has now come when all employees in the District-men, women, and minors should be covered by generally applicable minimum wage legislation. In this respect, the District lags behind 16 States which have made such provision-24 years ago, Connecticut was the first State to enact minimum wage legislation for men. The Commissioners believe that many of the economic and social ills of the District may well be traced to this lag in protective wage legislation. At the joint Senate and House District Committee hearings held in February and March of this year on the matter of crime in the District of Columbia, Commissioner Tobriner testified that in order to get to the basic roots of crime, we should, among other things, have minimum wage legislation enacted and that there is a vast segment of our population which is not covered by the minimum wage law, which refers only to minors and women, and which is not subject to the Fair Labor Standards Act since this segment, consisting largely of people like busboys, cooks, hospital orderlies, and the like, is not engaged in interstate commerce. While the Commissioners appreciate the many merits of H.R. 8423, as introduced by the chairman, they believe certain changes should be made in the bill in the interest of strengthening it, on the one hand, and, on the other, providing for reaching the $1.25 minimum wage and 40-hour workweek by a process of escalation. Accordingly, the Commissioners recommend that H.R. 8423 be amended. This amendment, which we ask be incorporated in the record, is in large part substantially identical with the language of H.R. 8423, but with a number of changes which the Commissioners consider desirable. The principal changes relate to vesting in the Commissioners, rather than in the Minimum Wage and Industrial Safety Board, the authority to administer the act, but with authority to delegate the functions to be performed thereunder; this, incidentally, Mr. Chairman, is the usual arrangement in recent years; coordinating the timing of the minimum wage rate and the overtime provision with those, respectively, specified in the Fair Labor Standards Act, as amended in 1961; and including among the specified prohibited acts the violation of any regulation or order issued under the authority of the act of September 19, 1918, and preserved by the bill. H.R. 8423 would take effect 180 days after its enactment at which time an hourly minimum wage of $1.25 and a time-and-a-half overtime rate for hours in excess of 40 per week would go into effect. The proposal of the Commissioners is that the bill take effect 180 days after enactment and that the $1.25 rate be reached in two steps: First, a $1.25 minimum on the effective date of the bill, and second, the $1.25 minimum to begin September 3, 1965. The amendments submitted by the Commissioners propose that the time-and-a-half overtime rate be paid for all hours in excess of 42 beginning on the effective date of the bill and for all hours in excess of 40 hours beginning on September 3, 1965. The 1961 Amendments of the Fair Labor Standards Act bringing new categories of employees under the act provide for a three-step arrangement to reach the $1.25 minimum. These are $1 an hour beginning September 1, 1961; $1.15 an hour beginning September 3, 1964, and $1.25 an hour beginning September 3, 1965. The 1961 amendments also provide for a three-step application of the overtime provisions to the newly covered employees as follows: Overtime after 44 hours beginning September 3, 1963; after 42 hours beginning September 3, 1964, and after 40 hours beginning September 3, 1965. The Commissioners' proposal, therefore, would result in the $1.25 minimum and the 40-hour overtime provision becoming effective at the same time as that minimum rate and the corresponding overtime provision become effective under the 1961 Amendments of the Fair Labor Standards Act. The escalator method of putting into effect new wage minimums has been utilized successfully, the Commissioners believe, in State and Federal laws and in the establishment of minimum wages in the District of Columbia. On four different occasions the District of Columbia Minimum Wage and Industrial Safety Board has used this method effectively to reduce the economic shock of reaching the minimum rate in one step. The escalation method of establishing the ultimate minimum wage rate and ultimate hours of work after which overtime compensation will be paid allows time for industries to accommodate themselves to the impact of an increase in the minimum wage and overtime compensation. The substitute language suggested by the Commissioners also provides that the bill not become effective until 6 months after its enactment. Their amendment also provides other types of adjustment, such as provisions for apprentices, learners, handicapped workers, students, and the making of regulations. relating to various kinds of allowances. The Commissioners are informed that in some industries the wages presently being paid employees are so low that the proposed minimum rate would result in a raise in pay for a large number of workers in such industries. In eating and drinking establishments, for instance, 61 percent of the employees will have increases of varying amounts on and after the effective date of the legislation recommended by the Commissioners. The increase, however, will not be so great as would first appear, inasmuch as the Commissioners' substitute language provides that certain benefits received by the workers may be taken into account in making up the minimum rate, such as, for example, meals furnished to and gratuities received by, workers in hotels and restaurants. The substitute language also provides that the Commissioners may issue regulations controlling the amount of such items going to make up the minimum wage rate. Should it be contended that enactment of H.R. 8423 would force business firms to move out of the District into areas, there is no real basis for the idea. Isolated cases may exist but in the main business remains in the District because of need and demand. The major industry in the District is the service industry, consisting mainly of retail stores, restaurants, hotels, motion picture theaters, gas stations, laundries, beauty shops, building contractors, and parking lots. These businesses exist to fill needs of consumers who are in the District either because they live here, their business. brings them to Washington or they are tourists visiting the Nation's Capital. Since enactment of the 1961 amendments of the Federal wage-hour law, many more employers and employees are now covered by a minimum wage. Therefore, those District firms covered by the Federal law now would no doubt continue to be covered if they operated from Maryland or Virginia and would gain no advantage by moving from the District. The Commissioners have been informed that there was no appreciable decrease in the number of women employed nor was there any apparent exodus from the District of business establishments when the minimum wage law was enacted in 1918; that in 1937 when the District's minimum wage law was reactivated by a decision of the Supreme Court, after it had been inoperative for 14 years, there was no decrease in employment nor in the number of establishments; that, in 1937, 35,000 women and minors in the District were covered by the law and, in 1963, 85,000 are covered, and that in fact the total number of employees in the District has increased steadily. On the basis of the number of employees reported to the District of Columbia Unemployment Compensation Board over the last 10 years, there has been an average annual increase of employees amounting to 11⁄2 percent. Business appears to have increased, even though minimum wage rates promulgated under the current District law have from time to time been revised upward and even though the coverage and rates under the Federal law have increased. Reference to chart entitled "Minimum Wage Laws by State, January 1, 1962," prepared by the Women's Bureau, Department of Labor, which I submit, Mr. Chairman, for the record, shows that many States with minimum wage laws are adjacent to States having no such laws. Particular attention is called to North Carolina, which is noted for its business growth. In this State a minimum wage law was passed in 1959 applying to men, women, and minors. The States on all sides of North Carolina have no such protection. Nevertheless, North Carolina from time to time improved its original legislation with strong amendments. In conclusion, the Commissioners believe that the establishment of a statutory minimum wage rate for all employees in the District of Columbia-men, women, and minors-is needed. They believe that the economic and social health of the community demands the establishment of such a minimum wage rate. Accordingly, they strongly recommend that H.R. 8423, with the Commissioners' amendment, be enacted. Mr. Chairman, with us here this morning, we have Miss Carrie Allgood, Mr. Charles Putnam, from the Minimum Wage Board, and from the Corporation Counsel's Office, Mr. Robert Kneipp. Mr. MULTER. The chart that you referred to will be made a part of the record at this point. Mr. DUNCAN. Thank you. Mr. MULTER. Yes. (The document referred to follows:) MINIMUM-WAGE LAWS, BY, STATE-January 1, 1962 Thirty-three States, District of Columbia, and Puerto Rico have minimum. Rhode Island, Vermont and Washington have both statutory-rate and wage- *In Washington and Wyoming the law applies to persons 18 years of age M-3 GPO: 1962 0-660298 Mr. MULTER. Mr. Springer? Mr. SPRINGER. Mr. Commissioner, what percent of the working force in the District of Columbia are not now covered by such a wage? Mr. DUNCAN. I will ask Miss Allgood if she will answer that for you, sir. It appears we do not have that percentage but we may be able to give something relating to it. Miss ALLGOOD. Our estimate of workers in private employment is 286 in private employment throughout the Government on that type of thing, and covered now under the minimum wage law are 86,000 in private industry. The figures we do not have are the-that I believe is as near as we can answer it, sir. We can't tell you how many are covered by the Fair Labor Standards Act because we have never been able to get that information. We can tell you what is covered by the Commissioners' law. Mr. SPRINGER. There is a Commissioners' report which went to the Honorable John McMillan, chairman of the committee, on November 7, 1963, in which they said: The bill would increase current minimum wage coverage for persons employed in the District from about 85,000 women and minors to about 286,000 men, women, and minors. In other words, you would raise wages for that many people, is that correct? Miss ALLGOOD. We can't answer it that way. We can answer but that many would be covered because, of course, many people who are in private industry earn a great deal more than the minimum, so you can't say it would raise the wage. We are giving you the figures in Mr. SPRINGER. What is the employment figure for the District of Columbia, do you know? Miss ALLGOOD. Well, that figure is the 286,000 figure there that you get. That is our estimate covered Mr. SPRINGER. There are 286,000 men, women, and minors. Miss ALLGOOD. On the basis of the unemployment compensation records, that is the best figure we know. We know that that is a conservative figure. Furthermore, this bill covers casual workers and domestic workers. That figure we don't have in there. Mr. SPRINGER. You don't have casuals and domestics. Miss ALLGOOD. Not in that 286,000 figure. Mr. SPRINGER. But you do believe that is a pretty conservative figure of the number of private work force not working for the Government or the District of Columbia, is that true? Miss ALLGOOD. That is true, and we base that on this fact, that the unemployment compensation figures represent the employers who report to the Unemployment Compensation Board, but there are, of course, as in many cases, many who do not report or some who do not report. Mr. SPRINGER. Now, do you have any estimate of how many of that 286,000 do not now make $1.25? Miss ALLGOOD. Our best reference is the BLS material that was compiled in 1952, and for that I would have to cite you to that study made by the Bureau of Labor Statistics. Mr. SPRINGER. What does BLS say on that? 28-199 0-64--2 |