"(3) the wages paid for work of like or comparable character by employers who voluntarily maintain minimum-wage standards in the industry. No classification shall be made under this section on the basis of age or sex. "(d) The industry committee shall file with the Administrator a report containing its recommendations with respect to the matters referred to it. Upon the filing of such report, the Administrator, after due notice to interested persons, and giving them an opportunity to be heard, shall by order approve and carry into effect the recommendations contained in such report, if he finds that the recommendations are made in accordance with law, are supported by the evidence adduced at the hearing, and, taking into consideration the same factors as are required to be considered by the industry committee, will carry out the purposes of this section; otherwise he shall disapprove such recommendations. If the Administrator disapproves such recommendations, he shall again refer the matter to such committee, or to another industry committee for such industry (which he may appoint for such purpose), for further consideration and recommendations. "(e) No order issued under this section with respect to any industry prior to the expiration of seven years from the effective date of section 6 shall remain in effect after such expiration, and no order shall be issued under this section with respect to any industry on or after such expiration, unless the industry committee by a preponderance of the evidence before it recommends, and the Administrator by a preponderance of the evidence adduced at the hearing finds, that the continued effectiveness or the issuance of the order, as the case may be, is necessary in order to prevent substantial curtailment of employment in the industry. • "(f) Orders issued under this section shall define the industries and classifications therein to which they are to apply, and shall contain such terms and conditions as the Administrator finds necessary to carry out the purposes of such orders, to prevent the circumvention or evasion thereof, and to safeguard the minimum wage rates established therein. No such order shall take effect until after due notice is given of the issuance thereof by publication in the Federal Register and by such other means as the Administrator deems reasonably calculated to give to interested persons general notice of such issuance. "(g) Due notice of any hearings provided for in this section shall be given by publication in the Federal Register and by such other means as the Administrator deems reasonably calculated to give general notice to interested persons." 7. Section 13 of the Act is hereby repealed. 8. Section 16 of the Act is amended to read as follows: "SEC. 16. (a) Any person who willfully violates any of the provisions of section 15 shall upon conviction thereof be subject to a fine of not more than $10,000, or to imprisonment for not more than six months, or both. No person shall be imprisoned under this subsection except for an offense committed after the conviction of such person for a prior offense under this subsection. "(b) Any employer who violates the provisions of section 6 or section 7 of this Act shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. Action to recover such liability may be maintained at any time within five years from the accrual of such liability in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated, or such employee or employees may designate an agent or representative to maintain such action for an in behalf of all employees similarly situated. The count in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action." Mr. RAMSPECK. The first witness is Mr. Lewis Hines, legislative representative of the American Federation of Labor. Mr. Hines, if you will come up here we will be glad to hear from you. Mr. PATTERSON. With reference to what bill? Mr. RAMSPECK. I just stated that all the bills were before us. STATEMENT OF LEWIS G. HINES, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR Mr. HINES. Mr. Chairman, my name is Lewis G. Hines, and I come here today as the legislative representative of the American Federation of Labor to speak generally on all of the bills before you, and to talk particularly about the subject of minimum wages at 65 cents for the first year, 70 cents for the second year, and 75 cents for the third year. I have a statement here that reflects the opinion of the American. Federation of Labor, particularly that of President Green, on this subject, which I would like to submit to the committee for the record. Mr. RAMSPECK. All right, sir. (The statement referred to is as follows:) [From the American Federation of Labor Information and Publicity Service] TESTIMONY PRESENTED BY LEWIS G. HINES, LEGISLATIVE REPRESENTATIVE OF THE AMERICAN FEDERATION OF LABOR, ON BEHALF OF PRESIDENT WILLIAM GREEN ON MINIMUM WAGE LEGISLATION BEFORE A SUBCOMMITTEE OF THE HOUSE LABOR COMMITTEE For 65 years the American Federation of Labor has maintained the right of a worker to a fair wage as compensation for work done, in order that he and his family might have decent and healthful standards-the foundation of national welfare. We have consistently stood for justice and prosperity for workers as an integral element in national prosperity. It has taken a long time to convince those in authority that national welfare and progress result from integrating efforts to raise standards of living for all groups of citizens. No one group in our economy can enjoy sustained prosperity unless other groups are proportionately prosperous. Integrated prosperity is the key to full employment toward which we hope to move. We must raise standards for the lower paid workers as well as those who set new goals. The normal index to wage-earning prosperity is the hourly wage rate. Wage rates should increase with increased productivity and ability of management to pay. Due to wartime policy which the Administration adopted to control inflation, hourly wage rates have been frozen during the war. The result was that collective bargaining itself was frozen-the workers' agency for industrial justice. Overtime 'and other expedients to increase weekly earnings were introduced to compensate for declining purchasing power of dollars. Workers who sharply increased their productivity were denied earned increases in wage rates. The Executive order following VJ-day permits collective bargaining to overcome as much of this differential as is possible within current prices. We cannot fully regain collective bargaining until we overcome production scarcities. The United States is sorely in need of a national wage policy in keeping with the economic power which this Nation wields. Whatever policy prevails here will influence wage policies in all other countries. The American Federation of Labor intends to maintain its traditional high-wage policy. We produce goods and services in amounts that permit high wages to be paid and we seek opportunities to increase our contributions to efficient production. The American Federation of Labor holds that our traditional high-wage policy is the keystone to balance in an economy attempting to maintain maximum production with maximum employment. High wages will make available to the masses of the people higher material standards of living and comfort. Some workers and some managements in the United States have enjoyed the highest national standards of living in the world. Our next step is to set new minimum standards and thus raise the whole economy to higher levels. A nation that leads the world in research and in technical application of scientific progress should also lead in making the benefits of technical progress available to its citizens for better living. Our main dependence for making our high-wage policy effective for all workers is collective bargaining. Collective bargaining is accepted public policy. We have given the same status to Federal legislation fixing minimum standards which facilitate collective bargaining. Now that practically all industrial groups realize moral responsibility for providing opportunity for work for all who are willing and seeking jobs, we must realign our policies and procedure to further the objectives of full employment. The first step in that direction is reexamination of basic wage rates and minimum standards. Why should we ask for a 65-cent minimum wage now? Because it is one of the most fundamental parts of our national effort for full employment based on full production. As Government officials and leaders of private industry have repeatedly pointed out, our national prosperity in the years ahead can only be based on a high standard of living. Industry cannot find a market for the goods it will produce a full capacity operation unless workers can buy. Wage and small-salaried workers buy 75 percent of all goods and services soid to consumers of the United States, and our mines and factories, farms and transport systems, stores and service industries depend more on the buying power of wage earners than on that of any other group. To raise the lowest-paid workers up to create the necessary market for American industry. Workers receiving 65 cents an hour, or $26 for a 40-hour week, spend all the income they receive for the products of American farms and industries. At this living level workers need their entire income for living expenses. They cannot afford to save any significant part of their incometherefore any increase in their wages is "live money"-money spent at once for food from farms, clothing, and housefurnishings from stores and factories. this level practically 100 percent of the wage increase is spent, while at higher income levels a portion is saved and does not go immediately for the purchase of goods and services. At A second important reason why we must set this 65-cent minimum now is that it represents a basic floor for living standards below which we dare not permit our American economy to fall. This 65-cent minimum is necessary today to accomplish the purpose set forth by Congress when the Fair Labor Standards Act was passed in October 1938. At today's prices a man cannot possibly support a typical family of four at even a minimum of subsistence on 65 cents. And when Congress passed the act in 1938, its purpose was to provide the minimum of subsistence so that every American might at least have the bare essentials of food, clothing, and shelter. But a minimum subsistence budget for a family of four requires a wage of 87 cents an hour for a 40-hour week at today's prices, according to the Labor Department's Maintenance budget. That is, the 65-cent minimum is 22 cents below even the Labor Department's bare subsistence budget. It provides only three-quarters of a minimum living. What kind of a living, then, will the 65 cents provide? On such a wage a worker's family of four can buy only three-fourths of the food necessary for a minimum adequate diet as calculated by the United States Department of Agriculture. This means that the father of the family, a man at active work, can have only a very small serving of meat, fish, or poultry for one meal on 6 of the 7 days in the week. He cannot buy even his full meat ration under present quotas of ration tickets; he has at least one meatless day during the week. The family cannot buy enough green vegetables and citrus fruits to give them the necessary vitamins. They cannot buy enough protective foods to maintain bodily health. What of the house they may call a home? It may cost them only $20 a month in rent. And a house rented at so low a figure in these days will probably either be in need of repair or will provide only the most crowded quarters. What of clothes? The father of the family can afford one overcoat in 5 years. His street suit must last 3 years-and he has only one. He can buy only three cotton shirts a year. For his wife he can afford a heavy coat once in 4 or 5 years. And she must make out on three dresses a year, including house dresses, street dresses, and all clothing for church or other occasions. With such meager clothing she cannot take her rightful place in the life of her community. The worker's growing boy must make out on one cotton suit per year, and one pair of slacks with two blouses. His wool suit must last 4 years. When this must supply his need for school and for play, for winter and for summer, can it be called a minimum of decency for a growing boy? (The above figures are from the U. S. Department of Labor.) This is all that a wage of 65 cents provides. Is it too much to ask in a country with the greatest productive capacity in the world? And if we fail to provide this 65-cent minimum, wages may be driven down so that hundreds of thousands of families will have much less than this to live on. American industry is able to produce at least a 65-cent living standard for every American and a far higher standard for the vast majority of American workers. The thing we want to accomplish with this bill is to see that American workers actually receive the bare minimum. During the war we have made great progress in raising the minimum wage. Starting with 40 cents, the minimum was lifted to 50 cents through the War Labor Board action, then to 55 cents. Meanwhile industry itself raised its minimums so that today the vast majority of our factory workers are already receiving far more than 65 cents an hour. Labor Department figures for the summer of 1945 show that 80 percent of all factory workers are today getting 65 cents or more per hour. Those who still receive 65 cents or less form a very small percentage indeed in most plants, so that it will not create a great burden for the plants to raise their minimum wage. Another vital reason why we need this minimum now is to hold the standards we have gained during the war. It has been our national policy, both for war and for reconversion, to prevent wage reductions. Now we find that some chiseling employers are using the reconversion period to attempt to force wages down, whether by actual wage reductions or by reclassifications. To establish this minimum is to stop the chiselers and to lay the foundation for the high wage, high production, and high employment economy which alone can preserve our American way of life in the years ahead. Why have American industries paid the highest wages in the world for the last century? Why will American industries be able to meet this 65-cent minimum in the months and years ahead? It is because American workers have the highest productivity of any workers in the world. Our productivity per hour of factory work in this country before the war was three times that of Britain and Russia, more than 140 percent above the efficient plants of Hitler's Germany, and four times the productivity of Japanese factory workers. During the war we have immensely increased productivity, and today we exceed other countries by an even higher figure. Throughout the last half century the amazing increase in American workers' productivity has steadily flooded the market with more and more products and services for consumers at lower and lower prices. And steadily rising wages have created a market to buy those products. Take for instance, the experience of the industry making electric refrigerators. In 1928 the early refrigerators sold for $400 each. In 1942, just before production was stopped, a better refrigerator sold for $150 or less, and the wages of refrigerator workers advanced steadily in that 14-year period. The price of an auto tire has been cut by 75 percent through increased productivity, but today's tires give 40 times the service of the tires used a quarter century ago. And hourly wage rates of tire makers have more than doubled in the last 13 years. These are only two examples of a process that goes on steadily year by year, throughout American industry. Productivity increases, wages rise, prices fall, and the quality of the product improves. A few figures for industry in general will give you an historical picture of this dynamic force of increasing productivity. From 1923 to 1940, in American manufacturing industries as a whole, production per man-hour rose 83 percent. Wholesale prices of the products produced by the factory workers actually declined by 18 percent, while "real" hourly wages of the workers rose 49 percent. And employers continued to make satisfactory profits. This is a striking example of increasing wages while prices declined. This rising productivity is the genius of our American competitive system. But the system cannot function and will not function unless wages rise enough to create a market for the ever-increasing stream of consumers' goods produced. The depression of the 1930's showed only too well what happens when workers' buying power fails to keep pace with their power to produce. We look forward to immense increases in productivity in the years just ahead. Experts estimate that in the next 3 years production per man-hour will increase 30 percent in American factories. Replacement of worn-out machinery, installation of new techniques and new machines developed during the war, will enable the average factory worker to produce nearly one-third more than he does today— and this amazing gain will take place in the short period of 3 years. With such advances in prospect, a minimum so low as 65 cents will soon be out of date. There is no question that manufacturers who have the ability typical of our American industrialists can pay this wage. If we permit workers to receive minimum wages of less than 65 cents an hour, who will buy the products which are going to pour from our factories as production and productivity increase? How will workers be able to buy enough radios, furniture, refrigerators, and other household equipment, automobiles, and other products to keep the wheels of industry in motion? We must plan now for our postwar market. Fixing a floor of 65 cents under wages will set the stage for maintenance and improvement of wages so that workers' buying power will rise to create a demand for industry's goods. To increase wages now throughout industry, up to industry's ability to pay, is a first requirement in our efforts for full production and full employment. Labor Department figures show that at today's wage levels workers' buying power will fall short by some $9,000,000,000 of the amount necessary to sustain full employment. If we fail to fill this gap, if we do not make up this shortage, then we risk a business depression as soon as workers' savings and employers' reserves are exhausted. Workers must have decent wages or they cannot afford to spend their savings or to become adequate buyers of industry's products in the future. An important added protection to workers is contained in section 12 of S. 1349 pertaining to child labor. The American Federation of Labor has consistently been opposed to the exploitation of children. The Supreme Court decision in regard to the Western Union case distinguished between commerce and the production of goods for commerce. After that decision there was a considerable increase in the employment of children by that company. We urge that children be given this additional protection against exploitation by coverage of industries engaged in commerce as well as those producing goods for commerce. RECOMMENDED CHANGES We recommend the following changes in S. 1349: 1. Eliminate all provisions in the proposed bill designed to establish by a wage order of the Government specific rates of pay for job classifications above the minimum The basis of the Fair Labor Standards Act, in intent and in law, is to eliminate substandard labor conditions. Its wage provisions are designed to establish a minimum wage standard. It was the express purpose of Congress in enacting the Fair Labor Standards Act of 1938 to establish a floor under wages. It is the proper prerogative of the Federal Governinent to make certain that the channels and instrumentalities of interstate commerce are closed to unfair competition, unfair because the competitive advantage is the advantage of the substandard wage. Congress said, in effect, that those who compete with goods made at substandard pay, engage in "an unfair and unconscionable method of competition in commerce," that they gain and profit by trading in the undermined health and stunted lives of workers whose pay is driven below the level necessary to maintain decent and healthful living. To safeguard "the maintenance of minimum standards of living necessary for health, efficiency, and general well-being of workers" is and should continue to be the controlling purpose of the minimum wage regulation. Detailed Government regulation of wages above the minimum is foreign to that purpose. It constitutes an invasion by the Government of the domain of free and voluntary collective bargaining between labor and management. It injects the Government into the areas of detailed determination of wage standards above and beyond the minimum. Minimum wage regulation is essential to prevent the development of a downward spiral of wages under pressure of unfair wage competition. Enforcement of such a minimum wage is vital not only to the maintenance of the standard of living, but also the protection of the entire economy of the Nation against the ravages of unchecked deflation of all wages, with the drain upon the buying power of the mass of the wage earners. Detailed regulation of wages above the minimum is not a part of the protective exercise of the Federal powers to safeguard the standards of minimum welfare of the workers and the integrity of the whole economy against unfair competition. We ask that all provisions relating to the establishment of wage differentials above the minimum be stricken from the bill as indicated specifically in appendix A. At the same time, it is important to stress that the increase in the minimum rates of pay, either directly by statute or by wage order, is bound to create a downward pressure upon wages above the minimum. Experience of minimum wage regulation in the past has demonstrated the tendency of the minimum becoming the maximum. A safeguard against the reduction of wages and the reduction in the relative standard between the minimum wages and the wages above the minimum is imperative to prevent a dislocation in the entire wage structure. We therefore recommend that the following safeguard be embodied in the bill to make certain that the relative standard between the minimum wage |