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Testimony in the Congressional Record - House of Representatives

Congressional Record, Proceedings and Debates of the First Session of the Seventy-Fifth Congress of the United States of American, Volume 83 - Part 6, April 28, 1938, to May 19, 1938. (Page 5885 to 7180)

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Page 5919        CONGRESSIONAL RECORD - HOUSE        April 28, 1938        (83 Cong. Rec. 5919, 1938)

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PERMISSION TO ADDRESS THE HOUSE

Mrs. Norton. Mr. Speaker, I ask unanimous consent to proceed for 1 minute.

The SPEAKER. Is there objection to the request of the gentlewoman from New Jersey?

There was no objection.

Mrs. NORTON. Mr. Speaker, I appeared before the Rules Committee this morning to present S. 2475, with an amendment, the so-called wage and hour bill, and asked for a rule that it may be considered in the House. In presenting that bill I made a statement that I think very clearly explains the entire purpose of the bill and also the differences between the recommitted bill and the bill we are now asking to bring before the House for consideration.

Mr. Speaker, I ask unanimous consent to include this statement in the RECORD, and may I suggest that every Member who is interested in this legislation read the statement, as I think it will clarify the subject when it comes before the House. We sincerely hope a rule may be granted in order to give the House an opportunity to consider this very important legislation.

The SPEAKER. Is there objection to the request of the gentlewoman from New Jersey?

There was no objection.

Mr. RICH. Mr. Speaker, reserving the right to object.

The SPEAKER. The gentleman's objection comes too late.

The statement is as follows:

I am directed by the Labor Committee to come before you to ask for a rule so that the committee amendment to S. 2475, reported from the Labor Committee on April 21, 1938, may be considered by the Members of the House of Representatives.

We of the Labor Committee believe that the b1ll should be allowed to be considered by the membership of the House and voted either up or down on its merits.

The bill was favorably reported by the Labor Committee by a vote of 14 to 4. The 14 members of the committee who voted for this bill are all as anxious as I am that it be considered by the House. We believe sincerely that it is a good bill, the most fair, equitable, and workable bill we could draft. The four members who voted against it are also anxious for the enactment of legislation to eliminate oppressive labor practices in certain employments, but do not agree with us in the method we have selected to attain this end.

After the wage and hour bill was recommitted last December, the Labor Committee immediately started work on it again. We held many meetings of the full committee, after which I appointed a subcommittee to consider the matter more fully. They held meetings every day for at least 3 weeks, at which they heard testimony from many Members of the House and from well-known lawyers. Any Member of Congress who wished to be heard was given the opportunity to testify. After a full consideration of all of the facts the Democratic members of the subcommittee submitted a bill to the full committee, which was rejected by the committee. I then submitted the proposal which you now have before you, to the committee, and it was accepted by them. Many of the features of the subcommittee draft were retained, but substantial changes were made in the administrative provisions, the minimum-wage and maximum-hour provisions. The main objective of 40 cents an hour for a 40-hour week was common to both drafts, as, indeed, it has been to all wage and hour drafts which have been considered by the committee.

Some of you gentlemen, I understand, objected to the bill you had before you last year because it was confusing, because it was not definite enough, because it did not, in your opinion, set a ceiling for hours and a floor for wages. You objected, as did many other Members of the House, to the administrative features. The Labor Committee recognized that in most cases these were valid objections. We further realize that the need for the enactment of this legislation during this session of Congress is urgent.

In the last few months there has occurred an alarmingly sharp decline in business activity. With that decline have come the inevitable wage cuts which the great mass of American businessmen so deplore, but are powerless to prevent. These businessmen know that wage cutting sets in motion a vicious spiral of deflation which, if allowed to gather sufficient strength, may threaten the foundations of government itself. We know that the Federal Government cannot and should not attempt to regulate the wages of all wage earners throughout the United States. But the Federal Government cannot by its inaction permit the channels of commerce to be used to set this spiral of deflation in motion. It cannot and should not permit our great interstate industries to become engulfed. During the last few years unprecedented demands have been made both upon the Federal Government and upon State and local governments for relief and work relief. Unless the wages paid by private employers are sufficient to maintain the bare cost of living, such demands will necessarily continue.

We have, therefore, for all of these reasons, reported from the Labor Committee a bill entirely different from that considered on the floor last December. I would like to call your attention to these differences briefly.

There are, of course, many important differences between the committee amendment to S. 2475 and the amendment agreed to in the Committee of the Whole prior to the recommittal of the bill.

The effect of the recommitted bill depended to a large extent upon the will and wisdom of the person appointed to administer it. There was created a wage and hour division in the Department of Labor. This division was to be headed by an administrator who

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[PAGE 5920]

was to be appointed by the President, with the advice and consent of the Senate. He was to receive compensation at the rate of $10,000 a year. It was made the duty of the administrator, upon a finding that a substantial number of employees in any occupation were receiving wages inconsistent with the minimum standard of living necessary for health, efficiency, and general well-being, to appoint a wage and hour committee to recommend minimum wages or maximum hours for the occupation. Standards were provided to guide the wage and hour committees with respect to the factors to be considered by them in making their recommendations. Apart from these standards, which I will discuss later, there was nothing to prevent minimum wages being prescribed which were lower than the going rate for the occupation, or maximum hours being prescribed which were higher than those generally prevailing in the occupation. Whether for a particular occupation minimum wages and maximum hours were prescribed at all depended upon the action or inaction of the administrator. The administrator was also given the power to make exemptions in special classes of cases.

It was he who defined the occupations to which a wage or hour order related, the territorial application of the order, and the class, craft, or industrial unit in which it was to operate. He was to classify employers, employees, and employments within the occupation to which the order related according to localities, the population of the various communities, the number of employees employed, the nature and volume of the goods produced, and other differentiating circumstances.

The administrator was also given power to investigate to determine whether violations had been committed or were about to be committed, and to bring action in the district courts to enjoin such violations. For the purpose of these investigations he was given the power of subpena.

In direct contrast to this system of administration of the recommitted bill there is, strictly speaking, except for one or two special cases, no administration of the reported bill. These exceptions are in the case of the child-labor provisions and the partial exemptions of learners, apprentices, and handicapped workers, and their administration will not, I feel sure, be questioned. The functions of the Secretary of Labor are very limited. He is directed to determine, on the basis of facts adduced at hearings, the relation of the various industries to interstate commerce. If the Secretary finds that the relation is close and substantial, he is to issue an order declaring that particular industry to be an industry affecting interstate commerce. After making that determination with respect to a particular industry the Secretary has discharged his functions. Thereafter the bill operates automatically upon all employers in the industry who are engaged, not casually but in the regular course of their business, in purchasing or selling goods in interstate commerce.

XXXXX

The Secretary is also given the power to investigate to determine whether violations have occurred but is given no power of enforcement. The enforcement is carried out by the Department of Justice.

Now, let us look at the minimum-wage provisions of the recommitted bill. Whenever the administrator found that a substantial number of employees in any occupation were employed at wages inconsistent with the minimum standard of living necessary for health, efficiency, and general well-being the administrator was to appoint a wage and hour committee to consider and recommend a minimum wage for the occupation. The wage and hour committee was to consist of a number of persons representing employers in the occupation, an equal number representing employees in the occupation, and three disinterested persons representing the public.

In recommending a minimum wage for the occupation the wage and hour committee was to take into consideration, among other relevant factors, the cost of living, the wages paid by employers voluntarily maintaining fair minimum wages, the wages established by collective bargaining, local economic conditions, the costs of transportation from producing points to consuming markets, and differences in unit costs of manufacturing occasioned by varying local natural resources, operating conditions, and other factors entering into cost of production. A wage in excess of 40 cents an hour could not be prescribed. If the Administrator found that the wage and hour committee had considered all of the above factors he was to hold a hearing on the recommendations and if he found that the proposed standards, so far as economically feasible, were at levels consistent with health, efficiency, and general well-being, he was to issue an order putting the recommendations into effect.

Let me contrast this with the reported bill. When the Secretary makes an order finding that a particular industry affects interstate commerce, every employer in the industry who is engaged in interstate commerce, or who is engaged in the ordinary course of his business in purchasing or selling goods in interstate commerce, is required during the first year from the effective date of the order to pay each employee employed by him 25 cents an hour, during the second year 30 cents an hour, during the third year 35 cents an hour, and during the fourth and each succeeding year 40 cents an hour.

In the recommitted bill with respect to maximum hours whenever the Administrator found that a substantial number of employees in any occupation were employed at hours inconsistent with the minimum standards of living necessary for health, efficiency, and general well-being, he was to appoint a wage and hour committee to consider and recommend a maximum workday and workweek for the occupation. The composition of wage and hour committee has already been described in connection with the establishment of minimum wages. In recommending a maximum workday and workweek the wage and hour committee was to consider, among other relevant circumstances, the hours of employment maintained by employers who voluntarily maintained a reasonable maximum workday and workweek, the hours of employment established by collective bargaining, and the number of persons seeking employment in the occupations involved. A workweek of less than 40 hours could not be established. If the Administrator found that the wage and hour committee had considered all of the above factors he was to hold a hearing on the recommendations and if he found that the proposed standards, so far as economically feasible, were at levels consistent with health, efficiency, and general well-being, he was to issue an order putting the recommendations into effect with respect to the occupation.

And in contrast to that procedure let us look at the maximumhour provisions of the reported bill. When the Secretary makes an order finding that a particular industry affects interstate commerce, no employer in the industry who is engaged in interstate commerce or who is engaged in the ordinary course of his business in purchasing or selling goods in interstate commerce, may employ any employee for more than 8 hours a day, or during the first year from the effective date of the order, employ any employee for more than 44 hours a week, during the second year more than 42 hours a week, or during the third year or any succeeding year more than 40 hours a week. An employee is not deemed employed in violation of these provisions 1f his overtime is computed at the rate of time anq one-half.

The child-labor provisions of the recommitted bill and the reported bill are practically identical.

The provisions for exemptions of learners, apprentices, and handicapped workers in both the recommitted bill and the reported bill are also virtually identical.

The exemptions from both the wage and hour provisions of the recommitted bill and the reported bill are the same. The recommitted bill, however, contained many more exemptions from the hour provisions than does this one. We have eliminated many of these as we feel that retaining them in the bill would lessen the effectiveness of the bill. The exemptions excluded in the reported bill include most of those which were adopted in Committee of the Whole and which were therefore not contained in the bill as originally reported from the Labor Committee.

I know that the ranking Democratic member of the Labor Committee expects to appear before you in opposition to this bill. He cannot conscientiously support it, I realize, because he believes it to be unconstitutional. I deeply regret that my colleague, BOB RAMSPECK, cannot be with me here today asking for a rule, but I, of course, respect his opinion, although I cannot agree with it. In his minority report on the wage and hour bill he contends, among other things, that the new draft is "not a reasonable exertion of governmental authority, but, on the contrary, is arbitrary and discriminatory." Upon that contention he bases almost entirely his whole argument.

I am not a lawyer, as you gentlemen know, and I have only my common sense to guide me in legal matters. I have, therefore, discussed the constitutionality of the reported amendment with several lawyers whose opinions I respect and whose advice I value.

My understanding is that the Washington minimum wage law for women is the only minimum-wage statute which has been sustained by the United States Supreme Court (West Coast Hotel Co. v. Parrish, 300 U. S. 379) . That statute authorized a board to fix minimum wages for women based on the cost of living necessary for health and decency. Chief Justice Hughes, who wrote the opinion in the Parrish case, at page 399 stated: "The legislature was entitled to adopt measures to reduce the evils of the 'sweating system,' the exploiting of workers at wages so low as to be insufficient to meet the bare cost of living, thus making their very helplessness the occasion of a most injurious competition. What these workers lose in wages the taxpayers are called upon to pay. The bare cost of living must be met."

From the above quotation and the provisions of the Washington statute it is clear that the Supreme Court regards a minimum wage which is based on the cost of living as reasonable. Hence, any minimum-wage statute reasonably related to cost of living has a fair chance of being sustained. Viewed in this light, I think the rigid minimum-wage rates fixed in the present bill can be upheld.

Admittedly the Congress can fix a minimum wage in accordance with this standard rather than delegate the task to an executive board or agency 1f it has facts showing what wage the cost of living warrants. Where a single minimum wage is prescribed by the Congress for all localities in the United States, as is the case in the proposed bill, under the doctrine of the Parrish case, it should only be necessary to show that the wage established in the statute is not in excess of that which is required by costs of living for the region of the United States where living is the cheapest. In other words, if the cost of living for industrial workers engaged in interstate commerce is cheaper in Alabama than in any other State in the Union, and the cost of living in that State requires a wage rate of 40 cents an hour to provide the necessities of life, such a wage rate for the entire country would appear to be reasonable and valid. No employer could show that he was aggrieved.

In my judgment, statistical studies which have been made within the last 2 years demonstrate that the minimum wages provided in the present bill are not in excess of the reqUirements of cost of

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[PAGE 5921]

living. In an elaborate oftlctal study entitled "Intercity Differences in cost of Living in March 1935, 59 Cities," made by Works Progress Administration in cooperation with the Bureau of Labor Statistics, it is stated that the "cost of a specified standard of living does not di1Ier widely among most cities; differences in living costs are to be explained to a considerable extent by the differences in the standard of living." This is illustrated by the following excerpt from this study:

"The cost of living in the maintenance level ranged from a high of $1,415 in Washington, D. C., to a low of $1,130 in Mobile, Ala., at March 1935 prices. The average in the 59 cities combined was $1,261. The cost of the emergency level was also highest in Washington, $1,014, but was lowest in Wichita, Kans., $810. The average was $903. At both levels the necessary outlay in the most expensive city averaged about 25 percent above that in the least expensive; in more than one-half the cities living costs were within a range of $100 per year."

The significance of this excerpt cannot be fully appreciated unless the terms "maintenance level" and "emergency level" are understood. The maintenance level is explained in the study to provide only for the cost of living necessary for material needs and some psychological needs. Emergency level provides almost exclusively for physical needs; and the study adds: "But it might be questioned on the ground of health hazards if families had to live at this level for a considerable time. • • • Neither of these budgets approaches the concept of what may be considered a satisfactory American standard of living, nor do their costs measure what families in this country would have to spend to secure 'the abundant life.'" In this study the cost-of-living figures were based on the living requirements of industrial workers for a family of four—husband, wife, and two children.

It should be noted that the lowest cost of living in any of the 59 cities on an emergency-level basis was found not in the South but at Wichita, Kans.—$810 a year tor a family of four. Now, the greatest annual wage which an employee could receive under the present bill after the 40 cents became operative is $832. This would require him to work 52 weeks a year, 40 hours a week. However, the act prescribes a minimum wage of only 25 cents an hour for the first year, which would produce an annual income of only $520 for an employee working full time at 40 hours a week.

On the basis of this survey, how can it be said that $520 or even $832 is more than enough to provide the costs of living necessary to health and decency?

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Page 6395        CONGRESSIONAL RECORD - HOUSE        May 6, 1938        (83 Cong. Rec. 6395, 1938)

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MOTION TO DISCHARGE COMMITTEE

MAY 6, 1938.

To THE CLERK OF THE HOUSE OF REPRESENTATIVES:

Pursuant to clause 4 of rule XXVII, I, Hon. MARY T. NORTON, move to discharge the Committee on Rules from the consideration of the resolution (H. Res. 478) entitled "A resolution making S. 2475 a special order of business," which was referred to said committee April 26, 1938, in support of which motion the undersigned Members of the House of Representatives affix their signatures, to wit:

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[PAGE 6396]

This motion was entered upon the Journal, entered in the CONGRESSIONAL RECORD with Signatures thereto, and referred to the Calendar of Motions to Discharge Committees May 6. 1938.

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