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Mr. HASLAM. Well, you see, it took into consideration about twentyone or twenty-two million workers, which ties pretty much in with what Mr. Walling's estimate was of the number of workers covered. The estimate covers all of this group of people who may be affected rightly or wrongly by the type of new concepts of coverage, and is not confined to manufacturing alone, as such.

Mr. ADAMS. That was your supposition.

Mr. HASLAM. That is right.

Mr. ADAMS. That is all.

Mr. Hook. One more question. Is your $15,000,000,000 increase based on just the wage increase under the present coverage, or the increase that would be effected if the exemptions were taken off?

Mr. HALSAM. It was estimated, I understand, on the basis of your existing concept of coverage.

Mr. Hook. The present?

Mr. HASLAM. The present concept of coverage, that is right; that twenty-one or twenty-two million workmen that the Administrator estimated were covered.

Mr. LANDIS. The main objections that we have had on this from most of the employers are that most of the employers I have talked to were in favor of some increase in the minimum wage, but they were disturbed about some of the prices having to be raised to meet the requirements. The figures that we have had before us estimate that a comparable figure to a wage of 40 cents an hour in 38, based on the way the cost of living has risen to '48, would be about 55 cents an hour. Our people are disturbed about the fact that, if we get it too high, it will interfere with apprentice workers, and if you get it too high without an increase in prices you will put some of the smaller fellows out of business, and if we open the act up to all of the amendments and take in the agricultural workers and canners and the small telephone exchanges which cannot pay the 65-cent minimum, we will really have difficulty.

Mr. HASLAM. That is right, sir. You see, there is a very serious problem when you try to look at the problems of an individual employer as such. I. is very difficult to take and apply over-all averages and indicate how it might affect my own little plant if I had one.

We feel, as Mr. Mosher has indicated in his statement, that whatever proposal the Congress should decide to act upon should not be on the basis of a blanket over-all increase, but that it should be operated on the basis of individual industry approaches. We feel that you even have individual company problems, but there has been experience under the wage-and-hour law under which wage rates went up to 40 cents in which the approach was on an industry basis. There was an opportunity to study and see the impact and to determine whether the proposed increase would tend to curtail employment, and if you jump a minimum, let us say, to 65 cents, or take another minimum of 75 cents, without reference to the ability of a particular industry to absorb it, we feel that it may tend to cause unemployment, which nobody wants. Mr. LANDIS. We understand that there are very few employees in the country today that do not get as much as 55 cents or even 65 cents an hour. We have heard the figures given, but we have nothing definite on it, that there are less than 20 percent of the workers getting less than 65 cents an hour, and I know in the canning industry the OPA held

those people to 55 cents an hour. They will not allow them to increase it over 55 cents an hour because they used the subsidy system to make up for that. They were willing to pay some of their workers 75 cents an hour.

But I would like to know from Mr. Mosher, if he would be for a straight minimum wage increase, without opening the act up for amendments, and what his objection would be to, maybe, 55, 60, or 65 cents an hour.

Mr. HASLAM. I think that I could answer for Mr. Mosher's position, sir, although I would be glad to talk with him about your request.

His position is expressed in the first statement that I filed for the record. He said that he believed that at most the approach should be on an individual industry basis, and that the real determination as to what minimum could be payable on the industry basis should be left to some sort of function in which consideration is given to the real question: Will the increase curtail employment opportunities?

Mr. LANDIS. That is true, but here our cost of living has increased from the equivalent of 40 cents an hour to 55 cents an hour, and I would like to know his objection to raising the minimum wages to at least that figure.

Mr. HASLAM. I certainly will be glad to ask him that, sir, but I would not be in a position to answer for him. You realize that.

Mr. RAMSPECK. Mr. Haslam, actually the effect of what the War Labor Board has done has been to fix a minimum wage of 55 cents an hour, has it not?

Mr. HASLAM. Well, I think it is more accurate to say, Mr. Chairman, that they really fixed a minimum of 50 cents an hour. As you recall, that was their substandard rate for a long time, and then in a number of dispute cases they actually ordered the 50-cent minimum, so that I suppose insofar as they affected the structure, their requirement has been more nearly 50 than 55 cents. Then they came along and adopted the 55-cent rate as a so-called substandard rate, and authorized all employers to voluntarily adopt the 55-cent minimum.

Mr. RAMSPECK. Of course, there are cases where that wage is not being paid and has not been ordered by the War Labor Board because no case was presented to them.

Mr. HASLAM. I would certainly assume so.

Mr. RAMSPECK. I know that is true, because I had an employer in my office the other day from my own district who is paying 40 cents an hour.

Are you familiar with the bill Mrs. Norton, the chairman of the committee, introduced, which would simply change the present figure in the Wages and Hours Act from 40 cents to 65 cents?

Mr. HASLAM. Yes, sir; I have read that.

Mr. RAMSPECK. Is it your understanding of that that it would leave the industry committees the question of whether or not wages should be raised in a given industry?

Mr. HASLAM. That may have been the intent, sir, but the way I understand the language of the bill, it would provide that on and after a fixed date-I think the date in the bill is the end of this yearthere would be no minimum rate that would be payable if it were less than 65 cents. Now, I may have misconstrued that.

Mr. RAMSPECK. You may be right.

Mr. HASLAM. That is my understanding of her bill, that it would wipe out all industry committee action as of now. It would prevent any employer subject to the law from paying a rate of less than 65 cents after the effective date of the amendment. That is as I understand her bill.

Mr. RAMSPECK. You may be right.

Are there any further questions?

Mr. Hook. Just one question. As I understood it, you said that the highest rate of profit as of any one year was $12,000,000,000. Mr. HASLAM. That is an estimated rate.

Mr. Hook. What was the average profit from 1935 to 1939?
Mr. HASLAM. Well, sir, I just cannot give you the answer to that.
Mr. Hook. Was it not about $5,000,000,000?

Mr. HASLAM. The year 1940, where we did have the figures, my recollection was that it was $6,600,000,000.

The rate for earlier years I can certainly supply for your record, because that would be available, but I just do not have it with me. Mr. Hook. Did not the profits run to about $25,000,000,000 in 1943, according to Department of Commerce records?

Mr. HASLAM. The information we have, according to the 1943 figures, I referred to in my statement, and that is, as I said, profits after taxes were-well, I do not have the 1943 figure. I have the 1944 estimate, which is about $12,000,000,000.

Mr. Hook. Does that take in the tax rebates?

Mr. HASLAM. Well, I really do not know. It is a profit figure of about $12,000,000,000. I do not know whether you would call a socalled tax rebate part of profit or not. I do not know how that would fit into the category of estimates that have been made.

Mr. Hook. In other words, that did not take into consideration any relief that had been given through the tax bill?

Mr. HASLAM. I would not want to say "yes" or "no," sir, because I do not know. If you were able to hear from our economist we might be able to clear up some of these questions.

Mr. McCONNELL. Mr. Haslam, you seem to confirm to me what other witnesses have confirmed in past hearings, and that is there is a terrible groping in the minds of many people as to how minimum wages should be computed; that is, how they should be fixed in laws, and so on; so I will ask you the question I have asked others, Have you any formula to suggest? I asked a man that the other day, and he said it was based on some kind of emergency standard of living determined during 1945. I then asked him how he arrived at a figure of 75 cents for 1947, and his answer, which led me to believe that there was confusion in the minds of people as to how you fix those rates. We have heard statements as to the amount of profit, as though that should be the formula by which you figure these laws. And yet if you will apply that formula to certain businesses which do not make a profit, then what do you do with your formula?

Also, in certain periods where profits are very slim or nonexistent, what do you do with your formula? So it seems to me that in order to be fair and not have it based on an emotional appeal or, on the other hand, on a prejudiced mind, you have to figure some formula that you can stand by through a period of time that allows for these fluctuations and also allows for different conditions in a country, and I am

not prepared in my mind to say what that formula is. That is why I am groping, and I would like to ask your ideas, if you have any at this time.

Mr. HASLAM. I would necessarily be groping, too. My own idea of the formula is tying the wages into productivity. If you get high productivity you can afford to pay high wages. I realize that that does not answer your question. And I also would like to point out that there is one flaw in that reasoning itself, because there are certain types of activities where you just cannot increase your productivity appreciably.

I went up to buy my baby some clothes the other day and I was waiting about 45 minutes for a clerk to serve me. It happened to be one who had been serving us before. But she was sitting there showing a lady and her daughter some sweaters for 45 minutes. She did not make any sale, but she showed her, I think, all the sweaters in the store, plus the skirts and everything else. But the productivity of that girl just could not very well be increased. It was a matter of having the customer there, and she had to please her.

Now, on the other hand, in manufacturing, as we pointed out, in the long run, over the years, you have had a steady increase in productivity. That has been brought about by a number of factors; a lot of it through increases in the machinery and in different lay-outs for production. Much of it has come about through your line production processes, you know, where you divide work. So I do not believe my formula is perhaps any better than some of the rest of them, but that is the idea that I have, and I pointed out a flaw in it. In some of it you just cannot increase your productivity, and the result there is that if you have to peg the wages up to a certain point you have either got to have some sort of price relief or you just are going to go out

of business.

Mr. McCONNELL. We have heard a lot about high profits and the need for increased wages. I might say "Amen" to that, but on the other hand what are we going to do when we have a depression? Then what is our argument?

Mr. HASLAM. That is right, sir.

Mr. McCONNELL. That is the problem we are facing.

Mr. WELCH. You dwelt to a considerable length on extending coverage. Do I understand your organization to be opposed to increasing wage rates specified by the act of 1938, even if confined to the present coverage?

Mr. HASLAM. I am not sure that I understand your question, but I can answer the position so far as I am in a spot to answer for the association, and that is to refer you to Mr. Mosher's statement, which I have included in the record. He said, in substance, this, that the real problem you have, gentlemen, is yours; that we do not want to try and tell you what must be done. We do feel that whatever you do so far as the wages are concerned, that it be done at most on an industry by industry basis, with full consideration given as to whether the action to increase wages would have the effect of curtailing employment opportunities. Mr. WELCH. If confined to present coverage, without extending the area of production, would you still be opposed to increasing the rates as fixed by the act of 1938?

Mr. HASLAM. Well, sir; I do not believe it is exactly fair for me to say that we are opposed, because I am not in a position to speak for the organization in that regard. We do feel very strongly that the approach to the problem should not be an approach that comes out of somebody's idea of a minimum rate that provides for the appropriate living conditions for a family of four. I think that is the old Heller budget that this gentleman was referring to. We feel that any place for minimum wage legislation, if the Congress decides you are going to have some minimum wage legislation, should be only at your substandard rate.

Now, whatever you decide that substandard base should be, we do not know. We do feel, though, very strongly that if you throw a minimum without regard to the ability of a particular industry to pay, you may wipe out a very sizeable portion of that industry, and that the approach, whatever you decide upon, should be on an industry by industry basis, where full consideration is given to the problems within the industry.

Now, I do not believe that the Congress itself could really realistically take that action. They would have to leave it to some administrative agency, perhaps the way they did it initially, under which the wage rates were boosted up to 40 cents an hour through industry committee action.

Mr. RAMSPECK. Gentlemen, it is 12 o'clock and later. The committee will take a recess until 10: 30 tomorrow morning.

Whereupon a recess was taken until the following day, Tuesday, October 23, 1945, at 10:30 a. m.

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