and restaurants, that people get by the method you spoke of? I am so often met with the fact that so many tipped employees really do not tell the true story.

Mr. LUNDQUIST. Well, certainly there are crosscurrents in these matters. But we would perceive that the normal hearing process, where labor, management, and the public interest, would be provided an opportunity to present their views, would give us a basis for coming to reasonable conclusions.

These are things we have to do almost always in relation to these matters, where labor and management have interests, and the public itself is likewise interested. I do not perceive any major difficulties. Mr. BELL. I yield the balance of my time to Mr. Goodell. Mr. GOODELL. I do not really have any more questions.

Mr. ROOSEVELT. Mr. Pucinski?

Mr. PUCINSKI. Mr. Secretary, we have been discussing, here, all morning, the difficulty in establishing minimum wage standards in the restaurant industry and the hotel industry, particularly because of the problem of tips.

There is no regularity in this field. Some people tip, and others do not. Some tip lavishly, others give very small tips.

I was wondering if the Department has ever undertaken any study, or would consider making a study, to see how the American public, that frequents restaurants and hotels, would feel about a flat service charge in lieu of tips, as they have in Europe.

For instance, Americans travel all over the world, and so far as I know, every country now, except our own, puts a flat service charge on your restaurant bill. Americans travel all over the world, and they pay these very willingly.

In Europe, I notice that a job of a waiter or a waitress is a very high-paying, good job, as compared to a similar job in this country. I do not know how the American people would feel about this. My guess is that they would probably be opposed to it. But we might be surprised to find that that particular segment of the American community that frequents restaurants might feel that in the long run they are saving money.

I do not mind telling you that there are times when I think, like everyone else, I wrestle with myself on how large a tip to leave. And sometimes you leave a much larger tip than you normally would.

So maybe we ought to find out how the American people feel about this thing. Maybe we might find some answers to this whole problem in that. I discussed this with the unions and the restaurant people, and they are all afraid to touch it, for very obvious reasons.

A neutral party like the Department might want to take a look at this, and if the American people are overwhelmingly opposed to it, fine. On the other hand, if they accept it in European travel, it is entirely possible that they might accept it here.

Mr. DANIELS. Will the gentleman yield?

There is a club, the National Lawyers Club here in Washington, where you go in and have your meals, provided, of course, you are a member, and you sign a chit, and they add the tip right on. And the place is well patronized, and I do not think their customers have any objections to that practice.

Mr. PUCINSKI. The point I am trying to make here is that I sometimes wonder if it is fair to the people who work in this industry to

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leave them completely to the mercy and the whims and the charity of the people they serve.

I do not mind telling you, Mr. Secretary: Ever since I have been on this committee and we have started these hearings on minimum wage, when I began seeing the wages that are paid to waitresses by the employer, it has had a subliminal effect on me. I leave a bigger tip now than I ever did before, simply because I figure that this gal is counting on that tip.

But I do not know why a large segment of the American labor force should rely on that kind of a formula for making their living. Secretary WIRTZ. Could I make just a brief statement?

Mr. ROOSEVELT. We will stay neutral, you meant?

Secretary WIRTZ. It is not neutral.

I think that the very, very general sentiment in this country would be to get rid of the tipping system, and it has from the standpoint of our Department a much more real significance; that is, that if there is to be full employment in this country, we have to develop new attitudes toward service trades.

Part of the reason that they have less dignity in this country than they have in other countries, I think, is tied in with the tipping system, which I count an abomination, not just from the standpoint of tipping, but from the standpoint of receiving.

I think it contributes greatly to the wrong psychology of the service trades. I think it cuts a person down a half inch in his own eyes every time he has to do something to get a tip.

I would subscribe completely to the approach which you are mentioning, and would say it is quite important to full employment in an economy which is moving from production to service as fast as ours is.

But I would like to add just one other word, too. And that is that it is very important that we not let this discussion, in my judgment, be dominated by the tip problem, as it has been before, because it has been a hard little problem that has kept us from doing some things that we should have been doing with respect to employees, most of whom are not tipped.

So I would hope very much that we would be able to find not the perfect, but the best possible way of meeting the tip problem this time, and not let it be the cause for our putting off something that we need very greatly to do, as far as employees, most of whom are not tipped, are concerned.

Mr. ROOSEVELT. Mr. Secretary, may I, for myself, just say I thoroughly agree with your statement, and I indeed subscribe to it wholeheartedly, all the way through.

Mr. Secretary, it may interest you to know that this is one of the few times that every member of the subcommittee has been present and has participated in the hearing. I think it is a compliment to you, and our confidence in the great assistance you always give this committee.

We appreciate it very much, and we will be glad to see you on the 17th, on a related problem.

The committee will stand adjourned until it joins Mr. Holland's committee on the 17th.

(Whereupon, at 11:40 a.m., the subcommitee was adjourned, to reconvene on February 17, 1964.)

MINIMUM WAGE-HOUR LEGISLATION

TUESDAY, FEBRUARY 25, 1964

HOUSE OF REPRESENTATIVES,

GENERAL SUBCOMMITTEE ON LABOR

OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C. The subcommittee met at 9:30 a.m., pursuant to recess, in room 429, Cannon Building, Hon. John H. Dent presiding.

Present: Representatives Dent, Pucinski, Hawkins, Gill, Ayres, Goodell, Martin, and Bell.

Also present: Representative Bruce.

Also present: Russell C. Derrickson, staff director; Odell Clark, investigator; John Schuyler, counsel to the General Subcommittee on Labor; J. H. Foreman, special assistant to Mr. Roosevelt; Edward Wynne, counsel to the full committee; and Cleomine Lewis, subcommittee clerk.

Mr. DENT. The hearing will come to order.

For the benefit of the witnesses, my name is John Dent, from Pennsylvania. The ranking member on my left is Mr. Ayres, and next is Mr. Martin, of Nebraska.

The first witness is Mr. Bernard Imming, United Fresh Fruit & Vegetable Association. Mr. Imming, will you take the witness stand and proceed in any manner that you feel will give the committee the most benefit from your testimony? You may either read your full text or you may summarize it and the text will be put into the record in total.

STATEMENT OF BERNARD J. IMMING, SECRETARY, UNITED FRESH FRUIT & VEGETABLE ASSOCIATION

Mr. IMMING. Thank you, Mr. Chairman.

This opportunity to present the views of our organization on the proposal to expand coverage of the minimum wage laws and reduce exemptions thereunder is very much appreciated. Our statement will be brief, but we trust its brevity will not be construed as an indication of relatively little interest or feeling in this most important matter. The United Fresh Fruit & Vegetable Association, with headquarters in Washington, D.C., is a national organization representing all factors in the production and marketing of fresh fruits and vegetables. Its 2,500 member companies handle about 75 percent of all commercial marketings of fresh produce.

At their 60th annual convention in Miami Beach, Fla., January 30, 1964, the members of our association adopted the following unanimous

resolution—and it is a reiteration of a position formally adopted every year for the past decade or so, with no substantial change:

The present exemptions from the minimum wage and overtime provisions of the Fair Labor Standards Act commonly referred to as the agricultural and seasonal exemptions are essential, and should be preserved.

In this reaffirmation of our position, we ask that the U.S. Department of Labor and the Congress properly recognize the seasonal aspects of the farm labor situation, especially as it pertains to the production of fresh fruits and vegetables.

That is our position, and here are a few of the reasons why it was adopted many years ago and continued to the present time.

1. Elimination of the exemptions now provided under subsections 7(b) (3), 7(c), and 13(a) (10) of the Fair Labor Standards Act would saddle the producer or farmer with costs he cannot afford to assume. The fresh fruit and vegetable industry is not subject to price supports, and it does not wish to become price supported. Fresh fruits and vegetables return to the producer only that price the buyer is willing to pay.

Consequently, the fresh fruit and vegetable producer cannot increase his prices at will to include overtime wages. As it is, the grower has been trapped in a cost-price squeeze because his costs, including labor, have been continuously rising while the prices he has received have not increased.

An illustration will show this situation very clearly:

According to the Bureau of Labor Statistics, with 1957-59 price averages as the base of 100, and with all averages adjusted to that base, the wholesale price index of fresh fruits for January 1963 was only 111.4, and for fresh and dried vegetables 99.8. Go back an entire decade for even more telling evidence.

The average wholesale price index for fresh fruits for the entire year, 1953, as reported by BLS and converted to the 1957-59 base, was 99.2, and for fresh and dried vegetables, 92.1. Almost unbelievably, the average price index for fresh and dried vegetables for 1963 was 87.3, or down about 5 percent from 9 years before.

It is abundantly clear that the producer is justifiably concerned with the inevitable production costs he must bear as a result of the elimination of overtime exemptions.

2. The highly seasonal nature of the fresh fruit and vegetable industry, which was substantiated by the study made by the Department of Labor at Congress' direction in 1961-62, makes overtime exemptions

necessary.

The very seasonality of our industry makes it impractical, except in isolated cases, to employ more than one shift. Unlike many others, including manufacturers and some distributors, our industry has no choice as to whether it will work over 40 hours a week, because we cannot control the inflow of raw materials. Commodities must be harvested, handled, and packed when they are ready, not necessarily on a 40-hour, 5-day-week basis, wage-hour regulations notwithstanding. Unless or until Congress can find a way to put nature on a 40-hour week, our industry must operate accordingly.

It is a fact that employees of fresh fruit and vegetable packinghouses are better off financially, and actually prefer to work longer hours when work is available, than they would be if limited to 40 hours a

week. Their annual take-home pay is greater since they rely mainly on seasonal employment.

The length of that season, in most cases, is governed by the nature of the commodity, and is relatively inelastic in a given area. The primary reason for the overtime provisions of section 7 of the Fair Labor Standards Act was to spread employment, but this does not work in the fresh fruit and vegetable industry because of the irregular inflow of commodities. The problem of these highly perishable commodities is altogether different from that of manufactured goods.

3. We question whether Congress intended that there should be any reduction in the exemptions from the payment of overtime for those engaged in the handling and processing of farm products, and consequently we wonder whether the Department of Labor has misconstrued that intent in recommending the changes embraced in

H.R. 9824.

It is true that the 1961 amendments to the act directed the Department to study the system of exemptions available for the handling and processing of agricultural products, with special reference to subsections 7(b) (3), 7(c), and 13(a) (10), and to make "recommendations for further legislation designed to simplify and remove the inequities in the application of such exemptions." Note the emphasis on "simplify" and "remove the inequities." Nothing was said about "reduction" or "elimination" or "removal of exemptions"-only simplification and removal of inequities.

Our industry quite agrees and knows from harsh experience that there have arisen many inequities in the application of the agricultural and seasonal exemptions to which the 1961 amendments referred. It happened that in February 1962, immediately after the Department of Labor study was published, several organizations sought an appointment with the then Secretary of Labor, Arthur Goldberg, to discuss the findings of the study and especially the inequities in the applications of the exemptions. The appointment was arranged by the United Fresh Fruit & Vegetable Association, through Senator Church of Idaho.

On March 6, 1962, we met with Secretary Goldberg and Clarence Lundquist, Administrator of the Department's Wage-Hour and Publie Contracts Division. The organizations represented on this occasion 2 years ago were the California Grape & Tree Fruit League; Florida Fruit & Vegetable Association; Grower-Shipper Vegetable Association of California; Idaho Grower Shipper Association; Northwest Horticultural Council, that is Washington and Oregon State; Texas Citrus & Vegetable Growers & Shippers Association; Western Growers Association; American Farm Bureau Federation; International Apple Association; National Canners Association; National Council of Farmer Cooperatives, and the United Fresh Fruit & Vegetable Association.

The discussion seemed to be most worthwhile. Secretary Goldberg welcomed our visit, and agreed with our suggestion that perhaps our experience and suggestions would be helpful before recommendations were made to the Congress for "legislation designed to simplify and remove the inequities in the application of such exemptions." After all, it was our industry to which the Congress referred. The Secretary praised our cooperative attitude and willingness to be helpful, and specifically directed the Department to work with us further.