the iron and steel and the meat packing industries are engaged in similar development of balanced wage structures within their areas.

We believe that the NRA and War Labor Board definitely confirm the practicality of those procedures. The present arrangement for committees considering those proposals, of course, does not make the establishment of these peg rates mandatory. It allows for this technique to be pursued and adopted. Moreover, the committee approach will allow for flexible procedures. In areas where substantial agreement already exists between employers and unions, it will be possible to adopt the union scales as they exist and extend them to the entire industry. This procedure is now widely practiced in the democratic countries such as Canada, Great Britain, France, and Australia.

We urge the adoption of this provision for the adoption of peg rates as contributing to the stabilization of highly competitive industries and the promotion of sound industrial relations.

VII. COVERAGE OF THE BILL SHOULD BE EXTENDED

The coverage of the present act is being extended. In section 13 the areas are extended by eliminating the exemption for seamen, eliminating the exemption granted to employees engaged in the "employment in the loading, unloading, and packing of (fish, shellfish, crustacea, sponges, seaweeds, or other aquatic forms of animal vegetable life) and the exemption granted to persons "employed within the area of production engaged in handling, packing, storing, ginning, compressing, pasteurizing, drying, preparing in their raw or natural state, or canning or agricultural, or horticultural commodities for market or in making cheese or butter or other dairy products." One exemption has been granted to "switchboard operators employed in a public telephone exchange which has less than 500 stations."

The second elimination is section 7c which is being deleted. It provides that employers engaged in the "first processing of milk whey, skimmed milk, or cream into dairy products, or in the ginning and compressing of cotton, or in the processing of cottonseed, or in the processing of sugar beets, sugar beet molasses, sugarcane, or maple sap into sugar (but not refined into sugar), or into sirup, the provisions of subsection (a) shall not apply to his employees in any place of employment where he is so engaged; and in the case of an employer engaged in the processing of, or in the canning or packing of perishable or seasonable fresh fruits or vegetables, or in the first processing, within the area of production as (defined by the administrator of agricultural or certain rural commodities during seasonal operations, or in handling, slaughtering, or dressing poultry or livestock, the provisions of subsection 9a) during a period or periods of not more than 14 work weeks in the aggregate in any calendar year, shall not apply to his employees in any place of employment where he is so engaged." President Truman has already made his views known. He has asked that the "scope of the Fair Labor Standards Act also should be clarified and extended. * * In view of changes which have occurred since 1938, I believe it is no longer necessary to exclude from the minimum-wage program the large number of workers engaged on agricultural processing which are now excluded. There now exists a twilight zone in which some workers are covered and others doing similar work are not. Extension of coverage would benefit both workers and employers, by removing competitive inequities."

**

Specific witnesses will discuss various classifications. We do not recognize any legitimate grounds for these exemptions. The ones which remain are generous. Many of them have already been removed by reason of union contracts and have become obsolete. Others have been excessive sources of conflict and endangered the administration of the act. No exemptions should be granted from the overtime penalty. The act should certainly be modified to provide for such payments to the groups now excluded.

VIII. CONCLUSION

The Congress of Industrial Organizations concludes by urging the adoption of the present bill as a necessary revision of the Wage and Hour Act. A satisfactory minimum wage is necessary for the redemption of our promises; it is imperative to gain full employment. It is inescapable if we are to keep our leadership in world affairs. We must abolish want. It is the one sure way of doing so.

Substandard wages are costly and discriminatory. American industry knows how to adjust itself to rising wages. It has always done so. The secret of

American industrialism is high wages. We must bring the straggling group within our fold. We must eliminate the blot of low wages.

The wage-and-hour law of 1938 stabilized our economy as it began a downward spiral; it prevented the unconscionable employer from tearing down the structure. It stabilized as a preliminary to a rise. The present bill will stabilize wages and correct the worst substandard conditions. It will provide the temporary stop-gap to the complete elimination of poverty and want from the industries which are covered. We cannot betray the soldier and the industrial veteran. We cannot betray our slogan. We must assure our citizenry and the world that our charters of the "four freedoms" was not a dream but a practical, real goal.

Only a program of correcting substandard wages would insure the American people that we are truly fighting deflation and future depressions. The test of our willingness to fight for an economy of full employment is the adoption of the proposed bill.

We are living in the atomic age. Our resources and powers are limitless. We have harnessed tremendous powers. We have learned how to destroy with them. We must compel these powers to be used constructively. We therefore call upon employers and the people of our country to fulfill the promise of this atomic age which is complete freedom from economic want. We must enlist these powers. Let us guarantee the 65-cent minimum with progressive realization of our 75-cent goal. With this enactment we point management's eye to tremendous new industrial and scientific developments. Let them utilize these advances so that we can truly meet these new vistas. American labor and management met the demands of the war. We can meet the demands of peace for freedom from want and security if we work toward these ends with the same teamwork as the scientists did in harnessing atomic power.

Mr. BARKIN. This schedule does not cover all of the jobs. Originally there were only seven jobs listed by the War Labor Board. That is all we are asking for. We conceive of that provision of the law as permitting industries, where there is mutual desire among the employers and the unions, to establish voluntarily pegged rates. It was done under the NRA. If your committee were desirous, I have in front of me the record of the President's Committee on Industrial Analysis, published in 1937, and the staff studies associated with it, which discusses the whole problem of the 55 codes of the NRA which established peg points above the minimum. These are rather compendious. If your committee desires them, they are available.

Mr. RAMSPECK. Personally, I do not think we want them, because you and I are talking about something entirely foreign to the wagehour law, which is to fix minimum wages. Are you proposing to substitute law for collective bargaining?

Mr. BARKIN. No, sir.

Mr. RAMSPECK. That is what you are arguing for.

Mr. BARKIN. No, sir. There are two parts of this law. There is a Federal minimum wage law, for which we are proposing 65, 70, and 75 cents. That is the minimum wage law. There are a number of industries wherein it is mutually desirable to fix peg points in order to establish some degree of uniform competition above the minimum

wage.

Mr. RAMSPECK. Why not fix them by collective bargaining?

Mr. BARKIN. We do, but there are industries within the country where there are very important and strategic competitors who do not observe those particular rates. Consequently, in order to insure real uniform and fair competition, there is a desire in many industries, both by union and employers, to permit committees to provide for such rates above the minimum.

As an interesting fact, as you know, in the NRA there was no compulsion to establish rates above the minimum, yet 55 industries

out of a total of some 550, practically 10 percent, adopted them. These industries by the way, were generally industries which were highly organized.

Mr. RAMSPECK. I do not agree with your statement that there was no compulsion under NRA.

Mr. BARKIN. There was no compulsion to incorporate these provisions within the codes.

Mr. RAMSPECK. As I understood the operation of the NRA, when the majority of the industry agreed on the code, the rest of the industry was compelled to abide by it.

Mr. BARKIN. Correct, and that is what I mean. There was no compulsion on a majority to insert it.

Mr. RAMSPECK. What you did was you substituted law for collective bargaining.

Mr. BARKIN. No, sir. What we did was to substitute a going collective-bargaining rate for a chaotic rate structure in the industry. The majority of the industry negotiating through that process established a rate which became the rate for the industry.

Mr. RAMSPECK. I understand that, but it was compulsory on the minority.

Mr. BARKIN. Correct.

Mr. RAMSPECK. Now you are proposing to go one step further and to have Congress enact a law which will compel all industry, by industry committees, to fix wages above 75 cents.

Mr. BARKIN. If there is a unanimity between labor and management in that industry on that committee. Congress does not force. We are not asking Congress to force.

Mr. RAMSPECK. Industry committees do not necessarily represent a majority of the industry.

Mr. BARKIN. They generally do.

Mr. RAMSPECK. They represent whoever the Administrator picks and puts on them.

Mr. BARKIN. Well, the Administrator is instructed to secure a representative committee of the industry.

Mr. RAMSPECK. Yes; that is true; but that does not mean representative by plurality or majority.

Mr. BARKIN. If the representativeness of the committee is challenged, it is subject to legal review. It is a finding of fact which he must make in his order.

Mr. RAMSPECK. The word "representative" is not defined, as I recall it, in the act. It certainly does not relate to representatives of a majority of the industry.

Mr. BARKIN. Well, it has to be representative of all of the interests. in the committee.

Mr. RAMSPECK. If Mr. McDonald's testimony is correct, you are actually proposing a minimum rate which is higher than the going rate in the steel industry in many sections.

Mr. BARKIN. No; we are proposing that the fringes of the industry which are not observing the going rate in the industry shall be brought up to at least 65 cents.

Mr. RAMSPECK. He stated in his statement that the United Steelworkers has many members working for less than 65 cents today.

Mr. BARKIN. Correct; but that total represents a very minor proportion of the total industry.

Mr. RAMSPECK. You are asking for a minimum rate higher than the rate now being received by many people in the industry.

Mr. BARKIN. That is what we are trying to eliminate, the fringe which is not observing the going rate within the industry.

Mr. RAMSPECK. You are actually trying to fix a minimum higher than the present prevailing rate.

Mr. BARKIN. If the rate is 25 cents, we are certainly trying to eliminate that. If the rate is 40 cents, we are trying to eliminate that. If the rate is 63 cents, we are trying to eliminate that for the first year, and we want to eliminate every rate under 75 cents by the end of the third year.

Mr. RAMSPECK. It occurs to me you might be proposing to legislate the labor unions out of business.

Mr. BARKIN. That is perfectly all right. If we increase the wages of the country, well, that is what unions are here for. Our unions are here not to perpetuate unionism per se but to perform the function for which they have been created. We are not worried about our functions disappearing. We will have to bring the facts before the public bodies to show what the needs of the people are.

Mr. RAMSPECK. We will give you five more minutes. Then we will have to recess.

Mr. BARKIN. I would like to call your attention, members of the committee, to one or two facts which I think are very pertinent in your reemployment situation. You have probably heard of Colonel McDermott's statement in which he decidedly condemned the fact that some employers in New York City are offering jobs to ex-servicemen at under $26 a week. He said that if it was the attitude of employers to try to take advantage of the desperation of unskilled veterans and that were to keep up, we will be in a horrible state of affairs. It is a terrible reward to a man who served from 2 to 5 years a job at $25 a week.

We want to say to you again that one of the problems of bringing about reconversion in this country is the absence of a minimum wage law such as we are proposing. I would like to introduce into the record here several facts which have been published by the United States Employment Service.

(The following matter was submitted for the record :)

LABOR MARKET CONDITIONS IN SELECTED AREAS FOLLOWING JAPANESE SURRENDER (AS OF SEPTEMBER 7, 1945) SUMMARY 1

The United States Employment Service continued to report a substantial number of job openings listed with the local employment office, principally in wholesale and retail trade, service activities, construction, and such other manufacturing as food processing, textiles, and apparel. It should be noted, however, that many of the job openings are at wage rates which do not compare favorably with war industry wage rates or the rates normally found in the heavy manufacturing industries now under going reconversion. Nationally, approximately 60 percent of job openings listed with the United States Employment Service offices are at hourly wage rates below 75 cents, with a significant number below 50 cents. Moreover, in States such as Michigan, which experienced extremely large releases of workers, since the Japanese surrender, the United States Employment Service local office unfilled openings are relatively few.

Mr. BARKIN. The Employment Service points out that one of the difficulties of getting a great many people to accept jobs is that many

1 Reports and Analysis Division, War Manpower Commission, September 12, 1945.

of these jobs are being paid inordinately low wages. A survey made by the USES for September 7, 1945, indicates that the proposed wage rates are between 50 and 75 cents; that probably there are 60 percent of the available jobs at this time pay under 75 cents. He indicates in the statement which was issued by the War Manpower Commission on September 12, 1945, that these low wages are one of the reasons, one of the blocks to the reemployment of people. People have been working, have been earning high wages, and do not want to have their standard of living depressed, we need legislation to prevent such wholesale depression of standards.

Mr. RAMSPECK. All right, Mr. Barkin. Thank you.

The committee will take a recess until 10:30 tomorrow morning. (Whereupon a recess was taken until the following day, Friday, October 19, 1945, at 10:30 a. m.)