States. So in those cases, perhaps a phase-out is appropriate."
Following that philosophy, Yeutter said he saw the footwear industry largely disappearing, retaining only a 20 percent "niche" in the U.S. market. With shoe factories closing almost daily, the industry is "already phased out, by and large," Yeutter said.
Because textile manufacturing can be mechanized and automated, Yeutter said "a very substantial residue" will survive while "smaller operations that are very labor intensive would be phased out." The apparel industry, however, is harder to automate and so is more likely to die, he added.
President Reagan overruled an International Trade Commission recommendation last August to protect the domestic shoe industry by placing quotas on imports. That decision angered Danforth, whose state, Missouri, is one of the nation's largest producers of shoes, and has led to attacks on the administration for failing to offer trade relief to industries suffering from import competition.
"The perceived position of the administration is, if an industry is in trouble, if it cannot compete, don't just phase it out, just let it drop," Danforth said.
"We shouldn't just kiss off an industry," he continued, but instead "should try to provide some opportunity for it to restructure itself, regroup and become competitive."
"If there is a realistic chance of the industry restructuring itself, we ought to give them that chance," Yeutter replied.
"If it is the judgment of the president of the United States that there is no reasonable chance of adjustment or recovery or restructuring, then they should be phased out."
He pointed to steel as an industry that was given that opportunity by Reagan, who last October ordered negotiations with major importers to get them to voluntarily decrease their shipments to the United States.