and declining prices for their products. Cotton producers in particular, faced with a rising tide of competition and an alarming falling away of export trade, have submitted to increasingly severe curtailment of production with severe reductions of income. The process of acreage curtailment has now gone to a point beyond which it cannot go. Cotton producers have no alternative but to reduce costs of production, by all means possible. For many producers the imposition of a minimum wage requirement would jeopardize their survival.

On this account the Delta Council of Mississippi and the Mid-South Cotton Producers Committee would respectfully support and commend the decision of the Committee on Education and Labor to exclude from its consideration the matter of exempted enterprises. Should at any future time the question of extended coverage be taken up for consideration, these organizations would ask to be informed and to be afforded opportunity to present a more extensive statement with supporting documentation.

Mr. HUSSEY. Next is a statement from the Republican Party of Puerto Rico, submitted by Hon. Carroll D. Kearns of Pennsylvania. Chairman BARDEN. Without objection, that may be inserted in the record at this point.

(The statement referred to follows:)

STATEMENT OF THE REPUBLICAN PARTY OF PUERTO RICO, SUBMITTED BY REPRESENTATIVE LUIS A. FERRE, VICE CHAIRMAN, REPUBLICAN PARTY OF PUERTO RICO, AND SENATOR CHARLES H. JULIA

The Republican Party of Puerto Rico wishes to establish its position before the Committee on Education and Labor of the House of Representatives of the United States Congress on the subject of amendments to the Fair Labor Standards Act now under consideration, as it affects those industries in the Commonwealth of Puerto Rico participating in interstate commerce.

We have stated before the Secretary of Labor that a minimum wage of 75 cents per hour should be reached by all such industries within a reasonable time, and have suggested that the present differential be divided in 3 equal steps; the first to be reached 90 days after the approval of the law; the second, 1 year later; and the third, 2 years after the 90-day increase. The increases above 75 cents per hour, up to the minimum that may be established by Congress to be determined periodically by the industry committees. There are, however, two industries in Puerto Rico which merit special treatment as they have to compete with foreign low-wage labor in the United States market. These are the home needlework industry and the processing of leaf tobacco-which really is an agricultural operation-and both, too, could be left subject to the determination of the industry committees after a close scrutiny is made of their capabilities to increase their minimums, with adequate protection, until they can pay the statutory minimum of 75 cents an hour.

It is our position that the industries which are established in Puerto Rico to manufacture goods which in continental United States are paying wages considerably above 75 cents should be able to pay this minimum in Puerto Rico. It is conceivable that industries such as the home needlework and tobacco-leaf processing, which have to compete with low-wage areas and are not duly protected by tariff rates, should be permitted to pay lower wages, until the tariff protection is increased or mechanization increases their competitive advantages, but on the other hand, those industries which participate in the flow of interstate commerce within the tariff wall, should be able to pay comparable wages to prevent the unfair exploitation of labor, while enjoying a reasonable differential during an initial period, to offset the disadvantage of an offshore area in attracting risk capital. This will give Puerto Rico a chance to enjoy a reasonable share of the yearly investment in our presently expanding national industrial plant capacity.

It is true that Puerto Rico does not have an industrial history, but we feel that the development of the skills of our people, who are not slow in learning the trades, as has been proven by the large migration of workers from Puerto Rico to continental United States,' should be financed by a larger initial working capital. which could be supplied either privately or by the Commonwealth government for the period of training. The fact is that the advantage of tax exemption in

1 Quoting from the booklet Capable Hands Can be Flown to Your Plant, published by the Economic Development Administration, attached.

Puerto Rico, on both property and income tax, and the further aid given by the Commonwealth government to such industries, is ample enough to compensate this initial disadvantage, as has been demonstrated by the many successful industries which are now operating in Puerto Rico.

According to the testimony of Mr. Teodoro Moscoso, administrator of the Puerto Rican Development Administration, before the house commerce and industry committee of the Commonwealth legislature, the various tax-exempt industries that operated in Puerto Rico under the industrial-development program of the said administration during the year 1953 could be divided into 2 groups; one group that made a net tax-exempt profit of $15,840,000, while the other group had a total overall loss of $1,635,000. The total amount of wages paid by both groups amounted to $16,699,000.

We do not believe that the point in question is the alleged unfair competition from the limited industrial development of Puerto Rico. When our industrial output is compared to the national output, such an argument becomes irrelevant. The paramount question is whether under the American flag we are going to have two standards of wage earners-one which will guarantee a fair return and a decent floor for wages, and another permitting and stimulating the unfair exploitation of the working classes.

Furthermore, it is our experience that, unless the minimums are set and, therefore, become the objectives of the industries concerned, no effort will be made either by management or labor to raise the productivity to meet, a substantial increase in wages.

The fixing of the minimum of 75 cents per hour for Puerto Rico 5 years after the minimum went into effect in continental United States in 1950 is not an unreasonable demand. As a matter of fact, the sugar industry, the shipping industry, the banking industry, the cement industry, the glass industry, and several other important industries in Puerto Rico have already met the 75-cent minimum. There is no reason why other industries should not have anticipated an increase of the minimum wage to the statutory limit and prepared themselves to meet it during a 5-year period.

The industry committees are theoretically a good mechanism to adjust wages, but experience has shown that they are slow in operating and that the objective of the law, which was to obtain the wage floor of 75 cents for all interstate commerce in Puerto Rico within a reasonable limit-and we believe that 5 years is a reasonable limit-has not been obtained.

This is more so the case when it is considered that the cost-of-living index has increased in Puerto Rico from 100 in 1941 to 197.2 in 1955, so that the 75-cent wage requested is equivalent substantially to 371⁄2 as compared to wages in that year. At that time the statutory wage covering industries engaged in interstate commerce in Puerto Rico was 30 cents an hour.

The industrial development of Puerto Rico is essential not only to the welfare of the people of the Commonwealth who are all American citizens and hence entitled to equality of opportunity in the enjoyment of our national economic expansion, but it is also highly desirable from the point of view of the continental wage earner, since Puerto Rico is a $527 million-a-year market with great potentialities for a substantial growth in purchasing power.

We feel that the suggested formula, which will establish a floor of 75 cents for all industries as an objective for 1958, while permitting further increases up to the new statutory limit which Congress may approve, through the action of the industry committees, will eliminate the present haphazard pattern of low wages in Puerto Rico and hence do away with the claim of unfair advantage on the part of mainland industries and labor unions as of a definite date. It will further give the Puerto Rican wage earner a much needed purchasing power to meet the increase in prices of American agricultural and industrial products, which are the consequence of increases in wage rates in the United States mainland.

Therefore, it is our position that a minimum wage of 75 cents per hour should be fixed to be operative in 1958 as suggested by us for all Puerto Rican industries in interstate commerce in order to guarantee a sound industrial development in Puerto Rico.

Mr. HUSSEY. Next is a statement by the Honorable Hugh J. Addonizio, of New Jersey.

Chairman BARDEN. Without objection, that may be inserted in the record.

(The statement referred to follows:)

STATEMENT OF HON. HUGH J. ADDONIZIO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. Chairman and members of the Committee on Education and Labor, I am pleased at your decision to consider my bill, H. R. 56, introduced on January 5. 1955, and the numerous other bills providing for an increase in the minimum-wage standards of the Nation.

A substantial increase in the minimum wage is now long overdue. The last increase, effective in January 1950, was enacted in 1949 when the country was suffering an economic recession. Congress almost doubled the minimum at that time, raising it by 35 cents, from 40 to 75 cents.

Thirty dollars a week is not a living wage in any part of the United States. The Bureau of Labor Statistics states that the average four-person family in the area with the lowest cost of living in the country needs more than twice that · amount in order to maintain a modest standard of living. But $30 a week, 75 cents an hour, is the minimum wage now set by the Fair Labor Standards Act, and thus that is the incredible sum which, for example, thousands of cotton textile millworkers in the Southeast region of the United States are paid. What sort of homes, food, clothing, and medical care, can these workers obtain for themselves and their families?

Protection of minimum labor standards is essential at all times in order to assure at least a minimum level of living to low-wage workers and their families. It is of strategic importance at the present time that the Nation's statutory minimum wage be raised to a realistic level fully reflecting the increase in the general level of wages. This would give a powerful boost to the purchasing power of low-income workers and help restore prosperity and full employment throughout the economy.

The Nation's ability to produce wealth and distribute it has increased many times since wage-and-hour legislation was proposed in 1937. This has been due to rising productivity in which labor was a major influence.

The fact that the buying power of wages and salaries generally has failed to rise as rapidly as the economy's increasing man-hour output, is ample justification for the proposed minimum wage of $1.25. If average wages have lagged behind the continuous growth of the economy as a whole, then the many factory workers, and especially those unorganized white-collar and service workers, have seen their spending ability cut in half by the lag in incomes. These workers represent a majority of the American people.

The primary case for the $1.25 minimum wage is the fact that much of the business community has failed to share the benefits of industrial progress with wage and salary earners. From 1946 through 1952 man-hour output rose 163 percent in the private and non-Government part of the economy. But the buying power of the straight-time average hourly earnings of manufacturing workers increased only 12.8 percent. This fact was due partly to the low-paid workers in unorganized plants which in some cases received the bare minimum wage of 75 cents per hour.

The buying power of wages and salaries must not merely catch up with the past productivity increases-it must forge ahead, if the growth of the economy is not to be distorted by imbalanced incomes and inadequate consumer buying power.

Industry can take in stride a substantial increase in the minimum wage if it has to. Persuasive evidence to this effect is provided by a new study of what happened when the minimum wage was last increased in 1950. The study by the United States Department of Labor finds that there were practically ro plant shutdowns or worker layoffs as a result.

Both economic justice and economic wisdom requires an immediate increase in the Federal minimum to at least $1.25 an hour. This would do no more than bring the objectives of our minimum-wage legislation up to date. American industry will have no more difficulty adjusting to this change than it had to the 40-cent minimum in 1938 and the 75-cent minimum in 1949.

The policy of the Fair Labor Standards Act is to correct and, as practicable. to eliminate labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and the general well-being of workers. A higher minimum wage is certainly necessary if the stated purpose of this law is to be carried out. A wider coverage of workers is also necessary,

not only for the personal good of the worker, but for the good of the economy and the country as a whole.

Certainly the workers of America (the most prosperous country in the world) are entitled to a reasonable share of the products of their labor.

The growth of America has not been due to the efforts of any one factor in the country, be it business, Government, or labor. Rather, this growth has been due to concerted efforts on the part of good Government, good business, and good labor. Since all have shared in the building of this great country, then it is certainly fair that all should share in the fruits of these concerted efforts.

Ahead lies the task of strengthening minimum wage administration, a task in which the fairminded people of this country must provide leadership. It is imperative that effective action be taken to maintain the full force of protection of minimum labor standards and to obtain changes necessary to give these programs genuine effectiveness. We should amend the Fair Labor Standards Act to provide for a realistic upward revision of the minimum rate above the current 75 cents to the $1.25 level, and to extend the protection of the law to the largest possible number of workers.

The very people who oppose an increase in the minimum wage are the ones who expect these poorly paid Americans to be their customers. It does not make even business sense. A higher minimum wage should serve as a prop to our economy, helping to maintain purchasing power upon which all business depends. It is no good to have customers in name only without means to buy the products they want and need.

Greater still than the economic justifications for the proposed $1.25 minimum wage is the justification based on human decency, humanitarian appeals, and concepts of consideration for the welfare of one's fellow man. This Nation throughout its history has been dedicated to these principles.

We can expect the usual statement in opposition; such legislation would “cause mass unemployment," "interference with free enterprise and collective bargaining" and "discriminate against small business." However, as stated before, events since the 1938 act and 1949 amendments amply disprove these claims.

Thirty dollars a week today is an insult to any American, even to the organized industrial workers who rightfully enjoy an average pay that is double the minimum. For there is always the danger-in time of adjustment-that the hard-won victories or organized labor may be imperiled by the downpull of these low minimum wages.

Most American enterprises are conducted by men and women who know and live up to the obligation they owe to their employees.

Apart from these are the few exploiters who manufacture misery and drive a wedge between employer and employee that threatens the teamwork upon which our progress depends.

Many Members of Congress and other citizens have registered keen disappointment with the recommendation by President Eisenhower in his state of the Union message that the minimum wage be increased to only 90 cents per hour. I feel that this small increase is entirely inadequate to meet the needs of millions of American workers and their families and to meet the needs of the national economy.

In the interest of justice and fair play, it is the responsibility of Congress to increase the minimum wage to $1.25 an hour and to provide for enforcement, because there is no room, in the United States for those who profit from the underpayment of those who produce for them.

I appreciate this opportunity to submit my views on this important issue to your committee and I urge that you approve legislation providing for a substantial increase in the basic minimum-wage structure.

Mr. HUSSEY. Next is a statement from the Northeastern Lumber Manufacurers Association, Inc., New York, N. Y.

Chairman BARDEN. Without objection, that statement may be inserted in the record.

(The statement referred to follows:)

STATEMENT OF NORTHEASTERN LUMBER MANUFACTURERS ASSOCIATION, INC.

The Northeastern Lumber Manufacturers Association is a trade organization representing the producers of lumber in New York State, Pennsylvania, and the New England States.

This industry is composed of approximately 4,000 sawmills. For the most part. they are individually owned small businesses. The Northeastern industry is responsible for about 4 percent of the total national lumber production, but the value of the production is in considerably greater proportion to the total value of all lumber produced than volume indicates.

The Northeastern lumber industry is a very important factor in the economy of the Northeast. Increase in the legal minimum wage is certain to result in higher operating costs for the manufacturers, which in turn will probably result in many of the smaller companies being forced out of business and consequently unemployment. The increase in the minimum wage would make necessary proportionate increases in all wages, which combined with higher operating costs, would simply mean further inflation.

Our appeal therefore, is that any increase in the minimum wage rate, or changes in the law itself, will simply mean a further handicap to many small businesses; displacement of labor, primarily unskilled; and undesirable infla tionary pressures.

Mr. HUSSEY. Next is a statement of the American Bankers Association.

Chairman BARDEN. Without objection, that statement may be inserted in the record at this point.

(The statement referred to follows:)

STATEMENT OF THE AMERICAN BANKERS ASSOCIATION

Banking is predominantly small business, being made up of thousands of small institutions. Of the approximately 14,500 banks, only 1,000 have de posits of over $25 million, another 3,500 have deposits between $5 million and $25 million, while approximately 10,000 banks have deposits of less than $5 million.

The proposals now under consideration seek to increase the present minimum wage of 75 cents per hour to new minimums ranging from 90 cents to $125 per hour. Any of these proposed amendments to the Fair Labor Standards Act would have serious effect on many banks.

Your attention is invited to the 5,000 small banks with deposits of less than $2 million located in smaller rural communities. The small size of these banks places a practical limitation on their earnings which would make the payment of even a 90-cent-per-hour minimum difficult, and anything over that prohibitive. It must be borne in mind that an increase in the salary rate of the lowest paid employee requires corresponding increases in the pay of most other employees in order to maintain customary salary differentials.

Bank employees in these banks do not have the same living expenses to meet that employees of city banks incur. Their transportation, food, clothing, and housing expenses are lower than similar expenses for the bank employees in the city. These advantages over city dwellers are reflected in lower living costs and proportionately lower salaries or wages.

Banks, small and large, employ a majority of their permanent staffs directly from high schools. These boys and girls are inexperienced, yet the banks pay them full salary while they are being training. Banks also provide employment for thousands of students during summer vacations. These summer replacements generally cannot operate the bookkeeping machines or teller windows, but are used to perform simple clerical tasks. If minimum wage standards are set too high it could result in the employment of only those who already have acquired specialized training through secretarial or commercial schools and might deprive many of these youths of employment opportunities. It is urged that if the minimum wage is raised that consideration be given to setting a lower rate during the first 6 months of employment and for vacation help and parttime help, or that Congress express the intention that learners' certificates, as presently provided for in the act, be made available to banks for this purpose.

Small banks, as well as other small enterprises employing clerical help for routine tasks, do not have the volume of activity to justify, nor can they afford. the installation of modern electronic labor saving office equipment. Therefore, the proposals now before this committee will have proportionately greater impact on smaller employers. Large employers with modern equipment employ more skilled operators at correspondingly higher rates of pay and will be little affected by these amendments. It is for this reason that we are concerned about the effect a higher minimum wage will have on the thousands of smaller banks.