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3 MINIMUM WAGE

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HEARING

BEFORE THE

COMMITTEE ON RULES

HOUSE OF REPRESENTATIVES

EIGHTY-NINTH CONGRESS

SECOND SESSION

ON

H.R. 13712

A BILL TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938

TO EXTEND ITS PROTECTION TO ADDITIONAL EMPLOYEES,

TO RAISE THE MINIMUM WAGE, AND FOR OTHER PURPOSES

PART III

APRIL 26, 1966

Printed for the use of the Committee on Rules

U.S. GOVERNMENT PRINTING OFFICE

61-624 WASHINGTON : 1966
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COMMITTEE ON RULES

HOWARD W. SMITH, Virginia, Chairman

WILLIAM M. COLMER, Mississippi

RAY J. MADDEN, Indiana

JAMES J. DELANEY, New York

JAMES W. TRIMBLE, Arkansas

RICHARD BOLLING, Missouri

THOMAS P. O'NEILL, JR., Massachusetts

B. F. SISK, California

JOHN YOUNG, Texas

CLAUDE PEPPER, Florida

II

H. ALLEN SMITH, California

JOHN B. ANDERSON, Illinois

DAVE MARTIN, Nebraska

JAMES H. QUILLEN, Tennessee

DELBERT L. LATTA, Ohio

LAURIE C. BATTLE, CO/M.8a

MARY SPENCER FORREST, Assistant Counsel

ROBERT D. HYNES, Jr., Minority Counsel
CONTENTS

Page Statement of Hon. Alphonzo Bell, a Member of Congress from the 28th District of California 55

TO AMEND THE FAIR LABOR STANDARDS ACT OF 1938,

TO EXTEND ITS PROTECTION TO ADDITIONAL EMPLOYEES, TO RAISE THE MINIMUM WAGE, AND FOR

OTHER PURPOSES

TUESDAY, APRIL 26, 1966

HOUSE OF REPRESENTATIVES,

COMMITTEE ON RULES,

TV a8h,ington, D.C.

The committee met, pursuant to notice, at 10:45 a.m., in room H-313, the Capitol, Hon. Howard W. Smith (chairman) presiding.

Present: Representatives Smith, Madden, Trimble, Bolling, O'Neill, Martin of Nebraska, Quillen, Latta, and Pepper.

Also present: Laurie C. Battle, counsel; Mary Spencer Forrest, assistant counsel; and Robert D. Hynes, Jr., minority counsel.

The CHAIRMAN. The committee will be in order.

We will proceed with the hearings on H.R. 13712, the Fair Labor

Standards Act.

Mr. Bell, we will be glad to hear from you.

STATEMENT OF HON. ALPHONZO BELL, A MEMBER OF CONGRESS

FROM THE 28TH DISTRICT OF CALIFORNIA

Mr. BELL. Mr. Chairman and members of the Rules Committee, I

have a short statement here to read and then I will be glad to try to

answer any questions that I can.

Mr. Chairman, last year, when amendments to the Fair Labor Standards Act were considered by the Education and Labor Committee, I

had a number of reservations concerning several provisions.

My position was reflected in the separate views of last year's committee report which stated in part:

Unquestionably the basic objectives of the Fair Labor Standards Amendments

of 1965 are valid.

We support an increase in the minimum wage and an extension of the pro- tections in the Fair Labor Standards Act to include a number of presently

exempted industries and employees.

We recognize the critical relationship of the act's guarantees with our efforts

to insure each worker an opportunity to earn a decent living.

It is with these premises in mind that we express concern about the impli- cations inherent in certain of the provisions of H.R. 10518 as reported by the committee.

The objections I had at that time to some provisions of H.R. 10518

have been substantially overcome by the changes adopted by the present

amendments in H.R. 13712.

Briefly let me summarize H.R. 13712:

First, it extends the protections of the act to about 7,243,000 workers engaged in one way or another with interstate commerce.

55
56 MINIMUM WAGE

Second, it provides an increase of the minimum wage to $1.40 an

hour in February 1967, and to $1.60 an hour in February 1968 for

workers who are presently covered by the act.

For those who will be covered for the first time, the hourly minimum wage will move from $1 in February 1967, to $1.15 in February

1968, to $1.30 in February 1969, to $1.45 in February 1970, and finally

to $1.60 in February 1971.

Agricultural workers would receive an hourly minimum wage of

$1 in February 1967, $1.15 in February 1968, and in 1969 $1.30.

I am convinced that by lowering the hourly minimum from $1.75

to $1.60 for workers presently covered by the act, H.R. 13712 takes

a more reasonable approach than last year's bill.

In fact, I made an unsuccessful attempt in committee last year to

amend H.R. 10518 to provide the $1.60 per hour minimum now a part

of H.R. 13712.

Another difficulty in the 1965 amendments was that the exemption

for small logging operations was eliminated entirely.

H.R. 13712 now provides for overtime and minimum wage exemption for logging- crew of eight or fewer men.

Recognizing the administrative difficulty in applying the act's regulations to the unique working conditions of these small operations,

I feel the eight-man exemption is an equitable compromise.

The coverage of tipped employees posed a great deal in difficulty for

the committee.

However, in providing overtime exemption for restaurants, hotels,

and motels the committee recognized the unusual working conditions

in the industry while at the same time insuring a minimum wage for

employees.

Mr. Chairman, some concern has been expressed about the implications of section 305 of H.R. 13712.

As it now reads it would provide that all employees of an employer

who has a Government contract would receive a minimum wage rate

at the highest level under section 6(a) (1).

This would mean that employees not otherwise covered by the act

must be paid at the $1.40 and the $1.60 rate if the employer had even

a single Government contract.

It is my understanding that an amendment will be proposed on the

floor to provide that employers who have Government contracts must

pay their employees who are not otherwise covered by the act a minimum wage as provided in section 6(b) of the act; that is at the

escalated scale starting at $1 per hour in 1967 up to the $1:60 level

in 1971.

Extension and strengthening the Fair Labor Standards Act hold

promise for great progress in raising the economic well-being of millions of Americans.

However, this can only be realized with accurate care and measured

change in keeping with the act's policy of eliminating "conditions

detrimental to the maintenance of the minimum standard of living"

without substantially curtailing employment or earning power.

I might point out that the need met by these amendments has long

been recognized by Republican leaders.

Each year from 1954 through 1959, President Eisenhower requested

Congress to extend the fair labor standards.
MINIMUM WAGE 57

In 1956 he stated that—

The need for the extension of coverage remains, and the Congress is again requested to proceed as far as is practical in this direction.

Mr. Chairman, I therefore urge bipartisan support of H. R. 13712.

Now, Mr. Chairman, that concludes my statement. However, I

would like to make one other point.

As you know, I appeared before this committee some months ago,

twice, as a matter of fact, on the Poverty Act. I was opposed to this

method of helping and battling poverty and some of the views I have

expressed and others have expressed seem to be true, as that program

has progressed. I think the Federal Government moving in, bypassing local organizations and throwing money into the poverty programs

is not showing itself to be the right way to solve the poverty program.

But I do believe that adequate coverage of minimum wage, is a way

of battling poverty.

When you stop to realize that a large percentage of those that have

jobs today are still living under poverty, one of the best ways to fight 

this battle is through the means of the free enterprise system. Let the

free enterprise system take a part in battling the poverty program.

I want at this time to point out something. There is a significant—

on page 10 of the report—correlation between poverty earnings and

the exclusion from the protection provisions of the act. In industries

where there is little or no coverage the proportions jump to 33 and

49 percent, respectively. Forty percent of all children living in

poverty are in families where there were workers who had a full-time

job throughout the year.

That expresses some of the views that I have relative to this thing.

I think that this is the right method to accomplish the end we wish to

accomplish and eradicate poverty from the land. I think this is one

of the necessary steps along with our education programs and so on.

I think this is making free enterprise play a large part in this.

That conclude my statement, Mr. Chairman.

The CHAIRMAN. Mr. Bell, this minimum wage law is something that

we do not seem to ever get through with. Every couple of years we

have another minimum wage bill that enlarges the coverage or increases the wage rates or something.

I sometimes wonder—it is a well-known fact at this particular time

that the question is not wages, and it is not hours, so much as it is

apparently a pretty stringent labor shortage. For instance, well, the

Washington Post—I read it every morning to see what the liberal

trends are and keep up with the times. I look at the want ads and

there were four and a fraction pages, full pages, little short want ads—

men—help wanted—help wanted, men. I do not know why they are

discriminating against the ladies, because the law specifically prohibits that and prohibits you from advertising. But that is the way

it was. That is just incidental.

With all of this shortage of labor—and I have seen where, in many

instances particularly in the building industries in this metropolitan

area right here, some people have had to suspend operations because

they could not get the help.

Now, why are you not worrying about these things when there is no question about the wages, no question about hours or advertisements—

why take up all the time of Congress to go through all this fuss for something that just at the moment is not material?
58 MINIMUM WAGE

Mr. BELL. Mr. Chairman, may I ask you a question? Were those

want ads for skilled or unskilled labor?

The CHAIRMAN. All kinds, from technicians down to—I remember

seeing the heading for—what do they call it—the handyman. You

go out now and try to get somebody to cut your lawn, for instance—

all this relief and all these idle people—unemployment compensation

and so forth.

Mr. BELL. Of course, the unemployment situation has improved in

recent months. However, I think there are still some problems at the

very low level of unskilled persons in many cases. It is difficult for

people at the very lowest levels.

The CHAIRMAN. Tell us about this unemployment. Where does this

unemployment exist? People have been advertising in the papers.

In Sunday papers you will see a whole section of want ads. Now,

where does the surplus in the unemployment exist? In what element?

Mr. BELL. Mr. Chairmant one place that is a problem that I know

of, and in my close association in being near it, is in the Watts area.

There is unemployment among these people.

The CHAIRMAN. The Watts area is a special problem?

Mr. BELL. They are the unskilled.

The CHAIRMAN. I hope you are not going to try to measure the

whole country by Watts.

Mr. BELL. I am not at all. I am pointing out that perhaps there

is not unemployment in your particular area but there may be in many

other areas of the country. That is the essence of my point. I do

not know about your particular area. If you tell me this in the situation 

The CHAIRMAN. The national statistics put unemployment at the

lowest point it has ever been. Then why take up all this time of Congress now when you have other very vital problems, to do something

that just is not necessary?

Let us say, for instance, take the restaurant industry. Now, you go

in here and upset that whole apple cart by bringing the restaurant

industry in, where you have to deal with the question of tips and you

have to make some arbitrary provision relative to tips. Yet, in these

very papers I am telling you about, you see reams of advertisements

for restaurants that you desperately in need of help and cannot get

it.

Minimum wage, minimum hours or whatever you want to say—it is

just not available. Now, why go and disrupt that whole big industry

in the country?

Mr. BELL. First of all, I must say that all the restaurants would not

be affected by this. The small ones that have a gross of less than

$500,000 for the first 2 years and a gross of under $250,000 for the next

2 years would not be involved. So you are talking about a fairly

large restaurant.

In answer to your problem on unemployment that you first brought

up, I must say that this is one of the reasons that I did not think

the poverty program was as necessary as it was. However, I will say

that I think that it is right that employers should pay a fair minimum

wage.

The CHAIRMAN. Even those restaurants—the larger restaurants are

advertising for help. I know people are around. here. They just

cannot get them.
MINIMUM WAGE 59

Mr. BELL. I cannot give you any specific instances of why they cannot get them, but I would say that this does not really directly affect

the minimum wage in this instance. This is going to be a problem.

The CHAIRMAN. I think we must all be aware of, and you admit that

we do have a shortage of labor in most areas, and even those unregulated—such as handymen—you cannot get for the minimum wage.

Now, I am serious about it—with all the very vital things that this

Congress has to deal with in the next few months, and also have to

deal with the minor incident of getting themselves reelected, you know,

which calls them out of Washington quite frequently, and we have

to sit around here usually 15 or 20 minutes to get a quorum of a committee because everybody is so busy—why use that valuable time for

something that is not necessary at this time? If you could give me

an answer to that. I think I know the answer. Because you are under certain pressures to do it.

Mr. BELL. Mr. Chairman, I think that the answer is that there are

some areas in the country and some people who are not receiving a

reasonable rate of pay.

The CHAIRMAN. I assume you would not have reported this bill

unless you had statistics on the question. Have you any statistics

that you can present?

Mr. BrT.L. Well, you can read the report and you will find some

statistics in the report, Mr. Chairman, that cover this. Page 24 of

the report will show you some facts relative to poverty and the need

for a minimum wage. Table 8 shows you the estimated number of

nonsupervisory workers brought under the coverage of the Fair Labor

Standards Act. They presently earn less than $1 an hour and estimated annual wage bill cost of increasing their minimum hourly

rates to $1 an hour. So I think it i$ pretty well stated in this report.

The CHAIRMAN. I may have some questions later on.

Mr. Smith?

Mr. Smrru. No questions, Mr. Chairman.

The CHAIRMAN. Mr. Colmer ?

Mr. COLMER. Nothing at present, Mr. Chairman.

The CHAIRMAN. Mr. Anderson?

Mr. ANDERSON. No questions.

The CHAIRMAN. Mr. Madden?

Mr. MADDEN. I see here in this table where it says February 1, 1967,

rate, $1 weekly wage $40. Forty dollars a week?

Mr. BELL. Yes.

Mr. MADDEN. That would be under the proposed increases, would

it not?

Mr. BELL. Yes. Proposed increase for those that have been uncovered up to now.

Mr. MADDEN. That would be $2,000 a year.

Mr. BELL. That is right.

Mr. MADDEN. A man with a family would have a rather difficult

time getting along on $2,000 a year, would he, in days like this?

Mr. BELL. He certainly would. The poverty level, as I recall it,

is set at $3,000. In California it is as high as $4,000. He is really

living in poverty when he is receiving $2,000 a year.

Mr. MADDEN. On February 1 of 1968 he would be increased up

$6 a week, which would be $2,300 in 1968. In 1969 he would get $52

a week, an increase of $8 a week in 1969. That is 3 years from now.

61-624-66-2
60 MINIMUM WAGE

Of course, if this prosperity keeps on going, that we are having now,

possibly in 1969 $52 a week would not be much to support a family

and educate children.

Mr. BELL. It certainly would not. You are putting your finger

right on the problem.

Mr. MADDEN. That amounts to $2,600 a year. Now, nobody knows

what is going to happen—you have got here February 1, 1971. That

man with a family will be receiving $64 a week.

Mr. BELL. Yes.

Mr. MADDEN. And that would be a total of $3,200 a year.

Mr. BELL. That is right.

Mr. MADDEN. Maybe we are going to have this minimum wage back

again if this prosperity that we are undergoing continues to go up.

Mr. BELL. This is quite a possibility.

Mr. MADDEN. I notice that the Secretary of the Treasury announced

that we have a gross national product today of $714 billion. Twenty

years ago, according to the Treasury, 1946, we had a gross national

product of $202 billion. So we have gone up from $202 billion, approximately, to $714 billion in 20 years. I do not think that this legislation that your committee is submitting even begins to meet the

problem that we are going to reach if we do not provide some kind of

a living for millions of people that do not possess the education so that

they have a craft. There are millions of these so-called handymen.

You do not need to call them handymen—heads of families—that do

not possess a craft. They are not carpenters; they are not electricians;

they are not bricklayers; they are just working men and women and

they have families. What are we going to do with these millions unless we have legislation like this? What is going to happen to them?

Mr. BELL. This is the very reason why I think this bill should be

supported. I think in all fairness, Mr. Madden, that this is a compromise bill. This is actually a considerably softer bill as far as its

impact is concerned than the Roosevelt bill was. You asked me what

is going to happen. I do not know. But I do believe when you have

people living under the conditions that you have just set out, something has to be done.

We had testimony before our committee indicating that there were

some people making salaries of 30 cents an hour and 60 cents an hour,

which is complete poverty.

Now, if enterprises and businesses are not going to do their share

in trying to give a person a living minimum wage, it becomes necessary

for legislation.

Mr. MADDEN. Well, I notice our distinguished chairman here was

asking about when are we going to complete this legislation? Every

year, or every so often, we have a new minimum wage bill coming in

here. If the chairman's suggestion is practical—very few in this

room probably remember it—the first time there were ever any hearings that I know of was way back in 1912 in Chicago when the Illinois

Senate created a special committee to come into Chicago to make an

investigation on sweatshops, when their people were working in sweatshops for 15 and 20 cents a day in those days, and whole families were

working in some of these sweatshops in those days. It was revealed

in the newspapers and in the testimony. Well, gradually over the

years we have come out of that stage of the economy. Of course, those
MINIMUM WAGE 61

were the days when there was only just a certain segment of our economy that enjoyed the abundance of this great land of ours and the big

percentage of the population was to work for the benefit of these folks

up in the high strata. But we have gradually come out of them and

when I look at this increase here, in answer to the chairman's question,

I think possibly you are going to find that maybe in a few years from

now there may be—even if this bill is passed—another piece of legislation to try and provide a living wage for millions of families in this

country because they cannot educate their children on this kind of

income under conditions like we have now.

We hear so much talk about migration—the country has gone to

the dogs—when 20 years ago this year our debt was $270 billion and

our income our gross national product was $202 billion. Our debt

was $50 billion more than our economy, 20 years ago this year, and

the Treasury will reveal that and today our debt is approximately—

gone up to $270 billion to $323 billion. Gone up $50 billion, approximately. But our national economy has gone up over $500 billion.

So I do not think that legislation like this is anything to be alarmed at.

I want to commend your committee for bringing in this legislation

and in order to prevent similar legislation coming in here in a few

years I do not think you have gone far enough on some of this minimum wage. Because, after all, these children that cannot be educated on families getting $46 a week—they probably will be State

problems. We will probably have bigger relief rolls in the next 3,

4, 5, 6 years unless they can get an education.

Mr. BELL. In further response to the gentleman, I certainly think

that it is a great deal better for us to try to improve the situation

through the method of the free enterprise system, working in th& private area. Do you not think this is a better way of doing it?

Mr. MADDEN. No question about that at all. Why legislation like this should be delayed—and anybody becoming alarmed that we are going to give a head of the family in 1970 $58 a week—it is ridiculous.

Maybe you have not gone far enough.

That is the end of my questions.

Mr. ANDERSON. You forgot the subject by the time you got to the predicate.

The CHAIRMAN. I was attracted by the predicate.

Mr. Martin?

Mr. MARTIN. Mr. Bell, you constantly referred to the fact that

minimum wages as set forth in this bill, for instance on newly covered employees at $1 an hour, were below the poverty level. You

constantly repeated that this bill is in the category of eliminating

poverty.

Since when was the thrust of this bill and the title of this bill

changed to antipoverty program?

Mr. BELL. I did not say that. The point that I think we are getting

at here is that this does in effect accomplish some of this. Where you have, as I statistically quoted to you before, so many of the workers

that are actually employed and yet are living on poverty wage—I think by raising this minimum wage we are moving in the direction

of getting them out of poverty. I think this is necessary. To that extent you might say it is an antipoverty bill.
62 MINIMUM WAGB

But I ask you, is not this a better way to approach the problem

of poverty than through a method of throwing out a lot of money

through such welfare programs and programs like the antipoverty

program—is not it better to have this done through the means of

raising wages to a living wage through the free enterprise system?

Is not this a better route to accomplish this result than to go the other

route?

Mr. MARTIN. The main thrust of your argument this morning has

been that this is tied in with poverty and it is going to help eliminate

poverty.

Mr. BELL. The gentleman is saying you are tying into poverty. It

only ties into poverty by virtue of the fact that poverty is involved

here because people are living on something that is less than a minimum

wage. I mean it is less than a living wage. That causes poverty.

And so only in that sense is it involved. The gentleman knows as well

as I do that this is not listed as an antipoverty bill. There is only

one antipoverty bill, but there are certainly a lot of other moneys that

are going from the Federal Government and from other sources that

are helping to fight poverty and I am just saying this is one of the

methods of fighting poverty.

Mr. MARTIN. From your testimony this morning I thought we were

talking about a poverty bill here.

Let me call attention to vhe act itself that was originally written in

1938 and it says:

An Act to provide for the establishment of fair labor standards in employment in and affecting the interstate commerce and for other purposes.

I think we have gotten a little bit far afield here in our discussion

this morning.

Mr. BELL. If someone is living on a wage substantially below what is

a livable minimum wage, to increase that minimum wage to a point

where he can live, is that not to some extent raising him out of poverty?

Mr. MARTIN. Let us get to the amendments themselves.

On presently covered employees this is going to increase the minimum wage from $1.25 to $1.40 and then $1.60. It is an increase the first

year of 12 percent second year, 14 percent.

On newly covered employees it starts at $1 an hour and over a

4-year period, to February 1, 1971, $1.60. Which, over approximately

41/2years is a 60-percent increase.

The President has set forth guidelines of 3.2-percent increases on

new labor contracts, increases in the prices sellers can charge for

products. What is your feeling in regard to violations of the President's guidelines here?

Mr. BELL. The 3.2 guidelines the President set is the average of the

Nation, not for specific industries.

Certainly, the lowest worker in an industry that is covered by the

minimum wage for the first time will get a 12-percent raise in wages.

But when this averages out over the total level, the 3.2-percent guidelines are not violated.

Mr. MARTIN. We are talking about the average right here when we

use these figures, 12 and 14 percent. It is the same thing you are

talking about.

Mr. BELL. You will notice that page 23 of the committee report

indicates that the overall wages will be raised five-tenths of 1 percent
MINIMUM WAGE 63

at $1.40 and 1.1 percent at $1.60 level. There is only 12 percent of

the work force not now receiving $1.40, and 18 percent not receiving

$1.60 per hour, so I do not think that this violates the guidelines.

Mr. MARTIN. If that is such a small percentage, there is not much

need for the legislation. I have figures right here on the average

pay of farmworkers in the United States issued by the Department of

Agriculture last week and it showed $1.28 an hour which is above

the minimum wage set for agricultural workers. Now, if these fellows

are getting $1.28, why do we have to have Federal legislation in this

area? There is no need for it.

Mr. BELL. You know as well as I do that a lot of people are not

involved in this minimum wage because they are already, as you

pointed out, receiving more than the minimum wage. But there are

some who are not receiving a minimum wage and you heard the testimony before our committee in which this was brought out.

I do not think there is any question about it, there are people

throughout this country that are living in a state of poverty strictly

because the management or the employers are not willing to pay

a minimum wage.

Mr. MARTIN. This is not a poverty bill. You are getting confused

with the poverty bill Congress enacted last year.

Mr. BELL. It involves poverty and I think that is the purpose of it

to some extent.

Mr. MARTIN. We had a great deal of testimony that because of the inclusion of many new businesses in the country, and particularly small

business, the number of jobs involved in these industries would be

lessened. We had no one who proved that this would create more jobs and more employment in the United States. We had no one

who so testified. I am greatly concerned about the fact that businesses

are going to be affected and they are going to have an increase in the

cost of operation and they may get along with fewer employees, either

by automation in their work or some other means to make their opera- tion more efficient and to reduce their operating expense.

Mr. BELL. You are saying in other words that this will affect

unemployment.

Mr. MARTIN. I think that is true.

Mr. BELL. On page 27 of your report, it says:

The half-truth which has had the largest influence on the history of the Fair

Labor Standards Act is that an increase in the minimum rate increase is unem- ployment. This is unquestionably right in terms of what would be the certain effect of an unreasonable and irresponsible raising of the statutory minimum

I hold this is not an unreasonable, irresponsible rate. And it

goes on—

Yet the record is that following the original establishment of the 40-cent hourly rate in 1938, after it was set at 25 cents in 1938, then 30 cents in 1939, 40 cents in 1944, to $1 in 1956, employment in the United States always went up, and usually went up more in the lower paid occupations most directly affected by the statutory requirement than in other occupations. Conversely, the unemployment rate went down, despite substantial increases in the work force generally and among those in the lower paid occupations in particular. There is no evi- dence that this was because of the statutory change.

In other words, the facts that are laid out before you would indicate that it does the reverse of what you say, not what you said it did. I

think that is the fact that we have to look at. There could be other
64 MINIMUM WAGE

parts of the industry could be expanding for one reason or another

at that particular time. But it always does seem to happen that way.

It always does happen that it does not affect unemployment adversely.

And so I think that is the answer to your question.

Mr. MARTIN. Well, I think that in itself is a half-truth in that it

does not recognize the fact that the population of our country has been

increasing by a good many millions over every 10-year period when

the census has been taken and as a result of this increase in the population there has been a greater demand for goods to be manufactured,

more demand for additional retail stores and services which naturally

increase our total employment picture in relation to our total populat ion. We must take that into account; what you read from the report

does not take that into account.

Mr. BELL. Let me point out one thing. As these increases take place

that you are talking about, sometimes, if you have quite a few people

who are below a living wage or living in conditions—I won't mention

poverty—if they are living in this kind of condition they also are slowing down the expansion of the economy.

Mr. MARTIN. I believe if you go back and look at the unemployment

figures as issued by the Department of Labor over the last few years,

you will very probably find there is unemployment among teenagers,

and it has been increasing while we have had this legislation in the

books. The unemployment rate in the last figures issued by the Department within 30 days or so, show that unemployment among teenagers is approximately 12 percent. These are primarily unskilled

workers. By putting the minimum wage at a point that is not profitable for the employer, we are going to lessen the opportunity for these

young people to get jobs and we are going to contribute further to the

unemployment among teenagers. What we need here is more work

and concentration in the field of vocational education and manpower

retraining, to teach these unskilled new skills. We are not going to

get at the real problem by increasing the minimum wage.

Mr. BELL. I think we have to recognize the fact that we had teenagers in the past as well as now and we had some dropout problems

too. As I just read to you. FLSA did not adversely affect unemployment, it increased employment. All the past changes in the minimum

wage have had the effect of increasing employment. So it just is not

true. Such programs as you mentioned, manpower development, retraining are good, and I think they are helping to some extent along

with industry, to educate these young people. I do not think increasing the minimum wage for teenagers is going to affect their opportunity of receiving jobs over the broad area of the country. And I

want also to note that 75 percent of the minimum wage can be paid to

a teenager under 21 for the first 6 weeks of his employment.

Mr. MARTIN. Eighty-five?

Mr. BELL. Seventy-five percent. So for 6 weeks of training employers can employ teenagers below the minimum wage, which I think

is one point that helps the bill.

He gets this training of 6 weeks and as he passes the 6 weeks he gets

the minimum wage. But he is at least partially trained.

Mr. MARTIN. Is it not true that the total amount of labor available

in this country today is decreased over when these hearings were held

almost a year ago?

Mr. BELL. You mean total unemployment level?
MINIMUM WAGE 65

Jr. MARTIN. Total labor force available. We have had a change

in the situation today from what we had when we held hearings last

year.

Mr. BELL. We had some changes with the military activities in Vietnam, which has changed the situation somewhat as far as labor. I suppose the draft and other elements are picking up some of these younger

people.

Mr. MARTIN. There is a great change in the labor situation. Let me

give you one example. This happened to be on Huntley-Brinkley last

night. They showed an ordnance plant out in Nebraska, in my district, making 500-pound bombs that switched over to 1,000-pound

bombs because of an alleged shortage in Vietnam. When it was announced last fall that the ordnance plant would reopen the schedule

at that time was that it would have 2,100 employees by the 1st of April

and all 3 lines in operation. Well, it has only about 800-and-someodd employees at the present time and only has 1 line in operation.

The reason is that the labor is not available in the area. We have

a tremendous labor shortage, and are behind schedule according to

what was planned last year.

Mr. BELL. I am not arguing this in some areas. Certainly we have

a labor shortage, but skilled labor is what the shortage is in and there

is some shortage of labor in some areas. We have an unemployment

rate of 3.8 percent.

Mr. MARTIN. The point that I am leading up to is that we did not

have any further hearings this year in regard to this legislation. All

the hearings were held last summer and we have had a change in our

situation as far as labor is concerned in this country. I think it would

have been wise to go into additional hearings before it was reported

because a different bill has been reported out.

Mr. BELL. As the gentleman knows, I certainly would not have objected to that. I think I requested that and I think I have a letter that

I wrote the chairman requesting that we have additional hearings.

However, I think the bill we have now is a much better bill and a much

sounded bill in view of some of the circumstances, some of which you

are mentioning. I am in favor of it.

Mr. MARTIN. Under this legislation, hotels, motels, and restaurants

are exempt from overtime. But hospitals are not exempt from overtime. Can you give me the reason why you set it up in this manner?

Mr. BELL. The reason behind that is based on the fact that hospitals

are more of a regulated type of business. As you know, when you go

out to dinner somewhere, sometimes you do not 'always eat at the exact

time and you delay the situation, and whereas hospitals and so forth,

they are more of a regulated type of operation and restaurants and

hotels 

Mr. MARTIN. How can a hospital control when patients come in?

They may have an accident on the highway and be brought in an hour

from now.

Mr. BELL. I do not think you can compare hospitals which are more

of a regulated nature with the restaurants and so forth. I think they

are a little bit different operation.

Mr. MARTIN. Hospitals have to adjust to when their patients come

in and take care of them when they come in on an emergency basis.

Mr. BELL. You have different shifts and different programs. All

businesses have to adjust to certain types of problems. All businesses
66 MINIMUM WAGE

have to do that. Regulated or not regulated they have to do that.

But restaurant business is of a different type. It is not similar to the

type of regulated, organized business that the hospital is.

Mr. MARTIN. Do you feel it is justified to require hospitals to pay

overtime?

Mr. BELL. Yes; I do.

Mr. MARTIN. Sorry I cannot agree with you on that. That is all,

Mr. Chairman.

The CHAIRMAN. Mr. Bolling?

Mr. BOLLING. No question.

The CHAIRMAN. Mr. Quillen?

Mr. QUILLEN. Mr. Chairman, Mr. Bell, I notice in this bill the

exemption is reduced on canneries to one 14-week period, 48 hours a

week, 10 hours a day. Under the existing law the canneries' exemption

is two 14-week periods.

Mr. BELL. 28 weeks.

Mr. QUILLEN. One unlimited and the other 56. In my area that is

going to do great violence and damage to the green bean industry and

other perishable commodities. You have a similar situation in California.

Mr. BELL. No, we do not. California has a 48-hour, 14-week situation, 10 hours a day under State law. So actually 56 weeks, 28 and

28 weeks, 56 hours would actually be, you might say, could even be

damaging to California because it would be this way.

Mr. QUILLEN. I know 

Mr. BELL. Can I comment here a little bit? We had considerable

testimony on this problem that you brought out, and it was indicated

time and again that there is a considerable amount of automation that

has gone into these canneries and to such an extent that they can do

a tremendous amount of work now that they do not have to pay people

overtime in a lot of work.

Mr. QUILLEN. That might exist in some areas where there are large

canneries but in my area it does not exist. It would do violence 

Mr. BELL. The testimony, and I wish I had it here to read it to you,

shows some indication that even in the smaller industries a lot of these

were changing to automatic type of work. We got down to a few areas

where there was any problem relative to highly perishable products.

Mr. QUILLEN. The purpose of this bill is not to do violence but to

help.

Mr. BELL. And I do not believe it is doing violence. The testimony

would indicate 14 weeks and I was one of those on the committee who

tried to eliminate it entirely. Myself and Mr. Meeds were one of those

who kept the 14 in. The interest at that time was to reduce it. I felt

there was enough reason to keep the 14 weeks in. The testimony

would indicate that there was a lot of question as to whether even the

14 weeks were desirable.

Mr. QUILLEN. It would do violence in my area.

Mr. BELL. I certainly hope it would not. Every witness indicated

that it would do violence—but as we broke down the testimony and

heard more testimony, it became evident that a lot of the violence

that they were talking about was in their imagination and I think

if you question your people very closely on it with some factual matters that I would be very glad to give you at a later date. You will

find that the violence was a little bit exaggerated.
MINIMUU WAGE 67

Mr. QUILLEN. We have one of the largest green bean producing

counties in the United States in my district. We just do not have the

transportation to take those beans to the market. They have to be

canned when they are in season. That is what I am talking about.

Mr. BELL. You still have your 14-week period.

Mr. QUILLEN. Ten hours a day, 48 hours a week is not much help.

Mr. BELL. They have beans in California.

Mr. QUILLEN. But you do not have as many hills as we have.

Mr. BELL. They have been able to live with it and there has not

been a big change in large versus small.

Mr. QUILLEN. One other thing, Mr. Bell. This has concerned me

ever since these hearings started. We are deeply concerned about

people having the right to live in a free enterprise system. Did you

know now that we are drafting young men and sending them into

Vietnam facing enemy fire and paying them $94 a month? Yet the,

argument here is that we want people to make $1 an hour as a minimum in some industries and then on up to $1.60; but here are young

men drafted to serve their country and some of them come back in

caskets, draped with the red, white, and blue flag.

Mr. BELL. Of course, it is awfully difficult to argue against trying

to help any of our soldiers in Vietnam. But I think you cannot very

well adjust the salary situation of our soldiers with all the other opportunities for purchasing of goods and so on.

Mr. QUILLEN. They have to live.

Mr. BELL. It is a little difficult in trying to discuss the soldiers in

Vietnam.

Mr. QUILLEN. It is the soldier anywhere.

Mr. BELL. It is a difficult comparison and I do not think a very

accurate one.

Mr. MADDEN. Would you yield there? These soldiers I do not think

are buying groceries and paying rent for families, either.

Mr. BELL. That is exactly what I was thinking of.

Mr. QUILLEN. You mean their families do not eat?

Mr. MADDEN. The soldiers are not paying for their meals and buying meals for families and clothing children going to school on $94 a

month.

Mr. SMITH. Why are they not?

Mr. QUILLEN. I served in the Navy.

Mr. MADDEN. They are not taking very many fathers with families

that are going to school, are they?

Mr. QMLLEN. They do in my district.

Mr. MADDEN. Fathers with families going to school?

Mr. QUILLEN. They are drafting them into the service. They do

not make the minimum rate of $1.40 per hour.

Mr. MADDEN. They are not supporting those families on $94 a month

over there in Vietnam.

Mr. QUILLEN. That is a basic salary; that is a private E-1 pay when

they are drafted.

Mr. MADDEN. They are not supporting their families over in Vietnam. They get their lodging and meals.

Mr. QUILLEN. Sometimes they get killed, don't they?

Mr. MADDEN. That's right.

Mr. QUILLEN. I think if we are
68 MINIMUM WAGE

Mr. BELL. It is difficult, as Mr. Madden pointed out, to try to bring

these two problems together and compare them.

Mr. QUILLEN. Our concern should be for all people without discrimination. A man gets just as hungry feeding his family if he works

in a restaurant under $250,000 volume as the man working in a restaurant with more than $250,000 volume. So this bill is discriminatory.

Mr. BELL. I do not agree that it is discriminatory. You do have

some restaurants that are not paying what they should be paying to

their help.

Mr. QUILLEN. That family also has the same problem as those working in a restaurant doing over $250,000 in volume.

Mr. BELL. Certainly: they do. However I think that the amount of

income that is coming in tips and so forth to a lot of employees in either

type of category is significant. Many of them are being paid adequately through the tips.

Mr. QUILLEN. It just concerns me and I want to make it a point of

record.

Mr. BELL. I appreciate it.

The CHAIRMAN. Mr. Sisk? Mr. O'Neill?

Mr. SISK. No questions.

Mr. O'NEILL. No questions.

The CHAIRMAN. Mr. Pepper?

Mr. PEPPER. Mr. Bell, in the course of the hearings that your committee had, did you have any witnesses appear before your committee

to tell them about the disastrous effects upon our economy or any part

of it because of the minimum wage law of 1938 or 1949 or 1961?

Mr. BELL. No we did not.

Mr. PEPPER. I think it is interesting that we have had already three

of these minimum wage bills, and I am pretty familiar with two of

them—the one in 1949''I handled in the Senate and I knew personally

about the opposition to the 1938 bill and the 1949 bill. Conscientious

people came before our Committee on Education and Labor in the

Senate and pleaded against those bills and pointed out the unfavorable

and, in some instances, grossly detrimental effect that those bills would

have if they became law. I am interested that I never heard very

much from those who inferred that these bills would have that effect.

I thought it might be relevant here.

Mr. BELL. It certainly was and testimony did come out from different departments of Government, and they confirmed what you are

saying.

Mr. PEPPER. Is it not a fact, Mr. Bell, that this is simply one of the

prongs of the attack upon the problem of trying to make it possible

for the people in the lower income levels to live a little better. Another one is the antipoverty program, and we are approaching it from

that point of view. Still another one is the retraining and the various

educational programs that we have tried to put into effect to enable

people in the lowest income groups to help themselves, to get up to

where they would be more desirable in the labor market and, therefore,

could earn a more adequate income and live better and have greater

purchasing power. So this is simply one of the approaches, is it not,

that we are making in this overall attack?

Mr. BELL. Yes. And I would certainly say that one of the better

approaches, although we must not again lable this as a poverty act.
MINIMUM WAGE 69

It is one of the better approaches because it does use the free enterprise

system.

Mr. PEPPER. If this bill were not going to have the effect of raising a

lot of minimum wages, a lot of people would not be objecting to it.

Now, just one other question. My attention has been called to the effects of this bill upon the sugarcane industry which is one of the important industries of my State. It is pointed out that the present

law allows a total exemption during the processing season. In my

State in the sugarcane industry it happens to be about 150 days. I

think in Los Angeles it is about 100 days. Now, under the present law

there is a total exemption from any overtime during the whole of the processing season, which is, as I say, in Florida about 150 days. Under this bill the processing season would be limited, I believe, to 14 weeks.

Mr. BELL. Fourteen weeks.

Mr. PEPPER. And then beyond the 14 weeks the ordinary minimum overtime provision would apply. And within the 14 weeks then,

the overtime in excess of 10 hours a day.

Mr. BELL. Forty-eight hours.

Mr. PEPPER. And overtime in excess of 48 hours a week. Now, if we

report this bill, I take it your committee is not opposing an open rule?

Mr. BELL. I am not, no.

Mr. PEPPER. If we report out an open rule there would be an opportunity for amendment. Some people point out that the smaller

processors may be subjected to a considerable burden. I guess your

committee heard testimony on that, or gave consideration to that

question?

Mr. BELL. Yes, I think I just discussed it a minute ago and the

facts were brought out. I cannot remember the names of the people

in the testimony, but it was brought out pretty clear, Senator, that over

a period of time that 48 hours, 14 weeks and 10 hours a day was the

very most that the operators in this type of industry should have and

the terrible rack and ruin it would bring to them was blown up out of

proportion. There has been a tremendous change in the canneries.

going more to automation where less people are needed and there are

different types of freezing methods and so forth that have been

developed. So this really is not the problem that we thought it was.

As a matter of fact, as I said earlier, the committee wanted to eliminate

all of it and it was my amendment actually.

Mr. PEPPER. I want to commend the gentleman upon his excellent

statement. Thank you, Mr. Chairman.

The CHAIRMAN. You were talking about sugar. I want to talk

about agriculture a little bit before we get through with you, you know.

Senator Pepper has referred to all the wage and hour bills that have

been passed in the past. But this, to my recollection—and I followed

the subject very closely—is the first time we have ever undertaken to

blanket farmers in this straightjacket of wages and hours.

Mr. BELL. Mr. Chairman, may I interrupt you? When you say to

blanket farmers, you blanket 1.6 percent of all the farms.

The CHAIRMAN. That's statistics and statistics do not always work

out. But I am not going into that because I want to do it later and

more elaborately.

The Senator was talking about the sugar situation. Now, after

hearing the testimony of Mr. Dent, a gentleman connnected with the
70 MINIMUM WAGE

sugarcane industry wrote me a letter in which he says the time of

exemption, as far as it applied to Los Angeles and the Senator's State

of Florida, would be far short of giving them enough time for the

harvest season and the processing season of the sugarcane. In other

words, from what he says, it takes 150 days in Florida and 100 days in

Los Angeles. That exemption is given them and, as far as time to be

exempt from the act is concerned, Florida would lose all of its

exemptions for a period of 2 to 60 days. That is 7 to 9 weeks.

Now what have you got to say about that?

Mr. BELL. Mr. Chairman, I want to hear Chairman Dent's testimony

in this.

The CHAIRMAN. You will find it in the printed testimony.

Mr. BELL. First you must recognize that the 1.6 percent of the

farms involved does not take in a great many farms that would be

involved under this minimum wage. So you are talking about a relatively small number and under the 500 man-day arrangement as far

as employment is concerned, you are talking about at least seven men

before the farm comes under it. And I know from a little bit of

experience in farming that a seven-man farm is a pretty sizable farm.

Now, also, as you will note in the bill there are certain exemptions

for people that work 13 weeks or less on a farm and live in the neighborhood and commute. So they are protected under that. In the particular situation you are mentioning, I do not know the area you are

talking about.

The CHAIRMAN. Is not that really the trouble, that we do not know

all of the circumstances in all of the varied areas of this country, and

it is complicated.

Mr. BELL. I do not think this is exactly accurate, sir. You have

some facts and figures that we have received from both the Agriculture Department and the Labor Department and they have taken a

pretty large study of the whole Nation and so I still say that under

the 500-man-day situation you are not really talking about many

farms.

The CHAIRMAN. Maybe I am not, but it hurts those little fellows

just as bad as somebody else.

Mr. BELL. They are not very little.

The CHAIRMAN. I would like to go into that with you later on the

question of other farm industries. But I was trying to confine this

particular phase to the sugar industry because of this letter that I received from a gentleman who evidently is in the business and must

be very knowledgeable on the subject.

From a practical standpoint now, you get all these statistics and.

you apply them in a blanket form so that you finally succeed in compressing the whole industry of any line into a straitjacket. The same

rules apply to everybody and you cannot make that work because you

do an injustice to a great many people by putting them in a straitjacket with the people who operate in a different way.

I call that to your attention now in case you might want to clarify

it later on.

Mr. SISK. Mr. Chairman, would you yield to me just a moment on

the sugarcane question? I do this just to ask a question. Now, un •

der the Sugar Act, sugar workers, workers employed by producers of

our sugar are already covered.

The CHAIRMAN. Yes.
MINIMUM WAGE 71

Mr. Sisx. Which is, as I understand it, at a higher rate than what

this bill would bring them in under, is not that correct?

The CHAIRMAN. That is my understanding. So you see, you place

them in two straitjackets, if such a thing is possible. They will have to

keep records and report to the Sugar Act authorities and then they will

have to report to the Wage and Hour Division of the Labor Department. So you have the hog tied two ways.

Mr. SISK. Could I ask one further question on that while we are

talking about sugar? With reference to the hours—the exemptions

which the Senator discussed a moment ago—to what extent would it be

different under that act than what it is at present under the Sugar Act

itself as it pertains to the pay of labor and overtime provisions?

Mr. BELL. As I understand the Sugar Act, that involves refining,

does it not?

Mr. SISK. If I understand it, it is the grower—even the employee

on the farm who is actually handling the processing, the harvesting

of the sugarbeets, for example.

Mr. BELL. From my understanding it would come under this act.

Mr. LATTA. Would the gentleman yield?

The CHAIRMAN. Go ahead, because I have to leave at 12 o'clock and

I will not be able to complete this. I have an engagement at 12 o'clock

and I am going to have to leave so I will defer that matter of the farm

because that is quite serious in my area. Mr. Latta?

Mr. LATTA. I would like to go into this matter of sugarbeets. We

raise sugarbeets in northwest Ohio. When people come in there to

block the beets, they do it on an acre basis and I do not know of any

regulations on these people.

Mr. SISK. Well 

Mr. LATTA. Why would they be different in California?

Mr. SISK. I know there was a recent development and the matter

had to be decided by the NLRB, or whoever has jurisdiction over it,

having to do with the fact that the sugarbeet growers were paying

below, at least charged paying below, the minimum wage, and so as a

result we had some hearings and, as I understand, the growers had to

make up the difference, or at least make a determination, and here

again I am not too knowledgeable. I would have to ask for more information on it. But it is my understanding that all workers on the

sugarbeet farms were covered under the law that pertains to minimum wage for sugarbeet workers. I may be in error, but that was my

understanding.

Mr. LATTA. So many dollars for blocking and so many dollars for

loaning and so on.

Mr. VdELL. My understanding is that in Ohio the Secretary sets the

rates and they are already what the bill would provide.

Mr. LATTA. Are they paid on an acreage basis?

Mr. BELL. The hourly earnings are set higher then what we are proposing here.

Mr. LATTA. The way it works out the Secretary's regulations pay

more.

Mr. BELL. The way it works out they are paid more.

Mr. LATTA. I have some questions on another item.

Mr. MARTIN. If the gentleman will yield for a moment on one point.

This was brought out when Mr. Dent testified. The Secretary of

Labor, for instance, in the sugarbeet field had set what he considered
72 MINIMUM WAGE)

the minimum wage which had to be offered by the sugarbeet operators

in order to secure employment. Then, if they .could not secure sufficient help he would consent to hold hearings m regard to bringing

in braceros from Mexico to work in the sugarbeet fields, a program

such as we had up until about a year and a half ago when it expired.

He did not have any authority to enforce that wage regulation. In

California it was $1.40. In Nebraska it was $1.40. It was a figure

the Secretary determined. But growers had to offer that much before.

he would consider bringing in braceros to work in the sugarbeet fields

if there still was a shortage. But he did not have any power to enforce $1.40..

Mr. BELL. But the result has been in California that they are paying pretty close to this rate.

Mr. MARTIN. They had to offer the. $1.40 in the sugarbeet fields.

The CHAIRMAN. Gentlemen, w e are being pressed for some other ,

legislation in the Aeronautic and Space Administration. They are

very anxious to get it out. There is another bill from the Judiciary

Committee and we have to get some grist downstairs for next week.

Mr. MADDEN. Mr. Chairman, if grist is what they want we have

it right here. Let's report this bill out. I think we have covered

about everything.

The CHAIRMAN. I doubt whether it can be reported out in the ,

absence of certain. members.

Mr. MADDEN. There are about 420 other Members downstairs who

would just like to get an opportunity to debate and vote on this.

Mr. Smirrix. Would you like to vote on it today?

Mr. MADDEN. I certainly would. We have been here 3 weeks now. -

The CHAIRMAN. If you will make the motion we will see what the

fate of this bill is.

Mr. BOLLING. I will pay for the psychiatrist's bill after he does it.

The CHAIR3IAN. We will meet tomorrow morning at 10:30.'I will

have to let you know later in the day whether we will proceed with it.

Mr. BELL. Do you want me to come back tomorrow?

The CHAIRMAN. let you know later in the day.

(Thereupon, at 12 o'clock noon, the committee recessed, to reconvene

at 10:30 a.m., Wednesday, April 27, 1966.)
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