by the National Labor Relations Board and its agents in assuming or refusing to take jurisdiction of a particular situation where power to take jurisdiction exists but its assumption may not be deemed necessary. No real parallel exists because of the entirely different natural of the laws, the Labor-Management Relations Act (and before it the National Labor Relations Act) fundamentally enjoining certain conduct while the Fair Labor Standards Act requires affirmative acts from day to day. There is no case-to-case situation in which similar discretion could be exercised under the latter law.

From the testimony of the Solicitor it would appear that the rule-making power might be exercised to exclude barbers from coverage but it is our belief that, so far as this power is related to the coverage question, it will be generally exercised to bolster a conclusion of substantial affect on interstate commerce by purely local enterprise.

Minimum wages and wage orders

It is quite apparent from the testimony of the Secretary of Labor and members of his staff before this subcommittee and the House Committee on Education and Labor that the philosophy of the proposed rigid 75-cent-per-hour minimum and the proposed machinery for establishment of industry minima up to one dollar is to hold today's high wage levels by regulation without regard to changes in cost of living and other economic factors. In fact, it is clear that the minima are supposed to prevent any deflation in our economy. Clearly these proposals are part of a general plan of economic control of our entire industrial society and are far removed from the eoncept of a "minimum standard of living."

We do not believe that the basic philosophy of the minimum wage and wage order proposals is sound. We believe that unless our economy remains at its present peak levels the proposals, if enacted into law, will have an injurious effect on employment and industry generally and on the baking industry. We grant that the present minimum wage requires adjustment to be consistent with the "minimum standard of living" purpose of the law and believe that the minimum should be set in the light of that purpose with perhaps machinery for general variation upward or downward as may be necessary to maintain a level consistent with that purpose.

Exemptions

We do not believe that the maximum hours provisions can be applied practically to employees who work away from the employer's supervision. Hence, we do not believe that the proposed change in the exemption of employees as to whom the Interstate Commerce Commission has regulatory power would prove practical. Further, the scope of the present exemption has just been made clear by the Supreme Court after 10 years of doubt. We think it unwise to reopen the matter for another extended period of interpretation and construction of new language. Liquidated damages

The Secretary of Labor and his staff have made it clear to the subcommittee that they do not intend by the reenactment of the provision for liquidated damages to amend or affect the rule in that regard established by the Portal-to-Portal Act, (sec. 11). We believe it would be wise to make that clear in the bill. Statute of limitations

In the light of industry's experience with the Fair Labor Standards Act of 1938, the constant surprise liabilities arising as interpretation and construction developed, any prudent businessman will approach the future under any revised wageand-hour law which this Congress may enact with the expectation that unintended and unexpected liabilities will arise as the new law is construed.

With a period of uncertainty inevitable, it is hardly the time to consider extending the period of the statute of limitations.

Labor and the economy generally are certainly not served by industry setting up as reserves against unexpected 4-year liabilities under a revised wage-and-hour law moneys which would otherwise be available for distribution as wages.

CONCLUSION

It is submitted that the first consideration of the subcommittee should be the clarification of all existing areas of doubt under the Fair Labor Standards Act of 1938. This is a proper and necessary function of the Congress. The responsibility should not be evaded by delegation of the function to any administrative officer or agent.

When the basic requirements of the law have been made clear, proposals for its extension and for upward adjustment of the wage floor should be viewed in the light of their apparent objectives, those expressed by their proponents, and applicable constitutional principles. To prevent interstate commerce from use as an instrument of employment at subminimum wage levels, the coverage and wage minima proposals of S. 653 are not necessary. The Secretary of Labor and his staff seem surprisingly willing to admit that the basic proposals of S. 653 are part of a general scheme of economic control to which scheme such proposals may be necessary. (The Secretary informed the House Committee on Education and Labor that this was free economy because the law would be freely adopted.)

We do not subscribe to legislation aimed at such objectives, nor do we believe the Congress should exercise its power over interstate commerce toward such objectives, assuming that this could be effectively done within the constitutional limits of such power.

C. TRACY TAYLOR, Counsel, Pennsylvania Bakers Association.

STATEMENT ON BEHALF OF THE AMERICAN BAKERS ASSOCIATION ON THE BILL (S. 653) To AMEND THE FAIR LABOR STANDARDS ACT OF 1938

This statement is made on behalf of the American Bakers Association and its members who are engaged in the production of bakery products. Their plants operate both in interstate and intrastate commerce.

Our members are greatly concerned over certain of the provisions of S. 653 which would amend the Fair Labor Standards Act of 1938, and which is currently being considered by this subcommittee of the Senate Committee on Labor and Public Welfare. We have expressed similar objections to H. R. 2033 and H. R. 3190, both of which were considered by the House Committee on Labor and Education. Many of the proposed changes in these bills are far reaching in scope and, in our opinion, will unquestionably be detrimental to the sound and efficient operation of the bakery business.

Specifically, we object to the following amendments proposed by the bill: The extension of coverage to "every employer who is engaged in any activity affecting commerce," as set forth in section 6 (a). Such enlargement of coverage is both impractical and unnecessary. It imposes on the small businessman burdens which the intrastate nature of his operations do not justify. Since there is no absolute line drawn as to what does and does not "affect" interstate commerce, it is obvious that a vast area of uncertainty of application will be opened up. We object to the granting of rule-making authority of the Secretary of Labor, since this would place in his hands power to issue binding regulations of interpretations which would have the effect of law. The attitude of the Wage and Hour Division, since the enactment of the law in 1938, has been one of attempting to stretch the meaning of the law to obtain the widest possible coverage. have no reason to believe that there has been or will be any change of attitude in the future, and for that reason are reluctant to see such a delegation of authority. We believe that proper legislation should be enacted in the first instance and the interpretative authority be left to the courts.

We

S. 653 would establish a minimum hourly wage of 75 cents, with an ultimate objective of $1 per hour. The advisability of such an approach to establish a proper minimum wage is debatable. It may well be argued if the original 40cent level is inadequate now, may not 75 cents or $1 at some future date be just as inadequate? In other words, why establish a fixed and arbitrary rate which may be valid for only the immediate period when it is so established. We would urge the committee to give consideration to a more flexible approach to this important problem and seek some practical way of avoiding the rigidity of a fixed wage rate.

We object to the curtailment of the exemption currently existing under section 13 (b) (1) of the act as to employees with respect to whom the Interstate Commerce Commission has the power to establish qualifications and maximum hours of service pursuant to the provisions of section 204 of the Motor Carrier Act of● 1935. The proposed section 13 (c) would, for all practical purposes, eliminate that exemption. It has worked satisfactorily since the Fair Labor Standards Act was first passed and after 10 years, recent Supreme Court decisions have clearly established its scope. We know of no necessity for changing it at this time.

Record of hearings before the House Committee on Education and Labor on H. R. 2033, at p. 46.

Section 19 of S. 653 would change the recently enacted Statute of Limitations on causes of action arising under the Fair Labor Standards Act from 2 to 4 years. The 2-year period was established after much consideration by the Congress for the rights of all concerned. To change that period now less than 2 years after its establishment will cause only uncertainty as to future rights and liabilities under the act. Businessmen of necessity must provide for unseen future contingencies. They try, however, to keep such contingencies at a minimum, or at least try to anticipate them. With periods of possible though unintended liabilities enlarged, the risks and uncertainties of business are increased accordingly. It is requested, therefore, that the statute of limitations of 2 years be retained.

We suggest that the proposed bill be clarified to show that the Congress does not wish to remove from the courts their discretion not to award liquidated damages where the defendant has shown he acted in good faith. It is our understanding that the Secretary of Labor does not desire to alter the present provision of the Portal-to-Portal Act which establishes that discretion, but S. 653 is ambiguous on the point.

There is a vital need for an amendment to the Fair Labor Standards Act which will relate that act realistically to established employer-employee contract custom or practice in the determination of what is to be included in working time or employment for purposes of the minimum wage and overtime requirements.

The concept of hours worked when the Fair Labor Standards Act was first passed probably had a common denominator in the minds of the legislators and the public. In any event, no definition of that concept was included in the Fair Labor Standards Act. It was abruptly destroyed by the decision in the Mount Clemens case.1

From that decision came an arbitrary and unreal concept which bore little, if any, resemblance to the actual intent and practice of employers and employees in particular industries and establishments. Matters incidental and necessary

to the employees' jobs were held to be included in the hours of employment or workweek for purposes of the Fair Labor Standards Act even though such matters had not been treated as working time under collective bargaining contracts or otherwise by employers and employees. Generally, such things had been considered as incident to the particular nature of the work and rates were established with that in mind.

The problem was partially cured through enactment of the Portal-to-Portal Act because the public, including labor itself, recognized the injustice and complete unreality of this new and arbitrary concept. Unfortunately, while the Portal Act solved the problem completely as to past liabilities, its curative effect as to the future was limited to such an extent by the unclear language of section 4 (a) of said act, that in effect only walking, riding or traveling to and from the actual place of performance of an employee's activity or activities is covered. We suggest that the Fair Labor Standards Act be amended to include among the definitions the following:

“( ) Hours worked. In determining for the purposes of sections 6 and 7 the hours for which an employee is employed, there shall be excluded any time which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective bargaining agreement applicable to the particular employee.”

The inclusion of such a provision would assure the integrity of collective bargaining and eliminate much potential liability.

In conclusion, we wish to state that we are disturbed at the apparent efforts of the Department of Labor to seek amendments to the Fair Labor Standards Act as part of what appears to be an over-all pattern to effect economic control of industry. This is a far cry from the original purpose of the act and we urge that this attempt be rejected by the committee.

In its efforts to clear up uncertainties now existing in the act, we also urge the committee not to change those provisions of the law which have attained clarity and meaning since its enactment.

Respectfully,

JOSEPH M. CREED, Counsel.

The next witness is Miss Gladys Dickason of the Amalgamated Clothing Workers of America.

1 Anderson v. Mt. Clemens Pottery Company, 328 U. S. 680.

STATEMENT OF GLADYS DICKASON, VICE PRESIDENT AND DIRECTOR OF RESEARCH, AMALGAMATED CLOTHING WORKERS OF AMERICA, CIO

Miss DICKASON. I am Gladys Dickason, vice president of the Amalgamated Clothing Workers of America. I appear here on behalf of the Amalgamated Clothing Workers and in support of the 75-cent minimum wage, the right of industry committees to riase it, and the extension of coverage of the minimum wage law.

Mr. Chairman, I would like to submit my statement for the record. Senator THOMAS. It will be incorporated in the record at this point. (Miss Dickason submitted the following prepared statement:)

STATEMENT ON S. 653 SUBMITTED TO THE SENATE COMMITTEE ON LABOR AND PUBLIC WELFARE BY GLADYS DICKASON, VICE PRESIDENT AND DIRECTOR OF RESEARCH, AMALGAMATED CLOTHING WORKERS OF AMERICA (CIO), APRIL 21, 1949

The Amalgamated Clothing Workers of America represents 375,000 workers employed in the manufacture of men's apparel, in the clothing service industries, and in retail trade in 38 States throughout the Nation. These 375,000 workers have a vital stake in this committee's deliberations on the proposed amendments to the Fair Labor Standards Act. They strongly urge you to recommend the immediate enactment of a 75-cent minimum wage and extension of coverage of the act.

The Amalgamated Clothing Workers of America endorses the statement submitted by the Congress of Industrial Organizations and has filed testimony on the extension of coverage to laundry and retail trade workers. This statement will deal with the effects of the proposed minimum wage on the men's apparel industry.

Some

The combined branches of the men's apparel industry constitute a major manu- › facturing segment of our economy employing more than 425,000 workers.1 what more than three-fourths of all the workers in the industry are members of the Amalgamated Clothing Workers of America.2

For 35 years the Amalgamated Clothing Workers of America has represented workers in the men's apparel industry in their united effort to improve their conditions of work. Throughout 23 of these years, the union has had detailed and comprehensive experience with the effect of unregulated competition with regard to minimum-wage levels on the living standards and purchasing power of the garment workers, on employment, and on the business stability of the industry. During 13 years of its history, the Amalgamated has known intimately and in detail the effect of Nation-wide minimum-wage floors on the industry and on the earnings and job opportunities of the workers in the industry.

PREVIOUS EXPERIENCE WITH WAGE FLOORS THROWS LIGHT ON PROBABLE EFFECTS OF PROPOSED 75-CENT MINIMUM

Experience with the minimum-wage levels previously established in the men's apparel industry throws strong light on the probable effects of the proposed 75 cent minimum not only on this industry but also, no doubt, on other industries where a higher minimum would require a significant increase in wages in individual plants or in specific sections. This is so because few, if any, other industries have suffered chronically from so low a wage scale as has prevailed in certain branches of the men's apparel industry in the absence of minimum-wage legislation. Few, if any, other industries have been required to make such drastic increases in wages as were necessary, in 1933 to 1935 and in 1938 to 1941, in individual plants or industrial branches in the men's apparel industry, to comply with the minimumwage rates established.

I The men's apparel industry includes those engaged in the manufacture of men's and boys' suits and overcoats, separate trousers, shirts, pajamas, underwear, Mackinaws and other heavy outerwear, work shirts, work pants, overalls, neckwear, robes, and gloves.

The Amalgamated Clothing Workers of America has a large additional membership in allied industries, as mentioned above.

90175-49-53

INCREASE TO 75 CENTS MODEST COMPARED TO PREVIOUS INCREASES REQUIRED

An increase to 75 cents an hour in the minimum wage now will involve a smaller increase in wage rates in manufacturing industry generally than was required by the adoption of the President's reemployment agreement and the NRA codes in 1933 and 1934. The spread between the minimum rates established at that time and the then prevailing average hourly earnings of 42 cents was not as great as the present spread between the proposed 75 cents minimum and current average hourly earnings of $1.38.

This is true not only of manufacturing industry generally but also of the lowest-paid industries. The increase in wage rates required for the establishment of a 75-cent minimum now will be much less for the industry now paying the lowest wages than the increase which was required for the lowest-paying industries in 1933 or for individual firms in 1938 when the Fair Labor Standards Act was passed.

The cotton garment branch of the men's apparel industry, with average hourly earnings of 19.3 cents in March 1933, was among the manufacturing industries paying the lowest wages at that time. With the adoption of the NRA minima of 30 cents and 32%1⁄2 cents an hour, hourly earnings rose by February 1934 to 35.6 cents, an increase of 84 percent. With a further increase in minimum rates late in 1934, earnings rose to 41.9 cents an hour by February 1935. Within the short period between March 1933 and February 1935, then, hourly earnings in this industrial branch were more than doubled. And, despite this large increase in wages, production and employment increased and business embarrassments declined.

The improvement recorded in employment, earnings, and production in the cotton-garment branch after adoption of relatively high minimum rates also took place in the lowest-paying areas of the men's clothing branch, which manufactures suits and overcoats. In eastern Pennsylvania, exclusive of Philadelphia, men's clothing workers' average hourly earnings were 21 cents in 1932. The introduction in 1933 of the 40-cent minimum with provision for minima of $1 an hour for cutters and 75 cents for off-pressers, doubled wages in that area. At the same time employment increased. The same development occurred in New Orleans where average hourly earnings had been approximately 16 cents and were also doubled during the NRA period and where the increase in wages was also accompanied by an increase in employment.

In individual plants, average hourly earnings were as low as 15 cents in 1937, the year before the adoption of the Fair Labor Standards Act. Compliance with the 25-cent minimum called for by the act required increases of not less than 66% percent in such plants. What happened in the dress-shirt industry in Tennessee in this period is a case in point. The Women's Bureau of the United States Department of Labor reported plant average wages as low as 15 cents an hour there in 1937. In 1939, after the 25-cent minimum bad become mandatory, employment in the dress-shirt industry in Tennessee was twice as high as it had been in 1937 when no minimum was in effect.

Increases of as much as 100 percent in 1933 and 66% percent in 1938 were instituted to comply with minimum-wage provisions. Whether industry-wide, as in cotton garments; applicable only to low-wage areas within an industry, as in the men's clothing industry in eastern Pennsylvania and New Orleans, or on an individual plant basis, such increases have not adversely affected employment. That is the record, and it offers food for thought with regard to the practicability of a 75-cent minimum at this time.

No firm or industry covered by the Fair Labor Standards Act can have average hourly earnings lower than 40 cents. Actually, few firms, if any, have plant averages as low as 50 cents an hour. But even in the case of firms where average earnings may be so low, past experience shows that the adjustments necessitated by the proposed 75-cent minimum, so modest when compared with previous requirements, will not interfere with increased business stability and increased employment.

Current earnings in the men's apparel industries indicate that raising the minimum to 75 cents at this time can be accomplished with very small increases in the total wage bill. In the last 3 years, the Almagamated Clothing Workers obtained three general wage increases for its members totaling from 271⁄2 to 40 cents an hour. The pattern established in the Amalgamated shops was followed by most of the nonunion plants. The effect of these wage increases is reflected in current hourly earnings. The following table shows the average hourly earnings for all men's apparel workers, union and nonunion, as reported by the Bureau of Labor Statistics for January 1949.