They said that a business which serves a particular local community and did not send products into the stream of interstate commerce can better be regulated by the laws of the States in which the business is operated. There is another matter to which I respectfully direct the committee's attention. The Bureau of Labor Statistics computes monthly average wage figures which are published in the Economic Indicators. For January and February of this year the average hourly earning for employees in the retail trade was $1.54 an hour. This compares with $1.93 for all manufacturing. Retail hourly earnings from 1945 to January-February 1956 have increased by 95 percent, while those of manufacturing have increased by 89 percent, and weekly earnings in retailing during this same period increased 88 percent whereas the weekly earnings in manufacturing increased by 76 percent. The average weekly earnings for employees show the same definite trend. The table from the Bureau of Labor Statistics is inserted in the record at this point. Hourly and weekly earnings, retail trade and all manufacturing Source: Bureau of Labor Statistics, Department of Labor. These figures have another significance. They show that during the last 10 years the earnings by retail employees have increased by a larger percentage than have the earnings in the manufacturing industries which are covered by the Federal wage-hour law. One of the reasons for the difference between the average hourly rates of manufacturing and retailing is the stability of employment in retailing. The retail employer must have a full working force on hand at all times to take care of customers or of potential customers. Thus, income from employment in a retail store is the equivalent in most instances to a guaranteed annual wage. We submit, Mr. Chairman, that all of the bills for extended coverage pending before this committee are discriminatory in nature. Broad public policy already established in Federal and State laws and by a multitude of judicial determinations have condemned discrimination in many forms. Furthermore, we know of no proposal before or after the original passage of the Fair Labor Standards Act to set up a test of coverage in those industries now covered which is based upon dollar volume of sales or number of units under the same ownership or control. In other words, in all of the coverage of this law, as far as we can determine, there isn't a single case where the testimony on coverage is discriminatory as it is in these proposals, and where the testimony on coverage is based on either dollar sales or the number of employees. In conclusion, it is the position of the American Retail Federation that the removal or curtailment of the scope of the present retail exemption as proposed in pending bills before this committee would be highly disruptive of the operations of a vital industry in our economy, and not in the interest of the retail employee nor the job he serves. The retail store is a local business and of necessity has to accommodate itself to local conditions. These conditions vary vastly from community to community throughout the Nation. If the minimum wage and hour regulation is needed, the States are the only governments qualified to legislate in this field. Mr. Chairman, I now offer for inclusion in the record of this hearing a comprehensive study completed last year entitled "Economic Characteristics of Retailing" by Dr. Jules Backman, professor of economics, New York University. It is the product of Dr. Backman's own research and study. Senator KENNEDY. Without objection, that will be made an exhibit. SUPPLEMENTARY STATEMENT ON THE BACKMAN STUDY Mr. JONES. Mr Chairman, I now offer for inclusion in the record of this hearing a comprehensive study completed last year entitled "Economic Characteristics of Retailing" by Dr. Jules Backman, professor of economics, New York University. It is the product of Dr. Backman's own research and study. With the permission of the committee I will briefly trace the scope intent, and significance of this study and the major conclusions reached. (The full text of the Backman report appears in the appendix.) (An appendix from the Backman study follows:) APPENDIX State laws and wage orders affecting retail wages and hours State laws and wage orders affecting retail wages and hours-Continued Mr. JONES. The Backman report goes through about eight chapters with a number of appendixes attached, and practically all of the figures quoted are from official sources. We have checked them carefully, and we think they are accurate. The first chapter deals with the idea that retailing is local in nature, and that prices, too, are always determined by local factors. Central purchasing and other activities are not unique to chainstores. The second chapter goes into the idea that retail stores are usually relatively small in size and volume. The volume of sales per store does not vary significantly with the store's number of employees, the number of employees per firm, or the units per firm. The volume of sales per employee is not significantly different for the large and the small store. Third, diversity of retailing in and of itself. It is a fact that the chainstore has not been increasing in relative importance in distribution. Four, in the matter of stability, retail trade as compared with other areas of economic activity during periods of economic decline has been far more stable than in production industries to which the law applies. It points up by statistics much greater stability of employment in the retail industry--and again, we come back to the point which might be expressed in this way-the basic work force in a retail store can expect 52 pay checks a year. Now, one of the reasons why the BLS statistics of hourly and weekly wages is deficient is that they do not include the fringe benefits in retailing, the almost universal 20-percent discount for the employee and his family on all merchandise sold in the store, the rapidly growing trend to pensions, and the employer paying sickness and health insurances. All of those are fringe benefits which are not included. in these figures for the retail industry. As I say, the fringe benefits are growing rapidly in this present climate. Then, Dr. Backman goes into the characteristics of retail trade, employment stability, and-most important-the marked amount of seasonal employment, the large volume of part-time employment in the retail trade, the relatively large proportion of younger workers and the relatively large number of women who are employed, and also goes into the point of the relatively small proportion of retail employees belonging to unions. Sixth, he goes into the area of retail wages, and makes the case that the retail wage level in any community is set by the wage practices in that community. No retailer is the arbiter of his own payroll, and the amount of money he pays his employees. If he doesn't conform to the local general wage pattern of the community, inevitably he will lose his best employees and be left with only the less satisfactory employees who can't find employment in the many other areas where employment is available. Another point I forgot to make a while ago, there are large numbers of people in the retail industry that could leave it tomorrow and get a bigger weekly paycheck, but they like retailing, they like the climate in which they work, and they like the business. But if retailers did not generally comply and conform to the particular wage pattern, they would end up with less efficient and less productive employees. Section 7 goes into detail on why retail wages, according to the BLS statistics, are lower in retailing than the manufacturing areas and the construction areas. It brings out the point that from an economic standpoint there will be lower capital investment per worker in the retail trade, and a high percentage of labor cost to total cost, far higher than in manufacturing. It points up the trend in retailing-that employment has been similar to other areas in our economy. |