The grower does not know what a crop is worth until it is placed on the market. Costs of production do not enter the mind of the public when they determine the price they will pay. The commodities we are considering are perishable. If not sold quickly, they may return nothing, they become unsalable. We have referred to the soft coal position, where costs and prices are supposed to work in relationship. A ton of coal may be sold today or in 90 or 120 or more days. This is not true of fresh fruits and vegetables. In comparing coal and apples, we are not comparing likes. Fresh fruits and vegetables need, and in previous legislation have received, consideration, not always adequate to their needs, but the proposal now to abandon even the consideration formerly given is a step in the wrong direction for the best interest of our national economy. That people will pay more for one variety than another is seen. Take the 5-year averages 1926-30, Baldwin, $1.51 per bushel; R. I. Greening, $1.63; Spy, $1.85; McIntosh, $2.13; Delicious, western box, $3.02; Winesap, $2.59; all being wholesale prices at New York City with an average daily per capita income of $1.76. An early relationship was that 2 days' income was exchangeable for a bushel of apples, using New York prices. At times it has taken 11⁄2 days and at other times 1 day's income, which illustrates the swing. A bushel of apples per capita is somewhat in excess of the present average annual consumption in all forms. New York market prices in recent years have been no better and often have been lower than f. o. b. prices. The competitive position of other crops comes into operation. This but proves the point made that prices are fixed by the buyer the demand and supply. Increased costs in production, preparation for market, freight to market, or selling are paid by the grower. These cannot be passed on to the consumer. Because of this fact agricultural labor has been left out of all attempts to fix a minimum wage. Also costs borne by the producer in preparing his product for market and in marketing received consideration. These are paid by the grower. We urge the retention of this approach and, if this bill is to be considered, we ask the insertion of amendments safeguarding all of these activities, on the ground that it is sound legislation to so handle these problems. THE FACTOR OF WAGES IN COSTS Manufacturers show that in their costs the wages represent about 25 percent of their production values. Raw materials take a higher percentage, averaging about 37 percent. Using census year data, the percentage taken for wages was 23.2 percent in the years 1933, 1935, 1939. It was 27.5 percent in 1923. Using the census years from 1919-39, the high was 18 percent over the 3 low years. The low period of 1933 shows the toll taken from wages by the depression. WENATCHEE, WASH., APPLES In the case of certain groups of apple orchards in this important producing district, labor costs in 1914 were 38 percent of production costs, materials 22 percent, fixed costs 40 percent. In 1943 labor costs in the same area constituted 56 percent of all production In 1939 many groups report average sale price for the season of $1.055 per box. Costs shown are $1.11. Yield affects cost per box. Packing labor cost.-A test run made at Yakima, Wash., the first week of October 1945 for this record shows: 14,805 packed boxes of Delicious and Jonathan required 4,791 hours of labor for packing, or 324 hours per 1,000 boxes. Average hourly rate for 102 employees in test was 79.1 cents. Winesap or other smaller apples will increase costs 5 to 10 percent. The labor cost is 26 cents and to this must be added the box, wraps, etc., to get total cost of packing. Storage labor cost.-The boxes after packing must be labeled, held in storage and loaded for shipment. Total cost is 23 cents, of which 13 cents is for labor. LABOR COSTS IN NEW YORK, APPLES Labor costs based on many studies show an average, for 1918-23, of 37.4 percent of all production costs. In 1927 they show 37.6 percent. Hours per acre and yield per acre are lower than in Washington and there is no irrigation practiced. Average hours to grow, pick, pack, and haul per acre, on 129 farms, for 30 years, orchards located on the best apple soil in western New York, show 140 hours per acre labor charge. If wages for packing are fixed, it affects 64.2 percent of the labor involved in production definitely, for harvesters will have to be paid the same rate as packers. With the record of prices at which apples are sold at wholesale in New York before us, with a present freight charge from Washington State to New York with protective service of 80 cents per box, and selling charges at present fixed by OPA, it is obvious that producers and all concerned, including consumers, must appreciate that no policy of fixed wages can be put on this industry at this time, and that the only way to handle it is to provide for complete exemption of all price fixing of labor for the handling, grading, packing, preparing for market, storing, loading on cars, or delivery to market of fresh fruits and vegetables. We place the amendment to section 13 later. THE 7 (C) AND 7 (B) (3) SEASONAL EXEMPTIONS Both of these give 14 weeks and are essential. Congress so found them. The proposed bill retains the 7 (b) (3) seasonal exemption. For example.-At present a packing plant servicing growers receives a succession of fruits to be packed for growers because they are not equipped to properly prepare for market or other reasons. Some of these are paying 50 cents an hour and work 60 hours a week. The account now shows 60 hours at 50 cents equals $30. If 75 cents is made mandatory, it does not mean an increase of 50 percent, but of 75 percent on a 60-hour week. The first 40 hours are at 75 cents an hour, or $30, the next 20 hours are at time and one-half, or $1.121⁄2 an hour, or a total of $22.50, and the pay for the 60 hours totals $52.50, or an average per hour of 87.4 cents an hour. If the packing time and harvest-time average 45 minutes to the box of apples, then the cost is 371⁄2 cents in one case and almost 66 cents in the latter. The difference in this one item is 281⁄2 cents a box, and with a yield of 400 boxes to the acre it means $114 an acre. In most years this is a very high profit and in many years it will not be attained. Half of the United States crop of apples is usually grown east of the Mississippi, sometimes 60 percent is so located. Yields may average 150 or 200 bushels to the acre. The gross returns may be made on sales at $1 to $2 per bushel. The number of minutes per bushel for packing and harvesting may remain about the same and, under such conditions and with prices commonly met with, a forced increase of 281⁄2 cents in labor for one item becomes arbitrary. Those conversant with the situation realize at once the folly of legislation proposing such a policy. EXPORTS The apple is the leading export fruit. In 1930 and prior years, in excess of 20,000,000 bushels were exported, or 20 percent of the amount sold in fresh fruit channels. This has a marked stabilizing effect on the domestic market and the greater base in production provides an ample domestic supply in short-crop years. Export markets are competitive. Arbitrarily pyramiding costs may offset or destroy any other natural advantages we may have. Preparing for export, packing for export, handling for export are all essentials. Varieties and certain producing areas have advantages in the export market because of favorable factors as soils, climate, temperature, etc. Handicapping this phase of the industry may have serious consequences. Fixing United States costs by law, when competing producing areas in other countries are left free, is, to say the least, unwise and should not be attempted. Canada, Australia, New Zealand, South Africa, Argentina, Chile, Europe at one time or another compete with us for markets. IMPORTS Shortages in food supplies may be met by imports and increasing quantities of food are being imported. All foods are competitive to a degree in their demand on the consumer's dollar. Competing fruits brought from low-cost producing areas may depress the domestic price of all fruits, and the more we stimulate the supplying of our markets by products of other lands, the keener the competition may be. Duties on most fruits entering the United States are low. Many other countries maintain relatively high duties on our fruits, in some cases prohibitive. Consideration of the effect of increasing costs on our fruits is of paramount importance. COMMENTS ON S. 1349 We desire to make the following comments on the bill S. 1349. Section 2 is amended by paragraph (b) (2) "to provide for the maintenance of reasonable wage differentials between interrelated job classifications in such industries." We can visualize the army of jobs which this will create in the Labor Department, once the possibilities have been properly refined. With some 60,000,000 or even 50,000,000 workers to be classified by jobs and their particular job and the wage which is to apply to each, and with our knowledge of the procedure and the interminable provisions of the hearings, and one could with fairness say absolute waste of time, energy, and effort, we can conceive of no more fertile field for political jobs than this job classification of labor and wages. It will never be done; in fact, if it follows the historic procedure, it will never be in anything but a maze of uncertainty and harassment to all who attempt to meet the requirements, and we forecast a continuing and continuous series of cases going to court to determine the points which will arise. Of all means devised for burdening commerce and those attempting to engage therein we believe this is the concept supreme to date. It is the manifestation of labor's attempt to use the Government to force a percentage of unfit onto the pay roll at what they deem a living wage. The policy of grading labor and fixing the price which must be paid, or the employer must go to jail or be fined $10,000, is so fantastic as to be unbelievable and the surprise is that it should be even considered. This whole proposal and the amendment to section 8 making it effective should be stricken, if the bill is to be considered. With every reason for employers being given some assurance that their efforts at this time will receive support and consideration from both labor and Government, the possibility of a suit for an infraction of one of the classifications set up and that such suit may be brought by any former employee or agent on behalf of another, any time in 5 years and for liquidating damages in addition, plus costs, means that insurance must be set up to handle such cases. Certainly 1 year is ample for the statute of limitations and in which to hold a pay-roll record open to determine the hours worked, the overtime and amount paid, and we would so provide. If it is contemplated that the litigation in determining the classifications and pay may need to go to the Supreme Court and the 5 years is provided for this purpose, then there is the more reason for dropping the whole bill now, for we can conceive of no better way to burden commerce and the free flow of goods in commerce than to create these mazes of uncertainty. These proposals lack the merit of reason, they are unreasonable. They do not belong in America. Let me personally ask each one here whether, with this set-up, you will find yourself encouraged to resume business and, further, if we do not quickly resume business activity, the tail spin of 1932, revocation of debts and vast unemployment is the only alternative. Deficit spending with our present indebtedness is recognized by you gentlemen as impossible unless taxes can be raised to meet such expenditures. Section 8 covers the industry committees and their activities. The industry committees investigate, hear witnesses, receive evidence, classify employees, subdivide industry employees into groups, and determine suitable minimum wage scales, etc. 1. Provide the unskilled job classifications in each industry. 2. Provide for the maintenance of reasonable wage differentials between interrelated job classifications. (NOTE. A never-ending performance.) 3. Recommend the minimum rate or rates of wages to be paid. (NOTE. Whatever rates are provided, these will become minimum wages, because the unions in order to justify their existence, will have to secure higher wages than those set out.) 4. The committee investigates conditions, receives such evidence as may be necessary or appropriate. (NOTE. The committee settles this question as to what is appropriate to receive and there is no court review of its actions, if not made within 60 days after the order is filed and then court review is limited to questions of law 5. The committee recommends the highest minimum wage rate for the industry and for its subdivisions, with not over 75 cents maximum per hour for unskilled labor. (NOTE. Unskilled labor is defined in sec. 3 (o) as "labor which does not require previous training or experience." Under this definition very littin labor will be found to be unskilled.) 6. The committee determines the minimum wage rate for each subdivision. 7. The Administrator holds a hearing based on the recommendations of the industry committee. He may approve or disapprove the recommendations. 8. The Administrator issues the orders fixing the job classifications and minimum wage scale applicable thereto. Because we have, while engaged in war, built up a wage scale much higher than was previously attained, it is not reasonable to write such a wage into law as minimum. We do not believe that a minimum of 75 cents an hour can be maintained unless coupled with it, is marked devaluation of the currency. in contemplation, we would like it developed. COURT REVIEW If this is If action is not taken by any person who deems himself aggrieved, in proper court, within 60 days after the order is issued, the order is final. Court review is limited to questions of law. We believe it advisable to revise section 10 to provide adequate court review of all proceedings under this act and to that end would amend section 10. AMENDMENTS Insert in section 13 (a) following proposed paragraph 5 or as a new paragraph in the present law: "(6) Any individual employed in an establishment, if he is engaged in cleaning grading, packing, drying, peeling, shelling, or otherwise preparing for market, precooling, refrigerating or storing of seasonal or perishable fruits or vegetables, or handling or transportation in connection with or incidental to such operations, (a) if he performs those operations on fresh fruits or vegetables all of which come from farms in that producing area, without regard to State lines, in which the establishment where he is employed is located, and where such commodities are, according to historical practice, normally or necessarily prepared for market. This exemption shall not apply to terminal or consumer markets where the products have been sent for distribution for consumption." Amend by striking out the following: Section 2 (b), all of paragraph (2), lines 16-18. Section 3 (n), job classification, etc., lines 3 to 5, page 3. Section 3 (0), unskilled job classification, etc., lines 6 to 8, page 3. Section 6, all of the section. Section 8, all of the section. Section 16 (b), line 11, amend the words "five years" to read "one year" and the sentence to read "Action to recover such liability may be maintained at any time within one year from the accrual of such liability," etc. Section 10, court review, amend paragraph “(a)” By striking out the first sentence and substituting for it the following: "Any person adversely affected by any agency action shall be entitled to judicial review thereof in any court of competent jurisdiction, by filing in such court, within i reasonable time after notification of such agency action, a written petition praying that the action be modified or set aside in whole or in part." By striking out the fourth sentence, beginning "The review by the court * * *" and substituting for it the following: "Every final agency action, or agency action for which there is no other adequate remedy in any court, shall be subject to judicial review. Any preliminary, procedural, or intermediate agency action or ruling not directly reviewable shall be subject to review upon the review of the final agency action. Any agency action shall be final for the purposes of this section notwithstanding that no petition for review, rehearing, reconsideration, reopening, or declaratory order has been presented to or determined by the agency.' By striking out the word "final" in the last sentence, so that it will read: "The judgment and decree of the court shall be subject to review, etc." Add after paragraph "(b)" the following new paragraphs: "(c) Form and venue of action: The form of proceeding for judicial review shall be any special statutory review proceeding relevant to the subject matter in any court specified by statute or, in the absence or inadequacy thereof, any applicable form of legal action (including actions for declaratory judgments or writs of injunction or habeas corpus) in any court of competent jursidiction. Any party adversely affected or threatened to be so affected may, through declaratory judgment procedure after resort to any adequate agency relief provided by rule or statute, secure a judicial declaration of rights respecting the validity or application of any agency action. Agency action shall be subject to judicial review in civil or criminal proceedings for judicial enforcement except to the extent that prior, adequate, and exclusive opportunity for such review is provided by statute. "(d) Interim relief: Pending judicial review any agency is authorized, where it finds that justice so requires, to postpone the effective date of any action taken by it. Upon such conditions as may be required and to the extent necessary to preserve status or rights, afford an opportunity for judicial review of any question of law or prevent irreparable injury, every reviewing court and every court to which a case may be taken on appeal from or upon application for certiorari or other writ to a reviewing court is authorized to issue all necessary and appropriate process to postpone the effective date of any agency action or temporarily grant or extend relief denied or withheld." "(e) Scope of review: So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) direct or compel agency action unlawfully withheld or unreasonably delayed and (B) hold unlawful and set aside agency action found (1) arbitrary, capricious, or otherwise not in accordance with law: (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without due observance of procedure required by law; (5) unsupported by competent, material, and substantial evidence upon the whole agency record as reviewed by the court in any case subject to the requirements of sections 7 and 8; or (6) unwarranted by the facts to the extent that the facts in any case are subject to trial de novo by the reviewing court. The relevant facts shall be tried and determined de novo by the original court of review in all cases in which adjudications are not required by statute to be made upon agency hearing." It will be necessary then to amend section 3 of the Fair Labor Standards Act, definitions, to include the following: "Person and party: 'Person' includes individuals, partnerships, corporations, associations, or public or private organizations of any character other than agencies. 'Party' includes any person or agency participating, or properly seeking and entitled to participate, in any agency proceeding or in proceedings for judicial review of any agency action." "Rule and rule making: 'Rule' means the whole or any part of any agency statement of general applicability designed to implement, interpret, or prescribe law or policy or to describe the organization, procedure, or practice requirements of any agency. 'Rule making' means agency process for the formulation, amendment, or repeal of a rule. "Order and adjudication: 'Order' means the whole or any part of the final disposition of judgment (whether or not affirmative, negative, or declaratory in form) of any agency, and 'adjudication' means its process, in a particular instance other than rule making but including licensing. "Agency action: For the purposes of section 10, 'agency action' includes the whole or part of every agency rule, order, license, sanction, relief, or the equivalent or denial thereof and including in each case the supporting procedures, findings conclusions, and reasons required by law." |