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Secretary SCHWELLENBACH. Yes, I do not think there is anything inconsistent with it.

Senator ELLENDER. In other words, we will be able to maintain the prevailing ceiling even though we increase the minimum wage to 65 cents. Now, as a matter of fact, isn't it true, or doesn't it follow, that if you increase the minimum wage, let us say, from 50 or 55 cents to 65 cents, that those in the upper brackets, by collective bargaining, will ask for an increase for equally as much to be fixed for them as a raise?

Secretary SCHWELLENBACH. Yes, I assume they will ask for it. Senator ELLENDER. Very well. Now, suppose our price controls are removed and we eliminate subsidies; don't you know in that case the cost of living is going to increase considerably?

Secretary SCHWELLENBACH. Yes, if we can assume all the things you assume or that you predict, undoubtedly the cost of living will go up.

Senator ELLENDER. What is that?

Secretary SCHWELLENBACH. If we can assume all of the things you assume and predict, undoubtedly the cost of living will go up. Senator ELLENDER. You do not think Congress is going to continue a subsidy for farmers of almost $2,000,000,000 a year, do you? Secretary SCHWELLENBACH. I do not know. I cannot answer that question.

Senator ELLENDER. I predict the cost of living is going to rise to such an extent that it is going to absorb all you are trying to do now for labor, and then some.

Senator TUNNELL. Your position, as I understand it, Mr. Secretary, is based on the fact that you distinguish between the legal minimum and the actual payments?

Secretary SCHWELLENBACH. Yes, sir.

Senator ELLENDER. All of which is born out of war.

Senator TUNNELL. Not all of it.

Senator AIKEN. Mr. Secretary, if you assume this great increase in cost of living, assuming all of the things which Senator Ellender assumes came to pass, you would also have to assume there would be no improvement in production, processing, and distribution machinery; isn't that true?

Secretary SCHWELLENBACH. Yes, that is correct.

Senator AIKEN. And we know there has been a development in the processing and distribution of food products that has done away with a great deal of the loss which had formerly occurred in the shipping and processing of strawberries. If, as he says, raising the minimum wage increases the price of sugar slightly, that would be balanced by the fact that the development of new processes of preserving strawberries and other foods that require sugar would be so much more efficient that it would offset the increased cost of sugar itself. I think, again, I am testifying instead of interrogating.

Senator TUNNELL. Senator Thomas has been very silent here, and I thought I would like to ask if he has any questions.

Senator THOMAS. I think, Mr. Chairman, maybe I ought to say this: The minimum wage is never anything that is for the benefit of all workers in all industries. When we passed the Fair Labor Standards Act, the average wage earner who was properly organized was way

above the 25-cent minimum, so the law did not do him much good, but it did do a great deal of good to the exploitable and exploited, very low paid labor. I think if you do not look upon the aim of this bill as taking care of the group that is not able to take care of itself, that we forget the real purpose of a minimum wage. Now, we know that there were, comparatively speaking, very few people who were getting less than 25 cents an hour when we passed the act, but we also knew that there were thousands of persons who were getting less, and the act was for their benefit.

This act, too, has its humanitarian aspects. The person who is already getting 75 cents an hour is not going to get any benefit from it, but the person who is just getting 40 cents is going to be benefited by it.

Senator SMITH. May I ask the Senator a question right there?

You suggest that those benefited are really those outside of the labor organizations which can adequately bargain to protect their own members?

Senator THOMAS. In presenting the bill to the Senate that statement was actually made, Senator. It was made in this way, that where collective bargining has been able to function, and it has functioned, this bill would not be helpful, but the bill is helpful to those persons who cannot use the agencies of collective bargaining.

Senator SMITH. I agree with you. I think women in the sweatshops may not be organized and such poor people may be exploited where the employers are ruthless.

Senator THOMAS. The take-home piecework, for example, in the manufacture of baseballs is an extremely interesting item of that kind. Senator TUNNELL. If that is all, thank you, Mr. Secretary. We will ask that Mr. Hinrichs be the next witness.

TESTIMONY OF A. F. HINRICHS, ACTING COMMISSIONER OF LABOR STATISTICS, ACCOMPANIED BY DR. DOROTHY S. BRADY, COST OF LIVING DIVISION, AND DR. ROBERT J. MYERS, WAGE ANALYSIS DIVISION

Senator TUNNELL. Mr. Hinrichs, will you give your name and position to the stenographer?

Mr. HINRICHS. A. F. Hinrichs, Acting Commissioner of Labor Statistics.

Senator TUNNELL. All right, Mr. Hinrichs, you may proceed.

Mr. HINRICHS. Mr. Chairman, with your permission, I would like to introduce Dr. Dorothy S. Brady, the Head of our Cost of Living Division, and Dr. Robert J. Myers, who will be here in a moment, in charge of our Wage Analysis Division. I shall be talking chiefly about the cost of living and wages as they bear upon the problems of the bill, and while out of 10 or 12 years of experience in the Bureau of Labor Statistics I have acquired a certain expertness in both of those fields, there may be certain questions that I would like to turn to my real authorities for a definitive answer.

Senator TUNNELL. I am glad to hear from those who really know. Senator ELLENDER. Will you give us your background, Mr. Hinrichs?

Mr. HINRICHs. I have been with the Bureau of Labor Statistics since 1934. In the period from 1934 to 1940, I was the Chief Econo

mist of the Bureau of Labor Statistics. One of my primary concerns throughout that period was with studies of the cost of living and studies of standard family budgets and of actual expenditures. The other of my chief concerns was with wage studies. Both of these types of data are included in my testimony today. Senator ELLENDER. What is your educational background?

Mr. HINRICHS. I received my Ph.D. from Columbia University, New York City, in 1923. I taught for 2 years as instructor at Columbia. I was, for about 3 years, the director of research for the New York State Bureau of Housing and Regional Planning. I was on the faculty of Brown University from 1927 to 1934 as associate professor of economics and statistics, and simultaneously was director of the Brown Bureau of Business Research. Since 1940, I have been in charge of the work of the Bureau of Labor Statistics. During the war period I acquired a larger familiarity with the cost of living than I would have wished for, had I had my way during these last few years. Senator ELLENDER. Have you ever worked on a farm?

Mr. HINRICHS. I have worked on a farm, but I would not like to say I have been dependent for my support on farm work. I worked as a boy on a farm.

Senator ELLENDER. Have you ever worked in a factory?

Mr. HINRICHS. Only for one summer.

Senator ELLENDER. The testimony that you are now giving is based purely on statistics that you and your force have gathered through the Department of Labor, as I understand it.

Mr. HINRICHS. Yes, with consideration of all other evidence that has come into the picture over some century or more of study of this problem of living standards. We would, for example, regard it as relevant to an appraisal of the emergency budget that I shall describe to you to know that back in 1790 in England there was a gentleman who developed a budget for which he pled very earnestly. This would have allowed every family oatmeal and milk. By general consent that kind of a budget today would be regarded as a rather inadequate living. It may be interesting to know however, that the emergency budget of WPA consisted, to the extent of more than 50 percent, of the equivalent of oatmeal and milk.

I presume it is the ultimate objective of minimum wage legislation to insure at least a minimum standard of living to the family of every regularly employed worker. In that connection, then, two questions are relevant to the establishment of a particular minimum wage:

First of all; Will the minimum wage yield a minimum standard of living?

Second, Is it practicable to establish such a minimum?

If I may, I would like to address myself first to the question of the cost of a minimum standard of living and its relationship to the wage rates set forth in this bill.

Senator TUNNELL. You are not going to confine yourself now to the written statement, I take it?

Mr. HINRICHS. I shall be glad to be interrupted, sir, at any time.
Senator TUNNELL. Just take your own course.

Mr. HINRICHS. I planned to move fairly closely with this written statement, but I am delighted to be interrupted at any time if a question arises. If further testimony is desired than that covered in the

written statement, I can answer at least certain questions from othe data on the table before me.

I would like to start, so far as this minimum standard of living i concerned, with a statement of expert opinion. A minimum wage o 40 cents as established in 1938 could not have been regarded as ade quate for the support of a family even at minimum levels. At tha time a 40-cent wage might conceivably have yielded as much as $80 a year. That presupposes 2,000 hours of work at the 40-cent rate. I would be the exception rather than the rule that any man would hav an opportunity to gain that much employment during the course of th year.

The lowest cost budget that I know anything about was an emer gency budget priced by the WPA in 1935 and costing on the averag $903 in 59 representative cities. By 1938 prices had risen, so that thi budget would have cost about $925.

That emergency budget was not intended to result in adequate o safe living. It was in every sense a budget for an emergency in famil living. It was described at the time as a budget which

might be questioned on the grounds of health hazards if families had to live a this level for a considerable period of time.

Even budgets planned for relief families were often more adequate for relief agencies normally do try to provide for emergencies as the occur. This budget provided for absolutely no emergencies and would have been more likely than not to result in malnutrition. It is signi cant for our present purposes only because it demonstrates how utterly inadequate the standard permitted by 40 cents was.

In 1938, however, there were cases of wages of 10 cents an hour of less and many cases where less than 20 cents an hour was paid. Under such conditions it may have been necessary to limit the immediate goa of the act to the establishment of the 40-cent minimum. With refer ence to that goal it is clear that it was only a way-station on the road to a decent standard.

Senator SMITH. Mr. Chairman, may I ask a question right there? Senator TUNNELL. Yes, Senator.

Senator SMITH. Are you distinguishing at all between the wages received by a man with a family and a man without a family?

How about a boy selling papers, or something, who may be glad to make a little money?

Mr. HINRICHS. I am talking throughout about the minimum cos for the maintenance of a family.

Senator SMITH. I wanted to get it straight. Might I ask you: Were the wages as low as 10 cents an hour where a person had a family to support?

Mr. HINRICHS. Yes, many. Simply because there are 130 million people in the United States, the number getting 10 cents was quite large even though that was not a common wage at that time; but wages in the cotton-textile industry, in the knit-goods industries, in lumbering operations, in tobacco stemmeries of 15 cents and less than 20 cents an hour were found in significant proportions. There was a rather large concentration of wages at that time in many industries at 20 to 25 cents an hour, and for many industries at that time 30 cents looked like big money. We do know of large numbers of instances where those low wages did constitute essentially the sole support of a family.

Where wages at the level prevail there is of course the most intense pressure on the wife of the family to supplement the family income, irrespective of her home duties and irrespective of the age of her children. Therefore as you go down the income scale among the chief earners, you do find increased participation in the labor market by women with infant children. That, I take it, is a condition that we would like to correct.

Senator SMITH. You feel if we can raise that minimum there would be less competition in the labor market and probably the alleged 60,000,000 job figure might be lowered?

Mr. HINRICHS. Yes, I am certain there would be less pressure on married women to come into the labor market.

Now, the bill you have before you, S. 1349, provides an immediate minimum of 65 cents and a minimum within 2 years of 75 cents an hour. These minima would permit of earnings for a fully employed worker of $1,300 now and $1,500 in 2 years.

Most of the discussion which I have heard in the last few minutes. has centered around the 65-cent minimum. I have carried my own thinking in this presentation in terms of the relationship of the upper limit, the 75-cent minimum, to living standards. Please bear in mind, therefore, if I do not correct myself as I go along, that you are talking, when you say 65 cents, about the $1,300 standard.

The statistical evidence of the inadequacy of the standard that would be permitted by a $1,300 or $1,500 family income seems to me to be almost overwhelming. I think it can be said, and I would say as a matter of expert opinion, that for a family to obtain a minimum standard of adequacy a worker must either earn more than 75 cents an hour or must work many hours of overtime, or else two or more people in the family have got to have jobs.

Now all that I can say in my capacity as an expert with reference to that figure of $1,500 as a minimum is that we do not know how much more than $1,500 would be required. The Bureau of Labor Statistics is making a study of precisely this subject with funds appropriated for the first time this year, and the results of that study are not going to be available for a number of months.

We do know that an adequate budget costs more than $1,500, which is the immediately relevant question. I can suggest, from my experience and from our statistics, two tests of that statement. First of all, let us take the standard budget approach.

Senator AIKEN. Mr. Hinrichs, for what size family is the budget of $1,500 insufficient; a family of four?

Mr. HINRICHS. A man, wife, and two children. I would hesitate to say it was adequate for a man, wife, and one child; but I simply do not know how much higher you have got to go. I am thinking in terms of the family of a man, wife, and two children.

Senator ELLENDER. When you say a minimum of $1,500, you mean for city folks or country folks? Just exactly, what is your yardstick there in reaching that conclusion? What class of people or employees do you have in mind?

Mr. HINRICHS. We are talking about urban wage earners.

So far as the rural standard is concerned, I would prefer to have that described by the Department of Agriculture.

Senator ELLENDER. Let us say the rural wage earner, then. Let us take one living in Tennessee, in a town of 3,000, and one living in New

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