The question of "resident employees" is not limited to janitorial employees. The philosophy of providing a means for the elderly to have a place to live and receive supplementary income also applies to many of the ladies who serve as resident managers. In many, many cases these ladies are never called upon to work, in one sense of the word, a 40-hour week. to all parites concerned. It provides the employee shelter and additional income Again it is an accommodation allowing him to maintain a decent residence and standard of living. It provides a special service for tenants. All we are asking the committee to do is recognize the problem we face in considering the actaul hours worked by 24-hour resident employees and provide adequate guidance so that we are not strangled and at the same time not taking away from these many citizens who are living on a fixed, limited income, as a means of providing for themselves. Turning now to another facet of the problem of sweeping revision in the District of Columbia minimum wage laws we ask you to consider our coverage under the Fair Labor Standards Act of 1938 as amended in 1961. There are indications the Department of Labor has interpreted, although no specific interpretative bulletin has been issued, the act in such a way that apartment houses are covered under the act. Our industry is taking steps to determine all of the ramifications of such an interpretation and the mechanical details necessary to be in complete compliance with the Federal minimum wage provisions. The readjustment is tedious, but we are proceeding with the task of getting our house in order if it is determined finally we are under the regulations that became effective September 3, 1963. In view of the fact Congress in its wisdom has set 1965 as the year newly covered employers will conform with the ultimate goal of the Fair Labor Standards Act, we urge the committee to give due consideration to the drastic effect H.R. 8423 will have on covered employers in the District of Columbia. enacts new legislation establishing minimum wages for citizens working in the If the Congress District of Columbia, it seems to us that such legislation should establish a uniform minimum for all citizens and that the minimum wage established should not exceed the minimum established by the Federal Fair Labor Standards Act for newly covered employers. in a number of respects, notably by providing means through wage orders for The bill you are now considering departs from these principles establishing minimums higher than the statutory limit for selected employees. You should either continue the wage order system or provide for a specific statutory minimum, but not do both. Again we thank you for considering our views. STATEMENT OF THE BUILDING OWNERS & MANAGERS ASSOCIATION OF METROPOLITAN WASHINGTON AT A HEARING OF THE CITIZENS COUNCIL ON PROPOSALS TO AMEND THE D.C. MINIMUM WAGE LAW, MAY 10, 1963 My name is Raymond J. Gerber. Building Owners & Managers Association of Metropolitan Washington. The I appear here today as president of the membership of the association represents the interests of owners and managers of office buildings and apartment houses in the District of Columbia. We feel that any broad and sweeping change in the minimum wage structure establishing a completely new concept in the method of administering the provisions of the District of Columbia minimum wage law would have an adverse effect on the entire community. Blanket coverage of all employees in one move would be injurious to the economic structure of our industry and probably many others who operate in our city. Any business faced with additional operating costs will have to pass these costs on to the consumer through increased prices. I will cite a specific example later. tional fuel for the inflationary spiral with no increase in the standard of living. What all of this will mean of course is addiIn addition to the inflationary ramifications such all encompassing changes would impose, we have reason to feel there will be a reduction in employment. Unemployment is a problem of national concern. Government has top economists studying the unemployment problem trying to As you are well aware, the U.S. find ways to reduce the number of people that are unemployed and here we are discussing a proposal that would increase unemployment. discuss later will explain in detail how our industry would be forced to look for The example I will ways to reduce the labor force. I can say now there are certain unskilled jobs in maintaining a building that can be done with machines instead of men. last month at a seminar our association sponsored we heard a consulting engineer Just tell us how some of the new cleaning machines can be utilized to reduce labor costs. Any substantial increase in wages would more than offset the purchase price of such machines. Mechanization of our cleaning methods would drastically reduce employment opportunities for unskilled persons. As you see a sweeping change in the minimum wage law may hurt the very persons we are trying to help. Another problem we fear might arise is the migration of businesses to Maryland and Virginia. It is no secret that there are a large number of office buildings and other commercial developments being constructed in nearby Maryland and Virginia at the present time. If wage rates become so high they are out of all perspective in relation to those in Virginia and Maryland we will lose not only business, but the workers who live in apartments also. We say this because the business houses will find it to their advantage to relocate and the employees will want to be near their work. You can see, I am sure, the added burden this will place on those who remain in the District. Those of us who manage investment properties have kept pace with the times. Indeed, many of the buildings operating in Washington have made a concerted effort to pay wages based on the Federal wage-hour law. Some buildings pay the Federal minimum or better. There are many fine new buildings in Washington where tenants expect first-class service and the management pays the necessary wages to provide what is expected. Our problem, however, is with the older smaller buildings that provide space either commercial or residential for the average businessman or citizen. Although it is not the only serious problem we face, one of the most intricate questions we have concerns those employees who are not highly trained and are on the premises 24 hours a day. Any sweeping changes in the present District of Columbia minimum wage law affecting these employees in a manner similar to all other employees would be disastrous. In our apartment buildings we have examples where resident managers and janitors, or in many cases both, live in the building. Naturally the tenants consider these representatives on 24-hour call and in many cases they are asked to do something for the owner or tenants beyond a regular 8-hour day. If I may tie these two factors together in one example that is representative of thousands of employees that would be affected, it will demonstrate how an absurd condition could be created. For our example let us take a 24-unit apartment building. One of the employees would be an elderly lady, perhaps a widow, living on a small pension that is inadequate in itself to provide her with all of the necessities of living. We do not ask her to do much more than accept an occasional complaint from tenants, sign for a few parcels delivered by a local department store, report any problems to the main office of the management company, and show an apartment when it becomes vacant. In our typical building the occupants are stable and since there are few vacancies and practically no complaints the resident manager has few duties, is free to come and go most of the time, and has no set hours. You can see from this that her duties are actually intermittent. For the service she does render we pay her $50 per month and furnish an apartment with all utilities included. Without this help her $105 per month pension would be inadequate. Indeed, with an income of only $105 per month she would be forced to live with relatives or become a ward of the government. Now let us demonstrate how, under broad and sweeping minimum wage provisions, her salary would be affected and the probable end result. The Federal Wage and Hour Administration considers time in which an employee is not actually working but on call to be working time. If this rule is applied in the District of Columbia we can make the following assumptions. Assume a mini mum wage rate of $1.25 per hour plus time and a half for all over 40 hours for a resident employee on call 24 hours a day. Assume she does get 8 hours a day uninterrupted time off. You can see immediately that the services rendered by a person in this position does not justify a salary of $801.05 per month and that it would be impossible to pass on a rent increase of $33.37 on an apartment renting for $75 to $95 per month. Some buildings would have two such employees-just imagine the impact on the rents everyone would have to pay. There would be no other choice but to find some other means to service tenants and let our residential employees go. We of course are not experts on how the other areas of our complex society will be affected, but we are sure many other businesses will have problems as complicated as ours. We want to emphasize again the case cited above is only one small glimpse of how our industry can be adversely affected unless long and careful study is given to all of the ramifications of the problem before any drastic action is taken to amend the present District of Columbia minimum wage law. We endorse the present system of making wage determinations through conference hearings. Such conference hearings provide a means for carefully examining the problems of each industry on a case-by-case basis. experience have proved its value in determining what is a proper wage. The years of change in the law that would impose blanket coverage without consideration of the particular problems of each industry affected would produce very harmful Any results. There does not seem to be any need for changing the present system and we urge the citizens council consider the wisdom of the U.S. Congress in establishing the mechanism and the precedent that has been set in resolving each case as it comes before the Minimum Wage Board. An excellent method for determining proper wage minimums is established and currently available to all who wish to be heard. We feel, therefore, there is no need for radical changes in the current law. Thank you. Hon. JOHN L. MCMILLAN, AMERICAN FEDERATION OF LABOR AND Chairman, Committee on the District of Columbia, DEAR MR. MCMILLAN: Pursuant to my telephone conversation this afternoon with Mr. James T. Clark, clerk, I am enclosing the attached statement on behalf of the American Federation of Labor and Congress of Industrial Organizations before Subcommittee No. 3 of the Senate Committee on the District of Columbia on H.R. 8423, the Minimum Wage Amendments Act of 1963 for the District of Columbia. We would like to have this statement included in the record of the hearings recently held before Subcommittee No. 3 of the House Committee on the District of Columbia. Sincerely yours, KENNETH A. MEIKLEJOHN, STATEMENT OF KENNETH A. MEIKLEJOHN, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS BEFORE SUBCOMMITTEE No. 3 OF THE SENATE COMMITTEE ON THE DISTRICT OF COLUMBIA ON H.R. 8423, THE MINIMUM WAGE AMENDMENTS ACT OF 1963 FOR THE DISTRICT OF COLUMBIA, DECEMBER 1963 Mr. Chairman, my name is Kenneth A. Meiklejohn. I am legislative representative of the American Federation of Labor and Congress of Industrial Organizations. On behalf of the AFL-CIO, I appreciate very much this opportunity to present our views on H.R. 8423, the Minimum Wage Amendments Act of 1963 for the District of Columbia. Let me say at the outset, Mr. Chairman, that we believe that early enactment of legislation which will bring the District of Columbia minimum wage law more closely into line with economic realities and with the needs and well-being of the people of the District of Columbia is very much in the interest of the people of Washington. Such action is long overdue, and it is gratifying that such legislation has now been introduced, that these hearings are now being held before your subcommittee, and that favorable action by the Congress now seems likely. I assure you that the AFL-CIO wholeheartedly supports the objectives and basic provisions of H.R. 8423. Enactment of H.R. 8423 is urgently needed at this time to make sure that wage earners in the District of Columbia receive wages which under present-day economic conditions are fairer and more just and tend toward more adequate levels of health, efficiency, and well-being. Unfortunately, many District wage earners are paid wages that are not adequate to provide even the most minimum standard. That this is so is shown by the special study made in 1962 by the Bureau of Labor Statistics of the U.S. Department of Labor of wages being paid, hours being worked per week, and work practices in the District of Columbia. This study showed that 2,050 of the employees employed in real estate occupations, 200 of those employed in motion picture theaters, 6,440 of those in eating and drinking places and 1,460 of those in hotels and motels earned less than $1 an hour in 1962. The percentage of workers who earned less than $1.15 an hour ranged from 19 percent, or nearly one-fifth, in retail trade to 61 percent, or more than threefifths, in eating and drinking places, and included 33 percent, or one-third of the employees in automobile repair and servicing, 32 percent, or nearly one-third, of the employees in hotels, motels, and rooming and boarding houses, 37 percent, or more than a third, of the employees in real estate, 28 percent, or more than one-fourth, of the workers in laundries, 25 percent, or a quarter of the employees in hospitals, and 19 percent, or nearly one-fifth, of the employees in retail trade. Employees carning less than $1.25 an hour in 1962 ranged from 29 percent, or more than one-fourth, of those in retail trade to between 50 and 60 percent, or more than half, of the employees working in laundries and miscellaneous services, and 60 percent and over, or more than three-fifths of the employees in eating and drinking places, hotels, motels, and rooming and boarding houses, and motion picture theaters. These figures do not, of course, take into account the higher wage levels that prevail in occupations that are generally subject to the Fair Labor Standards Act. Under that act the minimum wage for employees engaged in commerce or in the production of goods for commerce who were covered by the act prior to the 1961 amendments was raised to $1.25 an hour effective last September 3. A minimum wage of $1 an hour, which has been in effect for 2 years, applies at present to employees, primarily in retailing, construction, and transit, whom the 1961 amendments brought under the coverage of the act. This minimum will be raised to $1.15 an hour effective September 3, 1964, and to $1.25 an hour effective September 3, 1965. Existing low wages in a number of presently uncovered industries must be considered rather in the light of the high cost of living with which low-paid, as well as higher paid workers, in the District of Columbia must contend. As this subcommittee, I am sure, well knows, living costs in Washington, D.C., are among the highest in the country. A modest but adequate budget for a family of four in Washington has been estimated by the Bureau of Labor Statistics as requiring an income of over $6,000 per year. Compare this, Mr. Chairman, with the annual income of $2,500 which a minimum wage of $1.25 an hour will earn during a year for a worker working 50 weeks at 40 hours per week. Even if two members of the family were working and earning at these levels, they could not between them provide an adequate level of living for the family in the District of Columbia. A single person needs at least $1.25 an hour to subsist in the District of Columbia, according to a study made by the District of Columbia Minimum Wage and Industrial Safety Board itself. Updating their figures of 1959 for a single woman's minimum budget, the income required to meet such a budget in 1963 comes to $50.66 a week, or $1.25 per hour for a 40-hour week. Thus in 4 years, the minimum standard required a $5 increase because of rising costs and taxes (see appendix for further detail). But low wages affect adversely, not only the health, efficiency, and well-being of the worker himself, but also the fair employer and his employees in their efforts to withstand the unfair wage-cutting competition of unfair employers. Low wages also undermine the stability of industry by leading to labor disputes and work stoppages and contribute to unemployment by reducing the purchasing power of workers. In many instances, as is evident from available wage and cost-of-living data, low wages must often be supplemented by public or private relief payments and thereby impose a heavy drain on public and community welfare resources. Long ago the Nation learned that low wages threaten health and well-being and injure the overall economy. The District of Columbia has made substantial progress in alleviating substandard living conditions due to low wages under its existing minimum wage law, enacted originally in 1918. Updating of the District law along the lines of the Fair Labor Standards Act is clearly called for at this time and I quote from the bill itself "to correct and as rapidly as practicable to eliminate the conditions" which I have described. As shown by studies of low wage industries conducted by the U.S. Department of Labor, the proposed adjustments would increase the total wage bill in other than eating and drinking establishments only approximately 5 percent. This is about equivalent to the Nation's annual increase in productivity, plus the change in the Consumer Price Index. Attached to this statement is a supplementary appendix setting forth in somewhat greater detail the data which we believe support the need for and propriety of H.R. 8423. I would like to request, Mr. Chairman, that this appendix be included in the record. In the remainder of my remarks I should like to deal briefly with some of the more important features of the legislation and to objections that have been raised to some of these features. First, H.R. 8423 proposes to apply minimum wage and maximum hour protection, not only to women and children but to men as well. Such action has been long overdue. Unfortunately, as the data included in our supplementary appendix show, there are occupations in which, because the present District of Columbia minimum wage law does not apply to men, women's wages average above those paid to men employed in the same occupations. An occupational wage survey made by the Bureau of Labor Statistics in October 1962 for the Washington standard metropolitan statistical area, including parts of Virginia and Maryland, shows that women are paid more than men in some occupations. This survey found 32 men elevator operators earning 70 to 80 cents an hour, but no women elevator operators were paid less than 90 cents. The same survey shows 81 male janitors, porters, and cleaners earning between 70 and 90 cents an hour, but no female janitors, porters, or cleaners earning less than 90 cents an hour in the larger establishments employing 50 or more workers. The existence of State minimum wage laws, like the existing District minimum wage law, which apply only to women and children is, we believe, an anachronism under today's economic and social conditions. Fifteen States and Puerto Rico have already amended their minimum wage laws to apply to men, and the Fair Labor Standards Act, of course, applies to both men and women. There is no reason and no one can be heard to contend today that a reasonable case can be made for continuing to exclude men from minimum wage and maximum hour protection. We strongly support the provisions of H.R. 8423 that would extend such protection to men, as well as women and minors, in the District of Columbia. Next, the bill proposes to set a floor of $1.25 an hour under wages, and a ceiling of 40 hours per week over hours for employees employed in gainful occupations in the District of Columbia. In this respect, the bill would bring the District minimum wage law closely into line with minimum wage and maximum hours standards now applicable to the great majority of employees subject to the Federal Fair Labor Standards Act of 1938, as amended. These standards, we believe, are amply justified by the data available to us on current wage levels, cost of living, and other relevant factors in the District of Columbia which are summarized in our supplementary appendix. The combination of low wages with long hours is particularly bad. The Labor Department suvey reported 29,475 men and women working over 40 hours a week. These long hours are being worked at a time when there are approximately 20,000 unemployed in the Washington area-more than enough to provide the extra manpower needed to reduce the long workweek of more than 40 hours. The Fair Labor Standards Act now requires that overtime compensation at time and one-half the employee's regular rate of pay must be paid for hours worked by employees in interstate industries in excess of 40 hours per week. Many workers in the District of Columbia already receive overtime in accordance with this standard. We believe that time and one-half for overtime hours is a minimum standard. If long hours are to be effectively discouraged, hours in excess of 40 per week must carry a stronger penalty than the present time and one-half requirement. We urge that provision be made for double time for overtime hours. The Commissioners of the District of Columbia have endorsed the $1.25 an hour minimum wage and the 40-hour maximum workweek as ultimate objectives, but have suggested that these objectives be accomplished on an escalator basis, with a minimum wage of $1.15 an hour and a maximum workweek of 42 hours per week to become effective upon the effective date of the bill, and the $1.25 minimum and the 40-hour maximum workweek not to become effective until September 3, 1965. This proposal is apparently based on the fact that similar escalator provisions were applied to the employees who were brought under the Fair Labor Standards Act for the first time in 1961 by the 1961 amendments to the act. The position of the District Commissioners obviously has a certain plausibility to it. We would point out, however, that in our judgment the Congress was unduly cautious when it adopted an escalator method of applying minimum wage and maximum hours protection under the 1961 amendments to the Fair Labor |