What is not fully realized or fully appreciated in this talk of high levels of production and high levels of employment is the fact that in this great productive democratic country of ours we do have such a large segment, a large share of our country's population living on substandard economic levels.

I should like to point out that recent figures published by the Federal Reserve Board indicate that there are approximately 412 million families in the United States which exist on incomes of $1,000 a year or less. Multiply this by the average family size of approximately 4 and you have the staggering figure of about 18 million people in this great, blessed, productive, generous country of ours-about 18 million people living on this poverty-stricken level reflected by an income of $1,000 or less a year.

It is clearly evident that too long has this large segment of our population been neglected, and that too many Americans lack adequate wages and purchasing power to participate as first-class citizens. In fact, they are scarcely able to provide the very minimum of the basic needs for human existence, providing for the minimum requirements of at least a reasonably adequate shelter, nutrition, clothing, and any medical and educational costs.

The second approach is concerning the overall economy. The economy is a moving, growing, constantly expanding thing. The measure of an economy's worth or annual productivity is stated in terms of the gross national product, the total value of all the production and services created or rendered in a given fiscal year. If we will go back to 1947 the gross national product was approximately $279 billion. From 1947 until 1953 the gross national product increased by about $94 billion to an all-time high economic productivity of $373 billion in 1953.

These are rough comparative terms to give you a measure of the trend, which was an increase of around 12 or 13 billion dollars year by year, each year increasing at that average rate.

In terms of prcentage, in order to be not static but relatively on the same level, the gross national product increases from 3 to 5 percent each year. It is an expanding economy. It averaged a 4-percent annual increase from 1947 to 1953.

But a large segment of the population, as pointed out here in this low-income group, has remained relatively static and is a drag on the whole economy. They cannot buy the additional goods that are made possible by advance in technology and productivity. They are not improving their station in life. Were they remaining on the same level they were on 8 or 10 years ago it would be bad enough, but you don't remain on the same level. You either improve and go along with the economy or you are not remaining on the same level.

Let's take the economic level as reflected by a rigid, set, 75-cent figure over a period of many years. That means that people who are getting 75 cents today are worse off than when they were getting 75 cents an hour, let's say, 5 or 6 years ago.

The country's economy expands. It continued to expand until 1953. These upward surges by the way do not necessarily mean a general improvement to too great a degree in the economic level because we had anywhere from 700,000 to 800,000 and up, perhaps to a million, new workers entering the labor market alone each year. You have to accommodate these workers to maintain the same level of relative

economic well-being. You have to have expansion. That is a normal growth just the way the normal human body, a growing body, develops month by month and year by year.

Then came 1954 and instead of another upward surge, from 1953 to 1954 there was a drop from around $373 billion gross national product to $357 billion. That is a $16 billion drop. Add to that the normal growth of $13 billion and you have an actual loss of almost $30 billion.

In 1955 we are sort of shakily struggling back to reach the level of 1953.

There are two points of view with respect to this comeback. One is the point of view that dominates this administration which says we are in wonderful shape; we are climbing back to the record levels of 1953. That, gentlemen, is one way to look at it. I think it is a wishful thinking way to look at it.

I think that the realities of the situation would show that the second point of view from which to look at the situation would be that after 2 years we are finally climbing slowly back to the level we were 2 years ago, which is merely saying we are coming back to where we started. And, in my opinion, gentlemen, that is getting nowhere fast.

One of the great responsibilities of this Congress is to give constant and careful attention to the economic health and well-being of the country and of all its people. You maintain a strong economic posture and a strong capacity to produce and we have been doing that magnificently-but with that must also go the making available to the people of the blessings of this great capacity to produce, making it accessible to the consumers.

An important block, an important foundation stone in increasing the capacity to purchase and thereby increasing the goods in the hands of the consumers would be legislation such as this which realistically acknowledges a growing and expanding economy, and thereby shapes upward a minimum wage, set by law at 75 cents, to a reasonably adequate figure of $1.25 an hour.

Mr. Chairman, that is sort of, in general terms, in summary, the nature of my testimony, which will be spelled out in more detail and more specifically in the record of your committee hearings.

Chairman BARDEN. Thank you, Mr. Blatnik.

Mr. Bailey?

Mr. BAILEY. I have no particular questions to ask, but I want to commend the gentleman for his appearance before the committee and for his calling attention to the fact that the overall national economy is one of the two factors that we have to keep in mind in adjusting to a proper level the minimum wage rates of the Nation.

I think, too, that that is the feeling of the committee, on the ground that we have a great segment, millions of our population, that are existing on a subnormal level due to the fact that their incomes are low and considerably below what the normal income should be for the average American family.

Again let me say I appreciate the gentleman's appearance before the committee.

Mr. BLATNIK. Thank you.

Chairman BARDEN. Mr. Bowler?

Mr. BOWLER. No questions.

Chairman BARDEN. Mrs. Green.

Mrs. GREEN. No questions.

Chairman BARDEN. Mr. Smith?

Mr. SMITH. No questions.

Chairman BARDEN. Mr. Holt?

Mr. HOLT. Yes, I have some questions.

Mr. Blatnik, I apologize for coming in after you had started. I had some other business that detained me.

I am a new member of this committee, this just being my second term on it, and I have not gone into this deeply enough to come up with a recommendation of my own at this time. That is why we are holding the hearings, because it is a rather complicated subject to some of us.

I am having difficulty reaching a conclusion as to just how you go about establishing what the minimum wage should be. In reaching your conclusions you must have done a lot of research on this. I may have missed this in your earlier testimony, and, if I have, please call it to my attention.

What about the coverage part of the legislation, the minimum wage legislation? Do you not think they kind of go together?

Mr. BLATNIK. Yes, I certainly do. I am for expanding the coverage. I have been given to understand that the committee was only considering, for whatever reasons they have of their own, the increasing of the present rate.

My own deep feeling is that not only is the amount of 75 cents entirely inadequate by the coverage certainly, by all means, should be expanded to cover another 2 or 3-I don't know the exact figures— maybe 4 million more people. That will extend merely the minimum economic guarantee for the minimum requireents of at least a fairly adequate basic life.

Mr. HOLT. I hasten to add I went along with the committee in deciding to restrict it to just the wage itself and not the coverage. But I was interested in your point of view because you come from a different section of the country than I do, and I am anxious to get all these thoughts together.

Secondly, have you given any thought to, or have you come up with ideas as to how many firms might be put out of business by a minimum wage of $1.25?

any

Mr. BLATNIK. I have seen figures and statistics, Mr. Holt. I cannot quote them offhand. But I do point this out:

From the very beginning of the wage controversy you will find that that argument was repeated over and over again, that if you raise the wages or cut the hours-and this goes back to the time when workers worked as much as 12 hours a day and when 10 hours a day was considered a short working day for 6 days a week, where perhaps 25 cents an hour was the average, not the minimum but the average salary-they said "My gosh, if you raise wages by 15 cents, you are going to put so many of these small industries out of business that the only result will be economic catastrophe and unemployment."

The record, without any question of doubt, will show that the whole history of wage legislation, the whole history of economic growth is that where wages improved, productivity improved and the living standards improved, and that the sum total was a contribution of great substance to the whole economy of the Nation.

Mr. HOLT. I think it is a factor to consider, however, that some would be put out of business, is it not?

Mr. BLATNIK. It certainly is a factor to consider. There will be economic adjustments. I am sure there are small industries on the borderline that are just getting by now on the 75 cents per hour and who may have great difficulty if it is raised to $1.25. It is a factor. I think it is a relatively minor factor when we are thinking, let us say, of millions of the American population.

Mr. HOLT. Certainly I was a little bit puzzled on your statement of the two points of view.

You mentioned the administration point of view. I was not clear on that. And I was even less clear on your own point of view. Would you mind going over those again?

Mr. BLATNIK. I would be glad to. I know I generalized and perhaps oversimplified.

The administration point of view was expressed by their spokesmen at some of our committees. And I will be specific in the case of the Secretary of the Treasury, Mr. George Humphrey. I want the record to show I have nothing but the highest of personal respect for him although we have quite different economic and political points

of view.

We discussed these different points of view in an atmosphere of mutual respect. He referred, in testimony on the public road building program, that it would bolster, you see, the economic activity which already is good in approaching the high levels of 1953. His point of view was that that was an outstanding thing, coming right back to reach the economic levels of a record high year of 1953.

To me, just a normal growth in economic activity, just a normal growth, would have placed the gross national product for this year of 1955 around $400 billion and we would not merely now be approaching the $373 billion level which we had back in 1953.

In my opinion, to return to the level of 2 years ago, no matter how high it was, in retrogression. You don't stand still.

Not to belabor the story used in Alice in Wonderland, but you have to keep moving to stand relatively in one place. The minute you stop running, the minute you stop expanding you are going to slide downward. And I say that economically the country has receded and retrogressed in the last 21 years.

Mr. HOLT. I don't quite understand how.

Mr. BLATNIK. The general economy in terms of population, in terms of productivity, in terms of the general wealth that it produces each year.

Mr. HOLT. It is not going backward.

Mr. BLATNIK. It expands normally. You don't just stand at a level; you expand around 3 percent each year.

Mr. HOLT. Is your point that it is not expanding fast enough? Mr. BLATNIK. I say it has not expanded at all. It has slipped by almost $13 billion last year when it should have been going up by $11 billion. There is a gap of about $25 billion.

Mr. HOLT. I may be confused on the point. What has slipped? Mr. BLATNIK. The whole economy. From 1946 to 1953 if you drew a line on a graph showing the gross national product, the total economic worth of the annual goods and services produced in this country, they were increasing from $279 billion upward at an average rate of

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$12 billion each year until they reached $373 billion in 1953. Then it slipped, I think, to about three hundred and sixty-some billion dollars. I don't know the exact figures.

Mr. HOLT. Would you mind, when you put your remarks in the record, clarifying that a little when you get your figures?

Mr. BLATNIK. Yes.

I am glad you asked the question.

Mr. HOLT. I do not agree with you, but I do not want to enter into a debate.

Mr. BLATNIK. Aside from agreement, Mr. Holt, may I point this out: I am glad you asked that question, and I will do my best to get the complete story in a more effective manner. I am now talking about economic facts that come from our own Government agencies.

But I say that this is the key, this is the crux, this is the thermometer registering the body temperature that indicates a degree of normalcy or well-being or any ailment in the body economic.

Mr. HOLT. Thank you.

Mr. BLATNIK. It is very important.

Mr. HOLT. Thank you.

Chairman BARDEN. Do you have any questions?
Mr. FJARE. No questions.

Chairman BARDEN. Mr. Blatnik, I think this committee is certainly fairly well agreed, and the majority of the committee feel that the time has arrived when it is safe for the economy to increase the minimum wage. But the committee would like to have some evidence supporting the fact that the committee is not only acting wisely but has data to support its views.

How did you arrive at your $1.25?

Mr. BLATNIK. We arrived at it by general agreement after discussing with many economic groups, and primarily those in unorganized labor and those in organized labor as to

Chairman BARDEN. You say we. Whom do you refer to as we when you say we arrived at it?

Mr. BLATNIK. I was referring, in this case, to myself. I am sorry. We and those of us colleagues interested in bettering the economic position of these low-income groups in our population. In this instance I will refer to myself.

The figures that I used are primarily those that are available from the Bureau of Labor Statistics and other economic survey reports which showed an approximate income of about $250 a month would be a bare minimum to pay for the basic items-which are very easily listed that are required, let us say, for a family of 2, 3, or 4 to live on. That is the cost of your food, clothing, shelter, medical expense. It would about cover that.

Chairman BARDEN. Does that relate to any particular State or section of the country, or do you just want that all the way across?

Mr. BLATNIK. All the way across. There are differences, of course, in costs of living in different areas of the country.

Chairman BARDEN. You know that in large sections of the country that a dollar and a quarter would even, in instances, be far in excess of the prevailing maximum in those areas?

Mr. BLATNIK. Yes.