Evening star., 1947-11-02
Woge-Hour Act Revision
Poses Difficult Problem

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Uncertain Economic Outlook Casts
Doubt on Wisdom of 75.Cent Minimum
By Gerard ID. Reilly
For the first time since its passage In 1885,
the Fair Labor Standards Act, more popularly
known as the wage-and-hour law. will be
subjected to comprehensive scrutiny and pos
sible revision by the standing committees on
labor in both branches Of Congress The
House committee. which began hearings ON
Secretary Schwelenbach's proposal for in
creasing the minimum wage standard from 40
to IS cents an hour, Is now taking testimony
on amendments advanced by certain industry
groups for clarifying the exemptions relating
to retailing, motor carriers, executive and pro-
fessional employees.
Last year when Congress was aroused by
the enormous liabilities confronting industry
and the United States Treasury by reason of
the portal-to-portal pay cases, the remedial
legislation was sent to the committees on
judiciary. The reason for this assignment was
that the labor committees were preoccupied
with numerous proposals for amending the
Wagner and Norris-La Guardia Acts, many Of
which were subsequently incorporated into the
drafts Of the Taft and Hartley bills
*%
Because Of the rules on the jurisdiction Of
committees, however, the ensuing wage-hour
legislation was limited in scope The topics
covered dealt primarily with the role of the
courts in enforcing the act, e.g., the statute of
limitations, the abrogation of existing claims,
the measure of damages and the defense of
good faith. The labor committees, however,
need not confine themselves to procedural
matters, but may also consider substantive
amendments.
The fixing of a new wage standard will be
one of the most difficult legislative problems.
In 1946 bipartisan group in the Senate
Labor Committee reported out bill raising the
minimum to S. cents, but on the floor an
amendment was added to write into law the
principle Of farm parity prices This was vio-
lently opposed by OPA. As q result, admins
tradon supporters permitted the bill to die In
the House committee.
The argument now advanced for 75-cent
door Is that the cost Of living has advanced
30 per cent since 1888 and that with current
prices 1t is impossible to support family on
less than $50 week. Both of these conten-
tions are factually correct But the premise
that standard should be determined by law
which would guarantee the head Of a family
wage sufficient to support himself and his
dependents Is foreign to the classic notion that
minimum-wag legislation should concern #
self primarily with protecting inexperienced
and temporary workers from exploitation,
rather than with prevailing wages in regular
employments for adult men.
Moreover, rigid floor of IS cents also assumed
a permanent level of imitation. If prices
should fall back to prewar schedules, several
economists have pointed out that an inf1exibly
= Nf
opportunities for employment. In periods of
declining profits, 75-cent hourly rate for un-
skilled workers Is likely to prove boomerang
as many employers could not afford to con-
tinue employing them at an inflated scale.
1t should be recalled that when the wage
hour bill was first presented, Frances Perkins,
the leading authority in the country on mini
mum wages, argued that Congress should not
attempt to set any definite figures. Under her
plan, the administrator, with the assistance
of management-labor committees could vary
the wage from industry to industry eco
nonic conditions warranted. Her advice was
accepted by the Senate. Despite the efforts
Of Mrs. Mary T. Norton, the chairman of the
House Labor Committee, however, her bill,
patterned after the British Trade Boards Act,
was recommitted in the House. The measure
was subsequently rewritten to provide for the
Accent wage and 40-hour week.
In the light of the uncertain economic pic
ture today, the Perkins proposal of 1887 seems
a sensible approach to the issue Of wage rev-
sion Although the former Secretary is no
longer officially concerned with labor prob
lems the House committee would do well to
call her as witness before formulating its
new bill.
Nfh rHhoc ~ fhn af uyhi ink dacnr
the attention of the committee. has been a
trend Of judicial decision toward the pyramid
ing of the overtime rate. The original act was
passed when there were some 100000 persons
unemployed. In order to spread work Con-
gress provided that any employe working more
than 10 hours in week should receive one
and one-half times his regular rate for every
hour in excess Of that While this was meant
to discourage overtime, the continuing short
age of manpower in many trades since the war
has meant that overtime has become q regu-
lar feature of the work week In certain In
dustries.
In q number of these union agreements re-
quire premium pay Frequently double time)
for Saturdays, Sundays, holidays and night
work. Where the assignments of some en-
ployes have been such that they periodically
work on holiday or night shifts the Wage
Hour Division and several of the lower courts
have held that the premium pay received
on these days should be added for the purpose
of computing the regular rate, If the individ-
uals total employment for a week exceeds 40
hours.
This has resulted in the paradox Of assigning
a higher figure for the statutory regular rate
than the rate recognized by union and employer
as the base rate in the contract Under these
rulings, employers who felt that they had paid
both the premium rate required by the contract
and the overtime rate required by law, have
been suddenly confronted with claims for back
overtime based upon this novel method Of COM
putation AS consequence, a field day has
been provided for the ambulance-chasing type
Of lawyer who brought the act into such dis
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