EMPLOYMENT AND INFLATIONARY EFFECTS

Opponents of minimum wage laws have long argued that it would force price increases, touch off inflationary wage raises in other areas and "price" large groups of low-paid workers out of their jobs. The evidence is that there were no adverse employment effects or inflationary trends arising from the increases in the FLSA effective September 3, 1961; we contend that the effects would be the same in the District of Columbia.

In his annual report to Congress on the effect of the 1961 wage hour law, Labor Secretary W. Willard Wirtz reported: The 1961 increase in the Federal minimum wage "brought substantial benefits to low-paid workers in many areas of the country and the increases in their incomes and purchasing power had beneficial effects in the communities in which they work." He expressed need for further extending the coverage of FLSA, emphasizing that workers not covered did not benefit, even in an indirect manner, from the increases.

He told Congress that the increases effective September 3, 1961, had no inflationary effect on wage levels generally nor did they have any detrimental effect upon the nationwide level of employment in the industries affected. He pointed out further that employment has in fact risen in those industries brought under the law's coverage since the increase took effect.

The report stressed that the most pronounced change in wage structure occurred in "nonmetropolitan areas of the South." In these areas 44 percent of employees in wholesale trade and 27 percent in manufacturing received wage increases to bring their earnings to $1.15 an hour. Employment in covered industries in these areasother than retail trade-increased by 235,000 over a 20-month period.

CONCLUSION

A minimum wage of $1.25 is wholly justified immediately. It is evident from studying the two cost-of-living budgets pertinent to the District of Columbia that even $1.25 an hour is not enough to maintain a decent American standard of living, but it is a step in the right direction.

The $1.25 minimum wage can be accomplished without curtailment in employment or earning power. The Greater Washington Central Labor Council, AFL-CIO, would not seek a bill the effect of which would curtail employment. We are always highly conscious of and deeply disturbed about any measure that would adversely affect employment in our community.

If the bill is to serve the fundamental purpose of assuring at least a minimum level of earnings to low-paid workers, its coverage must be extended as broadly as possible. It is clear that uncovered workers' earnings lag behind those of covered workers. Unless the coverage of this bill remains broad, these uncovered workers will be doomed to continue at depressed wage levels and substandard living conditions. No sound case can be made against minimum wage and hours' protection. It would bring a measure of justice to thousands of workers who have no other recourse. It would stimulate our community's economy without danger of inflation, or a decline in employment.

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Thank you very much, Mr. Chairman, for the opportunity to appear before the committee.

Senator MORSE. Thank you very much, Mr. McGuigan, for your

statement.

I am going to ask Mr. Judd to supply you with a copy of Commissioner Tobriner's testimony before the committee earlier tonight. I would appreciate if you and Mr. Turner would prepare a memorandum commenting upon certain amendments to the bill that the District Commissioners recommended, including their proposal for an escalator clause whereby the full amount would not go into effect immediately.

I said at the time and repeat that the District Commissioners made a strong prima facie case, and I think it is fair that you be given an opportunity to file a supplementary memorandum to your statement giving the committee the benefit of your views not only of this proposal contained in the Commissioner's statement, but all of their proposals involving any amendments.

I would like to have that memorandum by the time I close the record. Mr. MCGUIGAN. Thank you very much, Senator. We will cooperate.

We always have a great deal of respect for the thinking of Mr. Tobriner and we will give you our comments.

Senator MORSE. Thank you very much. I am always pleased to call the witness who will appear before this committee at this time, Miss Selma Borchardt, who will be our next witness. She has made many constructive contributions to the work of this committee, particularly in the field of education as well as in other issues that involve the general welfare of the people of the District of Columbia.

You may proceed in your own way.

STATEMENT OF MISS SELMA BORCHARDT, EXECUTIVE SECRETARY, WASHINGTON TEACHERS' UNION

Miss BORCHARDT. Senator, I am here as the executive secretary of the Washington Teachers' Union. Probably that which distinguishes the teachers' union from other professional educational organizations is our active interest in preserving and promoting the welfare of the child and the community at large.

I am very happy to come before you, Senator, because as one of the witnesses once said, "You think with your heart as well as your head," and that has characterized your work, and I am so happy to have you here to help us.

Senator MORSE. I want to say that at this time of the evening it is very refreshing to me.

Miss BORCHARDT. We are very happy to follow the very fine statement of the Greater Washington Central Labor Council with just a few examples taken from human experience.

To help preserve decent standards in family living we must have a minimum wage containing the principles that you have for the most part-we too are concerned with the language in the provisions for apprenticeship, and we know that we would like to submit that in some detail.

We know that in most families with both parents employed, they are employed because they need the money. Most women do their work outside of the home and inside of the home because the money is essential for the family care.

I want to tell of an experience that I had with one of the youngsters.. You know nowadays the teacher has to ask the place of employment of the mother and the place of employment of the father, and knowing what the picture is, when I said to the boy, "Where does father work, and where does his mother work?" his answer was, "She don't work." I said, "How many children are in your family, how many children under 10 are in your family?"

He counted very carefully and said, "Eight."

I said, "Does your mother take care of all of the eight?" He said, "She cooks and sews." And he added, "and washes clothes"; all of which went into the picture.

I said, "Don't you think that is work?"

He said, "Yes, but it is in the house."

I said, "Does she want to go out to work?"

He said, "She has got to.

I said, "Well, she must make enough to feed you."

Then came a heartwringing statement: "She can't feed all of us every day."

And to have that said in the Nation's Capital is tragic, and tells the story that is involved in this.

Then when we realize the homes of some of these children, they are clean, I am not talking about the hovels that are dirty, I am talking about homes that are clean but in which there is no space.

What are you going to do if you have to put six in one room, as is the case in many a poor, clean home? What inducement is there for

the child to come home?

We deplore moonlighting, Senator. There you have the case of one breadwinner and sometimes two who have to go out and work at two jobs.

In families of that sort we checked and we found in one school 25 percent of the children in that school have never had a family meal because the parents work at different hours, and therefore the children have never had the privilege of sitting down as a family to a meal. We think that is a tragedy.

Now when you take back a few figures, just to repeat a few here, way back in August 1960 of the Labor Review, the figures are given there that a family of four must have a minimum of $5,199 to maintain decent standards of living. And that is low enough, I think, $5,199. Then the figures go on to show the hundreds of families here who do not have anywhere near that income, and we look to you, Senator, to make sure that every family has that income. For if you won't help us, we are lost.

We lean on you and we know we will get help.

Thank you.

Senator MORSE. Thank you very much, Miss Borchardt.

I want to assure you that the whole committee will do this job. We will follow what the facts show in this case.

With the testimony that we have received here tonight, a very, very strong case can and will be made for the bill. I want to thank you very much.

Miss BORCHARDT. Thank you.

Senator MORSE. The next witness will be Mr. Arnold Sternberg, chairman of District Affairs, Democratic Central Committee.

STATEMENT OF ARNOLD STERNBERG, CHAIRMAN, DISTRICT AFFAIRS, DEMOCRATIC CENTRAL COMMITTEE

Mr. STERNBERG. Thank you very much, Senator.

I will try not to keep you very much later than you have already stayed.

Senator MORSE. Go right ahead. Take your time.

Mr. STERNBERG. Thank you.

I regret that I don't have a prepared statement, but I will have one for you before the record closes.

Senator MORSE. You may file your statement subsequently.

Mr. STERNBERG. Thank you.

I do have some comments with respect to the bill which I would like to give you briefly at this point.

On March 4 of this year the Democratic Central Committee unanimously voted to support S. 860, your bill to amend the District of Columbia minimum wage law.

We adopted this policy after reviewing a study made by the U.S. Department of Labor earnings in selected industries in the District in the summer of 1962. I don't think I need refer to that. I assume that by this time it is in the record.

But quite frankly our position was based on that study.

In addition to that study, there were three other studies made by the Bureau of Labor Statistics which we took into consideration in arriving at our position in support of this legislation.

If those are not already part of the record, I should like if I may, Senator, to make them a part of the record and to comment on each one of them briefly.

Senator MORSE. Because of the length of the reports, I rule that they may be referred to by reference only. Copies of these reports will be found in the committee files.

Mr. STERNBERG. The first of these studies was made by the Bureau of Labor Statistics in June of 1961 in the laundry and drycleaning industry throughout the United States.

The present District of Columbia minimum wage law provides for an order in this industry. However, despite the existence of this minimum wage order, 13 percent of the employees in the District working in laundry and drycleaning establishments were in June of 1961 receiving less than $1 an hour in average hourly earnings.

According to the BLS survey, the District's average hourly earnings are estimated at $1.17 an hour, which is less than the average hourly earnings of similar employees in the same laundry and drycleaning industry in Boston, Buffalo, New York, Newark, Philadelphia, Chicago, Cincinnati, Cleveland, Detroit, Indianapolis, Kansas City, Milwaukee, Minneapolis, Los Angeles, Portland, and San Francisco.

In each of those cities in the laundry and drycleaning industry average hourly earnings ranged from $1.19 to as high as $1.66.

Average hourly earnings in the District of Columbia in this industry, as I noted, were $1.17, and 13 percent of the employees in this industry in the District received less than $1 an hour.

This alone I think suffices to point out the inadequacies of the present law.

Secondly, a similar industrial wage survey in the contract cleaning industry made by the Bureau of Labor Statistics in the summer of 1961 shows that 4.8 percent of the employees in this industry in the District earn less than $1 an hour. This is a higher proportion of such employees than in any other city in the country, included in the BLS survey, except for Atlanta, Ga.

In this industry, contract cleaning only in Atlanta and Dallas of the 20 cities studied had lower average hourly earnings than did the District, and again, Senator, this is an industry in which there is a District of Columbia minimum wage order.

On the east coast alone, Boston at $1.51; New York at $1.84; Newark, $1.51; Philadelphia, $1.70; Pittsburgh, $1.72; Baltimore, $1.29; and Miami, $1.42, all have higher hourly average earnings as indicated than reported for the District.

The same situation holds true for our hotel and motel industry. This according to a survey done by the Department of Labor in the summer of 1962, which shows that 19 percent of all employees in this industry in the District earn less than $1 an hour, and 6 percent of the employees in the hotel and motel industry in the District earn less than 75 cents an hour.

Here, again, the District of Columbia's average hourly earnings for this industry as reported by the Bureau of Labor Statistics industrial wage survey, June of 1961, show that Boston, New York, Pittsburgh, Chicago, Detroit, Milwaukee, Minneapolis, Los Angeles, Portland, and San Francisco, all had higher average hourly earnings than did the District, and those average hourly earnings range from $1.29 all the way up to $1.79 an hour.

Senator MORSE. Can you supply us with a list or can you gentlemen in the Department of Labor supply us with a list of job classifications in the District of Columbia in the motel and hotel industry who are receiving less than 75 cents an hour?

The Department of Labor representatives say that they will try to supply that for the record.

(The job classification list follows:)

MEMORANDUM PREPARED AT THE REQUEST OF SENATOR MORSE ON JOB CLASSIFICATIONS IN HOTELS AND MOTELS AND IN EATING AND DRINKING PLACES IN THE DISTRICT OF COLUMBIA IN WHICH LOW WAGES ARE PAID

The Bureau of Labor Statistics of the U.S. Department of Labor conducted surveys in June 1961 to obtain data on rates of pay and other pertinent information for hotels and motels and for eating and drinking places in metropolitan areas with 750,000 or more in population. Among the areas for which separate data were tabulated was the Washington standard metropolitan statistical area, which includes Washington, D.C.; Montgomery County and Prince Georges County in Maryland; and Alexandria city, Falls Church city, Arlington city, and Fairfax County in Virginia. The survey of hotels and motels covered establishments with 20 or more employees. The survey of eating and drinking places covered establishments with 10 or more employees.