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Secretary WIRTZ. That is right.

Mr. AYRES. When we changed that, then we took dollar volume and put it under that category. Is that not right?

Secretary WIRTZ. I think that is roughly right. The original reference was to interstate commerce or production for interstate commerce, but I affirm the proposition that we have tried to implement that in terms of dollar amount.

Mr. AYRES. We changed the law when the minimum was increased, and we extended coverage. Then we changed the precedent, and we now base those that are covered in all industries on dollar volume, the newly covered ones under the last amendment to the act?

Secretary WIRTZ. When you refer to a change, I do not understand it to be a change, as far as the policy involved is concerned.

There has been the implementation of this standard, which is basically, and must be, an interstate commerce standard. There is an implementation of that in terms of dollar amounts. And if in saying that, the answer coincides with the question, I am glad. If not, I am still not sure that I get the question.

Mr. Ayres. The thing that I want to get in the record, Mr. Secretary, is that when we amended the act, we then said: "İf you do a million dollars or more in the retail field, you are covered."

Secretary WIRTZ. That is correct.

Mr. AYRES. Without any consideration as to whether or not interstate commerce is involved ?

Secretary WIRTZ. No. It is with the last that I have the difficulty.

I do not think that the dollar limits are without reference to the idea of interstate commerce. I think they are an implementation of the interstate commerce idea.

Mr. AYRES. Suppose legislation was considered that would repeal the amendment to the act 3 years ago, which would say dollar volume is not to be considered. What would be the administrative effect of that?

Secretary WIRTZ. What would be the administrative effect of the repeal of the dollar reference?

Mr. AYRES. Yes.

Secretary WIRTZ. Well, we would have to work out administrative rules for the implementation of the interstate commerce principle.

Mr. AYRES. Assuming that legislation in that direction was not accepted, then, in order to have a really clear conscience, would it not be better to say that everyone should be covered?

Secretary WIRTZ. I would have to reply again in terms of what I think is a pragmatic sense of conscience, and frankly would not subscribe to the idea that the absolute would be the most effective implementation of conscience, because I think there is a matter of administration in carrying out the conscience, as well as in carrying out a business judgment.

In the platonic sense of the ideal conscience, I could agree the other would arguably be better, but practically, no, I think some of these lines are better for the pragmatic implementation of the conscience.

Mr. ROOSEVELT. Without objection from the next ranking members, I am going to call on Mr. Gill at this time. He has to be at a 10:30 meeting on pending legislation in the House, and if it is all right with you gentlemen, I will call on him at this time.

Mr. Gill? Mr. GILL. Thank you, Mr. Chairman, and I thank the gentleman for vielding.

I wonder if we could explore one phase of this bill in a little more detail. That is the hotel coverage.

We are trying to decipher in the act the distinctions which are made between hotels which are part of a chain and hotels which are indiridually owned, insofar as it goes to determining jurisdiction. Mr. Secretary, could you or Mr. Donahue elaborate on that?

Secretary Wirtz. I will answer in general, Mr. Gill, and leave the more specific questions to the others.

In general the test is this: that there will be coverage only if the enterprise, the total enterprise, is a million-dollar enterprise, and there will be coverage with respect to a particular establishment only if the volume is a quarter of a million dollars a year, $250,000 a year.

If there is a particular establishment with a volume of less than $250,000 a year, as, for example, $200,000 a year, that volume will be counted into the enterprise for the purpose of coverage of the whol enterprise, but that particular establishment would not be covered.

Mr. GILL. In other words, you could have three chain hotels, take Hilton or Sheraton or some other national chain in a given jurisdiction. Two of them could be covered, because they had more than $250,000 worth of business, and one might not, because it had $200,000? Secretary WIRTZ. That is correct.

Mr. GILL. But the total enterprise would still add up to more than a million dollars, if that was the case ?

Secretary WIRTZ. That is right. And that would pose the kind of problem to which Mr. Ayres referred, and yet would leave us with the feeling that if we are going to administer it sensibly, we just have to recognize the situation.

Mr. GILL. There is some reference in the act to management contracts in determining whether or not an enterprise is part of a larger enterprise or not?

Secretary Wirtz. That is a specific I would like to refer to the Solicitor, if I may.

As I understand the question, it is: What is the appropriate test for determining whether a particular hotel is part of a larger enterprise?

Mr. Gill. Yes. Assume that the facility belongs to owner A, but owner A has contracted with large chain B for management. How does that affect the jurisdiction over that hotel!

Mr. DONAHUE. Well, there are lots of varying circumstances which can occur, as the Congressman well recognizes. But if there is merely a management contract for services of management by an independently owned hotel, then that independently owned hotel would not be considered part of an overall enterprise. Instead, it would be considered, to the extent it is an enterprise, an enterprise in and of itself.

Mr. Gill. I see. Then it would be possible for a number of indiFidual owners to enter into a management contract with one manager and still maintain their exemption under the act ?

Mr. DONAHUE. That would be possible, so far as the enterprise is concerned. They would not necessarily be a single enterprise.

Mr. Gill. And they would not necessarily be covered individually, because even though they had $250,000 worth of business, they would not be considered part of a total enterprise of a million dollars or more?

Mr. DONAHUE. That might well be true.

Mr. Gill. So we have another way of getting out from under this act, if we work at it a bit ?

Mr. DOxAHUE. That is correct.

Mr. Gill. I wonder if you could give us some estimate, Mr. Secretary, or any of your assistants, as to the total number of hotel-motel employees that would be included by the proposed legislation, versus those that would be left out.

Secretary Wirtz. Mr. Lundquist ?

Mr. LUNDQUIST. Yes. The legislative proposal insofar as it relates to hotels would add about 190,000 workers to coverage under the Fair Labor Standards Act.

Mr. Gill. What proportion of the total employees is that?

Mr. LUNDQUIST. That is about 38 percent, if my memory ser right. There are about 490,000 employees.

Mr. GILL. So really we are taking a very small bite with this piece of legislation?


Mr. GILL. Do you have any idea how the same figures compare when you take gas stations?

Mr. LUNDQUIST. As Mr. Dent mentioned, certainly 86,000 gas station workers out of the total number of gas station employees that are spread throughout the country-I suspect it would be less than 20 percent, and I am guessing a little bit in that regard.

Mr. Gill. Another question in the matter of choice of coverage here. I have been questioned on the fact that hospital employees are among the exclusions at the present time, and that no effort has been made to include them.

Is there some particular reason for this? And if so, what?

Secretary Wirtz. It is again a question which goes to conscience, and to a consideration of the balancing of conscience against some of the pragmatic factors in the situation.

These are eleemosynary institutions to which you refer. I am frank to say that as a matter of personal judgment, it is very hard for me to tolerate the idea of somebody working at less than what seems a living or proper minimum wage, just because he or she is working for an enterprise whose purposes are as lofty and elevated as those of these groups to which we refer.

At the same time, I am forced to recognize the fact that that practice has developed to a point where today it has become so widespread in the carrying out of the hospital and other enterprises that it is very hard to move it aside.

I do not like the situation, and frankly, Mr. Gill, I do not like my answer, but that is the answer.

Mr. ROOSEVELT. Will my colleague yield?

I think the record should show that while many of these are nonprofit hospitals, there are a great number of profit hospitals today I know there are in California, and I assume there are in many other States, also. And the Secretary's answer may have some bearing on the nonprofit situations, but would seem to me to have no bearing on the profit situations at all.

Secretary Wirtz. I should like to identify myself with the statement that has been made by the Chair.

Mr. ROOSEVELT. And therefore you would probably not object to giving consideration to bringing those in, and if we bring those in, there will be the cry of discrimination, and we will be coming right back to the main thrust.

Mr. GILL. I would like to supplement that a bit, Mr. Secretary, with the observation that even though a hospital itself may be nonprofit, I doubt if that applies 100 percent to all of those conected with the management thereof. It does not affect the doctors' fees paid, or the fee paid to other technicians. That is a part of the cost of the hospital. It merely means nobody is taking money off the top after all the deductions and other payments are made.

So I just merely wanted to pose this as a problem. Is there any particular reason why hospitals, where good and efficient work is far more crucial than in some of these other enterprises we are covering, should be limited, in the lower pay levels at least, to people who have very low earning power and sometimes very low skills?

Secretary Wirtz. I should not, by replying to your question, want to indicate a difference of view, because I do not have one. I would just have to recognize that without overgeneralizing the answer, the Tage economics of the society are not worked out right.

We pay the people who teach our children at the point in their lives where it is most important less than we pay people who teach them later, or people who do not teach them at all.

And I do not like that. And I mention it just as another illustration of the kind of thing we have here.

I do not like the idea that we have offered hospital care to ourselves on a basis which presently includes a large number of people working in that enterprise at less than they ought to be.

Nor. I think it is partly because we have not worked out the economics of hospital care at all, and it is partly because people cannot afford, especially older people, the kind of hospital care that they need and are entitled to.

The economics of hospital care are completely out of joint. We want very much to do something about that, as far as the program of hospital insurance or hospital protection for older workers under cial security is concerned.

That is not unrelated to what we are talking about now. Part of the reason people work at inadequate wages in hospitals today is because we have not worked our system out so that people can pay for the kind of hospital care they ought to get.

But I would subscribe completely to the implications of the question, and incidentally, would be glad, Mr. Chairman, to entertain a suggestion from the committee that in your judgment there is more exploration of this matter called for than we have so far made.

It has not been covered by these studies which we have filed with you. We would be glad to go into it. Jír. ROOSEVELT. You may so request it, without objection.

Mr. GILL. One other question on the matter of coverage, and I do not really know where this fits.

There has been some question raised by persons connected with the blind that there should be some relationship between minimum wage and wages paid in blind workshops. I have an impression that employment sometimes works to the detriment of the person who is supposedly being given a job in a blind workshop, if he is not paid anything that is comparable to a living wage.

Has your Department looked into this problem at all?
Secretary WIRTZ. Yes. We have been very much interested in it.

Mr. Dent has a bill in, covering this particular point. It is a matter to which we have been giving very careful attention and a good deal of thought

I think it is a matter, Mr. Gill, and Mr. Dent, on which it is very hard to come up with a single right answer. It is a balancing of considerations, here.

We do not want to permit blind people to be paid at wages which will mean that they are given an unfair advantage. At the same time they present a very serious situation.

The kind of problem that bothers us most is this: Here is a blind person who is given an opportunity to work on what may be an incentive basis. And it takes that person perhaps 8 or 10 times as long to do a particular job as it does someone not suffering from this detriment. It is very hard to reach a firm conclusion as to whether we help or hurt that person by establishing a flat minimum.

Now, so far, we have felt that the best thing to do is to feel our way, and to treat individual situations on a case-by-case basis.

But the question which you raise, the bill which Mr. Dent has introduced, has brought us face to face with this problem. We are trying to work it out on the best basis possible.

Mr. GILL. I will leave the balance of questioning on that to Mr. Dent or others.

Mr. Dent. Will you yield on that?

I just would like to say it would be very good if the Department would make a study on this basis. I have talked to the blind representatives about this suggestion, and right now would be a good time to suggest to you that you look into the possibility of having the so-called apprentice time run uncovered, and then at some cutoff point of apprentice time, that we do cover, because what has happened, very seriously, is that there has been a certain amount of severe exploitation creeping into this, where they are working for as low as 10 cents an hour.

And it has just gotten to the point of being almost a national disgrace. That is the reason I became very interested in it.

I would suggest that you look into that, because there is a point there where there is no return to the employer, or to the workshop, as they call it. And there ought to be something given on that order.

Secretary WIRTZ. I am advised, Mr. Chairman, we would be in a position to file a supplementary statement with respect to this problem, which we will be glad to do shortly on the basis of consideration al. ready given the problem.

Mr. Gill. I would like to close with the observation that in our State we have coverage under the minimum wage laws far in excess of

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