Peak-season employment in the canning and preserving industries Sources: Production worker employment, weekly hours, and hourly earnings are from the Bureau of Labor Statistics. Mr. DOLNICK. What has been said here with respect to employees in the canning and preserving industries applies with equal force to those of the poultry and egg industry. They, too, are included within the two exemption periods provided for in the act. Our organization has approximately 30,000 men and women employed in the poultry and egg industry. Often they are employed in communities where the poultry plant represents the sole source of employment. Their wages are relatively low. We find that those covered by collective bargaining agreements earn an average of between $1.25 and $1.35 an hour. It is estimated that those not organized into labor unions in the industry earn between $1.05 and $1.10 an hour. It is difficult to know exactly, but it is estimated that there are 150,000 workers in the poultry-processing industry. Because of the nature of the industry itself and the areas in which it is located, it has been difficult to organize them into labor unions. Those of our members working in the industry who are covered by collective bargaining agreements presently receive overtime payments after 8 hours of work in any one day and after 40 hours of work in any one week. These agreements allow for no exemptions as provided by law. Consequently, the employers under contract to our Íocal unions operate under a higher labor cost than those employers whose employees are not organized into labor unions. Thus, the Fair Labor Standards Act exemption serves to promote competition in lowering wages or retarding wage increases. It is also basically unfair to single out any group of workers in any group of industries and shackle them with exemptions which materially affect their living standards. Senator DOUGLAS. This may seem an ignorant question. But I have it before me. Do you understand that the exemption primarily affects the standard working people? Mr. DOLNICK. Yes. They have two exemption periods. Two 14week exemption periods, one of which has no limitation and one of which is a 56-hour week. Senator DOUGLAS. That is on hours. Is it on wages, too? Mr. DOLNICK. Yes. Senator DOUGLAS. On both wages and hours. Mr. DOLNICK. Both wages and hours, that is right. We recommend to this honorable committee that the Fair Labor Standards Act be amended in the following manner. 1. Broaden the basic coverage of the law by bringing within the coverage of the act all firms engaging in business "affecting commerce." Coverage should be extended to all workers, including those working in retail establishments, fisheries, and other allied industries. Merely altering specific exemptions will leave still excluded a large segment of our working population who most urgently need equal treatment under the law. 2. Delete from the exemptions in the present law those conditions which exclude retail employees. The bulk of employees in retail establishments today work for "Big Business." We can no longer speak of the retail trade as a "momma and papa" enterprise. They need and should receive equal treatment under the law. We recommend that companies operating more than 5 retail stores or doing an annual business of more than $500,000 be covered by the provisions of the law. 3. Eliminate from the law the present two 14-week exemption periods which apply to certain industries. Technological progress and automation, as well as improved methods of distribution, have all but eliminated required longer hours of work in peak season periods. We have shown that in the canning and preserving industry the average hours worked in the peak seasonal months of the year is a little over 39 hours. 4. A number of excellent bills which would attain these objectives are now before the committee. We sincerely hope that you will give favorable consideration to these measures. We especially want to call your attention to S. 3310, containing amendments to the Fair Labor Standards Act of 1938, affecting the food industries, sponsored by Senator Pat McNamara. S. 3310 would end the injustices now in effect for the retail, canning, fish processing, poultry and other food industries. Thank you very much. Senator DOUGLAS. Thank you. The next meeting of the subcommittee will be on next Monday, And in addition to the witnesses scheduled, testimony will be received from Dr. Blum. (Whereupon, at 12:12 p. m., the subcommittee recessed, to reconvene at May 14, 1956.) AMENDING THE FAIR LABOR STANDARDS ACT OF 1938 MONDAY, MAY 14, 1956 UNITED STATES SENATE, COMMITTEE ON LABOR AND PUBLIC WELFARE, SUBCOMMITTEE ON LABOR, The subcommittee met, pursuant to adjournment, at 10 a. m., in room P-63, the Capitol, Paul H. Douglas (chairman) presiding. Present: Senator Douglas, Senator Goldwater. Also present: Stewart E. McClure, staff director; John S. Forsythe, general counsel; and Michael Bernstein, minority staff director. Senator DOUGLAS. The subcommittee will come to order. The first witness this morning is Dr. Fred H. Blum, of the University of Minnesota. Last year Dr. Blum served as the very efficient consultant to this committee and made two extremely able reports. The first report on the amendment of the Fair Labor Standards Act of 1938, as amended, and the second report on Puerto Rico. These reports I think are models of accuracy and ability. This year we wanted to have a very thorough study made for the committee on coverage. But we had no money with which to carry on this study. To our great appreciation, Dr. Blum volunteered to do the study without fee. And the present report of 368 pages prepared by him is really a great contribution on the question of coverage, particularly in the field of retail establishments. It is so very rare in this world that one gets good work for nothing; and I think the attention of the public should be called to this fact. Had we asked a commercial firm of research men to prepare this report, it would have cost us, I am sure, over $10,000. If we had asked a Government agency to do it, I am sure, it would have cost thousands of dollars. And the result perhaps wouldn't have been as thorough as that which we have now. Dr. Blum has done this work in his spare time. And he has made an extremely valuable contribution. I want to thank you publicly, Dr. Blum, as I thanked you privately, for your unselfishness and also for your efficiency. A great many unselfish people are not very efficient. And a great many efficient people are not unselfish. So, it is a real pleasure to find a man who is both unselfish and efficient. Now, Dr. Blum, you have made this very thorough study, which will be part of the record. I would appreciate it if you would go ahead and summarize the main results that you found and also some of the problems. I know that you approached this subject as a scientist; 78155-56- -17 and even though you may have sympathies in this matter you do not allow them to color the effects which you find. STATEMENT OF DR. FRED H. BLUM, SOCIAL SCIENCE PROGRAM. UNIVERSITY OF MINNESOTA Dr. BLUM. Mr. Chairman, thank you very much for your very kind words. It was a pleasure to do this report for the committee. And I appreciate the opportunity to be here today and to elaborate on some of the findings. Whenever one has finished a manuscript one gets some ideas that one would have liked to incorporate in the manuscript. This is therefore a very fine opportunity to bring out a few of the salient findings and to relate them to the key issues which emerged from some of the hearings which I attended last week and some of the records which I had an opportunity to look at. I would like to present the findings of the report in connection with the two major objectives of the Fair Labor Standards Act, namely, to eliminate substandard conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers; and second, to accomplish this without substantially curtailing employment and earning opportunities. I think we have to be guided by the twofold objective of the act. First I want to comment on the extent to which substandards exist in retailing today. The act does not define the minimum standard or indicate what standard should be used. Hence, there is a fairly wide range within which the standard could be determined. However, I have taken into consideration the two objectives of the act in the very determination of the standard to be used. In other words, I felt that it would be unrealistic at this time to set the standard at a level which would really afford a good minimum standard of living to a family; I have therefore taken the needs of a single woman without dependents as the standard to judge the degree to which retailing measures up to the objectives of the act. Senator DOUGLAS. That is, you have not taken the family standard? You have not assumed that the single woman had dependents? Dr. BLUM. That is correct. Senator DOUGLAS. You have merely taken the standard of a single woman without dependents? Dr. BLUM. Yes. Using this standard, I would like to give you first the results of the study and then substantiate them. The study has shown that as of April 1955 between one-third and one-half of all employees in retailing earned less than the minimum necessary to sustain a single woman without dependents. Now, what is the evidence for this rather broad and, to me rather startling finding? The standard itself is the median of 13 budget studies undertaken by various States. All these budget studies were undertaken in view of minimum-wage legislation. They are related to minimum needs as the States see them, which are usually lower than Federal standards and certainly much lower than the Bureau of Labor Statistics "City worker's family budget." The median budget requires a wage of $1.15 an hour, assuming that the employee is working 50 weeks a year at 40 hours a week; a wage of $1.28 an hour, assuming that the |