NOTE: 1/ Includes industries where the product has remained fairly constant during the war period, such as, Boots and Shoes, Cement, Cotton Goods, Lumber and Timber Products, Printing and Publishing and. Tobacco Products. Compiled from U. S. Department of Labor release. Exhibit XI. Southern pine cost, realization and spread: Groups I, II, III, and total mills for 6 years 1941-46 NOTE.-Group I mills are chiefly large mills reporting full break-down of cost; group II mills are mostly small mills reporting on condensed cost form; group III are concentration plants reporting on condensed -cost form. Source: Southern Pine Cost, Southern Pine Association. Exhibit XII [From Newsweek, January 13, 1947] BUSINESS TIDES-THE HIGH COST OF JUDICIAL LEGISLATION (By Henry Hazlitt) The decision of the Supreme Court in the Mount Clemens Pottery case on June 10 has brought on union claims for alleged unpaid wages that could completely ruin great American industries. We can find the simplest way to extricate ourselves from the "portal-to-portal" mess by retracing the legislative and judicial blunders that got us into it. The Fair Labor Standards Act of 1938 prescribes a minimum hourly wage of 40 cents. But it goes on to provide that an employer must pay "not less than one and one-half times the regular rate" for all hours above 40 a week. It is the latter provision that extends the control of the Federal Government over the wages, high or low, of practically everybody. It benefits most the highest paid and penalizes most the employer who pays most. If he pays his workers only 40 cents an hour, he is penalized only 20 cents more for overtime, but if he pays them $1.50 an hour- he is penalized 75 cents more for overtime. But Congress at least stopped with this blunder. It did not go on to redefine what constitutes an hour's work. This meant that it accepted the established customs of industry in this respect. This was the sensible view taken by the special master appointed in the Mount Clemens Pottery case, by the circuit court of appeals in overruling the district court, and by the Supreme Court minority. But it was not the view of the Supreme Court majority. Mr. Justice Murphy argued that walking time to the place of work within the employer's premises must be considered part of the working hours, because "without such walking on the part of the employees, the productive aims of the employer could not have been achieved." On this logic, there is no reason why he could not have gone on to include in working hours the time spent by the worker in traveling to work from his home, or even the time spent in getting up, dressing, or reasonable sleep for without such activities on the part of the employees, the productive aims of the employer could not have been achieved either. Justice Murphy even boldly declared. that "the statutory workweek includes all time during which an employee is necessarily required to be on the employer's premises." Yet there is no such definition whatever of the work week in the statute. It is arbitrarily imposed by the Supreme Court. This is a glaring case of judicial legislation. If the Supreme Court is to be free to rewrite legislation in this way, under the guise of telling Congress what it really meant to do, then it becomes a third House of Congress whose members cannot be reached by the voters and whose laws cannot be vetoed. This is intolerable. There is a simple way in which Congress can rebuke such judicial usurpation as it must be rebuked, and at the same time prevent the immeasureable harm that the Mount Clemens Pottery decision could work. It should pass a joint resolution reading somewhat as follows: "In using the word 'workweek' in the Fair Labor Standards Act Congress did not mean to redefine this common term or to set aside long-established contracts or customs which had absorbed in the rate of pay of the respective jobs recognition of whatever preliminary activities might be required for that particular job. 'Workweek' is a simple term used by Congress in accordance with the common understanding of it. For the courts to include in it items that have been customarily and generally absorbed in the rate of pay but excluded from measured working time is not justified in the absence of affirmative legislative action." These are not my words. They are taken straight out of the dissenting opinion of the Supreme Court minority in the Mount Clemens Pottery case. This joint resolution could be supplemented, under ample precedents, by an amendment to the Fair Labor Standards Act closing the Federal Courts to all suits of the type now being filed by unions. Congress need not stand by helpless when a court presumes to tell it that its own law means what it does not mean. If it wants to go farther, and undo some of the harm it has itself done, Congress should reduce the legal minimum overtime wage rate to 50 percent above the legal minimum regular rate. This would confine its intervention to the wages of marginal workers. It should stop trying to regulate everybody's. EXHIBIT B PROPOSED CHANGES IN THE WAGE-HOUR LAW (A statement of the position of the southern pine industry on proposed amendments to the Fair Labor Standards Act of 1938, presented to the Wage and Hour Subcommittee of the House Education and Labor Committee, November 12, 1947, submitted by R. M. Eagle, Carmona, Tex., for the Southern Pine Industry Committee) SOUTHERN PINE INDUSTRY COMMITTEE The Southern Pine Industry Committee was originally established at a mass meeting of southern pine lumber manufacturers held in New Orleans on June 4, 1937, primarily for the purpose of dealing with wage-and-hour problems. After the passage of the Fair Labor Standards Act in 1938, the committee supplied information to the industry relating to that law, in order to assist southern pine producers to understand and observe its requirements. When the Nation began to prepare for war, the industry organized the Southern Pine Emergency Defense Committee (in 1940), and after the formal entry of this country into conflict, that committee was succeeded by the Southern Pine War Committee. The sole function of the committee was to aid the Government in every conceivable way in prosecuting the war, and the committee placed its complete facilities at the disposition of appropriate agencies of the Government. Shortly after the termination of hostilities, the Southern Pine War Committee was merged with and became known as the Southern Pine Industry Committee. Its purpose now is to serve as the voice of the united industry and to represent the industry wherever necessary. Since its rebirth in January 1946, the committee's activities have pertained principally to relations with the legislative and executive branches of the Federal Government. In the establishment and execution of its policies, the committee solicits the views of the industry through industry-wide meetings and by mail. The present membership of the committee appears on the next page. C. C. Sheppard, Chairman Tom DeWeese, Vice Chairman H. C. Berckes, Secretary L. W. Morgan, Alabama Mill Co., Selma, Ala. Scott Shepherd, Shepherd Lumber Corp., Montgomery, Ala. J. B. Swift, Swift-Hunter Lumber Co., Atmore, Ala. C. L. Willis, Gulf Lumber Co., Mobile Ala. Harold Cabe, Gurdon Lumber Co., Gurdon, Ark. Paul Leird, Leird Lumber Co., Little Rock, Ark. W. R. Warner, Southern Lumber Co., Warren, Ark. J. E. Crosby, Putnam Lumber & Export Co., Jacksonville, Fla. M. J. Foley, Brooks-Scanlon, Inc., Foley, Fla. E. W. Thompson, Jr., E. W. Thompson Lumber Co., St. Cloud, Fla. S. F. Gutherie, Greensboro Lumber Co., Greensboro, Ga. J. M. McElrath, Jeffreys-McElrath Manufacturing Co., Macon, Ga. W. H. Turner, Chattahoochee Valley Lumber Co., LaGrange, Ga. S. W. Bowen, Woodard-Walker-Bowen Co., Shreveport, La. E. O. Lightsey, Lightsey Bros., Miley, S. C. W. B. McNeal, Argent Lumber Company, Hardeeville, S. C. W. I. Dooly, Conasauga River Lumber Co., Conasauga, Tenn. E. P. Vaughn, Vestal Lumber & Manufacturing Co., Knoxville, Tenn. J. B. Edens, Corrigan Lumber Co., Corrigan, Tex. Lacy Hunt, Lacy H. Hunt Lumber Co., Nacogdoches, Tex. E. L. Kurth, Jr., Angelina County Lumber Co., Keltys, Tex. PROPOSED CHANGES IN THE WAGE-HOUR LAW The Southern Pine Industry Committee represents southern pine manufacturers in 12 lumber-producing States from Virginia to Florida, from Florida to Texas. It is integrated with the southern hardwood industry and employs, including fulland part time, approximately 250,000 workers at a total annual pay roll of approximately $300,000,000. It is predominantly a small-mill industry, the operations numbering between 12,000 and 17,000. The United States Forest Service of the Department of Agriculture in a pamphlet, Cost of Producing Southern Pine Lumber by Small Mills, in 1939, had this to say about these small mills: "About one-half of the total output of southern pine lumber is produced by small mills * * * Most of these cut less than 10,000 board feet a day and less than 2,000,000 feet a year. The typical small mill is a portable mill, employing 6 to 10 men in the mill and about as many in the woods. It works more or less intermittently, seldom more than 200 days a year. These mills cut lumber either on their own account or under contract for concentration yards or other operators who take the rough lumber, finish it, and put it on the market. "Few of the small-mill operators own timberland. Many of them buy stumpage from farmers or other landowners, but in many instances the stumpage is purchased by the concentration-yard operators who employ the small-mill men to cut it for them. The timber is mostly second growth, some of it as young as 25 years, but more commonly 35 to 70 years old. Some mills are working in remnants of old stands. Most of the timber tracts operated are small, and consequently the mills move frequently. Some of them move as often as once in 10 days or 2 weeks, and cut as little as 50,000 feet at a 'set.' Others stay in one place for several months; a few are semipermanent and remain several years at the same location. "The operations vary widely in efficiency, owing to differences in equipment, in character of labor, in logging conditions and quality of timber, and in ability of the operators. Some have good, up-to-date mills and employ efficient methods of operation; many of the mills are poorly maintained, the power plants inadequate, and the logging equipment poorly suited for the job. There is a wide range in skill and industriousness of the labor, as well as in the executive and business ability of the operators. Although some operators keep careful and accurate records, accounting methods at most mills are crude. Many keep no written records at all, and have only a vague idea of their costs and earnings. "Many of the small-mill owners are farmers and most of the woods and mill workers do farm work during part of the year. It is common practice for the operator himself to work in the woods or in the mill, as foreman, truck driver, or sawyer. Earnings both of the employees and of the operators are usually low, but constitute a needed cash income which many of them could not get from any other source." (For fuller description of the industry, see p. 5 of attachment I.) At the June-July hearings of the Wage and Hour Subcommittee of the House Education and Labor Committee, the Southern Pine Industry Committee submitted a general statement on July 7 of the position of the southern lumber industry regarding the Fair Labor Standards Act of 1938. Our contentions then were that (1) the minimum wage should not be disturbed; (2) the overtime provisions should be removed; and, (3) those employees engaged in logging should be exempted from the Fair Labor Standards Act. Now that the Fair Labor Standards Act has been thrown open for constructive suggestions, the Southern Pine Industry Committee wishes to submit its previous statement as an appendage to this brief. (See attachment I.) Our industry feels that there are a series of amendments necessary now to make the Fair Labor Standards Act come closer to being a workable, enforcible piece of Federal legislation rather than a vehicle of ever-extending judicial and administrative "government by men." Specifically, we recommend that (1) the overtime provisions be stricken out; and, in the alternative (a) "Belo 1 or Halliburton plans" be legislatively recognized; 1 Belo plan-is a "guaranteed wage" plan having four essentials: (1) A fixed basic or regular rate of pay; (2) payment for overtime at a rate not less than time and one-half such regular rate; (3) guarantee that the aggregate pay each week for regular and overtime work will not fall below a definite, fixed sum; (4) the contract is an individual agreement with each employee. This Belo plan was upheld in Walling v. A. H. Belo Corp., 316 U. S. 624 (1942). |