Senator ELLENDER. Let us take our present legal minimum wage of 40 cents, and let us assume that the war had not occurred and that in 1940 we had increased the wage to what you now propose, to 65 cents or over 60 percent. Do you mean to say that that would increase productivity in proportion to what the wage was increased?

Secretary SCHWELLENBACH. No. If you simply had a 40-cent level and everybody was getting 40 cents or less, I do not think you could justify an increase now of 62.5 percent, but there is just one weakness in your question, and that is you assume that the war did not occur and the fact is we did have a war.

Senator ELLENDER. You say, however, by paying more wages it means more productivity. It means more incentive for labor, as I understand, for the man who works, and thereby his productivity is increased.

Secretary SCHWELLENBACH. Yes.

Senator ELLENDER. I do not mean to impose on you in a field not covered by your writtten statement, and if the question I am going to ask cannot be answered by you, I will ask it of someone else. Where did you get your information, or may I ask, how did you come to the conclusion that 65 cents was the rate that should be fixed as a minimum wage for the first year, 70 cents for the second year, and 75 cents for the third year and thereafter?

Secretary SCHWELLENBACH. Well, it was suggested originally-I am not being facetious-it was suggested originally by Mr. Pepper, Mr. Kilgore, Mr. Myers, Mr. Wagner, Mr. Chavez, Mr. Magnuson, Mr. Guffey, Mr. Mead, Mr. Murray, and Mr. Thomas of Utah. My task was simply to examine their suggestion and see if I agreed with it.

Senator ELLENDER. Suppose they made it 80 cents-I know some would like to see it 80 cents now-would the fact they are advocating it lead you to the belief that it was the true minimum?

Secretary SCHWELLENBACH. No; although I do have considerable confidence in those gentlemen.

Senator ELLENDER. How is that?

Secretary SCHWELLENBACH. I do have considerable confidence in those gentlemen.

Senator ELLENDER. Yes.

Secretary SCHWELLENBACH. Suppose they said 80 cents; certainly I would not be forced to accept it as the true minimum, if the figures did not justify it.

Senator ELLENDER. Senator Smith had asked you the question a while ago as to whether or not you had studied the effect that this minimum wage would have all over the country. I recall when I first came in the Senate-and you were in the Senate when I first came there we had WPA legislation up, and I recall very well that the workers in the South who did the same chores as the workers in the North and Northwest and Northeast, who handled the wheelbarrow the same way, who ditched here and there, were paid, I think, $19 a month in contrast to the fellow from the Northeast who got $44, and the fellow from the West who got $54, as I recall. In any event, there was a great difference in the amount of wages paid to the various WPA workers throughout the country, depending upon the section of the country in which they lived. I think that the distinguished witness voted for a proposition of that kind. Isn't that true, Mr. Secretary?

Secretary SCHWELLENBACH. I do not think we ever had the wage differentials of WPA up.

Senator ELLENDER. Yes; we did.

Secretary SCHWELLENBACH. There was a lot of discussion about it in the Senate.

Senator ELLENDER. I remember distinctly that I tried, and many other Southereners tried, to get a few more crumbs than the $19 that WPA workers were getting down there.

Senator TUNNELL. I would like to ask if there is any difference in the value of the work between the southern worker and the northern worker?

Senator ELLENDER. I think the war has shown that in the South they are equal to any of the workers of the North, and they are surpassing many of them. It is a nice thing to keep in mind that a lot of your Northeast industries have found their way down South. Senator TUNNELL. They are looking for lower wages.

Senator ELLENDER. I would not say that; I would say it is because they had better opportunities.

Senator TUNNELL. That is what they say.

Senator ELLENDER. One of the main inducements that caused them to go down there was because they went where the raw material was the cotton. That is why a good many cotton mills went down there. On the other hand, labor was more plentiful and living conditions were cheaper.

Senator TUNNELL. Then, you agree, Senator, that being the case, that the minimum wage should be the same all over the country, that is, the level of wages should be about the same, if the workmen are equal in ability?

Senator ELLENDER. Certainly; there is no doubt about that. I am not questioning that at all. But, aside from other objections that I will discuss in the course of these hearings, the thing that bothers me is the sudden upping of the wage, you understand, that I fear will be destructive. It will cause the same situation as we had when the original Wage and Hour Bill was passed in 1938. I was on the committee that considered the bill; I was present when the hearings were held that formed the basis of that law, and I was on the conference committee. I believe that a very good case was made to show that the South at the time could not stand a shift in basic wages, or minimum wages, I mean from 25 to 40 cents, unless some transitional period occurred.

Senator TUNNELL. What do you think is the basic reason for the wage differential, and particularly the agricultural wage differential, between the South and Northeast and West?

Senator ELLENDER. For one thing, there is this difference: There is more employment in the South the year round than you have in the North. If we had to handle our farms in the South as they are handled up North, we could afford to pay higher wages down there because we would employ hired help for a much less period of time to do the job. In order to retain labor they must be employed the year around.

I paid my way through college by working in North and South Dakota wheat fields. Farmers worked about 6 months of the year, and the rest of the time because of the cold winters the ground could not be worked and they had a hard time keeping their livestock from freezing. There was not constant work for all hired help the year round

and the farmer-owner did not give employment the year round. In the State of Wisconsin, also in the State of Minnesota and, I imagine, in your State, a farmer cannot work the year round because of the cold. In the South, as I have indicated, we have more continuous employment. Most hired help live on the farm and it is necessary to give steady work.

A bricklayer, or a carpenter, does not get as much per hour in the South as he would get in the North, because in the South the employment is more steady. Half of the time, or I would say one-third of the time, a bricklayer in the North cannot work because of weather conditions. Mortar freezes. Carpenters cannot get steady employment for the same reason.

Senator TUNNELL. If he lays as many bricks, why should not he get the same pay?

Senator ELLENDER. If he lays as many bricks in 9 months as the one in the South lays in 12 months, I think they should be paid on the same basis.

Senator TUNNELL. You mean on an annual basis?

Senator ELLENDER. Yes. That is one of the reasons why I fear that sufficient study has not been given to the proposition of making a minimum wage apply all over the country.

Senator AIKEN. I want to dispel any idea that the North does not work the year round.

Senator ELLENDER. Senator Aiken, that may be true as to the farmer himself, the individual owner.

Senator TUNNELL. I might suggest to the Senator if he moves North a little more, on one of those farms, he will find they work pretty much the whole year.

Senator ELLENDER. I grant that as to the farm owner himself, but I am talking about the laboring man, the hired help.

Senator TUNNELL. The farmer does not grow in winter in the South, does he?

Senator ELLENDER. Yes. In South Dakota I recall working for a farmer where it required 28 men to operate the farm for a period of about three months in the summer. Do you think he needed the 28 men in the wintertime?

Senator TUNNELL. There are seasonal occupations both in the North and South, and when you have seasonal crops in the South you have seasonal occupation.

Senator ELLENDER. We have more continuous employment.
Senator TUNNELL. Some of you do and some of you do not.

Senator ELLENDER. The vast majority of them do. There is always something to do on a farm in the South. I do not mean only by the management but by the many, many employees who are hired on a yearly basis.

Senator AIKEN. What the Senator says is true in regard to wheat and perhaps cotton. It is not true of dairy farming, where you require the same amount of labor the year round.

Senator TUNNELL. Mr. Secretary, is there any ground for the different minimum wage in different sections of the country, or has that question been considered?

Secretary SCHWELLENBACH. No; I do not think so. We go back to the same argument that we went through in 1938, about differentials and the objections which the members of the Senate from the South

had. If we are going to build up a national economy on the basis of purchasing power sufficient to consume the products of our industry and agriculture, we cannot do it upon the basis of having one portion of the country say, "We just cannot go along with the rest of the country on minimum wage rates."

Senator TUNNELL. Notwithstanding my question, I agree with Senator Ellender, that the person in the South is entitled to as good a wage, as high a wage as the one in the North. Now, if there is lower standard, is not that one of the things that we are trying to correct?

Secretary SCHWELLENBACH. Is it the Senator's position that we should have the same standard all over the country? I did not quite understand that that was his position?

Senator ELLENDER. I did not take that position, although I would like to see it. I do think before any minimum wage is written into law by the Congress that working conditions and the like ought to be considered as they exist in various parts of the country. As I indicated a moment ago, Congress went on record, since I have been in the Senate, that in the payment of wages for WPA workers there was a differential fixed between the South and the North and the West. Now, if conditions prevailed then as to cause that differential, my question is: Why should not the same thing prevail in respect to minimum wages? I want to know why. I would like to have the Secretary give us some evidence on the subject.

Secretary SCHWELLENBACH. I think the Senator will remember that my position always was against the wage differentials in WPA, and it was not those of us from the Northwest, at any rate, who were causing the differentials.

Senator ELLENDER. I do not pretend to know what the vote of the Senator was on that.

Secretary SCHWELLENBACH. I do not think we ever actually voted upon it. The thing I can remember is that we were always giving blank checks to Mr. Roosevelt and Mr. Hopkins, letting them do it. I made a speech one day criticizing the differential as between one portion of my State and another portion of my State.

Senator ELLENDER. I want the record to show that some amendment was put in and there was a vote on it. I remember it distinctly. Secretary SCHWELLENBACH. You may be right.

Senator ELLENDER. As I recall, the usual handful of southerners who were adversely affected were the only votes for it. The Northeast, North, and West piled up on us and swamped us. What you are trying to do now is to make us take a dose which may eventually destroy a lot of southern industry, that has moved from the Northeast to the South. I am confident that it will deter further industrial expansion in the South.

Senator AIKEN. Is that why industry moved from the Northeast to the South, to get the benefit of the lower wages that prevailed there?

Senator ELLENDER. That may have been one of the reasons, but, as I said, the main reason was to get nearer the raw material markets. In other words, a lot of manufacturers said, "Why pay enormous rates to bring cotton to Massachusetts when we can build a factory around the cotton fields?"

Senator AIKEN. If that is the reason, why does not the wool industry move to Idaho or Colorado?

Senator ELLENDER. It might be cheaper to move wool than cotton. Wool is grown over a wider area than cotton. I did not go into that subject.

Senator TUNNELL. Let me ask you this: If the bill is for minimum wages only and if there is a variation, then it is not as to the minimum. The minimum, as I understand it, is being paid in all sections pretty largely. You say there are some violations. There are some industries that do not seem to be covered by it, but the minimum law is being met in one section as it is being met in another. The maximum is where there is a difference, as I understand it.

Secretary SCHWELLENBACH. Yes.

Senator ELLENDER. The minimum has been fixed by law the same all over the country, has it not?

Secretary SCHWELLENBACH. Yes.

Senator ELLENDER. Certainly. What the Senator is talking about is the 55 cents, I believe, that was made under WLB regulations through some most ingenious method. That is what you have in mind, is it not?

Secretary SCHWELLENBACH. No, I am just referring to the figures which will be presented showing the comparatively small percentages that are receiving less than 50 cents now, and that it is not a 62.5 percent increase in actual wages as at the present time.

Senator TUNNELL. What I am saying is that the minimum wage is not what is disturbing us now, because the minimum wage law is being generally observed, but there is a maximum much above the minimum which is required by law and which is being paid in many sections of the country; isn't that right?

Secretary SCHWELLENBACH. Yes.

Senator AIKEN. You stated, Mr. Secretary, that you did not think raising the minimum wage in accordance with this bill would raise consumer cost. I assume that you base your reasoning on the general level of cost, because it seems self evident that on items where the labor cost is high an increase in wages would result in some increase in the cost of those products.

Secretary SCHWELLENBACH. Yes; I said that to Senator Ellender, that there were items in which it would result in an increase.

Senator AIKEN. The fact that we have devised means of producing many items much cheaper than we ever did before would offset the higher price of those consumer goods where an increase in cost would be necessary?

Secretary SCHWELLENBACH. That is the position that Mr. Hinrichs will present to you.

Senator AIKEN. How much importance do you give to the maintenance of purchasing power in increasing the minimum wage of the country?

Secretary SCHWELLENBACH. Well, my philosophy is that in this country we can produce all that we need and that our problem is oneof maintaining the power to consume. You cannot maintain the power to consume without purchasing power, and you cannot maintain purchasing power and have large segments of the population receiving less than is necessary in order to have a reasonable standard of living.