five cents is a pittance, I don't care where it is in this country, for any wage. It is really not American to pay 65 cents an hour, not nowadays.

Senator SMITH. Well, I think any one of us would like to see that go to the highest possible figure, but what we are thinking of is the effect that that is going to have on prices throughout the country.

Mr. MCDONOUGH. Well, I don't think a rise to 65 cents an hour is going to affect prices one iota, in the country.

1

Senator SMITH. Wouldn't you expect, if you raised your minimum wage from 40 to 65 cents, there would be a movement correspondingly to move all wages up in that same proportion?

Mr. MCDONOUGH. Most people get considerably more than 65 cents now, and I don't think that it necessarily would push up wages. There might be too great a disparity now between the top man and the 65cent-an-hour man. As I pointed out, down in Puerto Rico, where they were making baseballs, that company apparently moved down there because they could get women for at least one woman, who was really a wonder, made $8 a week when she was going good.

Senator SMITH. That is the very kind of a case we want to know about so that those people can't be exploited in that way.

Mr. MCDONOUGH. Another thing about Puerto Rico, they pay those low wages, and the people live worse than animals. A lot of wild animals live better than those people, some of them, do down there. In fact, they live a cleaner life. And this low-wage schedule puts that kind of employer down there, just to live off of the people.

Senator SMITH. What I am trying to get at is continental United States, leaving those special areas aside for special treatment. But here you think we could have uniform wages all over the country so there would be no competition in the labor market at all, and that all of the competition would be in efficiency and—

Mr. MCDONOUGH (interposing). I think it would be wonderful if they had the same wages, it doesn't make any difference whether North or South, and those same classes of employers would be incited to be better managers.

Now as it is, a factory can go to a certain part of the country, and with no inducement to manage better, get a cheaper production by paying these lower wages. That is the reason they move there.

Senator SMITH. I agree with you that that is most undesirable. There are certain conditions that have grown up in certain parts of the country, and whether you can change them overnight by changing this minimum wage, that is one of the things I am not sure about.

Mr. MCDONOUGH. I think that might stop a lot of plants that have moved there, or intend to move there, from going down there, remaining where they are. They just move from the North down to the South because they pay lower wages in the South, which means that the people have a lower standard of living, because any person goes to any place in the South and it costs just the same to live there as it does here, if you live the same way.

Senator SMITH. Now, let me go to another classification, and that is the farmer. Are you including the farmer there?

Mr. MCDONOUGH. No; I am not.

Senator SMITH. There is a real problem, because he has got to compete in the labor market with industry.

Mr. MCDONOUGH. That is exempted.

Senator SMITH. Yes; but we have to deal with it or the farmer won't be able to get any help at all, if a person can go to industry and get a minimum wage which is higher than the farmer can pay.

Mr. MCDONOUGH. As the world goes on, everybody can't work in industry. The farmer will still have labor that he can obtain; everybody can't work in industry.

Senator SMITH. I am from New Jersey, and I have a great many farmers in my State, and they are quite concerned about this being put at a figure which would prevent them from getting labor on the farm.

Mr. MCDONOUGH. It might be a good thing for the farmer to pay 65 cents an hour, too.

Senator AIKEN. There are not many farmers that are paying less than the minimum wage now, I believe, but what concerns them is probably that they feel they will lose exemption on the overtime provision, and certain kinds of farm help have to work long hours during the day. I think that through the Northeast, farm labor is receiving as much or more than the lower-paid industrial labor receives today. Senator TUNNELL. There is just one other thought. California is considered a high labor market, isn't it?

Mr. MCDONOUGH. Yes; it is.

Senator TUNNELL. Have you been able to compete with your products, with the products of other sections of the country where the standards of wages are lower?

Mr. MCDONOUGH. I might tell you this: There were 23 manufacturers making these invasion boats, and they made them on the west coast, they made them on the south coast, and they made them in the Mid-Western States. I think I can state without any fear of being disputed that I paid the highest wages in the country, and made the lowest price. You can check that up with the Navy. In fact, if you notice in the foreword to my remarks I state that we used to get $25,600. We made the boats 6 feet longer and my last price was : $11,800.

To show that there is something in management, in the Mid-Western States they made them on the Mississippi River, and they were never able to meet the Pacific coast prices where the wages were higher. Senator AIKEN. Where did you get your steel?

Mr. MCDONOUGH. And we had to bring the steel-they had that advantage-we had to bring the steel from the east coast or from Chicago and pay a higher shipping cost.

Senator AIKEN. How did it come from Chicago?

Mr. MCDONOUGH. All-rail during the war.

Senator AIKEN. All-rail?

Mr. MCDONOUGH. Yes. Then in addition, the Navy had to pay approximately $1,000 an invasion boat to ship it out to the coast. Senator AIKEN. If you had had all-water transportation, you could have built the boats still cheaper?

Mr. MCDONOUGH. Yes; it would have been much cheaper.

Senator AIKEN. If you had had the St. Lawrence Canal built, you could have built them still cheaper.

Mr. MCDONOUGH. Yes; and then you reduce the price of steel from $4 to $3.50.

Senator TUNNELL. I hadn't heard that they were going to run that canal west.

Senator AIKEN. We are going to make transportation cheaper, between Oakland and Chicago, anyway.

Senator TUNNELL. When you were able to make the same product in competition and did actually furnish that product at the lowest price, how about your profits?

Mr. MCDONOUGH. I will tell you about the profits. Last year I gave the Government back voluntarily $2,059,837.

Senator AIKEN. You say "voluntarily." How much did you give them involuntarily?

Mr. MCDONOUGH. Then I gave them $1,070,000 due to renegotiation. I am just showing you the profits. That is the reason we reduced the price, it was just exorbitant.

Senator TUNNELL. I wasn't trying to get you to say just how much you made, but whether you could produce the same thing at a lower rate, pay the highest wages, and at the same time make good profits. Mr. MCDONOUGH. Yes; we made too much profit; not only good, but too much.

Senator TUNNELL. I am sure the Government felt gratified.
Has anyone else any questions?

Thank you, Mr. McDonough.

Mr. MCDONOUGH. Thank you, Senator.

Senator TUNNELL. Mr. Barkin is the next witness.

Mr. BARKIN. I see that you are director of research of the Textile Workers Union of America?

Mr. BARKIN. I am appearing here, members of the committee, on behalf of the CIO. I am chairman of the CIO committee on the revision of the wage and hour law, the revisions which you are here considering. I am here appearing, not on behalf of the textile union, which is my formal association, but in my capacity as chairman of the CIO committee for the revision of the wage and hour law.

Senator TUNNELL. You may proceed in your own way, Mr. Barkin. TESTIMONY OF SOLOMON BARKIN, CHAIRMAN, CIO COMMITTEE

ON S. 1349, REVISION OF WAGE AND HOUR LAW

Mr. BARKIN. Mr. Chairman, you have before you two documents. One is a statement and the other is a statistical supplement, both of which I have handed to the reporter. I do not wish to read the entire document but rather offer them in evidence and have them incorporated in the record.

Senator TUNNELL. You would like to have both incorporated in the record?

Mr. BARKIN. Yes. And I will rely primarily on a summary discussion of the contents, and hope that we can clarify any questions which still remain unresolved.

(The statements appear in the Appendix.)

Mr. BARKIN. We are very much concerned with modernizing the wage and hour law. The present law was characterized by the President of the United States as obsolete. We are here supporting the proposed revision in order to modernize it. In more customary language of the day we would also like to reconvert the wage and hour law to the standards which now prevail.

When I wrote this particular statement last week after some extensive estimates I was able to arrive at an approximation that under the

present coverage of the Law, some 4,000,000 people would be affected, and that would represent about

Senator TUNNELL (interposing). What do you mean by the statement that some 4,000,000 people would be affected?

Mr. BARKIN. In other words, 4,000,000 people would receive direct wage increases by reason of this Law.

Senator TUNNELL. In all lines of industry?

Mr. BARKIN. In all lines of industry covered by this law.

I am very happy to tell you, Mr. Chairman, that during the last week, and by reason of the current developments in the wage scene, I think that by the time your committee considers recommending this bill for adoption by the Senate, that that 4,000,000 will probably, be halved to 2,000,000.

Senator TUNNELL. Why?

Mr. BARKIN. Because, Mr. Chairman, I am happy to announce to you that our union, as one of a number of unions, has now consummated an agreement with the northern cotton textile industry for a 65-cent minimum, on Tuesday of this week. The one industry which hitherto has been the symbol of oppression, the symbol of substandard wages, is now at the 65-cent level.

Senator LA FOLLETTE. How many workers are affected by that agreement that will be brought up to 65 cents?

Mr. BARKIN. The present agreement is directly entered into between our union, the textile union, and the Fall River and New Bedford : manufacturers, and companies located there that have other plants throughout New England, employing about 28,000 people. But we have contracts with companies employing 92 percent of all of the northern cotton-rayon textile workers

Senator AIKEN (interposing). How far south does that cover?
Mr. BARKIN. That goes through Pennsylvania.

Senator AIKEN. What is the minimum below that line?

Mr. BARKIN. Well, I will come to that, Senator, in a moment. We have consummated the agreement in Fall River and New Bedford, and these plants, for example the American Thread Co., have plants in Connecticut and Massachusetts. They are bound by that agreement. The Berkshire Fine Spinning Co. has plants in Vermont, Massachusetts, and Rhode Island, so they are tied in directly.

Also I may announce that we have, the previous week, signed a contract for the rayon throwing and weaving industry in Paterson, N. J., for 65 cents; and only 2 weeks prior to that we had already, before we had gotten this agreement for 65 cents, negotiated contracts in the State of Pennsylvania for 60 cents minimum, which obviously will, in time, be subject to review by reason of this higher minimum, because we maintain, as Mr. McDonough has indicated, a uniform wage scale throughout the industry.

In the South we now have a 55-cent minimum and a 572-cent minimum. That is, some mills voluntarily——

Senator AIKEN (interposing). What increase does the 65-cent minimum in the North represent?

Mr. BARKIN. An increase from 57 cents to 65 cents.

Senator AIKEN. However the northern mills, some of them, have been paying 65 cents, haven't they?

Mr. BARKIN. No.

Senator AIKEN. They haven't?

Mr. BARKIN. No-I mean as a minimum.

Senator AIKEN. And you have had an industry-wide contract with them up to this time?

Mr. BARKIN. We have had approximately an industry-wide contract. The major part of the industry, or the leading part of the industry, is located in these two communities, Fall River and New Bedford, and some of the concerns located there have plants throughout the rest of New England and everybody follows.

Senator AIKEN. You say that that has been the minimum. Has the minimum also had a tendency to be the ceiling?

Mr. BARKIN. No; we have a classified wage scale. For example, at the present time loom fixers-before the 65-cent minimum, got $1.02, and they will now go up to $1.10.

Senator SMITH. You say that the New Jersey plants are included? Mr. BARKIN. Correct, they have a 65-cent minimum.

Senator AIKEN. That represents an increase of 15 percent in the minimum?

Mr. BARKIN. Approximately, but not that much overall.

Senator SMITH. Let me bring out this point. This was accomplished by collective bargaining?

Mr. BARKIN. Correct.

Senator SMITH. Which has always seemed to me to be the fairest approach to these questions. Do you see any danger to the whole principle of collective bargaining by our slowly moving the legislative minimum wage up?

Mr. BARKIN. On the contrary it is the best guarantee for free collective bargaining to provide a support for the freely negotiated rates which are secured through the collective bargaining process. I might add that our union is probably in the best position to appreciate the importance of the contribution which the wages-andhours law makes toward industrial stability, because without it I am sure that there would be a great many employers on the fringe who would be constantly eating away on standard wages and established wage terms in the industry.

Senator SMTH. Then you would suggest that probably the management of the better industries would be glad to see a floor put under wages too in order to prevent cutting by the fringe industries?

Mr. BARKIN. Correct. All progressive managements that realize the necessity of stable industrial relations which are constantly progressing and which share attitudes such as Mr. McDonough has expressed, favor it as soon as they become aware of the constructive effects of such action. A great many employers fear the action because they don't appreciate or haven't experienced the values and contributions which stable wage rates make. We have found in our experience that a suspicion which precedes an experience is soon erased by living under a stable wage structure.

Senator AIKEN. Mr. Barkin, are there any textile mills where collective bargaining does not prevail?

Mr. BARKIN. Correct. We do not have a 100 percent organization. Senator AIKEN. And those mills that do not, that are not unionized and have no collective bargaining arrangements, could cut prices and wages, they could cut under their competition unless they were controlled by law?