end it has long subsidized both the cane and beet sugar industries, allowed the existence of monopolistic or semimonopolistic combines within the sugar industry, fostered the fixing of industry-wide prices, and in other ways given financial assistance to the industry. Sugar is an industry protected by Congress. Sugar prices are protected by Congress. Sugar workers in Hawaii have received only nominal protection from Congress up to this time.

The Hawaiian sugar industry has long been dependent upon congressional aid. In 1876 it first obtained preferential treatment in a reciprocal trade agreement with the United States, and after annexation in 1898 received tariff protection. The Congress brought Hawaii under the quota system by passage in 1934 of the Jones-Costigan Act under which Hawaii was allotted a quota of approximately one-seventh of all sugar to be consumed by the United States. The protection and control of the Hawaiian sugar industry was further extended by the Sugar Act of 1937.

Hawaiian sugar played a major part in the prosecution of the war. Sugar rationing continues as the most stringent form of food rationing due to the world shortage of sugar, and the recent location, in Java, of 1,600,000 tons of sugar comes as a blessing to a world which had anticipated the necessary maintenance of sugar rationing for months or years. The war itself has taught the necessity of maintaining an adequate sugar supply. The world's great sugar-producing areas are few: mainland United States, producing beet and cane sugar, the islands of Puerto Rica and Cuba, the Territory of Hawaii, the Philippines, and Java, all producing cane sugar, and the central European beet-producing areas. Of these seven basic sugar areas, three were nonproductive during periods of enemy occupation and in these three, the Philippines, Java, and Europe, the volume and maturity date of newly planted crops is still a matter of speculation. Certainly in the Philippines, where in the current year only enough sugar has been planted to yield the spare crop of 35,000 tons in 1947, sugar production is far from the road to normalcy.

The Congress has treated the sugar industry as an economic unit, but it has segregated the workers in the industry. Thus refinery workers, engaged in the refining of both cane and beet sugar, whether produced within continental United States or imported are protected by the hours provisions of the Fair Labor Standards Act while mill employees engaged in the manufacture of raw sugar, whether employed on the mainland or in the Territories and insular possessions, are excluded.

This is an inconsistent approach. Similarly the Congress has failed to face the wage question in the sugar industry, particularly in reference to agricultural workers. What Federal aid is extended directly to sugar workers is in the form, in Hawaii for example, of a percentage bonus on base wages, and has no remedial effect upon the substandard wage structure itself. Thus the total cash wage paid mill workers in Hawaii, which must reach the 40 cents statutory minimum under FLSA, is compounded of a variety of payments: The basic wage in the sugar mills is 28 cents an hour; to this is added a 30% percent Federal sugar bonus bringing the base wage to 36.54 cents per hour; to this is added an assumed 6-cent valuation on perquisites furnished by the employer bringing the calculated total hourly wage minimum to 42.54 cents. But the fact of that matter is that only 28 cents of this wage plus the value of perquisites is furnished by the employer while the balance is direct Fedoral aid. In 1944 when the sugar bonus totaled 25 percent the wage consisted of 23 cents cash wage base paid by the employers, 7 cents sugar bonus, and 6 cents perquisites and barely provided compliance with the FLSA statutory minimum.

Nor has Congress faced the question of hours in the cane sugar milling industry. Certainly there is ample evidence that cane sugar milling is industrial, that it is comparable to factory and industrial work and totally divorced from the agricultural process. Refineries on the mainland engaged in the refining of raw sugar manufactured in Hawaii are required to abide by the 40-hour week, while sugar workers are granted no Federal hours protection whatsoever while they are engaged in the milling of sugar.

The result of many years of legislation is that the mainland sugar industry has been subsidized at the expense of the Hawaiian sugar workers. The cost of production of mainland sugar is approximately twice as high as the cost of production in Cuba, while Hawiian and Puerto Rican costs are estimated to be 60 percent higher than Cuban costs and thus approximately 80 percent of mainland costs. It is clear therefore that Congress has not considered the price of pro

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duction, in which wages play a part, a prime determinant in the development of a national sugar policy. It is the policy of the United States to produce sugar in the United States, notwithstanding the fact that Cuba and Java alone could probably produce enough sugar to supply all of our demands. This policy is an unsound policy if it is predicated, as it has been, upon the maintenance of miser able, substandard wages and hours in the Territory of Hawaii and our other noncontinental sugar regions.

THE PROPOSED AMENDMENTS IN RELATION TO THE HAWAIIAN SUGAR INDUSTRY

Coverage

The International Longshoremen's and Warehousemen's Union welcomes the proposals in S. 1349 for extension of the coverage of the Fair Labor Standards Act by the elimination of the exemptions contained in section 7 (c) of the present act. The organization and operation of the cane-sugar industry are such that the provisions of section 7 (c) placed an unjust burden upon the workers in the sugar industry, in complete disregard of the essentially unified industrial process and the integrated nature of both milling and refining of cane sugar. The inclusion of language in section 7 (c), excluding a part of the sugar manufacturing industry's workers from a part of the act's benefits has initiated an undesirable chain of administrative exceptions and exemptions which in the sugar industry have done much to nullify the statement of policy in section 2 of FLSA and to prevent its effectuation.

Similarly the proposed deletion from section 13 (a) (4) of the language excluding from the wage and hour provisions of the act employees engaged in the "loading, unloading, or packing for shipment or in propagating. processing, marketing, freezing, canning, curing, storing, or distributing" the products or byproducts resulting from the "catching, taking, harvesting, cultivating, or farming of any kind of fish, shellfish, crustacea, sponges, seaweeds, or other aquatic forms of animal and vegetable life' 'is thoroughly desirable. Finally it is time that section 13 (a) (10), the so-called “area of production” clause be stricken from the Fair Labor Standards Act. It has served for the most part, during the 7 years of the act's operation, to exclude from the act many workers engaged in basic industrial operations and engaged in commerce and the production of goods for commerce, and has maintained the depressed conditions of these excluded workers at a level "detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers," in contradiction of the act's stated policy.

The proposals to extend the coverage of the act deserve adoption.

Hours

Deletion of the exclusions of section 7 (c) is both warranted and desirable with particular reference to the cane sugar milling industry.

Abundant evidence has been introduced in this brief statement to negate the claim that the milling of raw sugar is an “agricultural" process. Rather it has been shown to be, as it is, a highly mechanized, factoryized industrial operation. As such it is clearly within Federal hours control and deserves the full protection of the Fair Labor Standards Act.

The 40-hour week is entirely practical in the cane sugar milling industry. The Hawaiian sugar industry, as the evidence demonstrates, is a year-round industry employing a stable labor force without seasonal fluctuations of any greater importance than the moderate seasonal fluctuations found in manufacturing industry generally.

When the Fair Labor Standards Act was pending in Congress many indus trialists opposed the 40-hour week, insisting that it was not practical because of "unusual" conditions prevailing in their industry. The Congress overrode those objections, declaring that the national interest, as expressed in maximum working hours and minimum wages, was superior to the special interests of any group. Industry adapted itself speedily to the provisions of FLSA once the act became effective and the 40-hour week is now a universally accepted standard except in the excluded industries.

It is time that the exceptions to the act be forgotten and the act be extended to cover by hours provisions all workers covered by the wage provisions of the act, and to extend the wage provisions along the lines noted above. The 40-hour week is completely practical in the Hawaiian sugar industry. The employers of all sugar plantations in Hawaii have recently concluded negotiation of union agreements covering mill and agricultural workers, a total of 22,000 in all, and instituting the 8-hour work day. Nevertheless, because FLSA does not cover

operations in the mill during the productive season and because the Territorial wage-hour law sets a workweek of 48 hours, the sugar industry contract work week is so frozen. The sugar industry of Hawaii has been able to adapt its field as well as mill operations to an 8-hour day. It has adapted its workweek to 48 hours although the operations of the plantations and of the mills are carried on 7 days a week. It can, as the majority of American industry has done, adapt its operations to a 40-hour straight time workweek.

There is no justification for denying to cane sugar mill workers, engaged in a process which the Department of Labor recognizes "greatly resembles refining operations with respect to mechanical techniques” and occupations, the benefit of the 40-hour week which has always been extended to refinery workers. The problem of extension is primarily one affecting cane-sugar milling.

A recent survey of sugar beet refining plants known to be operating on a 40hour straight time workweek during the campaign season, during which they would be eligible on petition for a seasonality exemption, showed that in 48 plants out of 71 for which information was available were so operating. The plants in question are located throughout the beet sugar States. Thus in Colorado 17 plants operate on a 40-hour week even during the seasonal period and only 2 do not; so do 7 out of 8 plants in Idaho, 5 out of 7 in Nebraska, 4 out of 6 in Utah, 4 out of 5 in Wyoming, and all of the 5 plants in Montana. No information is available on scheduled hours in Michigan.

Extension of the hours protection of the Fair Labor Standards Act can be achieved by concurrence in the amendments proposed by S. 1349 which strike from the act the exceptions now contained in sections 7 (c) and 13. Wages

Detailed evidence has already been presented to the committee bearing on the general inadequacy of the statutory 40-cent minimum wage established by the FLSA. It is not the purpose of the International Longshoremen's and Warehousemen's Union to burden the record with repetitive evidence. It is pertinent however to draw certain conclusions directly related to the statutory minimum wage and its applicabillity to the sugar industry of Hawaii.

It is true that the mill workers of the Hawaiian cane-sugar industry have always been covered by the wage provisions of FLSA. But the minimum wage established by the act has come close at the same time to being a maximum wage. The plantations in Hawaii constitute an economic blot upon our national economy. Substandard wages long eliminated on the mainland still flourish there. It is only necessary to compare the industry-wide average hourly wage of 48.4 cents per hour for all sugar-mill workers (including workers engaged in transportation, construction, maintenance, store and boarding-house operations, laboratories, etc.) with the average hourly rate of 98.5 cents per hour in the mainland sugar-beet industry and 85.5 cents per hour in the mainland cane sugar refining to indicate the seriousness of the problem.

In May 1945 the average worker in mainland sugar refining received a weekly pay check of $39.84 for a workweek of 46.6 hours. A Hawaiian sugar-mill worker, receiving in May 1945 even an above-minimum wage of 45 cents an hour (including therein the 6-cent valuation on perquisites and the 30-percent sugar bonus on base wage), would have had to work 75 hours to receive a pay check of $39.84, or more than 60 percent more hours than the mainland sugarrefinery worker.

Sugar-industry wage rates on the mainland leave much to be desired, but it is significant that the average hourly wage rates in the mainland sugar industry, as long ago as October 1941, were 65.3 cents in sugar-beet- and 68 4 cents in canesugar refining. In other words, 4 years ago the average hourly rates in the mainland sugar industry were in excess of the proposed initial base minimum under S. 1349; and 4 years ago those rates, which are now approximately double Hawaiian rates, were double the then prevailing Hawaiian rates.

It is futile to consider national wage standards without considering wage standards in the Territories. And it is equally futile to attempt to solve wage problems in Hawaii without first solving the problem of wages in the sugar industry, for it is basic industry. Legislation is essential if the Territorial sugar wages, far below what even the War Labor Board found constituting a "substandard wage," are to be raised to a decent minimum. It cannot be forgotten that workers in Hawaii pay a minimum of 25 percent more than inflated mainland prices for all food, clothing, and other consumer goods, virtually all of which are imported from the mainland. The 40-cent minimum wage now prevailing may be assumed for Hawaii to have a purchasing power of approximately 20 to 25 percent less than it has on the mainland. Thus the devaluation of the

40-cent minimum which has occurred on the mainland as the result of cost-ofliving and price increases is even greater in the Territory of Hawaii.

The Hawaiian sugar industry is in the enviable situation of having the United States Congress behind it on all matters of subsidies, quotas, price sup port, and bounty payments. The sugar workers of Hawaii now need and merit the support of Congress, and congressional enactment of the increased minimum wages proposed by S. 1349.

EXHIBIT 55

STATEMENT IN SUPPORT OF S. 1349 TO AMEND FAIR LABOR STANDARDS ACT BY RAISING MINIMUM WAGE TO 65 CENTS PER HOUR

(Submitted by State, County and Municipal Workers of America, CIO,
September 25, 1945)

National wage policy today must be viewed in the light of what a few short weeks ago we called postwar needs. That time is now upon us. The men and women who served on the home front in the factories, mines and mills, who sustained the war effort in the State, county and municipal services, the small businessmen and farmers, are united with those who have already returned and who will return from service in the armed forces in their determination that the sacrifices of war shall reap the harvest of a better life.

To achieve these aims, our factories must be put to work at full capacity. Every man and women who wants a job must be able to find one at a wage which will enable him to buy the products of other's labor. The maintenance and extension of purchasing power not only during the present transition period from wartime to peacetime production but continually thereafter is the keystone to the achievement of full employment.

We can achieve this program. The blueprint for it has been worked out. President Roosevelt's new economic bill of rights pointed the way. President Truman's message to Congress September 6 was explicit. It remains for Congress to pass the legislation implementing the blueprint. This bill to amend the Fair Labor Standards Act is one of the pieces of the total pattern the American people expect their legislators to cut to fit our Nation's needs.

One of the largest customers for American production in the next few years will be State and local government. This is a matter of necessity. While we pride ourselves as a Nation on our high standard of living, let us not forget our shortcomings. America needs many of the goods and services which only gorernment can give, and in giving these goods and services, the Government must buy and consume.

It is estimated that the total needed improvement program for State and local roads and bridges alone today amounts to more than $7,000,000,000. An anual highway program of $3,000,000,000 a year is the minimum necessary to meet present needs. The American Road Builders' Association recommends a total public construction program of $5,000,000,000 annually, leaving a balance of $2,000,000,000 annually for other public works, water and sewer facilities.'

The total national postwar need for all public school and college plant facilities will be about 61⁄2 billion dollars, 3 billion dollars of which is so urgently needed as to be necessary during the next 5 years.2

Forty percent of our counties, with a total of 17,000,000 inhabitants, have no registered general hospitals today, and more than two-thirds of our States have fewer hospital beds than are considered adequate by professional standards.' A recent census of water treatment facilities by the United States Public Health Service estimates the cost of additional water supply facilities needed immediately to be approximately $683,300,000. About 11 percent of our total population is served by public water supplies receiving no treatment.*

At least 1,500,000 new housing units must be built each year for the next 10 years to supply minimum low-cost housing needs."

A Sound Plan for Post-War Roads and Jobs, American Road Builders' Association, Washington, D. C., p. 51.

2 Planning for Post-War Municipal Services, an analysis of problems and trends with suggestions for developing local policies. (Chicago, the International City Managers' Association, 1945), ch. 14, Education, by Bess Goodykoontz, p. 82.

Alvin H. Hansen and Harvey S. Perloff, State and Local Finance in the National EcoDomy (New York, 1944), p. 187.

Public Health Reports, LIX (January 7, 1944).

CIO Reemployment Plan, by Philip Murray, Congress of Industrial Organizations. Washington, D. C., p. 7.

These are pressing needs. But no amount of planning for construction alone will achieve our goal if the human element is overlooked. State and local government pay rolls, today surpassed only by the metal products industry and the combined total of all wholesale and retail trade, must do their share to swell the purchasing power of their more than 3,000,000 employees.

The teachers in our newly built schools must not be allowed to continue to eke out an existence on less than $1,000 a year, as more than a quarter million did in 1942-43.* The women cleaners must bring home more than 50 cents an hour, their present wage in New Rochelle, N. Y. The fireman in the boiler room must get more than the 62% cents an hour that he now receives in Chisholm, Minn. Workers in school cafeteria kitchens must take home more than the $2.98 a day now paid in Boston, Mass.

The bright new hospitals will not properly service community health if the nurses continue to live on an average minimum of $107 a month, and if other employees continue to work 72 hours a week at rates of less than $25 as many do now in New York's State hospitals. New roads will not be well serviced by workers compelled to pay $7 to $9.50 per month to enroll in the State employees' retirement system out of earnings of 65 cents an hour. The men in charge of our State parks and forests will not be able to contribute their purchasing power to the general welfare of the rest of the country if their semimonthly takehome pay, out of a gross of $72.50, continued to be $43.95.

6

Because they form the one homogeneous group of workers found in every community, industrial, farm, rural, or town, the purchasing power or lack of it of State and local government employees cannot help but have a telling effect on the difference between the development of a sound economic policy of full employment or a return to prewar low production conditions.

In a brief on the economic problems of State and local government workers submitted by this union to the Senate Subcommittee on Wartime Health and Education on January 25, 1944, and attached to this document, it was clearly shown that this body of workers does not today receive enough money to exist on a bare health and decency level,

It was shown that Government employees, in 1941, were 13.2 percent behind their relative position in 1939, with the result that the approximately 17 percent increase they have received during the period of the Little Steel formula has left them in economic circumstances far less favorable than those enjoyed by the majority of privately employed workers. It was demonstrated that State and local-government employees suffer low take-home pay due to absence in their pay envelopes of overtime and premium bonuses. Their hours, because of their exclusion from the provisions of the Federal wages and hours law, tend to be longer than those in private industry. Their working conditions are exceptionally hazardous and injurious to health. They are not covered by social security, nor, in hundreds of classifications, by State and local retirement plans, so that the threat of pauperism hangs continually over their heads. their exclusion from the National Labor Relations Act, they are denied the benefits of collective bargaining under the law of the land, except insofar as they have been able to win it in isolated sections of Government through selforganization in unions."

By

One final reason why State and local government workers lag behind their privately employed fellow citizens lies in the fact that while wartime increases for industrial workers are permanent increases, those for State and local government employees have in many instances been in the form of temporary wartime benefits only. Five of the States surveyed by the Bureau of Labor Statistics during the past year definitely indicated that salary raises were of a temporary nature, while three others implied that increases were only for the duration of the war. While no data on the status of wartime pay increases to municipal Specific examples are all taken from this union's files on wages existing in affiliated local unions.

Economic Problems of Local Government Workers, submitted by Abram Flaxer, president, State, County, and Municipal Workers of America, CIO, to the U. S. Senate Subcommittee on Wartime Health and Education hearings on white-collar and Government workers, January 25, 1944.

The State, County, and Municipal Workers of America today has on file at the national office 19 contracts in effect with local government units. Since its formation in 1937, the union has won approximately $175,000,000 in wage increases for State and local government employees.

According to a letter from A. H. Hinrichs, Acting Commissioner of the Bureau of Labor Statistics, dated September 26, 1944, the following five States granted increases of a temporary nature: California, Colorado, Massachusetts, New Hampshire, New Jersey. In the following three, increases are for the duration of the war: Minnesota, New York, North Carolina.