senting the end of the Second World War, is selected, increases in present gross earnings have been 73.5 percent for manufacturing as compared with an 82 percent for the retail trade as a whole and 95.5-percent increase for department and specialty stores. 2. Payroll percent to sales In the section of the report dealing with multistate enterprises, it states that the total payroll for 1948 for such multiunit firms was equivalent to 12 percent of total sales and that the corresponding ratio for general merchandise stores was 14 percent. In section II of the report dealing with retail generally, it reports a total payroll average of 10 cents of each consumer dollar. We cannot identify the source of the multichain payroll averages or of the averages of the retail trade generally. However, studies made for the NRDGA by the Harvard Graduate School of Business Administration, which include both multiunit and independent retail and department stores of all sizes have consistently shown a higher percentage of payroll costs to sales. For example, in 1948, 17.3 cents out of each sales dollar went for payroll. Since that date and with only one exception payroll costs to sales in department and specialty stores have steadily risen reaching the alltime high of 18.4 percent in 1953. 3. State minimum wage laws While some 22 States and the District of Columbia have minimum wage laws, in 14 of these States minimum wage protection is given "only" to women or women and minors. The report is silent on the fact that 10 States have equal pay laws intended primarily to see that women receive the same pay as men for comparable quantity and quality of work but which also assures that men are not paid less than women. It would be entirely naive thinking that employers generally could and would hire men workers at a lower rate than women for the same job duties or that men themselves, under normal circumstances, would accept a lower rate of pay than provided the women. 4. Ratio of sales personnel The first section of the report states that "in retail trade almost one-third of all workers are sales workers." In the second section 36 percent of retail workers are engaged in sales. Either figure we believe is distorted by the inclusion as "workers" of the proprietors, managers, and officials embracing the many thousands of owners of "mama and papa" stores to which the report refers. Figures for the department store and specialty store segment show that on the average 50 percent of all store employees are sales employees and in the medium size and smaller stores the percentage ranges as high as 60 percent er more. These limited illustrations ar typical of many of the statistics presented and conclusions drawn which we believe to be either inaccurate or only partial observations. COVERAGE OF MULTISTATE ENTERPRISES As previously stated, these "Materials" are intended to justify the Secretary of Labor's suggestion that wage-and-hour provisions be extended to multistate enterprises. We find nothing in the statistical data he submitted which indicates or confirms the basic need for minimum-wage protection for employees in units of organizations operating in more than one State. The only conclusion that can logically be drawn from the "Materials" is that coverage should be extended to these enterprises simply on the basis of their ability to pay and not on the existence of substandard wage schedules. As stated on page 16 of the first section of the report, "multistate enterprises are, generally speaking, stable firms with substantial reserves." This implies a new philosophy apparently of paying wages out of reserves rather than out of expense margins on which stores must operate. The "Materials" do not in our opinion prove that the unit of a multistate enterprise is any less local in its operation than the independent retail establishment. To our knowledge the substantial majority of multiunit organizations in the department and specialty store field determine their minimum wages, hours of employment, and basic working conditions at the local level in competition with the local labor market. Very few multiple State organizations to our knowledge apply a national minimum wage irrespective of regional or community practices. While the ownership of these enterprises may be centralized, the individual units from the standpoint of wage and employment procedures are basically operated as a local unit. The success of each unit depends upon the customer's acceptance and backing to the same degree as an inde pendent retail establishment. The only retail employees of these enterprises which may truly be regarded as being in interstate commerce are those located in the central offices and in large central warehouses serving units in multiple States. These employees have been and are currently subject to wage-and-hour controls. The proposal to extend it to employees in the multiple units themselves would divide the industry and is a "foot-in-the-door" policy laying the groundwork for later extension. We, therefore, restate the position of the National Retail Dry Goods Association. We are opposed to suggested legislation which would place some of the employees in local retail establishments under wage-and-hour controls and exempt others. We insist that if and when minimum-wage legislation is needed for the retail and service trades it is properly within the province of the States and not the Federal Government to legislate. We strongly urge the retention of the present retail exemption. Mr. HUSSEY. Next is a statement of Clarence Mitchell, Director of the Washington Bureau of the National Association for the Advancement of Colored People. Chairman BARDEN. Without objection, that statement may be inserted in the record. (The statement referred to follows:) STATEMENT OF CLARENCE MITCHELL, DIRECTOR OF THE WASHINGTON BUREAU OF THE NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE Mr. Chairman and gentlemen of the committee, I am Clarence Mitchell, director of the Washington Bureau of the National Association for the Advancement of Colored People. At its national convention held in Dallas, Tex., in 1954, our organization passed a resolution urging that Congress adopt a minimum wage of $1.25 an hour. The resolution also urged that the present law be extended to include agriculture workers and other persons not now covered. Approximately 25 percent of the colored men and 10 percent of the colored women who are employed work in agriculture. A great many of these are migratory workers who are employed on the factory-type farms. All deserve the same treatment that persons working in covered industries now receive or will get under an improved law. Persons employed in service industries should be covered by the law. Fifteen percent of employed colored men and 65 percent of employed colored women are in this industry group. It is interesting to note that exemptions in the present act have been a convenient loophole for persons skilled in ways of evading the law. For example, we have reports from Southern States showing that in logging operations the exemp tions given to employers of less than 12 persons have been used to keep wages low in certain areas. This is accomplished by the simple device of splitting the work force into groups of 12 each. Figures of the Bureau of Labor Statistics on consumer expenditures in 1950 show that the average urban family with an income of $1,500 based on the current minimum wage spends $174 more than it earns. The $1.25 minimum wage rate would give these families a living standard 52 percent higher than they now have. In that same year, census figures show that the average income for colored wage earners was $1,300, which incidentally was only 52 percent of the average income for white persons. This committee has heard so many facts on why the minimum wage should be increased that it is unnecessary to repeat them. We earnestly hope that in this Congress the act will be broadened and strengthened to meet the obvious needs of those who are wage earners. Mr. HUSSEY. Next is a statement from the National Association of Refrigerated Warehouses. Chairman BARDEN. Without objection, that statement may be inserted in the record. (The statement referred to follows:) STATEMENT OF F. D. NEWELL, JR., IN BEHALF OF NATIONAL ASSOCIATION OF REFRIGERATED WAREHOUSES, WASHINGTON 5, D. C. This statement is filed by the National Association of Refrigerated Warehouses on behalf of its 500 member companies throughout the United States in opposition to any increase in the minimum wage rates under the Fair Labor Standards Act. GOVERNMENTAL INTERFERENCE IN WAGE PATTERNS WILL INFLATE NATION'S The many bills introduced in Congress to increase the minimum wage by from 15 cents to 60 cents an hour constitute an artificial and inflationary interference with a delicately balanced economy and an impairment of free employeremployee bargaining. Attempts to justify any such increase on the grounds that it will affect only a few minimum wage earners or that the increase can be paid out of profits are erroneous. Past experience with minimum wages shows that there has always been a historical differential between the legal minimum wage and higher wages. Any increase in minimum sets in motion a series of pressures to increase wages in the higher brackets in order to maintain the historical differential. thing will happen again-resulting in increases all along the line. The same No segment of the economy-agriculture, labor, business or the general public will be unaffected. Even if agriculture were totally exempt, which it is not, increased wages in our food distribution channels would upset the sensitive cost-price relationships between food on the farm, in distribution and at retail. Increased costs of food, services, and manufactured products will be passed on to consumers, which includes everybody, in increased prices. The industries affected immediately, those now paying the legal minimum wage, are, for the most part, marginal concerns which could not absorb an increase without laying off some workers or possibly being forced out of business altogether. The increased competition in many lines of business today coupled with wage pressures has narrowed profit margins to a point where there is no cushion to absorb further wage increases. This can mean nothing but increased prices, an inflationary step. For years the forces of competition, careful management and improved efficiency have enabled industry to pay constantly increasing real wages without artificial interference from Government, or domination by Government edict. The free interplay of these economic forces is the very basis of our economic system. Left alone they will continue to operate to the benefit of all, as they have in the past. Interfere with them however, and you can create economic hazards and handicaps and a period of adjustment and uncertainty harmful to business and labor alike. We respectfully urge that no increase in the minimum wage be made at this time. Mr. HUSSEY. Next is the statement of the California Grape and Tree Fruit League of San Francisco, Calif., submitted by Harold Angier, general manager. Chairman BARDEN. Without objection, that statement may be inserted in the record. (The statement referred to follows:) STATEMENT OF CALIFORNIA GRAPE AND TREE FRUIT LEAGUE, SAN FRANCISCO, CALIF. I, Harold Angier, general manager of the California Grape and Tree Fruit League, 717 Market Street, San Francisco, Calif., respectfully submit the following testimony regarding proposed legislation to amend the Fair Labor Standards Act. The California Grape and Tree Fruit League is a nonprofit, industry service organization, whose grower and shipper members produce, harvest, pack, and ship, approximately 85 percent of all the California fresh deciduous tree fruits, berries, and grapes shipped to market in interstate and foreign commerce. The average annual volume of California fresh deciduous tree fruits, berries, and grapes moved in interstate and foreign commerce is over 750,000 tons, 85 percent of which is marketed in the territory east of the Mississippi River. At the present time, this important California industry is faced with what is commonly called the cost-price squeeze. The high cost of labor, material, and transportation is responsible. Consumers are resisting the prices being asked for fresh fruit, with the result that the volume sold is declining due to a shift in consumer purchases to competitive items. Fresh fruit is a highly perishable commodity. It must be shipped to market when it is ready and sold for whatever price it will bring. A large proportion of the fresh fruit moves to market in interstate commerce is handled on consignment for the grower's account. Under these circumstances all of the charges for packing, loading, cooling, transportation and selling are deducted from the grower's account sale. This means that the grower is the one who is directly affected by increased costs even though such costs are paid by a commercial packer and shipper, or by a cooperative association. Commercial packers and shippers and cooperative associations are subject to compliance with the minimum wage unless they qualify under the area-of-production exemption. We believe that Congress in its wisdom intended to protect the grower's position by providing the area-of-production exemption, but the parenthetical phrase (as defined by the Administrator) has resulted in a definition of area of production which is most unsatisfactory to the fresh-fruit industry and agriculture in general. As the law is presently written this industry is unalterably opposed to any increase in the minimum wage. A recent survey conducted by this league shows that none of our members pay less than 75 cents per hour to any of their employees regardless of whether they are subject or not. The survey also shows that increasing the minimum to $1 per hour would substantially increase the payrolls of subject employers and therefore increase growers' costs where they have their fruit packed and loaded at commercial or cooperative establishments outside of the area of production as defined by the Administrator. A large proportion of the payrolls in fresh-fruit packing establishments are for packing labor, generally local housewives and school girls. Seasonal employment of this nature lends itself to a wide range of productivity based on experience. This work is usually performed on a piece work basis. A $1-per-hour minimum would deny a certain proportion of these fruit packers employment as employers could not afford pieceworkers who were unable to make the minimum. This would create serious labor shortages during the peak harvest periods and cause serious loss of highly perishable fruit. The other feature of the proposal to increase the minimum which concerns subject employers in this industry is the effect increasing the minimum would have on wage scales above the minimum. It is generally felt that increasing the minimum will result in demands for increases in the pay scales above any new minimum established. This would result in substantial increases in packing costs which would have to be paid by growers in the form of reduced returns. If the minimum is increased there seems to be only one solution as far as this industry is concerned. This solution is to amend the act with a sensible definition of the area of production. The present definition promulgated by the Administrator is most unsatisfactory and will create severe hardships and discrimination if the minimum wage is increased. There are many country towns in Cals fornia located in fruit-producing areas with populations over 2.500 and some over 50,000. For the Administrator to establish a rule that a fresh-fruit-packing establishment located in a town of 2,500 population is subject to the minimum wage and another performing the same services for the growers in the same producing area located over 1 airline mile from that town is discriminatory and without sound reason. We compliment the Committee on Education and Labor in its unanimous deci sion to restrict the hearing to the subject of increasing the minimum and not include extending of coverage or eliminating present exemptions. We urgently request full consideration of an amendment which would change section 13 (a) 10 by striking out, after the words "area of production," the parenthetical phrase "(as defined by the Administrator)." And adding to this section a practical and reasonable definition of the "area of production" We support the definition proposed by the United Fresh Fruit and Vegetable Association after consultation with various commodity and agricultural representatives. This definition is as follows: "Area of production' means, with respect to livestock, poultry, or any agricultural or horticultural commodity, the area or areas (the geographical bonddaries of which shall be expressed in terms of counties or States, or counties and States) which may be ascertained and designated by the Secretary of Labor, in which such agricultural product is produced in commercial quantities; and such contiguous counties in the same or adjoining States, if it is customary for the product to move from the county in which it is produced to an establishment located in any such contiguous county for the performance of any of the operations in section 13 (a) 10." We hope that the committee will recognize the imperative need by this industry of a just and practical definition of the area of production and introduce an amendment along the lines we have suggested. Mr. HUSSEY. Next is a statement by Sidney Levingston, Ruleville, Miss. Chairman BARDEN. Without objection, we will include that in the printed record. (The statement referred to follows:) STATEMENT OF SIDNEY LEVINGSTON, RULEVILLE, MISS., CHAIRMAN OF THE Gentlemen: My name is Sidney Levingston. I am a farmer living at Ruleville, Miss. As chairman of the committee on labor of the Delta Council of Mississippi, and the member for the State of Mississippi of the Special Farm Labor Advisory Committee to the Secretary of Labor, I should be grateful to this committee for permission to file the following statement for inclusion in the record of hearings on the minimum wage bills now pending. I wish to do this on behalf not only of the Delta Council of Mississippi but also of the Mid-South Cotton Producers Committee. Members of both the Delta Council and of the Mid-South Committee are deeply concerned with the provisions of a number of these bills, and officials of the organizations other than the Delta Council that are associated in the Mid-South Cotton Producers Committee wish to be recorded as supporting this statement. To make clear to the committee the nature of this interest, I should like to explain that the Delta Council is a public service organization representing the Yazoo-Mississippi Delta, the purpose of which is to promote the economic and civic development of the 18 alluvial counties comprising this area. Delta Council represents the common interests of the 650,000 people of this important agricultural section. For more than 20 years the Delta Council has been a vital and constructive force in advancing the development of the Delta area. It stands for the best in citizenship, and it takes justifiable pride in the progress of the last 2 decades. The Mississippi Delta is essentially a cotton producing area. Mississippi is the second largest cotton producing State in the country, and delta farmers are producers of just about half of the State's cotton. Members of the Delta Council are therefore primarily dependent upon cotton for their livelihood. The Mid-South Cotton Producers Committee is an affiliation of the Delta Council of Mississippi with four similar organizations. These are the Delta Council of Louisiana, the Agricultural Council of Arkansas, the Tennessee Agricultural Council, and the Missouri Cotton Producers Association, all of them likewise active and progressive factors in the life of their States. Together these organizations cover an area that accounts for much more than half of the total cotton production of their five major cotton-producing States. Understanding that it is the purpose of the Committee on Education and Labor to consider at this time only the minimum wage rate, I shall make my statement brief. Under the legislation as it stands today on the statute books, agriculture and first processors of agricultural products in the areas of production are of course exempt from minimum wage and hour requirements. Cotton producers, and cotton ginners in areas of production, would thus not be directly affected by a change in the minimum wage rate, so long as this exemption holds. They are anxiously concerned, however, that these exemptions not be removed or narrowed. When fair labor standards legislation was in process of enactment in 1938, the Congress, after searching studies and mature deliberation, wisely concluded that because of the special conditions under which necessarily they are carried on, agriculture and its first processing industries in areas of production should be wholly exempt. Again, when the amendments of 1949 were under consideration, Congress, after similar careful analysis, arrived at the same conclusion. The premises on which this decision was taken are no less valid today than before. In fact, they are more cogent. For the past several years farmers have found their income progressively squeezed between rising costs of production |