Therefore, it seems to me that the question that industry has toI think the question that these industries which are now developing, which are such huge chains, have to ask themselves is what is their responsibility toward our general economy and toward meeting the human needs of the people that they employ. I think that is what we are driving at in this thing. And if their present profit and loss statements won't permit them to meet the added cost of these, I think they have to adjust their business accordingly. Senator ALLOTT. Well, suppose that adjusting their business accordingly throws a lot of people out of work, and you have not accomplished anything? Mr. HOLDERMAN. I don't think it will. I think the history of minimum wages has shown that on the Federal level, at least, it is shown that employment has grown as purchasing power has increased. Unemployment has not risen as a result Senator ALLOTT. It also grows as a result of education. Mr. HOLDERMAN. Yes; that is true. Senator ALLOTT. And that experience has followed through throughout our history. Mr. HOLDERMAN. As a result of education? Senator ALLOTT. Yes, sir. Just as much as the other. But I suppose you say, through the testimony, the details of which I don't recall, last year, in which it was demonstrated that a wide scale minimum wage clear across the board would throw numerous industries, particularly in the South, out of business. So you are confronted, and this committee is then confronted, with whether it is better to raise their wages and throw them out of work or let them work for what they can be paid. Mr. HOLDERMAN. Didn't the experience show in the establishment of Federal minima years ago that while there may be some temporary adjustment, that the increasing purchasing power permitted the taking up of that slack. As people consumed more goods, there was increased employment in those particular fields. While it was true that there was some shift in work force, neverthe less that took up the slack and certainly provided for the human needs of those who were the recipients or were the beneficiaries of those laws. Senator ALLOTT. How does New Jersey's minimum wage standards compare with your neighbor's, New York, Pennsylvania? Mr. HOLDERMAN. I can only give you 1 or 2 examples. The mercantile industry at the present time is 75 cents an hour in New York. The present minima, because this new one that I described, has not gone into effect; and it is now 60 and 65. Or rather 55 and 60 in New Jersey. We are lower than New York State. I understand, however, that last week the commissioner of labor in New York appointed a wage board for the mercantile industry. So, it is likely that there will be some change there. What it is, what it will be, I have no idea. Senator ALLOTT. And what about the State of Pennsylvania? Mr. HOLDERMAN. They do not have any. At least, none enforcible. I think there was some court action on it years ago. Mr. FLEMM. They never did pass any order other than a laundry order in Pennsylvania. And every time they attempted anything, Bucks County Court said it was unconstitutional. Senator ALLOTT. Do you find that the lack of minimum wages in Pennsylvania has led to a great outflux of business to Pennsylvania from New Jersey? Mr. HOLDERMAN. From New Jersey into Pennsylvania? Mr. HOLDERMAN. An outflux of industry to that State, no. Senator ALLOTT. Industry and business, too? Retail business? Mr. HOLDERMAN. I dare say, Senator, that probably one of the principal factors or one of the principal reasons for the fact that Philadelphia was almost completely a market area for the residents of southern Jersey probably was due to the lack of minimum wage and the lower wages paid in the Philadelphia market. For example, there has not been a large department store in the city of Camden in spite of the fact that they have some hundred and fifty thousand population until this year, when Strawbridge & Clothier moved into the Camden area. Senator ALLOTT. Couldn't that be traceable-I don't know that particular community-but couldn't that be traceable to other things? Communities also lack initiative. Mr. HOLDERMAN. I wouldn't say so. I think there is enough business initiative in New Jersey so that if the market was favorable in the south Jersey area that they would Senator ALLOTT. Well, would you say that the difference is the reason that they have not had large department stores in Trenton-or Camden rather? Mr. HOLDERMAN. I think it is a contributing factor. Then, incidentally, I did not mention the fact that only recently has Trenton had any substantial-sized department stores. I don't think there is any in the Phillipsburg area. Mr. FLEMM. Phillipsburg is a large manufacturing area with practically no retail trade. All the retail trade goes across the river to Easton. Senator ALLOTT. I would call your attention to the fact that there are numerous other twin cities in the United States in which you find all of the retail, or practically all of the retail, development in one of the cities, and almost none in the other. And in my opinion at leastI cannot put much emphasis on the wage factor-but I do not think it makes that much difference in the business relationships. Mr. HOLDERMAN. Well, I am not an accountant, but it seems to me that it is a very strange coincidence that that same condition does exist on the northern border in New York State in that market area where there was a minimum wage in both New York and New Jersey, an enforcible minimum wage, and where competition was more even than it is in south Jersey. Senator ALLOTT. Well, is there an influx from New York to New Jersey? Mr. HOLDERMAN. There is now; yes. Very substantial in the last few years. Senator ALLOTT. Would you say that is due to the difference in wages? Mr. HOLDERMAN. Possibly it may be a factor. I think it is a combined factor. I think there are a number of factors. One, the very rapidly increasing population in northern Jersey. And being closer to that, making it more convenient to the customer capturing a larger market there; and also the possibilities that our minimum wage is possibly lower than the one in New York State may also have been a contributing factor. Senator ALLOTT. I think that is all. Senator DOUGLAS. Thank you very much. We will meet again tomorrow at 10 o'clock. (Whereupon, at 12:35 p. m., the hearing recessed to reconvene at 10 a. m., May 9, 1956.) AMENDING THE FAIR LABOR STANDARDS ACT OF 1938 WEDNESDAY, MAY 9, 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, United States Capitol, Senator Paul H. Douglas (chairman) presiding. Present: Senators Douglas and Allott. Also present: Stewart McClure, staff director; John S. Forsythe, general counsel; Michael Bernstein, minority staff director; Mary DiDio, professional staff member. Senator DOUGLAS. The committee will come to order. The first witness this morning is Mr. Al Whitehouse, director of the industrial union department, AFL-CIO. We are very glad to have you this morning. You are accompanied by Mr. Jack Barbash? STATEMENT OF ALBERT WHITEHOUSE, DIRECTOR; ACCOMPANIED BY JACK BARBASH, DIRECTOR OF RESEARCH, INDUSTRIAL UNION DEPARTMENT, AFL-CIO Mr. WHITEHOUSE. He is director of research of the industrial union department. The industrial union department of the AFL-CIO appreciates this opportunity to present its views on the legislation under consideraion by your subcommittee. We are the newest trade department of the merged federation and, in fact, the industrial union department is a direct result of the merger. The department is composed of 72 affiliated unions with more than 7 million members. The main object of the industrial union department is to promote the interests of industrial unions within the AFL-CIO consistent with the principle established in the AFL-CIO constitution that both craft and industrial unions are appropriate, equal, and necessary as methods of union organization. There is no legislative objective closer to the interests of industrial unions than the enactment of a sound and inclusive Federal minimumwage law. By the time these hearings are over, you will have heard from all of the groups in interest. President Meany and Mr. Ruttenberg have already presented the position of the AFL-CIO on the pending legislation. Various affiliates of the AFL-CIO and of the industrial union department will concern themselves with special aspects of the legislation as it affects them directly. We should like to let the record show our endorsement and support of the AFL-CIO position on this legislation. And rather than repeat at length what you will get from other witnesses, what I would like to do in behalf of the industrial union department is to address myself to certain broad policy considerations which should affect your judgment in reporting out a sound bill. Your subcommittee, Mr. Chairman, and the full committee of which it is a part is in an extraordinary good position to be well informed on the coverage problems before you. Although, in the main, you amended the wage provisions of the Fair Labor Standards Act last year, your hearings also explored the problem of adequate coverage in considerable detail. In fact, I think the subcommittee deserves considerable commendation for the quality of its record on the coverage issue, for that record shows a proper regard for the facts and the interests of all groups involved. In a very real sense, you now have a record which is fully adequate as a basis for the intelligent discharge of your legislative responsibilities in reporting out a sound bill extending the coverage of the Fair Labor Standards Act. In fact, the record is so good that we can document our own views through the record before you. That record points up the problem very sharply. It is this: Shall the crazy quilt of specific exemptions written into the law and the restrictive application of the Federal commerce jurisdiction written into the law, be permitted to frustrate the stated objectives of the law? We think that you will resolve the issue in the way that it should be resolved by removing the exemptions in the main and broadening the commerce application of the act. PURPOSES OF FAIR LABOR STANDARDS ACT The objective of the Fair Labor Standards Act is to correct, and as rapidly as possible to eliminate, in industries engaged in commerce, labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general wellbeing of workers, without substantially curtailing employment or earning power. From the act's declaration of policy and from the facts of economic life, I think it is possible to be even more specific as to the purposes which minimum-wage legislation must serve. 1. Workers in American enterprise should have the opportunity, protected by law, to work for wages consistent with the maintenance of a standard of living necessary for health, efficiency, and general well-being. 2. Workers covered by collective bargaining have, in the main, achieved the standards set forth by the law. Therefore, it becomes all the more important for the law to enforce this public policy as to the workers who, for one reason or another, are not protected by collective bargaining. 3. The fact that large numbers of workers are denied an opportunity-protected by law-to work under decent standards is not only harmful to the workers affected but constitutes a threat to the well |