it would be very difficult to make it reasonably accurate because of the fact that we do not now have detailed information in many of these areas as to what the contractor is paying. So we would not know what the difference might be. As you pointed out, there is another factor, too, that has a bearing. Just because you pay a man a different wage rate doesn't mean that it either makes the contract cost more or less. If the man gets 60 percent more pay but produces twice as much work, it might be more efficient to hire higher priced men. So it gets into nebulous situations as to evaluating how much it might cost.

Mr. TAFT. If you could help us along those lines, we would appreciate it. We are likely to be asked this if we ever get to the full committee or to the floor.

Mr. O'HARA. Gentlemen, I think we will let you go at that. We have one more witness, and it is now 11:30. I hope you will continue to keep yourselves available to us if we have further questions, because you are the technicians that we are going to rely on, and you know what is going on in this field much better than we do, and we will hold the record open until March 26 for the submission of the information that we ask that you supply us and we would hope that you would get it to us by then and we may have further questions as we go along.

Thank you very much for taking the time to help us out here today. Colonel HOLLAND. Thank you, Mr. Chairman.

Mr. O'HARA. Our next witness is appearing on behalf of the American Federation of Labor and Congress of Industrial Organizations. He is Mr. Kenneth Meiklejohn, legislative representative.

Mr. Meiklejohn, if you will please identify yourself for the record we will be pleased to hear your testimony.

STATEMENT OF KENNETH A. MEIKLEJOHN, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

Mr. MEIKLEJOHN. Thank you, Mr. Chairman. My name is Kenneth A. Meiklejohn. I am legislative representative of the American Federation of Labor and Congress of Industrial Organizations, and I appear here on behalf of that organization.

I have a statement, Mr. Chairman, which I would like to read. I may skip over parts of it but I would like to read parts of it if I may. Mr. O'HARA. Please go ahead.

Mr. MEIKLEJOHN. At the outset, I should like to say that we sincerely welcome the introduction of H.R. 1678 and H.R. 6088, providing labor standards for workers employed under Government service contracts, and we appreciate very much the opportunity to submit our views on these bills.

The fact that such workers still lack such protection is all the more deplorable because employees working on construction contracted for or aided by the Government and employees working under Government contracts for materials, supplies, articles, and equipment have enjoyed such protection for workers employed under Government contracts for janitorial, custodial, and cleaning service, and in maintenance work, laundry, drycleaning, hauling, pest extermination, repair of clothing and equipment, and other service work is important, urgent, and long overdue.

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The AFL-CIO supports the general objectives of H.R. 1678 and H.R. 6088. These bills differ in technical detail, but their common purpose is to accomplish the objective I have just outlined. Later on, I shall discuss their differences and indicate the types of provisions we would favor. First, however, I would like to summarize briefly the factors that lead us to believe that Congress should take prompt action to enact legislation in this field and thus round out the protective labor standards system for employees working on Government contract or federally assisted work.

The principle underlying these bills is that Federal funds should not be used to finance contracts for services of one kind and another needed by the Government which depress or undercut prevailing wage rates and other labor standards or otherwise result in oppressive and undesirable working conditions. Such use of Federal funds and of the Federal contracting authority is detrimental to the workers involved, unfair to, and often disastrous for, contractors who seek to pay fair wages and observe decent labor conditions, and inimical to the economic and social health of the Nation as a whole.

At this time, the Nation is particularly concerned about the problem of poverty in this land of plenty. Yet, without passage of these bills, Federal funds can be spent, and today are being spent all too frequently, to pay workers employed under Government service contracts poverty wages. Legislation along the lines proposed in H.R. 1678 and H.R. 6088 must, we strongly believe, be enacted so that workers performing services for the Government under contract are not themselves the victims of poverty.

Obviously, no one measure is going to do away with our poverty problem overnight. Indeed, a whole complex of public and private measures will be needed. Within the framework, however, of the people with whom H.R. 1678 and H.R. 6088 are concerned, such legislation can do much to raise living standards for workers and their families and achieve fairer and more just competitive conditions among contractors seeking to obtain and carry out Government service

contracts.

In this connection, it is worth noting that many of the workers performing services under Government service contracts are Negroes or members of other minority groups who are among the lowest paid workers in the country. If legislation along the lines of the bills before this subcommittee was enacted, uniform wage levels and other labor conditions would prevail for all contractors seeking Government service contracts in a particular locality. One contractor could not underbid his competitors by cutting his workers' wages to, or maintaining them at, the lowest possible level. His low bid would have to be based on economies and efficiencies he is able to achieve, but could not be at the expense of his workers.

As I have said, the proposals before the committee would bring wage protection to the one remaining substantial group of employees working under Federal contracts not covered by current labor standards statutes. Wage protection has been given construction workers engaged on Federal contracts since 1931 under the Davis-Bacon Act. Similar protection has been given manufacturing workers engaged on Federal contracts since 1936 under the Walsh-Healey Act. Yet Government service contractors have complete freedom to pay any

wage rates for which they can obtain employees-no matter how low. Mr. GRIFFIN. Is there not a Government policy, the result of an Executive order issued by President Kennedy in 1961 that all such specifications require the payment of the minimum wage provided under the Fair Labor Standards Act?

Mr. MEIKLEJOHN. I believe that is the applicable minimum wage, Congressman Griffin, and as far as I recall, many of these employees would not be doing work covered under the Wage and Hour Act. But I will check that. I think that that statement probably should be checked and I will be glad to do so, because I am not certain as to the scope of that order. I will be glad to send that in for the record. I think that is a good request.

The Davis-Bacon Act requires that employees on construction work contracted for or assisted by the Government shall be paid according to a wage rate schedule reflecting prevailing wage rates as predetermined by the Secretary of Labor in project areas. Walsh-Healey provides comparable protections for employees on Federal supply contracts. That act also requires guarantee of safety and health standards. Under both laws prevailing wage rates provide the standard to be applied on Federal contracts which come within their purview. H.R. 1678 and H.R. 6088 are analogous to the other Federal contract laws.

The Building Service Employees International Union, an affiliate of the AFL-CIO, pointed out to this committee numerous concrete instances which exemplified the need for this type of legislation. That union has first-hand knowledge of the cleaning service and maintenance industry, and its testimony clearly showed the urgent need for the type of legislation that the committee is presently considering. We endorse and support their presentation before this subcommittee. I should like now to discuss some of the specific provisions of H.R. 1678 and H.R. 6088. In comparing these bills, we find that H.R. 6088, like the Davis-Bacon Act, covers contracts in the amount of as little as $2,000, whereas H.R. 1678 is like the Walsh-Healey Act and covers contracts in the amount of $10,000 and up. H.R. 6088, on the other hand, relies upon wage boards to determine the rates to be paid workers under Government service contracts, while under H.R. 1678 such rates would be fixed by the Secretary of Labor. Finally, H.R. 6088 assures the workers the equivalent of Federal fringe benefits rather than fringe benefits generally, as does H.R. 1678.

H.R. 6088 covers contracts in excess of $2,000—

which provide for the furnishing of services, including janitorial, custodial, or cleaning services, or maintenance work to a Federal agency.

This $2,000 figure is preferable to the $10,000 figure used as the coverage criterion in H.R. 1678 since service contracts are likely to be for smaller dollar volumes than manufacturing contracts. We favor the $2,000 coverage criterion.

Both bills would protect such service workers as janitors, custodial workers, cleaners, maintenance workers, laundry and drycleaning workers, pest exterminators, and clothing and equipment workers. Employees of concessionaires, however, should also receive the protection of prevailing wages and working standards. Such concessionaires operate on and use Federal property on space leased to them by the Federal agencies. The Federal Government is their landlord.

Yet many food service workers, employed by such concessionaires, are without the protection of decent wages and labor conditions. These workers should also be covered in the bill that is reported out by this subcommittee.

Enforcement is assigned to different agencies by the two bills. H.R. 6088 would assign enforcement principally to the contracting agency, with rulemaking authority in the Secretary of Labor. H.R. 1678 would place enforcement in the hands of the Department of Labor. We urge that enforcement be vested in the Department of Labor, as is the case under the Walsh-Healey and Davis-Bacon Acts.

We do not favor the use of wage boards to fix wages, as proposed in H.R. 6088. Rather, we would urge the subcommittee to adopt provisions for predeterminations by the Secretary of Labor, along lines similar to those now provided for in the Davis-Bacon Act. Wage board procedure, such as are now followed in determining the wages to be paid to blue-collar Federal employees, currently result in frequent substantial delays in wage adjustments to take account of wage changes that have taken place in the locality. Furthermore, gearing such changes to wage levels prevailing for Government employees is apt to keep wages at unreasonably low levels. For these reasons, we urge a Davis-Bacon, rather than a wage-board or Walsh-Healey approach to the making of prevailing wage predeterminations for workers emploved under Government service contracts.

H.R. 6088 contains generally satisfactory provisions on fringe benefits to be included in the employees' compensation. As the Education and Labor Committee and the House itself has recognized, in the fringe benefit amendments to the Davis-Bacon Act, and I refer to H.R. 6041, as passed by the House, fringe benefits today are important components of employee compensation. Such benefits under H.R. 6088 would be the same as the health, life, and accident insurance and vacations and retirement benefits provided by the Federal Government or, in lieu thereof, an amount equal to the cost to the Federal Government of furnishing such benefits. These provisions seem quite appropriate, and the administrative task of establishing the fringe benefit pattern should be quite simple. The definition of fringe benefits in section 2(b) and section 6(d) of H.R. 6088, however, should, we believe, be broadened to include all Federal employee fringes such as paid holidays and sick leave provisions not included in the benefits listed in the bill.

H.R. 6088 contains no overtime provision. We urge that any legislation to be reported by this subcommittee contain a provision similar to section 3(c) of H.R. 1678 which would provide for time and one-half an employee's regular rate of pay for hours of work in excess of 8 hours per day or 40 hours per week.

Further, there should be a provision that guarantees all employees of any Government service contract at least the applicable minimum wage rate specified for employees covered by the Fair Labor Standards Act. The counterparts of these workers employed in Federal service are assured by Presidential order that their wage rates shall at least equal the applicable Fair Labor Standards Act minimum. I think that is the answer to your question, Congressman Griffin.

Mr. GRIFFIN. Yes, since I asked the question earlier, I have had a chance to examine the Presidential order, and also the reference

made by Mrs. Peterson, and the reference is only to Federal employees. Mr. MEIKLEJOHN. That is correct. I am glad the record is now clear on it.

There is no justification for paying less to employees of private contractors doing service work for the Government under Federal contract. We urge that the guarantee of the minimum wage established by Fair Labor Standards Act be extended to all employees under Government service contracts irrespective of the amount of the

contract.

We believe that the economic, legal, and moral justification of labor standards protection for employees empoyed under Government service contracts is clear, and we urge you to take prompt action to provide such protection.

I may say, Mr. Chairman, in conclusion, that we recognize some of the technical problems involved in draft legislation which will cover the various situations which I believe the subcommittee will want to cover in this bill. We certainly will be glad to be of whatever help we can in assisting the committee in doing so. With that, I will be very glad to try to answer any questions.

Mr. O'HARA. Mr. Griffin?

Mr. GRIFFIN. No questions.

Mr. O'HARA. Mr. Taft?

Mr. TAFT. Mr. Meiklejohn, let us take the area of custodial, janitorial, and cleaning services first.

How many employees or what percentage, of the employees in the country at the present time are covered by union contracts of one sort or another in these categories?

Mr. MEIKLEJOHN. I do not have the exact figure, but I can endeavor to get that for you. I would imagine it is a rather small figure. Mr. TAFT. It is a fairly low percentage in both localities?

Mr. MEIKLEJOHN. That is correct. I do not have the exact information.

Mr. TAFT. I would appreciate it if you could get us something along that line.

Mr. MEIKLEJOHN. Certainly.

Mr. TAFT. The reason I raise the question is because you have raised the question as to the procedures to be used, whether you go to the Secretary or whether you go to a wage board determination or how you do this.

Mr. MEIKLEJOHN. Yes, I understand the question.

Mr. TAFT. How difficult is it going to be or how easy is it going to be for the Secretary of Labor or for a wage board, for that matter, to get the actual information as to what the prevailing rate is in a particular locality? How is he going to get it? How is the information going to be available?

Mr. MEIKLEJOHN. The Department of Labor has had experience along that line under the Davis-Bacon Act, I do not know that the same procedures would necessarily apply in this area, because the type of work which is being done is a different type of work and the extent of organization is much less

Mr. TAFT. The point I would like to get to is that unlike many industries, such as those which are covered under Walsh-Healey, in this case the Secretary of Labor would not be able to take a look at