TABLE VII.-Weekly clerical salary rates in New York City

The War Labor Board, as part of its wage-stabilization function, established going rates for white-collar as well as other occupations. In the vast majority of firms whose salaried employees are unorganized, these War Labor Board going rates have tended to become the accepted standards, although there are still many firms which pay less. An examination of the going rates of the War Labor Board in a number of key cities shows that rates for a substantial number of occupations fall below 65 cents an hour on the basis of a 40-hour week.

TABLE VIII.—-NWLB going rates for clerical workers in selected areas

TABLE VIII.-NWLB going rates for clerical workers in selected areas— -Con

It is, therefore, particularly vital to the white-collar workers that the amendments empowering industry committees to raise the minimum in particular indus tries from 65 cents up to 75 cents earlier than 1947 be enacted. In the adminis tration of this provision, industry committees for the predominantly white-collar fields must be appointed to study the white-collar salary situation and to recommend the immediate adoption of minimums higher than 65 cents in these industries.

MINIMUM RATES FOR KEY OCCUPATION'S

It is also of vital significance to white-collar workers that the proposed amendment to empower the industry committees to establish minimum rates for key occupations higher than the general minimums in the act be enacted. Because the white-collar workers are as yet largely unorganized, they must look to national wage policies of the Government and legislative aid in the elimination of both their substandard salaries and salaries above substandard levels which are inadequate for the work performed.

The salaries listed in the preceding tables show the glaring inequities which prevail among salaried employees. For example, for billing-machine operators covered by the National Industrial Conference Board study, salary ranges from $15 to $57 (table VI). It is unreasonable that such a wide range can be based on individual merit. Even a beginning billing-machine operator requires certain minimum training and ability. Nor can there be any reasonable explanation for the wide disparity between the mode of $27 and the maximum of $57. The only explanation for this or for the equally wide and illogical ranges shown in other tables is the chaotic situation which prevails in setting white-collar salaries where they are not achieved through collective bargaining.

The Congress of the United States can make a substantial contribution toward eliminating the chaos which characterizes the white-collar salary structure by giving power to industry committees to set minimum rates in excess of the general minimums for key white-collar occupations.

FLUCTUATING WORKWEEK

The salaried employees, particularly in the banking and brokerage fields, have been victims of a grave inequity in the administration of the Fair Labor Standards Act. Under Interpretative Bulletin No. 4 there is created a fluctuating workweek for salaried workers under which overtime need not be paid on the basis of time and a half for all hours in excess of 40 per week. Instead, there has been contrived a formula under which the hourly rate of pay fluctuates in accordance with the number of hours worked each week, and overtime can be compensated for at what amounts to one-half of the fluctuating hourly rate.

This monstrous formula can only be understood by illustrating how it works out in practice. Let us take a case of a bank employee earning $40 per week. (This figure is taken not because it is typical of bank salaries but because it is simpler for the complicated mathematics which follow.)

If during 1 week this employee works exactly 40 hours, he gets paid $40, and his hourly rate is $1 per hour.

If he works 50 hours per week, his 50 hours are then divided into $40, giving him an hourly rate of 80 cents. For the 10 hours in excess of 40 hours he gets paid not time and a half but half time, or 40 cents per hour.

If he works 60 hours, his hourly rate drops to 66% cents per hour, and he gets paid for overtime at the rate of 33% cents per hour.

Other workers, including many other salaried employees who earn $40 per week or $1 per hour, would receive overtime pay at the rate of $1.50 per hour regardless of the number of hours worked.

Since this situation results from an administrative interpretation, it can be corrected by the Wage and Hour Administrator without the need for legislative action. However, an expression of opinion on the part of the members of this committee would be very helpful in bringing about such a change.

This interpretation is so unfair and discriminatory that many banks and brokerage houses voluntarily abandoned the formula during the war and have been paying their employees time and a half for all time over 40 hours. Many others did so as a result of the protests of their employees. However, the interpretation exists as a legal formula, and the practice is still followed in many establishments. There is nothing to prevent those firms which have abandoned the "fluctuating" workweek from returning to this formula, now that wartime labor shortages are disappearing.

A SALARY POLICY FOR THE POSTWAR

We have asserted that the 65-cent minimum and even the subsequent 75 cent hourly minimum proposed in these amendments will be insufficient to assure adequate living standards for salaried employees. We support the amendments to the Fair Labor Standards Act because we feel that they represent the steps in the right direction of eliminating the most seriously substandard salaries and because we believe that this action on the part of Congress will encourage further improvements through collective bargaining and through, in some instances, voluntary action on the part of employers.

The United Office and Professional Workers of America asserts that establishment of proper standards for the white-collar workers require more thoroughgoing revision on our entire national salary structure along the following lines: 1. General salary increases so that the over-all total of increases since 1941 is at least 50 percent.

ers

2. Reduction in the workweek to 35 hours.

3. A minimum base salary of $30 a week for a 35-hour week for clerical work

4. Classification systems with salary rates based on a fair evaluation of jobs, taking into account special features of white-collar employment; and providing for a fair system of promotions and merit and automatic increases.

5. Provisions for job security, including adequate severance pay and protection against unwarranted dismissal and casual lay-off.

6. Provision of adequate paid vacations, sick leave, and insurance benefits. The United Office and Professional Workers of America proposes to achieve these objectives for its members through collective bargaining. We propose to bring the benefits of our existing contracts, together with these additional provisions, to as many of the salaried employees as we can influence to join our organization.

However, we recognize that the organized white-collar workers who enjoy the advantages of collective bargaining comprise a small proportion of the total number of workers in these fields. The vast unorganized group of salaried employees must look to Congress for aid in the solution of their salary problems. The enactment of these proposed amendments to the Fair Labor Standards Act will help to eliminate some of the most serious inequities from which white-collar workers have suffered since the post-1929 depression.

These amendments will result in raising purchasing power among those sections of the population whose living standards most urgently need improvement. This increased purchasing power is essential if our industries are to maintain during peace the levels of production achieved during the war. The increased

income will be put to most rapid use if it is placed in the hands of those Ameri can workers who need it most. It will be quickly spent for the additional food and clothing, for improved shelter, health care, and other vital needs, of which the lowest-paid groups of white-collar workers, as well as other workers, have been so long deprived.

EXHIBIT 60

STATEMENT OF HARTMAN BARBER, LEGISLATIVE REPRESENTATIVE, BROTHERHOOD OF RAILWAY AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES, TO THE SUBCOMMITTEE OF THE COMMITTEE ON EDUCATION AND LABOS OF THE UNITED STATES SENATE, IN REFERENCE TO BILL S. 1349, AMENDING THE FAIR LABOR STANDARDS ACT OF 1938

Mr. Chairman and members of the committee, this statement is intended supplement the testimony of Mr. L. E. Keller, research director of the Brother hood of Maintenance of Way Employees, and Mr. A. E. Lyon, executive secretary of the Railway Labor Executives' Association, who appeared before your cormittee on Tuesday, October 23, in support of the pending bill, S. 1349, to amend the Fair Labor Standards Act of 1938. Our organization, the Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Erployees, concurs in the testimony presented by Messrs. Keller and Lyon and supports the amendments to the bill offered by Mr. Lyon recommending the deletion of that part of the bill designed to adjust rates of pay above the minimun rates and the amending of subsection (m) of the present act by the insertion of the words "and employees of common carriers engaged in the preparation and service of foods and beverages" following the word "vessel." The effect of this amendment would be to prevent railroad companies from deducting the cost of meals and lodging out of the pay of dining-car employees while en route or laying over at points away from home terminals.

You have before you the very able and detailed presentations of Messrs. Lyer and Keller covering the various features of the bill and more particularly the justification of the increase in the minimum rates of pay to 65 cents and pro gressively within a 2-year period to 70 and 75 cents. At this time I would like to place our brotherhood on record as in favor of the proposed increase in min mum rates; however, we do not desire to have wage rates, except the minimu rates fixed by Congress. We believe that wage rates above the minimum ca best be established through the process of collective bargaining.

Your attention is now directed to some facts covering the low-rated employees represented by this brotherhood, which represents approximately a membership of 300,000, composed of clerks, freight handlers, express and station employees on the class I railroads of this country, as well as those employed by switching and terminal companies. The minimum rate of pay applying to one craft a class of employees is 57 cents per hour and is generally paid in the southeast and southwest areas to freight, baggage, mail, and material handlers, janitors, at porters. In all sections this rate prevails for elevator operations, messengers. and office boys and other nonclerical office workers, such as assorters and dug cating and binder operators. There are approximately seven to ten thousari employees now receiving this minimum rate of 57 cents per hour. There are probably ten to fifteen thousand employees in one class of service who get a minimum of 65 cents per hour. Our national straight-time average hourly co pensation is 72 cents per hour for freight handlers and 70 cents per hour for common laborers in the stores, departments, stations, warehouses, and gra elevators.

An increase in minimum rates to 65 cents per hour and to 75 cents within 3 2-year period will not be very costly to the railroads. The witness for the ra. roads, Dr. Parmalee, told your committee that the increase in the minimum ra'r from 57 to 65 cents would involve an increased expenditure by the carriers $34,000,000 per year; that an increase to 70 cents would cost $75,000,000; and th 75 cent minimum, an increase in the pay rolls of $127,000,000. Dr. Parmalee als stated that the 65-cent minimum would cover 255.000 railroad employees, th 70-cent minimum, 426,000; and the 75-cent minimum, 475,000. He did not te you, however, that the pay rolls of Class I railroads amounted to $3.883,245,000| in the year 1944 and that the increase in the minimum rates would only amou to an increase of less than 1 percent in the yearly pay rolls at the 65-cent lev less than 2 percent at the 70-cent level, and slightly more than 3 percent at the 75-cent minimum.

The representative of the railroads told this committee that railroad employees in train and engine service and in the railroad shops throughout the country were paid on a uniform national basis. It was also indicated there were regional differences in the wage levels of some classes of employees represented by this brotherhood and the maintenance-of-way employees. While it is conceded that the rates of pay of train and engine-service employees and shopmen have evolved to their present levels through collective bargaining, yet we are firmly of the opinion that higher statutory minimum rates would be very helpful in negotiating higher rates of pay for these low-wage groups. By having these increased minimum rates, the process of negotiating higher rates of pay with the carriers for these low-rated employees would be facilitated and brought more in line with higher-rated regions, and eventually a higher national average could be effectuated.

We do not believe that an increase in minimum rates would be inflationary. Since VJ-day a marked rise has occurred in unemployment. With the elimination of overtime pay, take-home wages have been considerably reduced. It has been estimated that if corrective measures are not taken to sustain employment and purchasing power that pay rolls in 1946 will decline to the extent of $20,000,000,000 compared with 1945. If our whole economy is to be spared a tailspin into depression, then wage rates must be increased to offset this tremendous loss, and it is equally essential that with higher rates of pay that minimum rates should also be increased. The wage floor should be set at a higher level.

A minimum wage of 65 cents per hour on the basis of 2,000 hours per year amounts to $1,300; of 70 cents, $1,400; and of 75 cents, $1,590. None of these yearly incomes are sufficient to sustain a worker and his family at a minimum of health and decency. Surely a rate of pay that does not reach this minimum of living cannot be termed "inflationary." We are of the opinion that the minimum rates fixed in the bill are not high enough; but we, too, are of the opinion these these minimum rates are an advance in standards which are worthy of our support.

A lot has been said about America out-producing the world. How many people realize that we also have out-hauled the world? The railroad employees of the United States, with a reduced personne! far below the year 1918, with a half a million fewer cars and locomotives, moved over twice as much freight during World War II than they did in World War I. These low-wage groups of railroad employees represented by this brotherhood and other railway labor organizations worked faithfully and aided in achieving this remarkable performance of human stamina and determination to carry our country to ultimate victory. They now ask your help. As one of the organizations representing these cmployees, the Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees, urges that the subcommittee favorably consider and report this bill with the changes concurred in by this organization. It is hoped that this action will be taken promptly.

EXHIBIT 61

STATEMENT OF DAVID J. MCDONALD, SECRETARY-TREASURER, UNITED STEELWORKERS OF AMERICA, BEFORE THE SUBCOMMITTEE ON EDUCATION AND LABOR, ON BILL S. 1349, AMENDMENTS TO THE FAIR LABOR STANDARDS ACT

It is common knowledge that the steel industry has a 78-cent common labor rate. Yet, within the steel industry and the fabricating plants and aluminum plants under the jurisdiction of the United Steelworkers of America there are 263 plants, employing 108,000 workers, in which the base rates are below 65

cents an hour.

That is one reason, gentlemen, for my being here. The employers we deal with cannot plead poverty except for a few scattered instances. It is high time that sweatshop wage scales be eliminated from American industry. There is no excuse for poverty among employed workers in this Nation. Our great productive capacity and efficiency make substandard wage scales entirely intolerable.

We of the United Steelworkers of America are hopeful that your committee will agree with us and vote approval of S. 1349, establishing a 65-cent minimum wage now and an eventual 75-cent rate.

The excuse cannot be made that the substandard problem is regional. than half the members of our union working in substandard-wage plan