Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia.

Senator DOUGLAS. In other words, you operate in Southern States as well as Northern States?

Mr. GEISMAR. Yes, sir; exactly.

The companies for whom I speak are in favor of a Federal minimum of $1 per hour for employees who have completed their training period. A lower minimum should be provided during the training period for inexperienced employees.

I am informed that at least two other employer associations consisting of small companies engaged in the manufacture of shirts and related products are also supporting this minimum before your committee. These associations are the Shirt Institute, Inc., and the New York Manufacturers' Association of Robes, Leisurewear, Shirts & Rainwear, Inc.

The firms whom I represent account for a total employment in the shirt, pajama, and related products industry of approximately 20,000 production workers.

We support a minimum of $1 per hour because we believe it is necessary to stimulate purchasing power among the lowest paid workers and because employers who pay fair wages should be protected against the unfair competition of substandard wages.

It is customary for economists to classify men's apparel as a necessity. But we in the industry have learned through experience that our product is a deferrable necessity. People are naturally obliged to give priority to the purchase of food and shelter.

If anything is left, and if medical expenses have not intervened, then they buy apparel. Invariably, the needs of the children and the women are attended to first. Only then are shirts, pajamas, and underwear bought for the men.

Senator DOUGLAS. Is that not quite a tribute to the gallantry of the male sex?

Mr. GEISMAR. Yes; I think we are not so bad. We have got to have something in our favor.

Senator ALLOTT. Women and children first.

Mr. GEISMAR. According to a bulletin of the Bureau of Labor Statistics, called Factory Workers Earnings, April 1954, there were, in that month, approximately 1,250,000, or about 10 percent of all factory workers in the United States, earning less than $1 per hour.

These workers were averaging about 82 cents per hour. It is our firm conviction that these workers cannot buy our products because of inadequate earnings, nor can they buy the products of many other industries. We think that raising their wages to $1 per hour would make them better customers for the products of American industry.

I think it is of interest to note that weekly benefit amounts under unemployment insurance laws are being increased in most of the States until today benefits are as high as $36 per week. Many of the States have raised unemployment insurance benefits this year, and it is safe to say that they must have acted on the basis of studies showing the need for higher benefits.

More than half the States pay as high as $30 per week or more, including States in all sections of the country. This is equal to the present Federal minimum wage of 75 cents for a 40-hour week. We

thus have a situation where a worker can be employed at a wage which is the same as, or in some States, even less than the amount he can receive in unemployment benefits when he is not working.

It seems self-evident that we must have a minimum-wage rate which is higher than the unemployment benefit rate or we put a premium on not taking available jobs.

There is attached to this statement, a copy of which will be handed to members of the committee and to the recorder, a list of 25 States whose unemployment-insurance laws provide for a maximum weekly benefit of $30 or more.

We are recommending a minimum of $1 per hour because we believe the resulting wage increase can be absorbed with little or no effect on prices. According to the Bureau of Labor Statistics wage study I referred to a moment ago, the number of factory employees in the United States earning less than $1 is approximately 10 percent of the total number of factory employees.

An average increase of about 18 cents per hour is required to bring this group up to $ 1per hour. This would mean an overall general increase of 1.8 cents per hour based on the total number of factory employees. We recognize that some increases to other employees might be required because of narrowing di :erentials, but this would probably not be sufficiently substantial to have a marked effect on wage levels.

American industry has shown in the past several years that it can absorb wage increases of this order without raising the price level. For example, between June 1953 and December 1954, average hourly earnings in manufacturing industries in the United States rose 7 cents, from $1.76 to $1.83. Yet in the same period the Consumer's Price Index actually declined from 114.5 to 114.3.

It is true that in the men's furnishings industry there is a larger percentage of production workers who earn less than $1 per hour and it may very well be that the manufacturers who employ those workers may have to raise their prices to a reasonable level in order that their employees should earn a decent minimum wage.

The companies for whom I speak all believe that this would have a beneficial effect on our industry and on the country as a whole. We believe that depressed wages is the first step to a general economic depression.

We have some employees who now earn less than $1 per hour and would therefore be affected by a $1 minimum. However, we believe the salutary effects would justify the cost to us. It is natural to ask why we have not voluntarily adjusted our minimums to $1 per hour. The answer lies in competitive conditions. We cannot raise our minimums when others are free to pay their workers 75 cents per hour. If we were to do this we would invite self-destruction.

We firmly believe that honest competition between business enterprises should not be conducted at the expense of employees. That is destructive competition, unworthy of the free-enterprise system. There are plenty of areas in the conduct of a business where competition can play a constructive role: Efficient management, imaginative merchandising, aggressive selling, modernization of machinery, modern production methods, and so forth.

We should not reward the employer who competes by paying less than a fair minimum. If we require everyone to pay not less than $1

per hour, we will bolster purchasing power and eliminate competition based upon substandard wages.

As long as the legal minimum remains at the low figure of 75 cents per hour, it will continue to be possible for substandard manufacturers to provide the most unfair kind of competition to the legitimate and efficiently operated units of the industry.

This competition tends to drive down wage standards for the entire industry. The competition of the substandard manufacturer is based solely on the payment of low wages, not on efficient management, intelligent merchandising, and the like, and I submit that this is unhealthy.

Under the present Fair Labor Standards Act employers are permitted to employ learners at less than the established minimum during a training period. The law requires an employer to apply for a certificate authorizing the employment of learners. This procedure has proved satisfactory in the past and should be continued if a $1 minimum is enacted.

Source: Commerce Clearing House, Unemployment Insurance Law Service.

The above is a list of the States in which the maximum weekly benefits are $30 or more. It is over half of the States in the Union, Senator DOUGLAS. Thank you very much, Mr. Geismar, it is a very interesting statement.

Am I correct in inferring that the firms in your group are longestablished firms that are well known through national advertising of trade-marked products?

Mr. GEISMAR. Yes, sir; I can give you a little specific information in our particular company. We are going to celebrate our 100th anniversary in 2 years. Jacobson's, I believe, are about 60 years old. The Hathaway Co. is older than we are. Publix goes back about 60 years. Cluett's I think just celebrated their 100th anniversary about a year ago. Lustberg Nast is about 50-some-odd years old. Troy District is probably 25 or 30 or more. Nearnberg's is about 50 years old, and there are a number of old manufacturers in the Philadelphia group. When I have said "old," I mean old in years, not old in activities, I hope.

Senator DOUGLAS. I understand your plants are unionized?
Mr. GEISMAR. Yes, sir.

Senator DOUGLAS. Are the southern plants unionized?

Mr. GEISMAR. We have one basic contract, North and South, covering our entire operation. I believe I cannot speak freely for the others, but I believe the others have a similar situation.

Senator DOUGLAS. In other words, instead of trying to find a way out by starting nonunion plants in the South, as some of the textile companies have done, what you want to do is to raise the level of the industry as a whole?

Mr. GEISMAR. We think that makes commonsense, Senator. We think, after all, if we live in these United States, it really does not make a bit of difference if we are north, east, south, or west. It is one big country, and we are more or less, if we have an equal footing and we can operate on a free and even basis, then it is up to us from a standpoint of efficient management, modernization of equipment, and what goes with it, we feel that there should not be some particular advantage because a man is in some so-called backward area because by having a reasonable base he is going to help that so-called backward

area.

That is our philosophy.

Senator DOUGLAS. Your attitude is in very sharp contrast with the attitude of a great many of the big textile companies which are more or less retreating from the high-wage and unionized areas of New England and the Middle States and throwing the bulk of their operations into nonunionized and much lower wage areas of the South.

Mr. GEISMAR. I am not here to discuss or to defend some other particular manufacturer. I can only explain what our philosophy is, and I think I can freely say that it is the philosophy of this group that I am talking for, because I have been authorized by them to make this statement.

Senator DOUGLAS. Personally, I would have welcomed a similar attitude by the textile industry, and I hope your example proves contagious.

Mr. GEISMAR. Thank you, Senator.

Senator DOUGLAS. Thank you very much.

The next witness is Mr. Charles Ballon of the Affiliated Dress Manufacturers, Inc.

STATEMENT OF CHARLES BALLON, ATTORNEY, AFFILIATED DRESS MANUFACTURERS, INC.

Mr. BALLON. I appear before you today, and thank the subcommittee for the opportunity and privilege of doing so, on behalf of the New York Dress Manufacturing Industry, the Affiliated Dress Manufacturers, Inc., the National Dress Manufacturers' Association, Inc., and the Popular Priced Dress Manufacturers' Group, Inc.

These 3 trade associations are composed of some 850 to 900 dress manufacturers engaged in business in New York City. They transact an annual volume of business approaching three-quarters of a million dollars and employ upwards of 65,000 workers.

These employees are represented by the International Ladies' Garment Workers' Union with whom the three trade associations, for whom I appear here today, negotiate and enter into collective-bargaining agreements on behalf of their respective members. There is a history of collective labor bargaining in the New York dress industry on a market wide basis that dates back to 1933, since which time not a single day of production or work has been lost by manufacturer or worker due to strike or other labor discord. This notable achieve

ment, credit for which is shared as well by the union as the employers' associations, was augmented just 9 weeks ago when a new 3-year pact was signed by the parties.

Since the entire New York dress-manufacturing industry is substantially organized, it can be assumed that any competitive advantage to be derived from employing nonunion labor is not available to a New York dress manufacturer. Instead, his labor problem stems primarily from nonunion and substandard wage-paying dress manufacturers and some only partially organized markets outside of New York City.

Thus, in New York the average earnings of dress workers are $2 per hour. In Atlanta, Ga., the average hourly earnings of workers in corresponding dress-manufacturing crafts are $1.01; in Dallas, Tex., $1.06; and in Wilkes-Barre (Hazelton area), Pa., $1.08 per hour.

These earnings figures are from statistical tables compiled by the Bureau of Labor Statistics of the Department of Labor. Thus, the average dress worker in the New York market earns about twice as much as his prototype in the Atlanta, Dallas, and Wilkes-Barre markets. And these are all organized dress-manufacturing centers.

Senator DOUGLAS. You mean they are operating under union contracts?

Mr. BALLON. To a large extent, sir; yes, sir. Consider, then, the extent of the differential between the rates of wages paid by the New York dress manufacturer and his competitor in an unorganized market. This competitive margin is prohibitive and in large measure accounts for the loss of volume on a national basis by the New York dress industry to other dress-producing centers.

In his testimony before this subcommittee on April 20, 1955, Mr. David Dubinsky, president of the ILGWU, stated:

Labor organizations are not always in the position to raise the wages and salaries of un erpaid workers. Unscrupulous employers know this only too well. The local community pressures which they generate and exploit make the problem of improving the workers' conditions all the more difficult. Yet the goods produced in such factories undermine the competitive standing of those firms who are doing their best to maintain fair labor standards. It is precisely in such cases, when the workers lack the protection of a union, that they need to be protected by law.

Section 2 of the Fair Labor Standards Act (20 U. S. C. A. 202), setting forth the congressional finding and declaration of policy that motivated the enactment of this farsighted piece of legislation, states that the payment of substandard wages "constitutes an unfair method of competition in commerce."

The Department of Labor has stated many times and the United States Supreme Court has ruled that one of the basic purposes of the Fair Labor Standards Act is to fix wages, not for particular individuals and companies but industry wide, on a basis which the industry can stand, and under conditions which, if classification is required in industry, will not give one section of it a competitive advantage over another.

Interstate commerce should not be made the instrument of competition in the distribution of goods produced under substandard labor conditions, which competition is injurious to the commerce and to the States from and to which the commerce flows (United States of America v. Darby, 312 U. S. 100 (1940)).