Federal minimum wages, and some of them have been loudly vociferous. Yet we have seen that our national wealth has grown tremendously and our standard of living has reached new heights. As a matter of fact, we have seen that some of those areas where the protests were the loudest, and the wages the lowest, have prospered most since the enactment of the Fair Labor Standards Act.

Yet, there are still many American families who do not have a decent standard of living. And there is no doubt that our present 75 cents minimum cannot provide it. A substantial increase in the minimum now would help these neediest families who burden our economy and public institutions. It will also protect those fairminded employers, who are paying decent wages, from the unfair competition of the sweatshop producers. Such an increase would immediately be translated into purchasing power, which would stimulate production and employment and, in turn, aid the farmers and the retailers. A Federal minimum of $1.25 an hour would be a major step toward an American standard of living for our lowest income families and would contribute greatly to our national prosperity.

I respectfully urge this committee to recommend a Federal minimum wage of $1.25 an hour.

SUPPLEMENTARY STATEMENT SUBMITTED WITH THE TESTIMONY OF GLADYS DICKASON, VICE PRESIDENT, AMALGAMATED CLOTHING WORKERS OF AMERICA, CIO

This statement is a supplement to the testimony of Gladys Dickason, vice president of the Amalgamated Clothing Workers of America. It consists of the economic analysis prepared for both the House of Representatives and Senate committees considering amendments to the Fair Labor Standards Act. As such, it is identical with the supplementary statement submitted by Jacob S. Potofsky, president of the Amalgamated Clothing Workers of America, to the Subcommittee on Labor of the Senate Committee on Labor and Public Welfare, on April 19, 1955. The essential facts are that (1) a substantial increase in the Federal minimum wage is needed to correct existing substandards of living among men's apparel workers; (2) a Federal minimum wage of $1.25 an hour will not result in significant increases in costs in the men's apparel industries and will help to relieve unfair competition based on substandard wages; and (3) in the men's apparel industries, past experience under the Fair Labor Standards Act has been favorable.

THE WAGES OF MEN'S APPAREL WORKERS ARE TOO LOW TO PROVIDE A MINIMUM STANDARD OF LIVING

The Finding and Declaration of Policy of the Fair Labor Standards Act of 1938 states that it is the policy of the act to correct and as rapidly as practicable to eliminate labor conditions detrimental to the maintenance of the minimum standard of living necessary for the health, efficiency, and general well-being of workers. There can be no question about the fact that the present 75 cents an hour Federal minimum wage is completely inadequate to serve as a realistic floor for a wage structure intended to correct such labor conditions.

Studies of living conditions have been made by government agencies for many years. Perhaps the most comprehensive work in this field was undertaken by the United States Bureau of Labor Statistics in 1945, under a directive of the Labor and Federal Security Subcommittee of the House of Representatives Appropriations Committee. The city worker's family budget, which the Bureau developed in response to this directive, is a budget for a family of four, consisting of an employed father, a mother, and two children under 15 years of age.

This city worker's family budget represents the estimated dollar cost required to maintain this family at a level of adequate living-to satisfy prevailing standards of what is necessary for health, efficiency, the nurture of children, and for participation in community activities. This is not a subsistence budget, nor is it a luxury budget; it is an attempt to describe and measure a modest but adequate standard of living.

This budget was originally priced by the Bureau of Labor Statistics at March 1946 price levels. It was priced most recently by the Bureau at October 1951 price levels. The Bureau found that at October 1951 price levels, the total annual cost of maintaining a family of four at a modest but adequate level ranged from $3,812 to $4,454 in the 34 cities studied, as indicated in table 1. When translated

into the hourly wages needed to meet this budget, it is obvious that, in October 1951, even in the American city with the lowest cost, a worker would have had to earn not less than $1.83 an hour, 40 hours a week, for 52 weeks a year, in order to maintain a family of four at a modest standard of living. For the 34 cities, the arithmetic average hourly wage needed to meet this budget was, in fact $2. At present price levels, higher earnings would obviously be needed to meet the city worker's family budget because of the increase in the cost of living in the last 3 years.

TABLE 1.—City worker's family budget, 34 large cities, October 19511

1 Source: U. S. Department of Labor, Bureau of Labor Statistics, Monthly Labor Review, May 1952, p. 521.

2 Calculated by dividing the total annual cost by 2,080 hours; i. e., 40 hours a week, 52 weeks a year.

When we say that an American worker needs $2 an hour, or $80 a week, or $4,160 a year to provide a modest but adequate living standard for his family, what do we mean? It is easy, in citing figures, to lose sight of what these amounts mean in terms of the everyday living of the city worker's family.on whose living standards the Bureau of Labor Statistics based its budget. Just how modest this standard of living is can be appreciated at once when one realizes that the budget allows a 4-person family with 2 growing children less than 3 pounds a week of roasts, steak, chops, porkchops, and poultry and less than 2 quarts of milk a day. On this budget, the employed head of the family buys 1 heavy wool suit every other year, and an overcoat every 6 years; his wife buys 2 rayon dresses a year, 1 woolen dress every 5 years, and a heavy cost every 4 years. The allowances on some items of children's apparel are suchrubbers or overshoes every other year, for instance that some hand-me-downs are obviously required to fill the gaps, in view of the normal rate of growth of youngsters of these ages. The wife does all the cooking, cleaning, and laundry without any paid assistance. As for recreation, the budget permits 2 motion pictures every 3 weeks for the parents; 1 play, concert, or sporting event a year for each member of the family; and the purchase of only 1 book a year for the entire family. This is the adequate standard which now requires a man to earn more than $2 an hour to meet it.

How do the earnings of the men's-apparel workers compare with the $2 an hour, or $4,160 a year, which the Bureau of Labor Statistics considers necessary

for a modest standard of living? All of the recent wage surveys of the men'sapparel industries made by the Bureau of Labor Statistics indicate that very few men's apparel workers earn enough to meet even this modest standard. In the past few years, the Bureau has made wage surveys in several branches of the men's-apparel industries. Table 2, which shows the average hourly earnings and the percentage of production workers earning less than $2 an hour in these various branches, indicates that relatively few production workers in men's-apparel industries earn enough to meet the cost of the Bureau's city worker's family budget.

TABLE 2.-Average hourly earnings and percentages of production workers earning less than $2 an hour in various branches of the men's apparel industries

1 Computations based on U. S. Department of Labor, Bureau of Labor Statistics, Straight-time Hourly Earnings for Selected Occupations in Men's and Boys' Suit and Coat Manufacture, March 1951, BLS 19883 OWR-23 (revised) forms.

U. S. Department of Labor, Bureau of Labor Statistics, Wage Structure, Work Clothing, July 1953, BLS Report No. 51, p. 6.

U. S. Department of Labor, Bureau of Labor Statistics, Wage Structure, Men's and Boys' Dress Shirts and Nightwear, May 1954, BLS Report No. 74, p. 6.

In the men's and boys' suit and coat industry, in March 1951, average hourly earnings were $1.684, and 72.8 percent of the production workers were earning less than $2 an hour. However, in both the work clothing branch, where average hourly earnings were 96 cents, and the dress shirt and nightwear branch, where average hourly earnings were $1.09, almost none of the production workers had earnings of $2 an hour or more. Wage increases in the men's apparel industries since the dates of the BLS surveys would reduce the number earning less than $2 somewhat, but they would still constitute the overwhelming majority.

Since the city worker's family budget was constructed for a familly in which the male wage earner is the head of the household, it is relevant to inquire into what proportion of males employed in the men's apparel industries have earnings of less than $2 an hour. The BLS wage surveys referred to above indicate that 53.6 percent of the male production workers in the suit and coat industry were earning less than $2 an hour in March 1951; 96.9 percent of the male production workers in the work clothing industry were earning less than $2 an hour in July 1953; and 91.3 percent of the male production workers in the dress shirt and nightwear industry were earning less than $2 an hour in May 1954. Thus, it is apparent that, on the whole, relatively few men employed as production workers in the men's apparel industries have hourly earnings as high as the hourly amounts required to be earned 40 hours a week, 52 weeks a year, to meet the cost of the modest city worker's family budget. And, in connection with the men's apparel industries, it must be noted that they have, at times, been subject to seasonality and slack time. Therefore, if relatively few male production workers earn hourly amounts high enough to meet the hourly cost of the modest BLS budget, even fewer will be able to meet the weekly cost, and certainly very few will have annual earnings high enough to meet the annual cost of the city worker's family budget.

Thus, it is clear that by the Government's own representation of a modest standard of living-which we have shown to be meager enough-men's apparel workers do not earn enough to provide even this modest standard of living for themselves and their families. A substantial increase in the Federal minimum wage is needed to correct those labor conditions "detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers."

THE EFFECTS OF A $1.25 FEDERAL MINIMUM WAGE ON THE MEN'S APPAREL INDUSTRIES That a Federal minimum wage of $1.25 an hour is necessary for the maintenance of a minimum standard of living is beyond question. That such a mini

mum is feasible, as regards its effects on costs in the men's apparel industries, and that such a minimum will help alleviate unfair competition in these industries, are also supported by the facts.

The effect on cost

On the basis of the BLS wage surveys referred to earlier and on the basis of data on labor cost and total cost reported in the 1952 Annual Survey of Manufactures, it is possible to estimate the effect of a $1.25 minimum wage on total costs in the men's apparel industries. Table 3 outlines the calculation of the percentage increases in total cost resulting from increasing all workers earning less than $1.25 an hour to $1.25 an hour.

TABLE 3.-Calculation of estimated increase in cost resulting from increasing the wages of all production workers earning less than $1.25 an hour to $1.25 an hour in various branches of the men's apparel industries

1 These data are for the work shirt branch. Labor cost and total cost data are not available for the work clothing branch as such.

2 Obtained by multiplying the percentage increase in total labor cost by the total labor cost as a percentage of total cost.

In the suit and coat industry, the percentage increase in total labor cost of a $1.25 minimum would be 2.5 percent, on the basis of the March 1951 BLS wage survey. Since labor cost represents 25.6 percent of total cost in this industry, the percentage increase in total cost would be a mere 0.6 percent. In the dress shirt and nightwear branch, the increase in labor cost would be 20.4 percent and the increase in total cost would be 5.2 percent, if a $1.25 minimum were enacted. In the work clothing branch, labor cost would be increased by 31.9 percent and total cost by 5.5 percent. Since the dates of these wage surveys, wage increases have been made in the men's apparel industries. These increases would have raised the general wage levels and would lower somewhat the percentage increase in both labor cost and total cost resulting from the institution of a $1.25 minimum wage at the present time.

From the foregoing figures, it is evident that the effect of a $1.25 minimum on total cost would be negligible in the men's clothing industry and that the effect even in the traditionally low-wage cotton garment industries would, on the basis of current figures, hardly exceed 5 percent.

At the same time, it is obvious that those who will be most affected by the increased minimum will be the manufacturers now competing unfairly on the basis of substandard wages.

Unfair competition

A major finding of the Fair Labor Standards Act is that "labor conditions detrimental to the maintenance of the minimum standard of living" constitute "an unfair method of competition in commerce," and it is the expressed policy of the act "to correct and, as rapidly as practicable, to eliminate" such conditions. If this intention is to be carried out, there must be a substantial increase in the Federal minimum wage.

The BLS wage studies of the men's dress shirt and nightwear and work clothing industries are quite revealing in this connection. We find that in the

dress shirt and nightwear branch, although the average hourly earnings were $1.09, a very large group of workers-18.1 percent-were earning between 75 and 80 cents an hour, or 29 to 34 cents below the average. In the work-clothing branch, an even larger percentage of workers were concentrated at this very substandard wage level of 75 to 80 cents an hour-26.1 percent. With an average of 96 cents an hour, we thus find that more than a fourth of the work-clothing workers were earning from 16 to 21 cents less than the average.

This means that the employers of a considerable number of men's cotton garment workers are paying wages which are very substandard when compared even with the low wage levels generally prevailing in these industries. These employers have apparently not voluntarily set wages comparable with those prevailing.

That is why, if the Fair Labor Standards Act is to be effectuated in terms of present conditions, the Government itself must establish a realistic wage floor to bring the wages of the substandard workers-who are unable to help themselves-up to a more decent level than the present obsolete 75 cents an hour allows. At the same time, those employers paying decent wages will be afforded better protection from the unfair competition of the producers paying substandard wages.

THE MEN'S APPAREL INDUSTRIES' PAST EXPERIENCE UNDER THE FAIR LABOR STANDARDS ACT HAS BEEN FAVORABLE

Since the enactment of the Fair Labor Standards Act in 1938, the men's apparel industries have experienced two major periods of adjustment to changes in Federal minimum wages under the act, the years from 1938 through 1941 and the 1949-50 period. The original Fair Labor Standards Act established a nationwide hourly minimum of 25 cents as of October 24, 1938, to be increased to 30 cents an hour by October 24, 1939, and to 40 cents by October 24, 1945. Provision was made, however, for industry committees to set minimum rates up to 40 cents an hour at dates earlier than October 1945. Accordingly, in July 1940, a 40-cent minimum was established for men's and boys' clothing, sportswear, and other odd outerwear, and leather and sheeplined garments, while rates of either 371⁄2 or 321⁄2 cents were set for other major men's apparel branches. By the end of 1941, however, the 40-cent minimum had also been adopted in these other men's apparel branches.

The first period of adjustment to Federal minimum wages under the Fair Labor Standards Act, then, may be said to cover the years 1938-41. The second period of adjustment followed the amendments to the act enacted 1949. These amendments included a 75 cents hourly minimum wage, effective January 25, 1950.

In the men's apparel industries, experience with Federal minimum wages under the Fair Labor Standards Act has been extensive and, apparently, favorable. Aside from the generally wholesome effect on these industries of the increased purchasing power and, presumably, fortified consumer demand for apparel which resulted from the nationwide minimum, the specific data for the men's appearel industries indicate that these industries adjusted favorably to the increased minimum wages.

In both periods of adjustment, 1938-41 and 1949-50, employment and the earnings of the workers in the men's apparel industries increased, the profit experience of the manufacturers was favorable, and there was a decline in the number of business failures and the amount of their current liabilities. The average value of men's garments at the factory actually declined after the first FLSA minimum was set in 1939 (the 1937-39 period being the only relevant period for which these data were available).

It is not surprising that increases in Federal minimum rates should result in higher average hourly earnings, and this was, in fact, the case in the men's apparel industries. But it is also important to note what happened to employment as a result of the minimum rate increases, not only because this is a significant economic indicator but also because the act specifically states its policy to be the correction of labor conditions detrimental to the maintenance of the ninimum standard of living necessary for the health, efficiency, and wellbeing of workers, "without substantially curtailing employment."

Table 4 shows that, in the 2 periods of adjustment to changes in minimum wages under the Fair Labor Standards Act, not only did earnings increase but employment, far from being curtailed, actually expanded.