The greatest difficulty wouldn't be with the mechanics, but would be with the very broad terms of the proposed exemption, which would restrict the exemption provision to drivers who perform a major portion of a workweek in over-the-road service. That is a very indefinite term and certainly we never could be sure what the dividing line would be. It is left to the Secretary of Labor to differentiate between what is over the road and what is not. Now, it could be so defined by the Secretary as to eliminate the exemption entirely, but regardless of where the line would be drawn by him, whether 25 miles or 100 miles or what not, there would be in practically every carrier company in this country some drivers who would be exempt and some drivers who would not, which would create a situation of the utmost confusion and, finally, would increase the drivers' costs of our carriers to the point of the highest pay. That as a practical matter always follows. In the next place, there would be the utmost amount of confusion. and expense in accounting, because when you have in one company drivers who are exempt and drivers who are not exempt; depending on whether they spend the major portion of their time in over-the-road service, they would be exempt one week and not in another week, and in most cases that would follow. So every carrier would be put to the burden of examining in detail the trip reports and the road reports of every driver for every week for every year to find out at his peril whether he was exempt or whether he was not. In conclusion upon that point, in view of the fact that after all of these years of litigation, after this thing has been authoritatively settled, just let it stay where it is. It is discriminatory against us in favor of our competitors, the railroads, and we hope you will not make it any more restrictive because the motor carriers of this country can't afford it. Senator PEPPER. M. Scott, as I see section 13 (c), it exempts from section 7, the overtime section, any employee employed during the greater part of any workweek as a driver or helper riding a motor vehicle in the performance of over-the-road transport operations as defined by the Secretary of Labor. Mr. SCOTT. Yes, sir. Senator PEPPER. Or it really means it exempts also from section 7 any employee employed on a line of road, trains, by an employer subject to part 1 of the Interstate Commerce Act. Now, it seems to me there that that language would exempt from the overtime provisions of the law, motor-vehicle drivers and helpers and, I suppose, those are the only employees who ride a motor vehicle over the road, and any employee who is engaged in the operation of a train over the road; so that in that case the exemptions would be analogous. The over-the-road operating employees of both motor vehicles and trains would be exempted as to overtime, but the employees of both who are otherwise engaged and employed would be subject to the overtime provisions as well as to the minimum wage provisions of the law, S. 653; isn't that correct? Mr. SCOTT. They would be analogous only to the extent that all operating employees of the railroads are engaged in over-the-road service. Now, this applies to all operating employees, whether engaged in local commutation service or what not, but it doesn't so apply to all drivers of motor carriers. It is only those drivers who operate a majority of their time in over-the-road service as defined by the Secretary. Now, if our exemption as to all drivers of motor carriers engaged in Interstate Commerce were retained, we wouldn't have any objection particularly to that, as compared with the exemption of railroad employees, but that over-the-road business and even the power of the Secretary to define it Senator PEPPER. The exemption is broader, I see. Mr. SCOTT. It applies to all operating employees. Senator PEPPER. I wonder if any of the Staff can tell us why that exemption was made in the case of drivers and helpers of motor vehicles over the road. Will you please look into that and let's see what may have been the reason for the narrow exemption? Is your suggestion, Mr. Scott, that if we were going to enter this field, that all drivers and all helpers riding on a motor vehicle in the performance of over-the-road transport operation as defined by the Secretary of Labor should be covered by the exemption? Mr. SCOTT. Well, I think as it is worded now it is very unfair and too restrictive. However, our main point is that we should have the exemption we now have, but if we are going to limit it to drivers, it should be all drivers who are engaged in interstate commerce, because all drivers engaged in interstate commerce are subject to the Commission's jurisdiction to regulate their hours, and their hours are regulated. I may say in addition, Senator-perhaps you haven't been close to it in recent years but there is a very strict check by the Interstate Commerce Commission on the hours of service of drivers and their helpers. We have to make daily logs and make monthly reports to the Commission as to every driver who exceeds the hours of service. Senator PEPPER. The report of the House committee says, after giving the meaning of what they have done, at the same time the bill would restore the benefits of the act to those employees who act as drivers or helpers for only a small portion of the work week, thus removing from the act the opportunity now presented to employers to evade the overtime requirements. Mr. SCOTT. Sometimes a driver, John Doe, will spend a larger proportion of his time in over-the-road service and next week he will not. That is the kind of confusing situation we hope to avoid. If you are going to exempt drivers and I think you should-you ought to exempt all drivers engaged in interstate commerce. Senator PEPPER. Why should we exempt drivers and operating railroad personnel at all from the overtime provisions? Mr. SCOTT. I think it is because of the very nature and character of transportation service, because it is a fact that you do have to operate 24 hours a day every day of the year, and you never can anticipate emergencies or the closing of traffic or accidents. You never can tell. A man has a road failure. You can't lay out your schedule on a 40-hour week in the United States. You just can't do it. There are too many variations in the distances between terminals and too many other limitations. Senator PEPPER. Are most of these over-the-road drivers and helpers organized at the present time? Mr. SCOTT. Yes, sir; something over 80 percent of them in the United States. We think that is a pretty high degree of organization because of the large number of individual carriers and the fact that we have individual contracts and no Nation-wide or regional bargaining. Senator PEPPER. Are most of them members of the teamsters' union? Mr. SCOTT. No; the Amalgamated who appeared here this morning. Senator PEPPER. Mr. Spradling spoke this morning. Mr. SCOTT. Yes, sir. We have some contracts with the Brotherhood of Railroad Trainmen and there are two or three with other unions, but mainly it is Amalgamated. Senator PEPPER. Very well, Mr. Scott. Mr. SCOTT. The second point has to do with the minimum wage, Section 6, page 11, will establish that at 75 cents per hour. First, let me say that our industry is not a sweat-shop industry. In my written statement, on page 6, I have made a comparison between the annual average wage of our employees and that includes them all, from the highest paid to the lowest paid, the janitors and porters at terminals, et cetera-our average in 1948 was $3,209 as compared to all industry, $2,803, and manufacturing industry of $3,119. As in the case of Mr. Beardsley, I don't know of any instance where a minimum is paid which is lower than the existing minimum. Consequently, we would have no objection, I am sure, throughout the industry, to a reasonable increase in the minimum wage, but we feel that any increase should be a flexible one and that it should be geared to the cost of living, both up and down. The real justification for an increased minimum wage is because of the fact that there has been an increase in the cost of living in recent years. Employees, however, are interested not in the number of dollars and cents they receive in any week or month, so much as they are interested in what that money they do receive will buy, real wages rather than dollar wages. Now, in considering this I think it should be remembered that in comparing the cost of living to the minimum wage, the minimum wage was 25 cents until 1939, the next 6 years to 1945 it was 30 cents, and it has been 40 cents only since 1945. Now, comparing the cost of living to the 30-cent minimum, you would come out with a 53-cent minimum wage at this time. Comparing it with the 40-cent minimum during the period that has been in effect, you would come out with 58 cents per hour minimum. Consequently, we don't argue so much, we don't argue at all against an increase in the minimum wage, but we do say let's have flexibility because that is a matter of great importance to us. As I say, our industry, is in a little financial difficulty because of decreasing revenues and increasing costs and a ceiling on our fares that we can't increase, and if there should come a further recession or a real depression and we were faced with an inflexible 75 cents minimum wage, it would very likely be quite destructive to our industry and, as I say, particularly the smaller members. Now, attached to this statement which has been filed with you are two tables which show from 1939 to the present the fluctuations in 90175-49-36 cost in increases and that sort of thing for class 1 motor carriers of passengers, and I respectfully call your attention to that. Senator PEPPER. Thank you, Mr. Scott. Next we will hear from the CIO Railway Employees, Mrs. Rosalind Shulman. STATEMENT OF ROSALIND SHULMAN, INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, CIO Mrs. SHULMAN. Mr. Chairman, Mr. Green said to tell you he was extremely sorry he could not be present. My name is Rosalind Shulman and I am research director of the Industrial Union of Marine and Shipbuilding Workers of America, CIO, which is a successor by merger to the United Railroad Workers of America, CIO. I do not want to take up the time of the committee with reading this statement that is here. Senator PEPPER. Your statement will be received for the record. (The statement referred to is as follows:) STATEMENT OF THE INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, CIO, SUCCESSOR, BY MERCER, OF THE UNITED RAILROAD WORKERS OF AMERICA, CIO, IN SUPPORT OF S. 653, A BILL TO PROVIDE FOR THE AMENDMENT OF THE FAIR LABOR STANDARDS ACT OF 1938 I. SUMMARY The Industrial Union of Marine and Shipbuilding Workers of America, CIO, which, in 1948, became the successor, by merger, of the United Railroad Workers of America, CIO, is unequivocally in favor of the provisions of Senate bill 653, to provide for the amendment of the Fair Labor Standards Act, and for other purposes. We particularly support the coverage of the nonoperating employees of railroads by the provisions of section 7 of the act. Our national convention has gone on record as favoring the inclusion of nonoperating employees of railroads under the overtime provisions of the Fair Labor Standards Act. We believe that the previous exemption of nonoperating railroad employees from the overtime provisions of the Fair Labor Standards Act was a mistake, and that this mistake was fully recognized and partially rectified by the report and recommendations of the emergency board appointed by the President of the United States in the 1948-49 dispute involving the nonoperating brotherhoods of the American Federation of Labor and the carriers. We believe that the railroads are clearly separated into two separate and distinct types of industrial practice. First is the operation of the railroad as a carrier, and, second, the operation by the railroads of some of the largest industrial plants in the country. The coverage of the nonoperating employees of the railroads by the overtime provisions of the Fair Labor Standards Act would, therefore, simply eliminate an inequality between various industries in this country. II. INTRODUCTION At its thirteenth national convention, the Industrial Union of Marine and Shipbuilding Workers of America, CIO, accepted as a constituent and affiliate, by merger, the United Railroad Workers of America, CIO, which represented and organized nonoperating employees of railroads in this country. This union is presently representing employees of the following railroads: Central Railroad Co. of New Jersey Delaware, Lackawanna & Western Railroad Co. Staten Island Rapid Transit Railroad Co. New York, New Haven & Hartford Railroad Co. Lehigh Valley Railroad Co. Aliquippa & Southern Railroad Co. Atchison, Topeka & Santa Fe Railroad Co. Gulf Coast & Santa Fe Panhandle & Santa Fe Railroad Co. Chicago Union Station Co. Donora & Southern Railroad Co. Louisville & National Railroad Co. Pittsburgh & Lake Erie Railroad Co. Lake Erie & Western Railroad Co. Alameda Belt Line Co. At its fourteenth national convention, recognizing the peculiar needs of nonoperating employees of railroads for the same basic protections as those afforded to other industrial workers, this union passed a resolution calling for the coverage of nonoperating employees of railroads by the overtime provisions of section 7 (a) of the Fair Labor Standards Act of 1938. S. 653 provides for this coverage. Therefore, this union is now appearing in favor, specifically, of this particular provision of S. 653: Section 13 (c) 2, pages 30 and 31. We understand that this particular section will, in effect, mean that only operating employees of railroad carriers will now be exempt from the provisions of section 7 of the act. III. HISTORY OF PREVIOUS EXEMPTION OF NONOPERATING EMPLOYEES FROM THE PROVISIONS OF THE FAIR LABOR STANDARDS ACT When the Seventy-first Congress, first session, was holding joint hearings before the United States Senate Committee on Education and Labor and the House of Representatives Committee on Labor, on bills to provide for the establishment of fair labor standards in employment in and affecting interstate commerce, and for other purposes (otherwise known as the Fair Labor Standards Act of 1938, or the wage-and-hour law), the representatives of the railroad employees, at that time, were called in to discuss the question of the inclusion or exclusion of railroad employees from the provisions of the act. Charles M. Hay, attorney for the Railway Labor Executives Association (representing the railroad brotherhoods, with the exception of the Brotherhood of Railroad Trainmen and the Brotherhood of Maintenance of Way Employees) of the American Federation of Labor, requested that all employees of carriers subject to title I of the Interstate Commerce Act be excluded from the benefits of the Fair Labor Standards Act. Mr. Hay stated in his testimony that the railroads should be exempt from the operations of the act because the representatives of the workers were relying "upon the principle of collective bargaining." These labor organizations were very much afraid that fixing of the minimum wage under the act would mean, in reality, the fixing of a maximum wage. A letter written by George M. Harrison, then the president of the Railroad Clerks, and the chairman of the Railway Labor Executives' Committee, to Mr. Hay, stated: "In submitting the amendment you are authorized to say to the committee that the employees in the railway industry have developed a high state of collective bargaining; wages and hours are generally covered by agreement. And we are of the opinion that in industries where collective bargaining is universally recognized that the Government should not undertake to fix wages; that while we favor a reduction in hours the peculiar characteristics of our industry will not permit of a universal application of a maximum workweek of 40 hours. We think there should be special legislation for industry on the limitation of hours when and if we undertake to reduce the standard of a day's work." Even while requesting the exemption for railroad workers, Mr. Hay admitted that 20 percent of the employees of railroads were receiving less than the 40-centsper-hour minimum envisaged under the act. It is amusing to see that the chairman of the committee tried in innumerable ways at the hearing to get Mr. Hay to understand that the application of the Fair Labor Standards Act to the railroad workers would in no way prejudice the |