2. Workers in several industries have benefited from minimum wages set under Walsh-Healey Act

The Secretary of Labor has set minimum wage rates at more than 75 cents an hour for work on Government contracts in the following industries:

Maryland, Virginia, North Carolina, South Carolina, Tennessee, Arkansas, Mississippi, Alabama, Georgia, and Florida.

* Different minimum rates apply in each of 3 areas; $1.085 in 12 Southern States, $1.19 in 7 Midwestern States and East St. Louis, Ill., and $1.23 in the rest of the country. The minimum rates for auxiliary workers are 412 cents lower than the above in each area.

Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia."

Determination of Secretary of Labor of $1 minimum, effective Feb. 21, 1953, has been stayed by Federal district court in Corington Mills v. Durkin, so that the 87-cent minimum is still effective.

Except auxiliary workers.

Determination of Secretary of Labor of $1.20 minimum, effective May 7, 1954, has been stayed by Federal district court in the Allendale Co. v. Mitchell, so that the $1.05 minimum is still effective.

3. Fulbright amendment has crippled administration of Walsh-Healey Act

AMENDMENT

During the consideration of the Defense Production Act of 1952, Senator Fulbright of Arkansas proposed three amendments to the Walsh-Healey Act. Two of these were dropped. They sought to define the term "locality" to mean the "city, town, village, or other civil subdivision in which the materials are to be manufactured" and the term "open market" to mean "materials and supplies of standard types and construction as are usually sold generally in the open market, regardless of the method used for Government procurement."

The third amendment was adopted after consideration by the Senate Committee on Banking and Currency. Labor was given a day in court only after considerable protest against the attempt to ram this provision through the committee. The Senate Committee on Labor and Public Welfare never did consider or endorse the Fulbright amendment. No record vote was ever taken on the amendment in the Senate or in the House.

This amendment provided for the application of the Administrative Procedures. Act to the operations of the Walsh-Healey Act, formerly specifically exempt. Only the Secretary's or Administrator's right to grant exemptions to the statute remained unchanged. All rules, wage determinations, interpretations, and legal questions are subject to judicial review.

By requiring rules, wage determinations, and interpretations to be subject to the Administrative Procedures Act, the amendment makes it necessary to give

notice to the interested parties with adequate opportunity for them to participate in the proposed rulemaking and with the right for them to petition for amendments or repeals of a rule.

All wage determinations have to be made on the record of a hearing and therefore compliance with sections 41 and 42 of the Administrative Procedures Act is mandatory. All persons in the industry, whether actually selling or possessing the ability to sell, can demand the judicial review of these determinations and has a right to institute them within 90 days after the determination is made.

All such persons may institute proceedings for a judicial review of any legal question including wage determinations and the meaning of the terms “locality," "regular dealer," "manufacturers," and "open market."

This amendment overruled the previous finding by the Supreme Court that determinations by the Secretary of Labor under the Walsh-Healey Act were final since the Government had the right to set the standards under which Government contracts were to be carried out (Perkins v. Lukens Steel Co.).

CRITICISMS

(1) Burdensome and Unnecessary Procedures Prescribed

(a) Before determinations are issued, the Government must make elaborate preparations to conform with technical procedures. Motions are made and rulings requested even before the hearings are held. At the formal hearing technical objections to evidence are now raised. Morions are made to complicate the procedure. The very formality causes the hearings to be protracted. Then follows the preparation of the record at great cost in time and money. A proposed decision is then issued with invitations for written objections. After considering further objections the final order is prepared and issued.

Comments.-(i) Secretary had normally preceded action by informal conference with parties. Hearings were open and cross-examination was allowed without the need of formal motions. Thorough consideration was provided.

(ii) Under current procedure, Secretary has not modified proposed orders as a result of objections which have unnecessarily delayed promulgation. (b) Procedure is slow-moving as a result of the need for complying with technical details:

(i) Action should be quick under Walsh-Healey Act to cover Government orders being issued, to prevent wage order from becoming obsolete and to realize the act's purpose.

(ii) Legal tests start in the United States district court, the bottom of the judicial ladder.

(2) Procedure Discriminates Against Fair Standards

Comments. (a) Technical rules of procedure are inappropriate for quasilegislative action by administrative boards usually exempt from Administrative Procedures Act or are only required to permit interested parties to present views. Thus, OPA, Departments of Defense, State, Interior, and others have not been subject to technical rules of procedure.

(b) Nonlabor phases of Government contract are not subject to the requirements for formal hearings.

(c) Government has right to lay down rules for Government contracts outlined by Congress. Congress decided there was a clear enough concept of prevailing wages for the administrative bodies to act and that in awarding contracts, none should be given to those who pay less than such a standard. Implementation is a matter of internal management and not properly to be subjected to the formal requirements of the Administrative Practices Act.

(d) Legal tests can be initiated by a person with no Government contracts if he represents himself as a source of supply.

(3) Amendment Opened Up the Secretary's Decision on Scope of Wage Order to Judicial Review

(a) The original Fulbright amendments introduced a definition of "locality" which would preclude designation of wide geographical units or the entire United States as a proper area for wage determination. This attempt was frustrated. But the proponents are trying to achieve by indirection that which they failed to accomplish through congressional action.

(b) By filing a court order challenging the Secretary's finding of a single national minimum wage for the textile and woolen and worsted industries, various employers are seeking to nullify the Secretary's determination.

(4) Amendment Opened Up Opportunities for Legal Action on Definitions of "Regular Dealer,” “Manufacturer,” and “Open Market”

(a) Many interests have long tried to divorce the prime contractor from his responsibility for subcontractors. This would permit the prime contractor to turn the contract over to another who would ignore the labor standards which the contract requires.

(b) Many have tried to get an exemption from the act by contending that they sell identical or similar products on the open market and therefore should be exempt from labor standards set under the Walsh-Healey Act.

These are obvious subterfuges to get out from under the act.

(5) Experience Proves Effective Administration Has Been Hamstrung

(1) The amendment has effectively hamstrung the administration of the act. The Secretary of Labor has promulgated two redeterminations of minimum wages since the adoption of the amendment. Both have been effectively enjoined by the courts under the provisions of the amendment.

(a) The Secretary of Labor ordered an increase in the minimum wage for the textile industry from $0.87 to $1 effective February 21, 1953 (applies to cotton, silk, and synthetic branches). The Federal District of Columbia Court stayed this order for the plaintiffs as a result of two suits (Covington Mills v. Durkin and Alabama Mills v. Durkin). After 2 years this case has not yet come to trial. Only recently the Government submitted its brief.

(b) In the woolen and worsted industry, the Secretary of Labor ordered an increase in the minimum wage from $1.05 to $1.20 for the broadwoven, yarn, thread, blanket, and pressed-felt branch, effective May 7, 1954. The Federal District Court for the District of Columbia stayed this order as a result of a suit filed by the Allendale Mills. More than 2 years later this case had not yet come to trial.

(c) At the time of the passage of the Fulbright amendment (June 1952) proceedings were then in process for the following industries: aviation textile products, battery; canvas products; envelopes; flour and cereal; metal business furniture; neckwear; paper and pulp; photographic equipment; scientific instruments; textiles and woolen and worsted; and tobacco. The order for the mental furniture and paper and pulp industries were ready for signature. Only the metal business furniture order has been issued; it became effective on December 6, 1954.

Result.-Two and one-half years after the passage of the amendment, the record is devoid of effective wage administration under the Walsh-Healey Act.

The Fulbright amendment has vitiated the effectiveness of the Walsh-Healey Act in setting minimum wages for Government work in line with the prevailing minimum wage. The delay has been tantamount to nullification of the act since the new minimum rates will be obsolete before the orders are released from the judicial proceedings made possible by the amendment.

(6) Legislative Correctives

(a) We favor the full repeal of the Fulbright amendment. We wish to restore to the Secretary of Labor the rights he previously possessed and no court actions shall be permitted to contest his findings. Bills introduced by Senators Green and Smith (Republican, Maine) and Congressmen Fogarty, Heselton, Nelson, and Addonizio would accomplish this purpose.

(b) Senator Payne (Republican, Maine) and Senator Kennedy (Democrat, Massachusetts) have introduced a bill which would permit the Secretary of Labor to use such geographic area or areas as he finds to be appropriate giving due consideration to locations of establishments, areas of marketing competition, or other competitive factors.

It is felt that through this clarification, the opponents of the act would have far less basis for utilizing the Fulbright amendment.

FACT SHEET No. 6

LOW WAGES PRODUCE SUBSTANDARD CITIZENS

Workers in the low-wage industries now covered by the Fair Labor Standards Act constitute a substantial proportion of the Nation's wage and salary earners. Among the nonfarm, nonservice workers, and non-self-employed, numbering 42.5 million persons, some 16.7 percent earned under $1,500 in 1952 (7,125,000 persons), and a second group comprising 19.5 percent earned between $1,500 and $2,000 spent $16.42 per week ($5.82 per person) on the average for food at be raised by the adoption of the $1.25 minimum. The current low-wage rates have kept their earnings depressed with consequent unfortunate effects. 1. Low incomes cut down nutritional level below reasonable standards Studies of the way families at various income levels in cities and towns used their food money in 1948, which are as typical now as then, show the following: "Low-income families use a much larger share of incomes for food than do high-income families. *** Families with less than $2,000 income, about onesixth of the total number, used 48 percent of their incomes for food; those with incomes of over $2,000 used 30 percent.

"The dollar amount spent by low-income families for food is less than that spent by higher income groups. *** City families with incomes of less than $2,000 spent $16.42 per week ($5.82 per person) on the average for food at home and away from home-$11 less than families with incomes over $2,000. *

** * 1 of every 6 city families was spending less than $5 a week per person for food at home and away from home-a sum with which it was difficult to buy a nutritionally adequate diet without careful management. The burden of economizing fell particularly hard on the low-income families. Of those with incomes under $2,000, a third were spending less than $5 per person for food, a third between $5 and $7, and a third over $7. *** About half of the lowincome families with four or more persons spent less than $5 a person a week. It is probable that many of these families did not secure nutritionally adequate diets. ***

"Low-income families use more grains, less milk, meat, vegetables, and fruits. Their homemakers spend less in actual dollars for major food groups except flour and cereals-than those not so limited. ***

"City households with incomes of less than $2,000 purchased about 20 percent less milk and vegetables and fruits; about 5 percent less eggs and meat, poultry, and fish; and 10 percent less bakery products than households with incomes of $2,000 and over. * * *

"Low-income families have less nutritious diets. Differences in food used by high- and low-income families were reflected in the nutritive value of their diets. **Diets of city families with incomes under $2,000 contained about 10 percent less calcium and riboflavin-for which milk and milk products are the chief sources-than the selections of higher income families, and 12 percent less vitamin A value and ascorbic acid, contributed to the diet in largest quantities by fruits and vegetables. The protein content of diets of these low-income families was 7 percent less than in diets of higher income families.

"Among the dietary essentials, calcium was the nutrient most likely to be low in the food of low-income families. The average amount in diets of families with incomes below $2,000 in the spring of 1948 was less than the allowances recommended by the National Research Council. This meant that diets of about 50 percent of the families at this income level did not include foods which supply calcium in amounts recommended by nutrition scientists." (From Materials on the Problem of Low-Income Families.)

2. Low incomes impair health of workers and their families

National Health Survey (1935-36) findings for gainfully occupied persons aged 15-64 show that the low-income groups are a breeding ground for disablement. Nonrelief families with incomes under $1,000 had 9.1 average annual days of disability per worker compared to 5.2-5.8 days for families with higher incomes. (Disability Among Gainfully Occupied Persons, Social Security Board, 1945.)

According to a Social Security Board report, "in the homes of the poor, sickness comes oftener and lasts longer than in the homes of the well-to-do, and death comes earlier. The chance for health and even for survival is far less among low-income groups than among families in moderate or comfortable circumstances. * ** Much of the cost of dependency which results from this

association of sickness and poverty is borne by the whole populoation." (Need for Medical Care Insurance, Social Security Board, 1944.)

The death rates for gainfully employed male workers increase as we descend the occupational ladder toward the lowest paying nonagricultural jobs:

Source: Jessamine S. Whitney, Death Rates by Occupation, National Tuberculosis Association (1934).

After a full survey of the data, the President's Commission on Health Needs of the Nation (1953) concludes: "The health of the American worker has been improving steadily over the past several decades. *** [But] these gains have not been uniform throughout the labor force. Workers in less favored occupations still have a higher mortality rate than do more favored categories. Death rates increase as the socioeconomic scale is descended. Studies by income level and by racial groups show significantly lower life expectancy and higher mortality rates for those groups from which the lower paid ranks of industrial employment are largely filled" (vol. 2, p. 57).

The children of low-income families suffer the most from the lack of adequate medical care resulting from poverty. According to the Report of the President's Commission on the Health Needs of the Nation (1952):

"One inescapable fact in regard to the health needs of children is that the lower the economical level, the greater the death rate. ***

"The importance of the relationship between income and various health deficiencies was forcefully emphasized in the recent comprehensive study of child health services conducted by the American Acadamy of Pediatrics with the cooperation of the Public Health Service and the Children's Bureau. The report of this study described the wide disparities in the amount of health facilities and services for children among differing economic groups and between urban and rural areas in various parts of the country.

"The major findings of the study are summarized graphically in relation to a grouping of States into four classes of descending per capita income. With respect to total volume of medical care, private practice, hospital facilities, or community health agencies, the wealthier States have rates above the national average and the States with lower per capita income have rates below the average. In this there is a dramatic consistency. Conversely in undesirable attributes, such as infant death rates, the poorer sections show an excess. In lowering death rates nothing seems quite as effective as raising the level of economic well-being."

Maternal deaths in childbirth are much higher in low-income than in higher income areas. In 1949, the rate of maternal deaths per 10,000 live births was 15.7 in States with per capita income under $1,000, compared to 10.4 in $1,000$1,249 States, 6.4 in $1,250-$1,499 States, and 6.7 in States with income of $1,500 and over.

The draft rejection rates during World War II illustrate the relation between low income and poor health. Rejection rates were highest for North Carolina, South Carolina, and Arkansas, three States at or near the bottom of the States listed according to per capita income.

3. Low incomes force families to live in substandard housing

In 1950, there were 1,645,000 nonfarm families with incomes of less than $1,999 who were occupying dilapidated dwelling units; these comprised 17 percent of the total number in this income bracket reporting on the condition of their housing (9,735,000). By comparison, there were 1,122,000 nonfarm families with incomes of $2,000 or more who lived in dilapidated units, or 4 percent of the total in these income classes (25,249,000).

The number of under $1,999 nonfarm families dwelling in units that were not dilapidated but were deficient in plumbing was 3,426,000, or 35 percent of the total in this income class; the number of 2,000 and above nonfarm families living