a 90-cent minimum. Fifty-seven percent of the association's shoe's manufacturing members employing 42,522 workers were surveyed. The results of this tabulation are listed.

New England shoe workers paid less than 90 cents per hour in April 1955

Many New England shoe firms are already paying minimum-wage rates much higher than the present 75 cents. These rates have been established through collective bargaining or are pai‹ voluntarily by the manufacturers.

EFFECT OF A DOLLAR MINIMUM WAGE

In order to determine the possible effect of a minimum wage of $1 per hour on shoe workers, our association undertook another survey of its Maine and New Hampshire shoe members. This analysis was limited to these two States because of the greater ratio of employees in the lower wage brackets than for Massachusetts (please refer to table 1). The results of this survey (which covers 83 percent of the Maine and New Hampshire shoe workers as listed in table 1) are shown below.

From the above table, it is obvious that any increase in the minimum hourly wage will affect a great number of employees. If the minimum were to be raised to $1 per hour, the net result would directly affect a percentage of shoe workers so large as to have a disruptive effect on the wage structure of the industry. The net result will certainly be a substantial increase in labor costs which will inevitably cause higher retail prices for shoes.

EFFECT OF HIGHER THAN 90-CENT MINIMUM WAGE

Any minimum hourly wage above 90 cents would involve relatively a much larger number of workers in the shoe industry. The average hourly wage of shoe workers throughout the country was $1.34 in April of this year, the most recent information available from the Bureau of Labor Statistics. The impact

of a minimum wage above 90 cents would be felt broadly throughout the industry. It is our considered opinion that a minimum in excess of 90 cents could conceivably cause serious unemployment of marginal and older shoe production workers who could not earn on a piecework basis (the industry's basic method of wage payment) the amount set as the minimum under the Fair Labor Standards Act. Slow or inefficient workers would be laid off because their rate of production on piecework would not yield earnings equal to or in excess of the minimum prescribed by statute or by a collective-bargaining agreement. Increasing the minimum wage beyond 90 cents could result in unemployment in this way.

SUMMARY

An increase in the minimum hourly wage from 75 to 90 cents per hour is not unreasonable in our present economy. Any figure beyond 90 cents, however. should be established through the normal patterns of collective bargaining, increased productivity, and improved efficiency. Legislative action—if taken to extremes can stifle business activity and cause serious industrial repercussions. The New England Shoe and Leather Association, therefore, respectfully requests this committee to recommend an increase in the Fair Labor Standards Act minimum hourly wage to 90 cents and to reject any minimum above this level.

Mr. FIELD. Our association joins with the Shoe Manufacturers Association in a united position of favoring the administration's proposal of a 90-cent minimum-wage rate. And we are very strongly opposed to any rate above the 90-cent level.

I will try to explain the reasons for our recommendation, which certainly for our industry we feel are well founded. They are based on economic fact and also a recommendation made not only in the best interests of our own industry, gentlemen, but in the interests of the American public.

Mr. ELLIOTT. Mr. Chairman, let the gentleman explain a little bit about what his industry is, just at this point.

Mr. FIELD. Fine, sir. The New England Shoe and Leather Association represents 425 manufacturers of shoes, leather, and allied products, within the New England States. We number in our membership roles 275 shoe manufacturers, who produce 95 percent or more of all the shoes made in the New England region.

Our region produces 37 to 40 percent of all the shoes made throughout the country in all shoe-producing States.

So we are a very important factor in our industry.

We have one further characteristic that I am sure will interest you, gentlemen, and that is that our membership, the manufacturers within our region, are made up by and large of small- to medium-sized concerns. With one exception, we have no large companies whose main offices and plants are located within New England.

Mr. ELLIOTT. What is the average-sized plant?

Mr. FIELD. The average-sized shoe factory is a company that operates about 200 to 250 workers. A plant operating fewer than 250 would be a small-sized concern.

Chairman BARDEN. Do I understand that you have other leatherworkers?

Mr. FIELD. Yes, besides shoe workers.

Chairman BARDEN. Handbags and suitcases?

Mr. FIELD. No, just workers in plants who produce items needed in the manufacture and processing of footwear. For example, ir New England, all the large shoe machinery companies are located. and we have plants that produce leather, and we have plants that

produce heels, both wood and rubber heels that go onto shoes, and shoe laces; everything down to the textile linings inside the men's and women's shoes.

Chairman BARDEN. And what would you regard as a really small operator?

Mr. FIELD. We have several of our members who do a wholesale business that have 10 workers; and our largest has 4,000 workers. The smaller companies do not manufacture shoes as such. Outside of a hand operation, a custom type of a plant, you cannot make shoes unless you have from 50 to 250 workers in the plant. A large-sized plant will have up to 500 to even 1,000 workers in a factory. We have a factory, actually, in New England, where they have 1,200 workers in one factory, in the city of Boston, Mass.

Now, that is an extreme instance, or an exception, of a very large factory.

Mr. LANDRUM. Is that the exception to which you refer?

Mr. FIELD. That is the exception. There is one which in 12 different factories has a total employment of 4,000 workers.

Chairman BARDEN. În your factories in Boston, 90 cents would not affect them, anyway.

Mr. FIELD. No, sir; because the present minimum would be that. Mr. FRELINGHUYSEN. Mr. Chairman, I just had a brief question to ask Mr. Field.

In connection with the maintenance of differential, I notice in your prepared statement you suggest that when a wage floor is raised the entire wage structure is also adjusted to maintain existing differentials between skills.

We have had a number of witnesses appear here who say that as a practical matter a sizable increase in the minimum would result in a flattening out of the wage differentials which presently exist, and that that is not a particularly disadvantageous situation.

Is it your feeling that there would be an attempt to maintain a wage differential, and that it should be maintained, and that that is one of the reasons why this is a serious problem as it affects your industry?

Mr. FIELD. That is exactly our position. Economic factors, collective bargaining, law of supply and demand, would be such that we must have skilled, semiskilled, and unskilled operators in our plant; and that the differentials, the relative rates between the unskilled and the semiskilled, and between those two groups and the skilled, would be maintained. And that was certainly true when the minimum rate was raised to 40 cents, and it was also true when the rate was further increased to the present 75-cent level.

Mr. FRELINGHUYSEN. What would be the result if the employer did not have the financial capacity to maintain the wage differential, and he applied what capacity he had to increasing the minimum wage? Would that result in dissatisfaction and people leaving employment; that the more skilled workers would leave employment and seek employment elsewhere? Or what would be the result? In other words, the higher up it is, the bigger the wage bill, and the less likelihood that there would be the financial capacity to increase the wages all along the line.

Mr. FIELD. That is right.

Mr. FRELINGHUYSEN. But if there was not enough capacity, what would be the result?

Mr. FIELD. Well, to answer that question properly, I would have to state that a manufacturer, any group of manufacturers, who could not pay the required minimum rate and the necessary increases in the rates to their other workers, would be faced with a competitive situation where, first, they would probably have to move to another area, or change their type of products, in order to continue operating.

Now, I am not sure that that specifically answers your question, but the competitive forces are such that in the established shoe centers no manufacturer can operate out of the established level of rates for the different skills required in producing shoes.

Mr. FRELINGHUYSEN. In your opinion, it would be highly desirable, insofar as it is possible, to maintain the wage differential which presently exists?

Mr. FIELD. Exactly. And we know, based on studies made among cur members, that the 90-cent rate-actually, a rate even lower than 90 cents, but certainly up to the 90-cent rate-would have some adjustments to maintain the differentials, but that those increases would not be so great as to seriously affect the future operations of our manufacturers, or seriously affect the number of workers on our payrolls. And we, as an industry, have some 230,000 shoe workers in the country, and there are onother 100,000 workers employed in other industries, manufacturing products needed in processing and producing shoes.

Mr. FRELINGHUYSEN. Thank you, Mr. Chairman.

Mr. FIELD. Now, if I may continue, gentlemen, I would like to point out that a minimum wage is designed as a floor in earnings to provide a minimum standard of wages. And that has been a major objective of the Fair Labor Standards Act.

We feel that an increase from 75 cents to 90 cents is justified by the actual increase in the cost of living, since January 1950, when the 75-cent rate was established; because there the actual cost of living index, as established by the United States Department of Labor, represents an increase of 1312 percent; and with a 90-cent minimum wage, what is being proposed is an increase of 20 percent.

Now, should a dollar minimum be established, we would be faced with an increase of 33 percent. And, of course, an increase to $1.25 would mean an increase of two-thirds over the current real minimum. And we maintain that any increase, any increase so substantial as being above the 20 percent increase, at least for our industry, would result in economic hardships that are not warranted at the present time.

Now, we have surveyed our members, and we have included in the statement which now appears in the record, and which is before you gentlemen, the following facts. And I will merely summarize the results of two surveys that we undertook: The first in April of this year, when we surveyed 150 of our manufacturing companies, shoe manufacturers, who employed at that time 42,522 workers. And we established that the overall increase for our New England area was the minimum rate raised to 90 cents per hour, an average of 10 percent. And that varied from a low of 6 percent in the State of Massachusetts to 15 percent for the State of Maine.

The gentleman this morning testified that the Government statistics indicated that the overall increase for our entire industry would be closer to 19 percent.

We further reexamined the records of those of our member plants in Maine and in New Hampshire, the two States where the largest ratio of workers would be affected by an increase of 90 cents, and we surveyed a sample, a representative group, of our Maine members. And we discovered that whereas there were 14 percent of our production workers then earning under 90 cents per hour, there were 6.5 percent additional workers earning over 90 cents but less than $1 an hour. So we had at that time in the State of Maine 20 percent of our production workers earning under $1 per hour. And in the same manner, when we checked and surveyed our representative plants in New Hampshire, we found that that percentage was 22 percent.

Now, we maintain, gentlemen, and we feel that these figures speak for themselves, that a differential of 6, 9, and even 15 percent, which would be established should the minimum be increased to 90 cents is one thing; but to have a dollar minimum established, which automatically would result in our own area in increases involving 20 percent and more of our production workers, the effect would be such as to seriously disrupt employment and economic factors in our industry.

First, when I say "employment," we know that we have a substantial number of our shoe workers today earning the 75-cent rate because they are handicapped or older workers-workers who, because of age or incapacity, handicaps, just cannot earn the established piece rates on their jobs. And in the shoe industry, most factories operate on a piece-rate basis, rather than on a straight-time hourly basis. I hope I have made that point clear, gentlemen.

So the net result there would be a substantial increase in labor cost to our member plants and the resultant employment for a percentage, for a number, of our workers. And no matter how small that percent may be, it is a factor that I am sure you will all take into consideration.

Mr. GWINN. Mr. Chairman, just a question, there, if you please. In order to determine the low earning capacity as being a real factor, instead of an artificial one, will you give us an example where the younger worker, on the same piece-work basis, the same compensation per piece, earns much more than the slow or the old worker, at the same work? What differential is there, there, so as to get a measurement of the real earning capacity of the so-called low earner? Mr. FIELD. I am not sure that I can give you any specific rate to indicate the earning capacity of the efficient, industrious worker, as compared to one that may be handicapped. But actually, this is how it works out.

An operator on a job, any machine job, has his rate of production, his rate of output, controlled by two factors. First, the rate at which the machine operates, because he is tending a machine. He is inserting or working with leather or other materials on that machine. And secondly, the industry in which that employee, that worker, will perform.

Piece rates are established generally on an average, a norm. The factories in Pennsylvania, New York, California-we have factories