Since this committee is immediately concerned only with that part of the wage picture affecting workers who receive less than 65 cents an hour, attention wi now be more narrowly directed to these workers. As previously stated, women employees' basic common labor rate except on the west coast, where men packing has not yet attained major proportions-is everywhere paid at the rate of 62 cents or less per hour.'

Women, according to the War Manpower Commission, constitute 25 percent of the labor force in meat packing. In many departments they provide the entire personnel. It might be assumed, however, that most of the women workers receive enough above the minimum rates to push them over the 65-cent line However, careful inquiry indicates that at least 80 percent of the women workers receive less than 65 cents an hour-and in the South, of course, the percentage is almost certainly 100.

Men workers below 65 cents an hour are limited, for the large companies, to the South. Small companies in the North as well as in the South frequently pay their less skilled workers less than 65 cents per hour. Nor is it to be overlooked that the South will undoubtedly grow as a meat-packing area, hand in hand with the growth of the livestock industry. Meanwhile, the present size and importan of the industry in the South is not to be minimized.

No doubt close estimates can be supplied to the committee by the United States Department of Labor as to the aggregate volume of employment in the meat packing industry which is rated at 65 cents or less, with a break-down by sex if that is desired.

In appraising the previously mentioned "competitive drag” resulting from low wages in this industry, additional important considerations must be taken into account. One is the fact that workers in lower-paid classifications, at or very close to the basic common labor rate, comprise at least two-thirds of all employment. Another consideration is clearly revealed by the following statement from a Swift & Co. source:

"The basic wage rate is the foundation upon which the entire wage structure is built." 3

This quoted statement calls attention to a familiar fact: The common labor rate provides the foundation upon which differentials in respect to more skilled jobs are built. That is, if the foundation is low, the whole wage structure will be substandard. And the way to change this is to raise the foundation.

Foundation raising can be accomplished in various ways, including collective bargaining which has made great headway in the few short years since this union appeared upon the scene. But for the reasons set forth above-not the least of which is the functioning of the "chain" lay-out of plants in the industry which has been described-we would welcome a raising and an evening up of the industry's wage foundation through statutory enactment by Congress.

The Big Four companies in particular speak of themselves and are described in the industry as "national packers." They are by no means unique in being national concerns. But we hold that these giant nation-wide networks in our industry afford especially strong demonstration of the need for national minimum wage standards for the workers who are such a vital factor in the industry Little, except by implication, so far has been said here on the unmet living requirements of families of packing-house workers who receive less than & cents per hour. The committee has had much convincing evidence on this allimportant side of the subiect. There is essentially little to add with respect to packing-house workers—except to point out that special living costs are imposed upon them in consequence of special health and accident hazards arising our of their work and that the lowest paid workers are largely concentrated in the most disagreeable and unhealthy sections of the packing plant.

We would, however, like to call the committee's attention to an analysis pr pared concerning the cost-of-living situation confronting our large membership at the Big Four plants in Omaha. This analysis is a section in our brief favoring the elimination of the existing geographical wage rate differentials in meat packing. The brief was recently submitted to the National Meat Packing Com mission (acting under NWLB procedure) during the course of hearings a Chicago,

A further exception is the Rath Packing Co., which pays 63 cents at its large plant in Waterloo, Iowa.

2 See, e. g.. Lynn Ramsey Edminster, Meat Packing and Slaughtering, Encyclopaedia of the Social Sciences. Vol. 10, p. 248.

Lesson II

3 Swift & Co.'s Training Courses, Training Division. Industrial Relations Department Chicago, Ill., August 1942. Series O. Employees' Earnings for Services. Wage Scales, Job Rates, and Occupational Ratings.

Minimum rates in the Omaha plants are 70 cents for men and 59 cents for women. Wage and income computations contained in the quoted statement below are in terms of 70 cents per hour. In view of the bill being considered by this committee providing within 2 years for a 70-cent minimum hourly rate, this material may be of particular interest to the committee. Because the committee is considering the advisability of a minimum rate which would apply to women as well as men, it will not be overlooked that the present 70-cent-an-hour male worker in Omaha, a northern city, typically has a family to support-a condition of course also applying to more than a few women workers.

If there might be an inclination to believe that raising 59-cent women workers in Omaha to 65 cents has no relevance for 70-cent workers, it is in order to recall the previously quoted statement from Swift & Co. to the effect that the common labor wage rate is the basic foundation for the whole wage structure. In other words, raising the 59-cent foundation to 65 cents would result in changing the entire wage structure, including the 70-cent rate for men. (Parenthetically, it may be remarked that our contracts with the companies provide for paying women the same rates as men where the work is the same.) The reproduced material on Omaha follows:

"LOW INCOME WORKERS IN OMAHA-COUNCIL BLUFFS

"Prewar income and expenditure data for Omaha, Nebr.-Council Bluffs, Iowa, are of value in providing perspective with regard to the present cost-of-living situation and also for the light thrown on the prospect for the near future. This meat-packing center may be regarded as typical of most others in respect to the cost of living. The situation of low-paid packing-house workers in a few localities might be slightly better, while in others it is worse-in southern cen'ers materially worse. The study of consumer purchases" reveals that for wage earners averaging $638 income per year in 1935-36, expenditures averaged $844, leaving an average net deficit of $184 for the year.* Deficits continued to exist for family incomes up to and including those averaging $1,391, where the deficit averaged $27 and affecting 47 percent of all families receiving this income. Only for the group averaging $1.625 did a "net surplus" ($45) develop. This was the record when living costs were much lower than they are at present.

"Commenting on the effect of wartime living cost increases on the lowest paid group of Omaha-Council Bluffs workers just cited, A. F. Hinrichs, Acting Commissioner of Labor Statistics in the Bureau of Labor Statistics, under date of May 16, stated in a letter addressed to the research director for this union: 'A price increase of 20 percent has serious implications for these families and the. community in which they live. If living standards are maintained, more of the families will spend in excess of the year's income and accumulate debts, some of which may never be paid. If the scale of living is further reduced, the health of the families is endangered. This group spent only $2.10 per week per person on food in 1935-36. At that time very few large city families spending this amount had adequate diets (U. S. Department of Agriculture, Miscellaneous Publication 452, Family Food Consumption and Dietary Levels, p. 58). Obviously, if the families have not increased their food expenditures, but altered their food choices, the higher prices have meant a larger number of low-income families with poor diets.'

"This statement of Mr. Hinrichs applies in large measure to a high percentage of the families whose incomes ranged up to $1,391, where a deficit was shown for the group as a whole. Here it is pertinent to note that 70-cents-per-hour workersif they were employed the almost-unheard-of average of 50 full 40-hour weeks a wear-would gross $1,400. But pay-roll deductions would cut this down materially. The woman worker with dependents-a condition which holds for many women employees in meat packing—would be correspondingly worse off.

"For a certain proportion of families during the war, in meat packing as in other industries, there has been more than one breadwinner. But for other families, loss of the main or sole breadwinner has worsened the family-income situation, making it more difficult to meet the much higher living costs which especially strike these families in wartime. Irrespective, however, of the net 48 Family Expenditures in Six Urban Communities of the West Central Rocky Mountain Region, 1935-36. Bull. 646, Vol. II, U. S. Department of Labor, Bureau of Labor Statistics, in cooperation with Works Progress Administration (1940). Table 1. pn. 103 ff.

"* Recording the difference as $184 rather than $206 was because of discrepancies in family records on receipts and disbursements. Therefore, a "net balance difference" is given; in this instance it is $22 (ibid., table, p. 103, and glossary, p. 279).

.

effect of various counteracting influences, this is certain: After the war, family incomes will be very largely supplied by one breadwinner. The trend in this direction is increasingly observable in many centers.

"CURRENT FOOD COSTS IN OMAHA

"An indication of what the low-income family is faced with on the basis of present living costs is provided by the food budget, prepared by the Community Welfare Council of Omaha, an agency supported by the Community Chest. The budget is presented both in terms of quantity and in money cost. It is care fully drawn up for men and women, differentiating as to requirements depending on whether the man is 'active,' 'moderatively active,' or 'sedentary' and for the woman depending on whether she is 'active,' 'moderately active,' 'sedentary,' 'pregnant,' or 'nursing.' In addition, varying requirements based on age are specified for children through the age of 12 years and separately for boys and girls above that age.

"On the basis of prices as of February 21, 1945, the council found that a family of four comprised of an active man, a moderately active woman, a girl of 15. and a boy of 12 would need to spend $59.31 per month on food. A suggested program for a family of four for 1 week is given, in quantities and prices, where the husband and wife are both moderately active. For this family, the suggested weekly purchases under the heading of 'Meat, poultry, fish, cheese-8 pounds demonstrate that economy was a primary consideration in the council's recommendations: 'Liver, 1 pound, 35 cents; chuck, 3 pounds. 28 points. 87 cents; heart. 2 pounds, 40 cents; cheese, 1 pound, 33 cents; codfish, 1 pound, 35 cents'-a total of $2.30 per week for this essential group of foods.

“Currently, a 70 cents an hour packing-house worker, at the generous estimate of take-home pay of $105 per month, on the basis of the Community Welfare Council of Omaha's carefully worked out budget, would be required to spend from $55 to $60 per month for food alone for a family of four. This is more than 50 percent of his monthly income, far above the 30 to 32 percent (in itself high) which is usually assumed for low-income families.

"Every community has special features about the cost of living in relation te particular types of employment or particular groups. Omaha is no exceptio so far as packinghouse workers are concerned. For example, most of the large number of Negro workers with jobs in the packing plants of South Omaba reside on the north side of Omaha. That means that they must ride streetcars. traversing the city's main business district, for an average of from 5 to 6 miles. Many white workers also take this long trip, the excessively crowded housing situation in South Omaha making this necessary. A large additional proportion. of the workers drive automobiles from nearby small towns, up to a distance of 15 miles or more-an expensive form of transportation. A minimum of 5 percent are estimated to reside in Council Bluffs, a location which, in addition to the distance factor, necessitates a 5-cent toll charge for crossing the Missour River.50

"The real cost involved in the time and inconvenience, as well as the money outlay, often entailed by getting to work is frequently overlooked in discussionS of living costs. If complete evidence were available it is certain that many situations similar to that at Omaha would be found.

"The South Omaha area itself, where large numbers of packinghouse workers reside, when measured by housing conditions and other familiar criteria, reveals a substandard state of things which has been chronic for a long time and which reflects the substandard income status of a high proportion of the packinghous workers. The detailed statistics demonstrating this are contained in the study. An Ecological Study of Omaha, by T. Earl Sullinger, professor of sociology at the University of Omaha. The study is based on "geographical units" as em employed by the Census Bureau for its enumeration districts in 1930.

40 Mimeographed material supplied by the Community Welfare Council of Omaha. 50 It may be noted that streetcar fares are higher in Omaha than in Chicago--a 10-cer cash fare as compared with 8 cents. In Omaha three tokens are sold for 25 cents: br even for those who take advantage of this, the fare is still slightly higher than Chicago's 52 Published by the bureau of social research, department of sociology, Municipal Tu versity of Omaha, 1938.

Detail for most of South Omaha is set forth in the description of census enumeratio districts Nos. 80, 81, pp. 33-34 of Professor Sullinger's study.

"Source: United Packinghouse Workers of America, CIO, Geographical Wage Rate D ferentials in the Meat Packing Industry, July 1945, pp. 49–52."

In relation to the general problem before it, undoubtedly the committee will not regard as decisive its opinion on the ability of any particular industry to pay the modest minimum of 65 cents per hour. At the same time, it may be of interest to comment briefly on this factor relative to meat packing.

We have already cited the extremely minor part, 6 to 7 percent, which plant labor makes up of total costs in this industry. And we have given a summery portrayal of the handsome profit record of the industry during the war. This record, with labor costs being so relatively small, could not have been due directly or chiefly to the low wages paid packing-house labor.

But questions may arise about the future. The immediate future is the financial reports for the year ending October 28. Remembering that volue of production is so important in determining profits in this industry, it may be noted that the Department of Agriculture estimates 1945 meat production as only 8 percent below the all-time record of 1944.

Indicative of the present and of the future beyond October 28, a number of clues on the profit outlook are worth citing. Packing companies are paying ceiling and near-ceiling prices for livestock, showing their conviction that a demand situation is in prospect which will be highly profitable. Demand not only comes from meat-hungry Americans but, in addition, from much hungrier populations in Europe who, through UNRRA, loans, or cash on the barrel, are anxious to consume hundreds of millions of pounds of meat. In the face of this demand situation, the packers evidence no worry over curtailed purchases by the Army procurement officers.

Further evidence that the packers are "sitting pretty" is the current active refinancing, facilitated by recent and prospective profit records, and the extensive recent purchases of independent packing company plants by larger companies, particularly in the South, where wages are especially out of line with living costs. Nor is it to be overlooked that, as in other industries, substantial tax refunds are slated for the packing companies; and further, with the Treasury Department's recommendation for the repeal of the excess-profits tax, that great additions are in prospect for stockholders from this source.

As for continued high volume, livestock numbers out on the range and in the feed lots assure slaughter totals far above prewar averages for at least 2 to 3 years.

After that? Much of the answer depends on whether the mass of consumers have sufficiently full employment at sufficiently high income levels to buy meat in the quantity and quality justifying farmers to maintain livestock production. It needs no proof that workers whose earnings are computed on the basis of rates at less than 65-or 70-cents per hour for 38 hours a week (prewar average in meat packing) do not provide the national foundation which will induce farmers to maintain their livestock output.

There may be irony in the circumstance that packing house workers, who help produce the Nation's meat, provide a large-scale example of the impediment to full employment, on the farm and in the factory, which arises when mass purchasing power is too low. How real this is may be made more vivid by again examining the meat item components which are advised for low-income workers by Omaha's Community Welfare Council. (See the quoted statement above, by Omaha's Community Welfare Council. (See the quoted statement above.) Packing-house workers are far from unique in illustrating this problem en masse. That is the significance of their situation in pointing to the urgent need for the legislation which is proposed in this bill. Respectfully submitted.

UNITED PACKINGHOUSE WORKERS
OF AMERICA, CIO.,

By LEWIS J. CLARK,

International President.

(Prepared by Research Department, 515 Engineering Bldg., 205 West Wacker Drive, Chicago 6, Ill.)

EXHIFIT 22

BRIEF OF MICHIGAN BEAN SHIPPERS ASSOCIATION, MICHIGAN BEAN PRODUCERS ASSOCIATION, NEW YORK STATE BEAN SHIPPERS ASSOCIATION, AND ROCKY MOUs" TAIN BEAN DEALERS ASSOCIATION, IN OPPOSITION TO THE ELIMINATION OF SECTION 13 (a) (10), "AREA OF PRODUCTION" EXEMPTION FROM FAIR LABOR STANDARDS ACT, AS PROPOSED BY SECTION 7 of S. 1349

This brief is respectfully submitted by courtesy of the permission which the committee extended through Mr. R. B. Bowden, executive vice president of the Grain and Feed Dealers National Association, at the conclusion of his testimony on October 9, 1945.

My name is William P. Smith. I am attorney for the above-named associa tions, whose members compose the major part of the dry edible bean industry in the United States, both farm cooperative and independent shippers, as well as growers. I also own and operate a 200-acre farm at Eaton Rapids, Mich., located in the heart of the bean-producing area of that State.

In Michigan, with which I am more intimately familiar, approximately one third of the bean crop is handled by farmer-owned cooperative elevators, acting through their agency, the Michigan Elevator Exchange. The balance is handled by independently owned elevators, the stock of many of these also being owned in whole or in large part by farmer-growers. These elevators, including the cooperatives, handling approximately 98 percent of the Michigan bean crop and totaling in excess of 300, are members of the Michigan Bean Shippers Association. Several thousand of the growers have their own organization, the Michigan Bean Producers Association, which is highly representative of the farmers' interest in this large and important cash crop.

The New York State Bean Shippers Association's members consist of some 100 elevators in that State and handle the processing and marketing of approximately 95 percent of the dry edible beans grown there, where this crop is, likewise, an important part of farming operations, particularly in the western portion of the State.

The same situation is true of the Rocky Mountain Bean Dealers Association, comprised of some 150 members, located in the States of Colorado, New Mexico, Wyoming, Nebraska, Idaho, and Montana, and handling approximately 85 percent of the dry, edible bean crop therein.

The bean industry, as represented by these rowers and elevator operators, is firmly opposed to the elimination of the "area of production" exemption as now, and since its inception, contained in section 13 (a) (10) of the Fair Labor Standards Act of 1938, as is now proposed by section 7 of S. 1349, which is under consideration by your committee.

Under the authority of the congressional directive to define the "area of production," contained in section 13 (a) (10) of the present act, the Wage-Hour Administrator, upon petition of the bean industry, held an extensive hearing in Washington in November 1938. This was the first of such hearings so held, and as the result of 394 pages of testimony by growers, elevator operators, and marketing specialists, the Administrator, on December 22, 1938, promulgated the following definition:

"SECTION 536.2. "ARFA OF PRODUCTION" AS USED IN SECTION 13 (a) (10) OF THE FAIR LABOR STANDARDS ACT.--An individual shall be regarded as employed in the "area of production" within the meaning of section 13 (a) (10), in handling, packing, storing, ginning, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning of agricultural or horticultural commodities for market, or in making cheese or butter or other dairy products.

"(c) With respect to dry edible beans, if he is so engaged in an establishment which is a first concentration point for the processing of such beans into standard comercial grades for marketing in their raw or natural state. As used in this subsection (c), "first concentration point" means a place where such beans are first assembled from nearby farms for such processing but shall not include any establishment normally receiving a portion of the beans assembled from other first concentration points."

We do not believe that it will be denied that the existing regulation, defining the "area of production" as it relates to dry edible beans, has operated and been administered for nearly 7 years in a manner satisfactory to the Wage and Hour Division. It is of importance, also, that its administration has caused very little

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