The total cost to the Industry would be $105,000,000. The OPA has estimated that total textile profits for 1944 were $871,000,000. Thus, the increased cost, as of June 1945, would have come to but 12.1 percent of the profits earned during the previous year. Offsetting this amount, however, is the reduction in the direct labor cost to the idustry by the elimination of overtime caused by the return to the 40-hour week. It is estimated that this would reduce total pay rolls by some $72,000,000. Thus the net effect of the 65-cent minimum as of June 1945 would be $33,000,000, or but 4 percent of 1944 profits. Contrast this insignificant sum with the amount of good which would be accomplished by the act. Already, major sections of the industry have voluntarily granted minimums of 65 cents, or higher.

We must bear in mind, too, that the industry's ability to absorb the increased wages will be increased by the tremendous technical changes now being contemplated by every mill. The improved processes will further reduce direct labor costs.

This picture of the ability of the industry as a whole to pay the increased wages is reflected by its various sections. Let me cite a few figures on the two largest of these the cotton-textile industry, and woolens and worsteds. In 1944, OPA estimates indicate that the cotton-textile industry earned profits of $774 for each employee on its pay roll. Evidence for 1945 points to probable profits of $952 per employee. In wool, the comparable figures were $1,690. Surely these figures indicate an ability to pay what slight increases would be needed by the 65-cent minimum without any increase in prices.

The question is not whether the industry can afford to pay a 65-cent minimum, but whether it can afford not to pay it, and whether the country can afford to permit any wages below that figure.

It is an established fact that low wages in the textile industry hampered war production. The country was in need of textile fabrics. Governmental agencies rallied to increase production. The War Department tried morale meetings; the OPA granted price increases; the WPB issued directives; the War Manpower Commission granted priority referral plans. None of these worked because the basic issue-low wages-was not met.

The same problem faces us today. Civilian textile needs are great. Only recently, the OPA had to ease up on its price regulations for clothing because the apparel manufacturers protested their inability to secure fabrics. Production has not recovered because workers do not find the jobs in the textile industry attractive. Workers displaced from other industries do not wish jobs in cotton textiles because the wages are so low and the conditions unsatisfactory. They frequently withdraw from the labor market rather than subject themselves to wages paid in textiles. With its present wage scale, the industry cannot attract the workers it needs to meet current demands. Thus the low wages in the textile industry have done much to retard the reconversion to peacetime production. This bill will do much to correct that situation.

The passage of this bill will also help us to fulfill our responsibilities to our fighting men. How can we honestly expect them to return to the textile industry with its low wages? Every survey made by the union shows that war veterans are not returning to the jobs they left in the low-wage textile mills. They feel they fought for something better than the right to a job at a starvation wage. Can we blame them? Have we the effrontery to say to them that the future holds nothing but poverty for their families? Let us not forget that the cash income of a private with a wife and two children is $128 a month. A 65-cent-an-hour job will provide him less than that.

There is an even stronger reason why the textile industry cannot afford to do without this bill. If they are to be prosperous, the textile industries require a high income economy. Demand for their products depends upon purchasing power in the hands of the mass of the people. Workers whose earnings fall below 65 cents an hour cannot afford to buy for themselves and their families the clothing, the household supplies they want, and need. An increase in purchasing power for the lower income groups, such as is provided in this bill, will reflect itself immediately in an increased demand for textile products, and increased prosperity for the industry.

What is true in textiles is true for the economy as a whole. The passage of this bill, is essential to provide needed purchasing power if we are to build an economy of abundance, one in which full employment will prevail.

We have just come through history's most terrible war. For 6 years, the free peoples of the world fought against tyranny and oppression, for the preservation

and extension of freedom and democracy. But democracy and freedom are in themselves simply abstractions. They take on meaning only as we apply them to our daily lives. Democracy and fredom can have no real meaning or substance unless they are buttressed by economic security; otherwise, they become mere catchwords, slogans with which we delude ourselves, and perhaps attempt to delude others.

There can be no economic security, no enduring prosperity, unless American workers are fully employed at good wages-not at 40 cents an hour-but at wages that will make it possible for them to buy the goods they produce.

Passage of the bill under consideration will not usher in the millenium. It is simply the necessary first step we must take if we are to make certain that the victory we won in war is transformed into victory in peace. Without such a victory, the peace we fought so long to gain will be lost.

We must exploit to the fullest the magnificent opportunity which now presents itself the opportunity to achieve lasting peace and security. The challenge is tremendous, but we can meet it successfully if we act at once, with boldness and resolution.

SUPPLEMENTAL STATEMENT BY TEXTILE WORKERS UNION OF AMERICA, CIO, ON ABILITY OF THE TEXTILE INDUSTRY TO PAY A 65-CENT MINIMUM WAGE

The impact of the 65-cent minimum wage will be felt differently in the varying sections of the textile industry. We now have a minimum of 55 cents an hour in the cotton-rayon industry in the South and 57 cents in the North, with a large section of the northern industry operating on a 65-cent minimum as a result of recent wage negotiations. Our woolen and worsted industry is universally on a 60-cent minimum wage, as is the carpet and rug industry, but current negotiations will bring it to 70 and 75 cents. Minimum wages in the synthetic-yarn industry range from 62 to 67.5 cents, but current 10-cent increases bring these to 72 and 77.5 cents. The rope and cordage industry tends to have a 65-cent minimum. The dyeing and finishing industry has a 69to 75-cent minimum in New England and a 95-cent minimum in New Jersey.

Recent wage movements, such as those noted above in cotton, and others which have started in the woolen and worsted industry have made obsolete the Bureau of Labor Statistics estimates of the distribution of textile workers under 65 cents. The Bureau figures indicate that some 5 percent are below 50 cents an hour, and 47 percent are below 65 cents an hour. We believe that a more accurate estimate would place the proportion of textile workers under 65 cents at less than 35 percent.

It is probable that the present wage movement, when carried to their conclusion, will further reduce the proportion of textile workers under 65 cents, to insignificant proportion. In that event, action by Congress to establish a 65cent minimum wage would serve to bring over the line those plants which have not come up to the prevailing wage, and would protect the competitive position of the fair employer who is paying the going wage rate.

In considering the ability of the individual industries, we are even more greatly assured of the practicality of this entire proposal. The cotton textile industry is one, which has been unusually profitable during recent years. The OPA has released some recent estimates of the profits of the industry.

It indicated the

350, 000, 000 340, 000, 000

400, 000, 000

At the beginning of this year, the industry was earning at the rate of $365,000,000 per year, but the total profits for the year are $400.

These high levels of profit have been maintained despite the shrinkage in prouction which has taken place since 1942. It is, moreover, interesting to note that these huge profits have been earned while wages have been increased and prices substantially controlled. The profits of the industry can be fully appre ciated when the profits are compared with the total pay roll. The total profits of $340,000,000 must be set alongside the total wage pay roll for the industry in 1944 of $550,000,000. Sixty-two cents profit was made for each dollar of wages paid.

These profits during the year were enhanced by the action of the OPA under the Bankhead amendment, which granted price increases amounting to well over

$100,000,000. OPA Administrator Bowles described these price increases as having been given "to industries which demonstrably did not need them." He observed that the cotton textile mills "were reaping huge windfalls under ceiling prices computed on the assumption that they would pay parity prices for cotton." At the close of 1944, the difference between the mills' cotton costs and the costs assumed in the price ceilings amounted on an annual basis, to at least $80,000,000. The OPA undertook to guarantee profits not of $38,000,000, which the industry enjoyed through the 1936-39 period, but a total of $60,000,000. In actual fact, of course the mere guaranty of such profits resulted in much higher profits, as processors have learned to make profit by more than one method. The consequence is that OPA's calculation of expected profits has always proved to be most conservative.

As a result, the 1945 wage increase was finally approved by the Office of Economic Stabilization in a letter of April 17, 1945, which read as follows:

"The Office of Price Administration reports that the authorization of wage increases for the 54 companies involved in the wage proceedings would not in itself require an industry-wide increase in the maximum prices of any of the major items which such firms produce although some of the participating companies may become entitled to individual price adjustments. Insofar as the principles approved in the wage decisions may be applied to companies not participating in the proceedings, ther may likewise be cases in which the company would become entitled to an individual adjustment, but the Office of Price Administration finds that it is unlikely that individual adjustments, even if the wage increases become industry-wide, would materially affect the level of industry prices. Whether an extension of the wage increases generally through the industry would at some future time require price increases for major textile items cannot be positively determined at the present time, but the Office of Price Administration concludes that any such future price increases would be of small percentage amounts even if it could be assumed that the wage increases would result in equivalent increases in labor costs without offset for increased productivity."

The cotton textile industry could, therefore, shoulder the cost of the 1945 wage adjustments. Nevertheless, the OPA found it necessary to revise its pricing policy for the cotton textile industry. This change took place because the OPA reinstituted the net worth formula first used in increasing the ceilings for terry products and related goods. As a result, supplementary orders 114 and 131 have been issued providing substantial price increases to the textile companies. The actual total value of the price increases may be estimated at $100,000,000. These concessions have handsomely increased the profitability of the cotton textile mills. The final financial results at the end of the year will fully disclose the total actual 1945 profits, by reason of these increases, which will go beyond the all-time profit high of 1942. Current estimates place profits at $400,000,000. In any event, Mr. Bowles, in his statement on issuing the first pricing on August 31, 1945, declared that "the level of revised cotton textile prices established by the order represents an increase, which in many cases exceeds 20 percent, above the prices originally established in 1941 and early 1942. It is this present level of prices which is based upon a parity price of cotton far in excess of the world market price. Likewise, the new level of prices is based upon unit conversion costs which represent a probable minimum level of production and production efficiency. With the expected expansion of textile production and the return of more efficient workers to the mills, conversion costs should certainly not increase further and may well decline." It is a frank statement by Mr. Bowles that the longer the mills operate under these new ceilings, the higher their profits will become. Their costs will be declining as they operate at a higher rate and bring in new machinery and people. The cotton textile industry can certainly afford the new increase to 65 cents. The present price structure permits them to absorb the additional cost with little ultimate effect on cost.

The same appraisal of financial ability can be repeated for the other divisions of the textile industry.

In the so-called silk and rayon industry, profits have also constantly increased, both in the gross and on an employee basis. The profits per employee in 1944 were $281 (table II). In the woolen and worsted, the profits have been consistently high and also show the industry's ability to pay a 65-cent minimum. In 1944 profits per employee were $1,690 in the woolen and worsted industry (table III).

78595-45- -65

Employment has always increased within the textile industry at the time of the wage increase. As the minima have risen, total employment has also jumped. Repeated assertions that the industry is endangered by wage increases have been disproved. They have resulted in higher employment, and in higher profits for the industry.

TABLE I.-Annual employee earnings and annual net income before taxes per employee in the cotton-textile industry, 1936–44

Source: Bureau of Labor Statistics and the Office of Price Administration.

TABLE II.-Annual net income per employce in silk and rayon industry

TABLE III.-Average annual employee earnings and profits before taxes per employee in wollen and worsted industry, 1939–43

Source: Employee number and pay-roll calculated by T. W. U. A. research department on basis of data from U. S. Census of Manufactures and Bureau of Labor Statistics. Net income: 1939-40, U. S. Treasury Department; 1941-42, Office of Price Administration, Division of Research.

EXHIBIT 50

STATEMENT BY SOLOMON BARKIN, CHAIRMAN, CIO COMMITTEE ON REVISION OF WAGE AND HOUR LAW, RESPECTING SECTION 8 INSOFAR AS IT RELATES TO JOB CLASSIFICATIONS ABOVE THE UNSKILLED GRADE

Senate bill 1349 provides, in section 8, that the proposed act is intended "to provide for the maintenance of reasonable wage differentials between interrelated job classifications in such industry." To establish such reasonable wage differentials industry committees are provided, which committees are instructed to recommend the highest minimum rates "which will maintain reasonable wage differentials between interrelated job classifications in such industry."

In section 8 (e), it is further provided that the "industry committee shall further define such reasonable job classifications within such industry or subdivision thereof, and shall recommend minimum wage rates for such job classifi cations (other than unskilled job classifications) at such levels as it determines to be necessary for the purpose of maintaining reasonable wage differentials between the minimum wage recommended by it for unskilled job classifications and the wage rates for interrelated job classifications in such industry or subdivision thereof."

In considering this provision, the CIO wishes to make it clear that it does not intend that this provision be mandatory. It is appropriate for each individual committee to consider the appropriateness of establishing minimum job classifications for jobs other than the unskilled job classifications. Furtherfore it wishes to make it clear that it does not desire it to be encumbent upon the committee to recommend minimum rates for all job classifications, but it shall recommend rates for such job classifications as it considers necessary to outline a reasonable job structure for the industry. These rates are to serve as peg rates, in terms of which the rest of the wage scale is to be considered by the parties in private negotiations. These wage rates must be considered as key rates for establishing balanced wage structures within a given industry. They are "a framework within which all intermediate rates would have to be established in balance with each other and the peg points."

On

This provision does not invite the replacement of collective bargaining. the contrary, it is a method of insuring that prevailing standards arrived at by collective bargaining shall be observed throughout the industry if recommended by the committee and approved by the administrator.

This provision is particularly necessary in highly competitive industries. In such industries, employers, as well as unions, are interested in competitive stability created, induced and protected by such uniformity in minimum job rates.

This proposed provision is well grounded in American experience and would merely incorporate a practice which has been observed since 1933 in wage legislation and regulation. It is a provision which is common and widespread in democratic countries.

The American experience with this provision is extensive. We call attention to the NRA codes and their provisions for wage regulations. Fifty-five of these codes provided for wage basing points and schedules. They were found necessary because of the general dissatisfaction prevalent during the NRA with the generalized formulas for the adjustment of wages above the minimum. It was found that they created many problems and were not enforceable. The industries which accepted this type of wage regulation were generally the industries in which collective bargaining was most advanced. These included apparel industries, construction, printing, trucking, bituminous coal, radio broadcasting, and numerous other industries. The most unique provision was that contained in several contracts, particularly bituminous coal and construction, which incorporated the wage terms found in union contracts and established them as the minimum occupational rates. The NRA, in section 7(b), specifically provided for the adoption of the economic terms of union contracts and their extension to the entire industry.

We are attaching herewith a summary of the experience under the NRA. Appendix A provides for a specific summary of the report of the President's Committee of Industrial Analysis and the staff reports which describe in detail each of their provisions and the experience thereunder. The committee concluded that "adequate provisions for the protection of wages of various occupational groups was shown to be necessary for a long-term program of stabilizing costs. Experience showed that the Government can successfully undertake the enforcement of provisions for the protection of wages of employees above the minimum