and the wages above the minimum be fully enforced in the administration of the law:

"No employer shall reduce the relative standard of compensation between the minimum wage and any wage or salary rate above the minimum because of the application of any minimum wage requirement of this act."

2. Minimum wage differentials for products or other subdivisions within an industry should be eliminated

The entire administrative experience of the Wage and Hour Division to date has demonstrated that the provision of section 8 (c), requiring industry committees to set up subdivisions within one industry in order to establish different minimum wages for each subdivision of the same industry, is without warrant and should be eliminated.

This provision has served as a basis for setting up minimum wage differentials for different products in the same industry. When the initial industry committees were convened, they spent much time in determining minimum rates for one product of the industry differing by as little as 1 cent or even half a cent from the rate set for another product in the same industry. When industry committees for these same industries were later reconvened, such classifications establishing wage differentials for different products were gradually eliminated. In one industry after another the wage classifications were eventually consolidated. A universally minimum rate of 40 cents was finally reached by all industry committees.

Past experience has proved the procedure of setting up industry classifications or subdivisions to be without any positive justification and administratively wasteful. It also has shown that many industry classifications brought about minimum wage differentials wholly artificial in character, provided solely because of the requirement of the act and for no substantive reason. We therefore recommend that section 8 (c) be amended to eliminate all reference to subdivisions and classifications for the purpose of minimum wage determination within one industry.

3. The basis on which minimum wages are determined by industry committees and the Administrator should be clarified

Section 8 (c) of the act now contains an indirect requirement that living costs, production costs, and wages established for similar word by collective labor agreements, as well as other factors, be taken into account in the minimum-wage determination. We ask that this requirement be made clear and direct.

It is important to spell clearly in the statute the affirmative duty of the industry committees to rely on these basic factors in the minimum-wage determination: (i) The cost of living; (ii) competitive conditions as affected by production and transportation costs; (iii) the wages established for work of like or comparable character by collective labor agreements negotiated between the employers and the employees by representatives of their own choosing; and (iv) the wages paid in work of like or comparable character by employers who voluntarily maintain minimum-wage standards in the industry. All safeguards now contained in the act to make certain that no minimum wage rate is fixed solely on a regional basis and that no wage differentials are permitted on the basis of age or sex must be retained in the statute.

4. Exemption of learners, apprentices, and messengers from the minimum wage should be eliminated

Section 14 of the act requires exemption from the minimum rate of learners, apprentices, and messengers, as well as handicapped workers, under a system of special exemption certificates. We ask that the exemption of learners, apprentices, and messengers from the benefits of the minimum rate be eliminated as inconsistent with the basic purpose of the minimum-wage policy of the act.

The minimum wage prescribed by the act must mean what it says: It should be an absolute minimum permitted in employment covered by the act. By definition, this minimum applies to the wages paid to the unskilled workers. Workers who have acquired skill and experience in performing work more exacting than unskilled labor are entitled to pay higher than the minimum.

This means that hiring rate or entrance rate should not begin at a standard lower than the minimum standard if the express purpose of the act is to be carried out. Learners engaged in productive work are entitled to compensation not lower than the minimum rate. In the case of apprentices, while it is an established practice to fix compensation during the period of apprenticeship at a rate

lower than the skill classification to which a work is being apprenticed, such compensation is related directly to the standard of pay established for that particular skill and not the minimum pay in the plant or establishment. The apprentice, as well as any other employee, must maintain his livelihood during the period of apprenticeship, and is entitled to compensation at a rate determined by collective bargaining and not lower than the established minimum. This minimum standard of compensation must be made equally applicable to learners, apprentices, and messengers as well as to all other unskilled workers.

Mr. HINES. I want to point out a few highlights in this statement and submit myself to any question that the committee may have in mind.

First of all let me say that the American Federation of Labor is keenly interested in this subject because it comes within the purview of our work, our aims, and our purposes. We have striven for 65 years for better economic conditions for workers in the Nation generally, so it is quite natural that we would support such legislation as this. I think the important thing about this type of legislation that raises wages, and in the meantime raises purchasing power, is that while it raises the standard of living for our people, it goes 'way far and beyond that. It is one of the necessary devices that we are going to have to have at this particular time and in the near future in order to keep our political economy from taking a tailspin. In other words, we have got to put more purchasing power in the hands of the workers, and particularly of the low-paid groups, if we expect to buy back all of these things that we hope to produce within the next few years, and which we hope to produce with much less effort and in a more abundant and efficient manner than we did prior to the war, due to technological advances and changes in production methods and increases in efficiency on the part of the workers.

I point out in the statement that 75 percent of all goods and services consumed in this country are consumed by the lower-paid groups, and that if a minimum wage of 65 cents went into effect now, all of that money which we designate here as "live" money would be spent immediately. There would not be any of it saved or hoarded. It would go for more food, clothing, and shelter and things that workers need which they do not have at the present time. Incidentally, I point out that according to figures submitted by the Department of Labor, most of our workers in the industrial groups are now getting 65 cents or better.

I also call attention to the fact that even with 65 cents we would be below the minimum necessary designated by the United States Department of Labor to keep a family of man and wife and two children, a family of four, in a proper and decent manner. They would still fall short, because according to the figures submitted by the United States Department of Labor they would need about 87 cents an hour to meet the bare minimum.

Mr. PATTERSON. Will you clarify that statement? You say 87 cents an hour to meet the bare minimum of what?

Mr. HINES. The bare minimum of comfort and decency to keep a family of four as set by the United States Department of Labor. Again, I say that 80 percent of all factory workers today are getting 65 cents or more.

I would like also to call to your attention the fact that we set forth here the manner in which we have grown efficient over a couple of

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decades. In 1928 the early refrigerators sold for $400 each. In 1942, just before production was stopped, a better refrigerator was sold for $150 or less, and the wages of refrigerator workers advanced steadily in the 14-year period.

The price of an auto tire has been cut by 75 percent through increased productivity, and today's tire gives 40 times the service of the tires used a quarter of a century ago. Hourly wage rates of tire makers have been more than doubled in the last 13 years.

In other words, we have become so efficient that we have been able to get out goods faster, more goods; we have been able to sell the products of industry cheaper, and to pay higher wages and make better profits. We stress that because of the arguments that have been advanced by some of the witnesses before the Senate committee that increased wage rates would necessarily mean increased prices. We contend that that is not true.

One of the Senators over there the other day, in questioning me, produced a table to show that in a number of instances workers today are receiving less than 65 cents, and he showed the percentage of workers and he cited the tobacco industry as an example, and he said that 58 percent of the workers involved in the tobacco industry are getting less than 65 cents an hour, and the inference was that it would be a hardship on the tobacco industry if wages were brought up to 65 cents or to a higher level, because today 58 percent of the workers are getting less than that. That was just typical of a number of industries that he referred to.

Well, I replied to that by saying, and I think there is food for thought in this statement, that the tobacco industry could well afford to pay 65 cents an hour, perhaps 70 or 75 cents an hour, without increasing prices. Maybe some of it would have to be siphoned from the advertising bill, but I think the Nation would be better off as a whole if the tobacco industry diverted some of the money that they spend in advertising in various ways to the pay envelopes of the workers, because it would create greater purchasing power than it does at the present time to buy the things the other workers produce. Mr. Hook. Just a minute, right there. I think that you are correct, because, for instance, the Herald-Leader of Virginia made this

comment:

In spite of the personal troubles of the tobacco firms, particularly the small industries, the Federal wage standards have had a gratifying effect in Richmond. The incomes of more than 2,000 families have been substantially increased. Scores of slum tenements have been abandoned for better living quarters. If reports are to be credited, the quality of work of the average stemmer has improved to a point that largely has compensated for the boost in wages. Trial of the Fair Labor Standards Act among southern low-wage industries may mean the same happy experience for other communities that Richmond has enjoyed for the past year.

May I make a statement on your tobacco case, too, wherein I think you are correct and a little conservative. In this case of the tobacco industry it is necessary to raise the wage level to 65 cents an hour, and some of them are getting less than 50 cents. Sixteen thousand are getting less than 50 cents an hour, and 58 percent are getting less than 65 cents an hour. If you work out the figures on that, which I have gotten from the Senate testimony, it is one-half of 1 percent. That is all that it would reflect so far as prices are concerned. In

other words, wages in some industries are not the primary force in fixing prices.

Mr. HINES. That is right.

Mr. PATTERSON. There are other factors involved.

Mr. HINES. There appeared before the Senate committee the other day a representative of the apple-growing industry from western New York. I just do not recall the gentleman's name, but he came from Rochester, and he complained bitterly about the extension of the Fair Labor Standards Act to agricultural workers, stating that it would, in effect, just about ruin the apple industry.

Well, I lived in Rochester for a number of years, and one of the things that always attracted my attention with regard to apples, the production of apples, and that of many other people up there, was the fact that so many apples were permitted to remain on the trees and rot, and when you inquired into it you found that this was not the fault of the apple grower but of the speculator who came along and bought whole orchards of apples, and if there were going to be too many apples he just let them remain on the tree. He did not pick them. He created an artificial scarcity rather than have a glut on the market, and when you got down to New York City you paid about a dime apiece for those apples, or their counterparts, that were on the trees in the orchards.

That is not only true with regard to apples but it is true with regard to many things, where some in-between factor intervenes and boosts the price up and creates an artificial scarcity. Certainly a raise in agricultural workers' wages under those circumstances would not have any effect upon the price of the apple.

I just cannot reconcile any person who has the interest of the Nation at heart coming forth with such an argument as that. We believe that we are going to have to increase the purchasing power of the lower-paid worker, particularly, but workers generally, who spend all of their money, in order to keep our economy on a perfect level; otherwise we are going to go into-well, we have a certain amount of reserves, that is true. We have savings and we have bonds. But we are also confronted, according to figures produced by Government agencies, with unemployment problems in the near future; by spring or perhaps by the first of the year they are going to be alarming in their proportions, and I think that we will go a long way to eat up those reserves. Consequently we are going to have to put more money in the pay envelopes of our workers to buy the things that we hope to produce.

It is plain, simple economics; that is all there is to it.

We have proposed here, Mr. Chairman, certain amendments to the Senate bill, which I have brought along today and which I think might be applicable to some of the bills that you have before you. I think they are worth perusal, and I would like to include these in the record.

For instance, we believe that the bill should delete any reference to the employment of learners or apprentices and messengers. Let me say in that connection that the question was raised in the Senate hearings that if we did that, there would be a tendency on the part of employers to be reluctant to start apprentices at work, to create positions for apprentices. I want to say right there that we have in

this country, as a result of a set-up that was created by the Federal Government some 7 or 8 years ago, what is known as the apprenticeship training system. It is now under the Department of Labor. This unit works in conjunction with State organizations, State administrations, and they have made considerable progress and had made it before the war and during the war in connection with setting up apprenticeship training programs in the States. You understand that for the 10 years or more that we were in the depression there were very few apprentices indentured to industry, because of the fact that employers could get all of the skilled help they needed and they were reluctant to hire apprentices, with the result that many of our skilled groups were suffering from lack of skill because the older mechanic was passing out of the picture and the new mechanic was not coming along.

As a result of this program which was adopted and put into effect we had any number of apprenticeship training programs in the various trades, particularly in the American Federation of Labor, where you find more skill, perhaps, than you do in other labor groups, and the application of minimum wages in no way would interfere with that program, nor would it interfere with the apprenticeship system, because the wages of apprentices more or less are reflected by the wages of the journeymen. In other words, the apprentice gets a certain percentage of what the journeyman gets, which in many instances would, of course, be above the minimum level set by law. We have also suggested a number of other amendments to the Senate bill, as I say, which would be applicable, perhaps, to the bills now before the House and, with your permission, Mr. Chairman, I would like to include those with this statement.

Mr. RAMSPECK. We will have them included in the record. (The matter referred to is as follows:)

AMENDMENTS PROPOSED BY THE AMERICAN FEDERATION OF LABOR TO S. 1349, TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938

The American Federation of Labor recommends that S. 1349 be amended in the following respects:

I. New amendments

1. Amend section 14 of the act as follows:

Delete: "(1) the employment of learners, of apprentices, and of messengers employed exclusively in delivering letters and messages, under special certificates issued pursuant to regulations of the Administrator, at such wages lower than the minimum wage applicable under section 6 and subject to such limitations as to time, number, proportion, and length of service as the Administrator shall prescribe, and".

2. Amend section 6 (a) of the act, page 3, lines 11 through 24 of the bill, as follows:

In line 24 change the period at the end of the section to a semicolon, and insert the following new language on the next line: "Provided, That no employer, with respect to any of his employees, shall reduce the relative standard of compensation between the minimum wage and any wage or salary rate above the minimum because of the application of any minimum wage requirement of this Act."

II. Changes in amendments proposed by 8. 1349

1. Proposed new section 2 (b) of the act, page 2, lines 11-19 of the bill:

In line 13, delete: “(1)". In lines 16-19, following the words "earning power," change semicolon to a period and delete: "and (2) to provide for the maintenance of reasonable wage differentials between interrelated job classifications in such industries."