Senator ELLENDER. What is your lowest minimum wage at the moment?

Mr. LYON. On class 1, or large railways, the minimum is 57 cents an hour. It is not uniform in all cases.

Senator ELLENDER. To raise it to 75 cents over a period of 2 years, you do not think it would affect the wages in the higher brackets?

Mr. LYON. I do not know whether it would or not. I think Mr. Keller has some data on the costs, and so forth, and I would prefer, in the interest of conserving time, that we defer that until that time. Senator ELLENDER. All right.

Mr. LYON. I desire to present a table which I have prepared from the published reports of the Interstate Commerce Commission for the year 1944, showing the occupational classifications to which I have referred, the average number of employees in each such occupation, and the average straight-time hourly earnings of the employes in each such occupation.

(The table referred to follows:)

Average straight-time hourly earnings of low-paid workers, class I railways of the United States, year 1944

103 104

Regular apprentices (maintenance of equipment and stores)
Coach cleaners..

Classified laborers (shops, engine houses, and power plants).
General laborers (shops, engine houses, and power plants).

Extra-gang men..

Section men

Maintenance-of-way laborers (other than track and roadway) and gar-
deners and farmers.

2. 134

.6%

72 General laborers (stores and ice, reclamation, and timber-treating plants). Truckers (stations, warehouses, and platforms).

Crossing and bridge flagmen and gatemen.
Foremen (laundry) and laundry workers..

Common laborers (stations, warehouses, platforms, and grain elevators).
Chefs and cooks (restaurants or dining cars).
Waiters, camp cooks, kitchen helpers, etc

Source: Interstate Commerce Commission M-300 report for year 1944.

Mr. LYON. It will be noted that low-wage employees are not confined to any one department or branch of railroad work. There are substantial numbers of such workers in railroad offices, stations, warehouses, freight platforms, in the maintenance-of-equipment department in the shops and engine houses, in the restaurants and dining cars, and in the maintenance-of-way department. These employees perform difficult, exacting, and responsible work. Their work is essential to the successful functioning of the railroad industry, and they have played a vital part in the good wartime job that the industry has performed during the past several years.

An examination of the average hourly earnings of these classi fications of railway employees, as well as an investigation of the deficient wage rates being paid to workers in the higher wage brackets. will show the real reason for the manpower problem with which the

railroad companies have been troubled and which still is a major difficulty according to railroad and Government officials.

In this connection it is of interest to recall that in 1943 an emergency board appointed by the President of the United States reported that for more than 1,000,000 railroad workers, with whose wage rates they were dealing, the average earnings in October 1942 were only 73.8 cents per hour. These million workers, according to the board, included skilled, semiskilled, and unskilled classifications. A comparable figure for a current month would be approximately 10 cents higher as wages were increased, some months after the board made its report, by 9, 10, and 11 cents an hour.

The provisions of the pending bill, appearing on page 7, which would amend section 8 of the present law so as to provide that industry committees shall recommend minimum wage rates for interrelated job classifications for the purpose of maintaining reasonable wage differentials between the minimum wage established for the so-called unskilled classifications and wage rates for interrelated job classifications, does not meet with our approval.

Senator SMITH. I would like to emphasize that the witness does not approve of those classifications.

Senator TUNNELL. You object to that portion of the bill which would encourage the maintaining of the same differentials?

Mr. LYON. We do not believe that the Government should deal with anything but minimum rates, as I shall indicate later.

Senator SMITH. Then you would eliminate all reference to job classifications?

Mr. LYON. Yes; we agree with the position taken by the American Federation of Labor in that respect.

We believe that it is necessary and proper that the law establish a minimum or a floor for wage rates, but we do not subscribe to the theory or principle in this part of the bill which would permit the Government, through the Wage and Hour Administration of the Department of Labor, or other machinery, to fix or prescribe wage rates above such minimum. The establishment of wage rates for job classifications which warrant higher wages than the minimum prescribed by law should be left to the representatives of industry and of labor, who are intimately acquainted with the many factors and problems which necessarily must be considered, and to the processes of collective bargaining.

We suggest and request that the pending bill be amended by striking these provisions. We agree with the views expressed in this connection by the American Federation of Labor.

Another amendment which we believe should be made to the pending bill has to do with the question of deductions from minimum wages of the reasonable cost of board, lodging, and other facilities customarily furnished by an employer to his employees. Beginning on line 23 of page 2 of the bill, subsection (m) of the present act should be further amended by inserting the words: "and employees of common carriers engaged in the preparation and service of food and beverages" following the word "vessel." The subsection would then read:

(m) "Wage" paid to any employee, except members of the crew of a vessel and employees of common carriers engaged in the preparation and service of food and beverages, includes the reasonable cost, as determined by the Admin

istrator, to the employer of furnishing such employee with board, lodging, or other facilities, if such board, lodging, or other facilities are customarily furnished by such employer to his employees.

This amendment is desired by the Hotel and Restaurant Employees' International Alliance, which represents dining car employees on substantially all of the class I railways, and it is supported and endorsed by the Railway Labor Executives' Association.

The dining-car employees point out that under application of the present law substantially all of them have been deprived of its benefits. This has been due to the fact that the railroad companies have deducted from the minimum-wage rates established under the law certain amounts as the cost of meals and lodging for these workers while they are en route or laying over at points away from home terminals.

Senator SMITH. How do you deal with the matter of tips for waiters in dining cars? Is it estimated about what the tips will run, or are the men paid without regard to that?

Mr. LYON. The men have a wage scale without regard to that. Some men get tips and others do not; it depends on the run and the class of train. A large number of these people are working on troop trains, where they get no tips whatever, as no money is exchanged between the man who eats the food and the man who serves him. Others make pretty good on tips, but numbers of them cannot work on those good trains, and we also have many men who are extra men. Senator SMITH. Are you including pullman porters in this amendment?

Mr. LYON. No, sir.

Senator SMITH. They are dealt with in a different way?

Mr. LYON. I am not familiar with that. The pullman porters' organization is not a member of our association.

Senator SMITH. You do not represent them?

Mr. LYON. No.

Senator SMITH. I see.

Mr. LYON. In 1938, when the present law became effective, diningcar waiters with less than 5 years' service were being paid approximately 27 cents an hour; those with 5 years or more of service were being paid 32 cents an hour; fourth cooks or dishwashers were being paid about 36 cents an hour. On some carriers apprentice waiters or bus boys were being paid only 20 cents an hour. Instead of increasing these wage rates to the minimums provided by the law the carriers charged off the difference between the rates in effect and the minimums provided under the law as the cost to the railroads of furnishing the employees with meals and lodging. As a result, the employees received no benefit.

The same thing was repeated when higher minimum wages were made effective by operation of the law. Thus, when the minimum under the act became 36 cents an hour on March 1, 1941, the carriers increased the charges or deductions for meals and lodging so that the employees again received no benefit. The service performed by dining-car employees is such that the employer must furnish them with meals and lodging while they are away from their home terminals. The practice is primarily for the benefit of the railroad company. It is followed because there must be a continuous operation of the

service and when the employees are laying over at an away-from-home point, the carriers insist on them sleeping at designated lodging houses or dormitories where they will be immediately available for service in event of emergency or sudden increase in the volume of traffic.

The conditions under which these employees work are comparable to those which apply in respect to the crew of a vessel. The pending bill would exempt the crew of a vessel from the deductions from minimum wages and we respectfully submit that justice to railroad dining-car workers requires that the proposed exemption be broadened so that they will get the benefits of the law.

In conclusion, Mr. Chairman and gentlemen of the committee, we submit that the commendable purpose of the existing act "to correct and as rapidly as practicable to eliminate" conditions in interstate commerce which are detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general wellbeing of workers" is not and cannot be fulfilled unless the pending bill is promptly enacted into law. We respectfully appeal to you for favorable action at the earliest possible date.

Senator TUNNELL. I notice this statement is on behalf of the Railway Labor Executives' Association. What is that?

Mr. LYON. The chief executive officers of the Nation-wide railway unions organized this association many years ago for the purpose of coordinating those activities in which they have a joint interest.

Senator TUNNELL. Who are entitled to join that organization? Mr. LYONS. Well, we have bylaws which provide that any organization, Nation-wide, of railroad workers, can apply for affiliation with our association.

Senator TUNNELL. How many members does each organization have in your association, the Railway Labor Executives' Association? Mr. LYON. The membership of each one of these organizations who are working on railroads, which most of them do, are, of course, affiliated with the association.

Senator TUNNELL. Do you mean all of the members can become members of the Railway Labor Executives' Association?

Mr. LYON. No, sir; the chief executive officer, technically, is a member of the association.

Senator TUNNELL. Just one from each association?

Mr. LYON. Yes, sir.

Senator TUNNELL. That would be the president?

Mr. LYON. Yes, sir; and he represents all of the membership. Senator TUNNELL. I was just trying to find out how it was composed.

Mr. LYON. You have a correct understanding.

Senator SMITH. We speak of the railroad brotherhoods as railroad organizations; that means this group you are representing?

Mr. LYON. In some cases the public, using the term "brotherhood," may refer to the train service brotherhoods in one sense and in another to all railway labor.

Senator SMITH. I was confused as to just what that term means.
Senator TUNNELL. Do you have any further questions?
Senator SMITH. No.

Senator TUNNELL. All right, thank you.

Mr. Keller.

TESTIMONY OF L. E. KELLER, RESEARCH DIRECTOR OF THE BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYEES

Mr. KELLER. Mr. Chairman and members of the committee, my name is L. E. Keller. My address is 61 Putnam Avenue, Detroit, Mich. I am the research director for the Brotherhood of Maintenance of Way Employees, the standard railway labor union that embraces the greatest portion of the low-paid workers in the railroad industry.

Another representative of the railway labor unions has dealt in more general terms with the pending bill in its entirety, and it is my desire to deal in more detail with the minimum-wage provisions.

The bill proposes 65 cents an hour for the first year, 70 cents an hour for the second year, and 75 cents an hour thereafter except that industry committees could fix the top figure of 75 cents at an earlier date.

In terms of annual wages, and on the basis of 2,000 hours of work per year, these hourly minimums would produce an annual income of $1,300 for the first year, $1,400 for the second year, and $1,500 thereafter.

These proposed minimum rates are too low to provide for an adequate minimum standard of living for an average American family of four and will not even make it possible for the wage earners' family, relying upon such an income, to provide the minimum standard found to be necessary in the well-known WPA budgetary studies. These budgetary studies have been placed before your committee by an earlier witness, Dr. Hinrichs, of the United States Bureau of Labor Statistics, and I shall not deal with them except to say that they call for more than the $1,500 per year that would be possible at 75 cents an hour, and yet they were thrown away by the Bureau of Labor Statistics in 1943 because they had become so inadequate and so indefensible that the Bureau could no longer justify itself in continuing to present them on the basis of revised price figures.

Every industry essential to the economic well-being of the country should be permitted to earn enough to pay good wages and should then be required to pay them. By way of a very simple illustration, if peanuts, when selling for 5 cents a bag, will not permit the payment of an adequate and socially decent wage to those essential to the raising and marketing of peanuts, then those who eat peanuts should pay 6 cents or 7 cents a bag or whatever may be necessary in order to permit decent wages.

However, it is not exclusively the industries with the lowest income that insist upon paying low wages. It is not merely the small industries that insist upon paying small wages. The railroad industry is neither small nor poor. It is one of the Nation's largest and most prosperous industries. But when the first Fair Labor Standards Act was passed in 1938, calling for the wholly inadequate 25 cents an hour, the railroad industry had thousands of employees working for less than 25 cents. One big railroad that was paying 20 cents an hour to several thousand section men became so frantic when they had to go up to 25 cents, and a year later up to 30 cents, that it launched upon a program for recapturing part of that wage which might easily be termed straight-out thievery.