tragic fact remains that the majority of Negro workers are still unable to earn enough to maintain an acceptable standard of living.

The results of these economic disadvantages are reflected in the depressed state of family life, education, and health so frequently observed in the large centers of Negro population.

We appear here today to recommend amendment of the Fair Labor Standards Act. We believe the act should be amended to include thousands of workers in a number of industries not covered by existing Federal laws. We believe this action, when taken by the Congress, will benefit millions of Negro wage earners who now eke out a precarious existence on substandard wages.

Although we are confining our presentation to the special needs of Negro workers, we must emphasize the fact that we are not unmindful of the plight of millions of other workers who do not enjoy protection from exploitation. In the course of these hearings, representatives of other responsible organizations have pointed out the need for a higher minimum wage.

They have described the benefits which will accrue to our national economy and to the working men and women of the Nation. We shall not attempt to duplicate their statements.

We should like to make it clear, however, that we join these organizations in urging the changes already proposed, and specifically the establishment of a minimum wage of $1.25 per hour for workers presently covered by the 75-cent-per-hour minimum established in

1950.

We believe this committee will be deeply interested in a few facts about the Negro workers, and we shall state them briefly and to the point.

The Bureau of Labor Statistics, in a report-Bulletin 1119—issued in December 1952, titled "Negroes in the United States: Their Employment and Economic Status," revealed that:

In 1950, Negro families had an average annual income of $1,869, 54 percent of the average annual income of $3,445 among white families.

The report stated:

The difference seems particularly wide in view of the fact that a higher proportion of Negro family members are in the labor force.

Referring to the individual Negro wage earner, the report said: In 1950, the Negro wage and salary worker earned an average of $1,300 yearly, or 52 percent of the average for white wage earners.

Further analysis of the report showed that 4,072,076 Negro workers, male and female, earned less than $1,500 annually. A total of 1,664,904 Negro men and women had incomes of $500 annually or less; while 1,338,854 had incomes between $500 and $999. In the income group $1,000 to $1.499, there were 1,068,313 Negro wage earners.

We present these facts to impress upon you the seriousness of the problems faced by too many Negro workers. Conceivably, the picture has improved somewhat since 1950, when the 75-cent-per-hour minimum was adopted, but information available to us indicates that this improvement is spotty and has benefited a relatively small number of Negro workers.

The logical questions for which we are seeking answers are these:

What steps must be taken to raise their earning power? The answer to the first question is not difficult. The majority of Negro workers are found in the lowest-paid occupations in the economy-the unskilled, service, and agricultural labor jobs. Many of these workers are without the protection of collective bargaining and frequently the victims of flagrant discrimination, both in the matter of employment opportunities and the right to advance on the jobs available to them.

This combination of unfavorable circumstances poses a problem of serious magnitude for all thoughtful Americans. For the Negro worker, the promise of a more satisfying economic existence seems remote, if not altogether beyond his reach.

From the vantage point of our nearly 50 years' experience in this field, we are convinced that the most effective method of resolving some of the Negro workers' income problems is to raise the minimum wage and extend its coverage.

From the facts reported in preceding sections of this statement, it will be noted that the present minimum of 75 cents per hour represents the maximum for millons of Negro workers.

The establishment of a more realistic minimum wage should provide the momentum for an upward wage trend, not only in the occupations covered by the law, but in the total wage structure. Such a change is desirable and absolutely essential to continued improvement in the economic fortunes of American workers, and especially so for the Nation's Negro labor force.

We thank you for the privilege of presenting our views and we respectfully urge your favorable action on the proposed changes in the Fair Labor Standards Act.

Senator DOUGLAS. Thank you very much.

Mr. Thomas, do you have any additions which you wish to make? STATEMENT OF JULIUS A. THOMAS, NATIONAL URBAN LEAGUE

Mr. THOMAS. Well, I suppose one addition should be a very abject apology to my colleague here and to you for getting lost in the hallway. Senator DOUGLAS. That is understandable.

Mг. THOMAS. I think Mr. Baldwin has expressed what we felt to be a point of view justified on the basis of our experience and on the basis of the goals toward which we are working.

We did not attempt, as he has already stated so very well, to go deeply into the economics of the total problem of wages, because we knew your committee was receiving that kind of information.

I think we come now to a new period, the beginning of a new period in all of our approaches to this and similar problems, and it looks to me that the movement is favorable on a good many fronts. We are encouraged by the fact that many more of the important industries are coming to recognize a responsibility for leadership in changing some of the employment patterns.

We are now facing the prospect of training hundreds of young men for new kinds of jobs, but there will remain for some time, perhaps many years, people who are not able to get the kind of training or work experience that will qualify them for the jobs in the new

industries in the South, for example, and the new industries in th rest of the country.

These are the people who are at the very bottom, and they becom the community problem. So you face the question of what need to be done to lift this large mass, and as we see it, one way to do it of course, is to establish a higher floor for wages in a wider range o occupations.

I think, Senator, as Mr. Baldwin has so very well stated it, I should be guilty of some redundancy if I stated more.

With us is Mr. Lyle Carter, who is the executive of the Washington (D. C.) Urban League. I haven't asked him if he wants to make a

comment.

Senator DOUGLAS. We would be glad to have you do so.

Mr. LYLE CARTER. I have no statement other than to concur in what has been said.

Senator DOUGLAS. The next witness is Dr. Seymour Harris, of Harvard University.

STATEMENT OF DR. SEYMOUR HARRIS, CHAIRMAN, NEW ENGLAND GOVERNORS' COMMITTEE ON THE TEXTILE INDUSTRY

I

Dr. HARRIS. I am sorry there is no Senator from the South. don't suppose Senator GOLDWATER considers himself a Senator from the South?

Senator GOLDWATER. Sometimes I do and sometimes I don't. Dr. HARRIS. I am trying a bit here to needle some of the southern Senators, but perhaps it will get across even though they are not here.

Senator GOLDWATER. I am susceptible.

Senator DOUGLAS. What is the phrase? You hope that there will be some intellectual osmosis?

Dr. HARRIS. That is right.

1. Appropriate rate: Under the Fair Labor Standards Act, a minimum wage of 40 cents was set as of 1941. In 1949, this was increased to 75 cents; and in 1955, the President proposes a minimum of 90 cents. But this is the time to raise the minimum wage from 75 cents to a figure substantially above the 90 cents asked by the President. It is not easy to suggest the appropriate rate. Perhaps a comparison of gross hourly earnings might give some indication of the proper rate on the assumption that the 40-cent rate in 1941 was justified. Clearly, in terms of effects on the economy, it certainly did not seem to be too high.

On this basis, it would seem that the appropriate rate would be more than $1, and especially when allowance is made for the greater rise in low-paying employments. Thus, in the years 1938 to 1951, the rise of wages in low-wage industries subject to the minimum wage was 171 percent, as against a rise of 121 percent in high-wage industries subject to a minimum rate. (U. S. Department of Labor, "Results of the Minimum Wage Increase of 1950," 1954, pp. 17-18.)

In this calculation, I have adjusted the proposed minimum rate to the probable wage rate in 1958. I assume that there would be no change in the minimum rate over the next 6 years, and hence, set the rate on the basis of wage rates in 1958, the midpoint between 1955

Note that the previous determinations were made in 1938 and 1949. I here assume an average rise of 212 percent, which corresponds to the gains of productivity and makes no allowance for some nflation, a likely development.

Indez numbers, minimum wages, and gross hourly earnings, 1941, 1949, and 1958

Source: Calculated from Economic Report of the President, 1955.

A rough estimate of annual wages obtained by dividing compensation of employees by the numbers employed and in the military servce gives an index of 240 in 1949 and 274 in 1958 (1941-100). Again, a minimum in excess of $1 is suggested.

This figure takes into account the phenomenal growth of fringe benefits. It should be noted that since 1929, supplements to wages have increased four times as much as employee compensation; and even from 1949 to 1953, supplements to wages rose almost 11⁄2 times as much as other employee compensation (calculated from National Income, 1954 ed.).

It seems to me that a rate substantially in excess of 90 cents can be justified in that if allowance is made for the rise in the cost of living, of productivity for the years 1949 to 1955, and for continued gains of prices and wages at least to 1958 (since legislation is so infrequent).

As we shall see, other considerations also point to a higher minimum. According to Secretary Mitchell, a 90-cent rate would involve an increase for 1.3 million, or 5 percent of the workers covered. (Statement before Senate Subcommittee on Labor and Welfare on Amendments of the Fair Labor Standards Act, April 14, 1955, p. 6.)

Below, I indicate the effect of a new minimum on factory workers (wages as of April 1954). Thus a 90-cent minimum would involve increases for 6.5 percent of factory workers and $1 an increase for 10.2 percent.

Percent of production workers in manufacturing industries earning less than designated amount

Source: U. S. Department of Labor, BLS: Wage Distribution for Factory Workers, April 1954, 1955, p. 5.

A possible approach is to set a minimum within certain ranges and allow industry committees to set the appropriate rate. Since legislation is so infrequent, the case for industry committees would be strengthened. It would then be possible to push wages up in a manner that would be less disruptive of employment. Furthermore, provision of a range of rates with industry committees would correct the present impasse under the Walsh-Healey Act.

2. Minimum wages and a decent standard of living: Behind minimum wage theory lies the view that employers should not profit by exploiting workers and especially those who are unorganized and paid low wages. The low-paid worker is also an inefficient worker.

3. Minimum wages and economic conditions: In 1938, when the Fair Labor Standards Act was passed, the country was in the midst of a recession and undoubtedly a fear prevailed that in the absence of a floor under wages a wage-price deflation might be started. Obviously, under these conditions Government is cautious concerning the level at which minimum wages are set.

In 1949, again the country was suffering from a recession and hence care had to be taken lest a rise in the minimum wage have an unfortunate effect on employment.

But in 1955, we are once more in the midst of a great boom, and with the high level of military outlays a substantial decline is most unlikely. Here is an opportunity to use the minimum wage as a weapon to direct labor into more productive employments where the peculiar composition of resources, capital, and labor in this country vield a high return. The resultant flow of labor in the face of excess demand is likely to result in a minimum of unemployment.

4. The Fair Labor Standards Act and other labor legislation: The case for a higher minimum gains strength at present because of the fact that the Walsh-Healey Act has bogged down under the handicap of the Fulbright amendment of 1952, which makes the wage determination by industries subject to the Administrative Procedure Act.

In textiles the result has been that a determination for cotton textiles and synthetics at $1.05 and for woolens of $1.25 have been voided. by the courts. Under the Fulbright amendment, the courts have interpreted a minimum wage fixed at a national level as contrary to the requirements that wages be set on a local basis.

It is unfortunate that northern interests allowed the Senate Banking and Currency Committee to obtain jurisdiction of wages under Government contracts and also that they did not prevent the passage of the Fulbright amendment. At any rate, the present status of the Walsh-Healey Act increases the need of a higher minimum under the Fair Labor Standards Act.

Another reason for treatment under the Fair Labor Standards Act is to be found in the effects of the Taft-Hartley Act and the recent surge of right-to-work laws. Prior to the Taft-Hartley Act and the spread of right-to-work laws, which especially prevail in Southern States, the gap between northern and southern wages tended to narrow.

For example, in textiles an excess of textile wages of about 67 percent in the North in 1890 had been narrowed to less than 10 percent by 1950. Even as late as 1924 there seems to have been a differential of about 50 percent. But there has been no further improvement since 1950, and there probably has been a rise in the differential.