PROPOSED AMENDMENTS TO THE FAIR LABOR STANDARDS ACT WEDNESDAY, NOVEMBER 7, 1945 HOUSE OF REPRESENTATIVES, The committee met at 10: 30 a. m., Hon. Robert Ramspeck presiding. Mr. RAMSPECK. The committee will be in order. Our first witness is Joseph F. Kehoe, director of organization, American Communications Association. STATEMENT OF JOSEPH F. KEHOE, DIRECTOR OF ORGANIZATION, AMERICAN COMMUNICATIONS ASSOCIATION Mr. RAMSPECK. You may proceed. Mr. KEHOE. I appear here today on behalf of my organization, which represents employees in all sections of the communications industry in our country, to heartily endorse and support amendments to the Fair Labor Standards Act raising minimum wages to 65 cents and broadening coverage of the act to give protection to millions of workers now excluded. Inasmuch as the communications industry has upward of half a million employees, the enactment of this legislation would have an immediate and salutary effect upon a substantial group of people in every community throughout the country. Approximately 30 percent of the employees in the industry receive less than 65 cents an hour, 34 percent less than 60 cents, and tens of thousands earn less than 50 cents. While some improvements in wage rates did take place during the war, this increase in no way matched the increase in living costs and worker productivity. The wages paid by the two major companies of the communications industry, telephone and telegraph, run as follows: The average hourly wage rate throughout the Western Union system is less than 69 cents per hour. Over 55 percent of all the employees receive less than 65 cents per hour; 4912 percent less than 60 cents; 26.6 percent under 50 cents; and 19.3 percent less than 45 cents per hour. Highly skilled telegraph workers with many years of experience are today being paid the disgraceful sum of 47 cents per hour in many localities throughout the country. The average hourly rate throughout the country for highly skilled, experienced telegraph operators is in the neighborhood of 63 cents per hour. That is a Nation-wide 80014-46- -39 603 average. The starting rate for all classes of employees is in many areas the present legal minimum of 40 cents. I might say, in connection with these figures, that they are based upon the annual reports of the company made to the Federal Communications Commission. In New York City, generally believed to be a relatively high-wage area, more than half of the company's 7,000 employees receive less than 65 cents an hour. Skilled operators, who require a considerable period of training and who have had as much as 3 years of experience, receive as little as 60 cents an hour. These skilled employees earn $24 a week, before tax and other deductions. Nearly 30 percent of the people of New York still receive 55 cents an hour, a wage long ago designated as substandard by the War Labor Board. I might say in this connection that the wage rates are not only substandard in the telegraph industry, but wages paid for skilled workers are far below the wages paid for similar skill in other industries. As an example, the city-wide rate for elevator operators in the city of New York is 87 cents, whereas the Western Union elevator operators receive an average wage of 61 cents an hour. Skilled clerks receive between 45 and 55 cents an hour. The New York region of the War Labor Board has recently made a step in the direction of correcting some of these substandard wages in recognition of a condition that demands correction, and has directed that the company pay 55 cents an hour as a minimum wage to all its employees. It has also directed some adjustment of wage rates to bring them. more in line with wage rates for similar skill in the labor area. The Western Union Co., however, which has been intransigent on the question of raising wages throughout its entire history, and which has sought always to maintain its operations through the payment of substandard wages, has not agreed to comply with this decision but has appealed to the National War Labor Board. This is in spite of the fact that the Western Union employees involved have had no wage increases for over 2 years. The giant telephone company, one of the richest corporations in the world, still pays 311⁄2 percent of its employees less than 60 cents an hour. It is only recently, toward the end of the war, that starting rates in telephone key classifications were raised to 50 cents. In some of our largest industrial cities, telephone operators must work more than 3 years before achieving a 65-cent rate. Smaller but important cities have telephone operators working 5 years to reach the sum of 65 cents an hour. In less densely populated communities, starting rates are lower, wage progression periods farther apart, and the 65cent rate is not reached for a good many years. There is nothing to even remotely justify the kind of depressed wages being paid in the communications industry. The companies frequently attempt to recruit workers by holding out the attraction of guaranteed, steady employment. The fact is that communications workers have no more job security than any other group of American workers and less than many. In common with their fellow laborers, they are subject to the hazard of unemployment through reduction in volume of business, depressions, and speed-up. This is amply illustrated by the record of telegraph and telephone employment in the thirties. In the 10-year period from 1930 to 1940 the number of employees in the telegraph industry declined by approximately 40 percent. Technoligical displacement does not account for this loss. The changeover from strictly manual operation to a mechanized form of transmission had largely been completed during the twenties. While the volume of business fluctuated considerably during this period, the output per worker steadily increased. Thus, speed-up accomplished substantial savings for the companies. Since 1940 telegraph employment increased slightly, but nothing like the same extent as did telegraph volume. I might say, in connection with this, that the average messages handled per employee have increased in the following manner: If we take 1926 as a normal period and use that as an index of 100, in 1944 the average messages per employee had risen to 134. That this was not merely an increase over a long period of time, but sharply increased during recent years, is shown by the fact that in 1943 the index figure was 122. Mr. RAMSPECK. What sort of employee are you talking about there? Mr. KEHOE. Mainly telegraph operators. The number of employees, taking the same year, 1926, as an index of 100, would show for 1944, 75, a drop of 25 points. Mr. RAMSPECK. Is that the type of operator that runs one of these automatic machines that they have? Mr. KEHOE. That is right. Mr. RAMSPECK. That takes less skill than it used to take to run the old type of operation where the operator had to know the Morse code, does it not? Mr. KEHOE. That is true, it does. Nevertheless, these workers who operate the automatic machines must be able to send and do send continually at a rate of 60 words a minute, with absolutely deadly accuracy. The machine sets their speed. They work in crowded operating rooms under conditions of great strain. They must be able to read a perforated code, and it is a highly skilled operation, although not as highly skilled as Morse. Thus we see that in the telegraph industry labor productivity has sharply increased during the war and the number of employees has decreased. The telephone monopoly offers the most dramatic example of corporate reverence for profits and dividends sweated out of the backs of its employees. In 1930, when Bell business was at its peak, 16 percent of the employees were fired, 60,000 workers. This was done solely for the purpose of supporting an expanded capital investment, and to maintain the sacred $9 Bell dividend. During the following 3 years, when the volume of business declined, the working force was reduced by one-third of the 1929 figure. Over and above the decline in employment as a result of speed-up and the falling off of traffic, beginning in the early thirties, the introduction of the dial system eliminated six manual operators for every dial switchboard operator retained. During the 5 years ending in 1935, while about one-fifth of the employees in the company were eliminated, 70,000, total dividend payments by the A. T. & T. increased by 45 percent. By 1937, when telephone business surpassed all previous high levels, the company employed 25 percent less people than it did in 1929. Even with the unprecedented volume of traffic which the company enjoyed in the war period, the total employment in the Bell system was about 6 percent lower in 1944 than in 1929. The volume of traffic, however, had increased by approximately 35 percent over 1929. It can be seen, therefore, that the company's argument of guaranteed steady employment over a lifetime of service does not stand up to the record. The Western Union Co. urges that Congress sanction the employment of child labor for messenger work, and that children under 18 years of age so employed be excluded from minimum wage provisions of the Fair Labor Standards Act. In attempting to argue its case, the company states: Regardless of the minimum wage, the best messengers from the point of view of service to the public are young ones. * I submit a list of instructions which Western Union hands to each messenger describing his duties. This is only one of a series of such instructions and is headed, "These Things Will Help You Deliver Telegrams." When one reads these instructions, one wonders why Western Union does not employ detectives rather than boys under 18 as messengers. The instructions say: When no one is home: 1. Try both front and rear doors. If apartment, ring superintendent or another apartment same floor to gain admittance and make further inquiry. 2. Confirm with neighbors that address is correct and find out When will he return? (Always use name to which message is adaddressed.) Where can he be reached? Or where does he work? If out of town, is his forwarding address known; if not, who might know it? When no one found at address given: 1. If unknown or no such number Inquire of neighbors. Ask at nearby stores. Inquire at post office if in the neighborhood. Ask mailman, milkman, or laundryman you may see making deliveries in vicinity. Check telephone book for address. 2. If moved and unable to get new address, find out Where did he work? What friends might know his address? What company moved him? What concern delivered his milk or laundry? From whom did he rent or what agent sold his house? What church did he attend? What school did his children attend? With what stores did he trade? 3. If you secure the new address in the neighborhood, make the delivery, write new address on delivery sheet, and tell the clerk at your office when you return. Those are official instructions given to messengers, and they are expected by the company to be followed out by these messengers. This is the work which the telegraph monopoly proposes to impose upon children, and at substandard wages. I might indicate, in addition to that, that the work of messengers is dangerous, which is shown in accident figures by the Department of Labor. They work in heavy traflic. They work in all kinds of weather. They ride bicycles on icy streets. In addition to that, they are subject to working in an occupation which requires their entering any kind of premises, whether it be a bar and grill, a bookie joint, or something worse. On the child-labor aspect, I should like to quote from Mr. Justice Murphy's dissenting opinion when the Supreme Court, in October 1944, decided that Western Union might use "oppressive child labor" as the term is defined in the Fair Labor Standards Act: By reading into the Fair Labor Standards Act an exception that Congress never intended or specified, this Court has today granted the Western Union Telegraph Co, a special dispensation to utilize the channels of interstate commerce while employing admittedly oppressive child labor. Such a result is reached, to borrow the words of the majority opinion, "by a series of interpretations so far-fetched and forced as to bring into question the candor of Congress as well as the integrity of the interpretive process." * * Oppressive child labor in any industry is a reversion to an outmoded and degenerate code of economic and social behavior. In the words of the Chief Executive: "A self-supporting and self-respecting democracy can plead no justification for the existence of child labor. ** * * All but the hopelessly reactionary will agree that to conserve our primary resources of manpower, Government must have some control over * * * the evil of child labor * This dissent was joined in by Justices Black, Douglas, and Rutledge. Section 14 of the Fair Labor Standards Act contains some language which the companies have sought to take advantage of to permit them to pay, first, less than 25 cents an hour, second, less than 30 cents an hour, and finally, less than 40 cents an hour. Each of these efforts, fortunately, failed. (1) In October 1938 Western Union, Postal Telegraph, and other telegraph carriers applied for certificates of exemption for messengers. Extensive hearings were held before Mr. William Leiserson, as hearing officer. Because these findings are important even today, in relation to the company's plea for a return to a darker age, I quote briefly from them. First, Mr. Leiserson found that the company was not entitled to an exemption as a matter of law and as a matter of interpretation of the law. Second, he found that what the company was seeking was to maintain an average weekly take-home pay for a messenger of $4.34 per week for a 55-hour week. This was in 1938. (The direct quotation is as follows:) Western Union asks that 10,065 of its 13,435 messengers be exempted, its proposals to pay specified numbers of the exempted messengers wages ranging from 10 to 24 cents per hour being in effect a request for approval by the Administrator of the yields or goals of its present zone rates below 25 cents per hour. The messengers employed by Western Union and Postal are not exclusively engaged in delivering letters and messages. Foot and bicycle messengers are mainly boys under 21, most of them between 16 and 18 years of age. Motor messengers are generally adults. Eighteen percent of one company's metropolitan messengers reported themselves as having families fully dependent on them for support, and 74 percent were partially supporting families. Some boys are wholly dependent on their earnings from messenger service for their own support. Messenger service is a distinctly hazardous occupation and between 1931 and 1938 no progress has been made toward reducing the number of accidents serious enough to involve loss of time from employment. The wage rates ranging down from 24 cents per hour to 10 cents and less, which the Administrator is asked to approve or prescribe, are not the local going wages and not the natural level of labor cost as contended by one of the |