In autumn 1959, $6,147 was needed for a District of Columbia worker's family-wife and two children-to enjoy a "modest but adequate" level of American living. In hourly terms, this is over $3 an hour. That figure is $6,426.22 in 1963. This would provide only a very modest standard of living.

If over $3 an hour can provide only such a modest standard of living, it takes little imagination to realize how much of a strain it is for a family to exist on less than $1.25 an hour. For a family of two, the same study would require $3,431 annually or $65.96 weeklyapproximately $1.70 an hour.

The District Minimum Wage Board in accordance with the current law has prepared a guide to what constitutes a necessary cost of living for a woman worker in the District of Columbia. This guide is based on the needs of a self-supporting woman between 25 and 35 years of age, living in a family group of three and sharing household costs. As of September 1959, the guide for wage conference groups gave the cost as $45.46 per week. This budget was adjusted to May 1963, by the AFL-CIO research department revealing a present cost of $50.27. (See table submitted for the record.) This study shows that even a single woman, sharing living costs must earn $1.25 to provide what the budget calls "modest but adequate."

No one should have to belabor the point that $1.25 an hour is too little to maintain a decent American standard of living.

UNCOVERED WORKERS LAG BEHIND

There is no question that denial of minimum wage and hours protection has meant that a large proportion of the uncovered workers are paid pitifully low wages and are required to work excessive hours without overtime pay.

Earnings in selected industries in the District of Columbia, summer 1962, prepared by the Bureau of Labor Statistics gives us some insight into current wages and hours of workers not covered by a minimum wage law. The report covered 87,000 nonsupervisory workers in retail stores, restaurants, real estate operations, and in selected service industries such as hotels, building services, laundries, automobile repair and services, motion picture theaters, and hospitals.

As most of you are throughly familiar with this report, I will not dwell on these statistics very long. But I do want to point out a few examples of the deplorable situation that exists among those workers not covered by minimum wage law. Examples: 65 percent in motion picture theaters receive straight time hourly earning less than $1.25 per hour; 40 percent in hospitals; 42 percent in automobile repair, automobile services, and garages; 57 percent in services to dwellings and other buildings; 58 percent in laundries, etc.; 60 percent in hotels, motels, and so forth; 50 percent in real estate; 29 percent in retail trade; and 67 percent in eating and drinking places-more than half of these employees were reported as generally earning tips.

These workers have no bargaining power. They must accept whatever wage is provided to them, no matter how low. Alternate job opportunities at decent wages are usually not known or available to them.

In the absence of a legal minimum requirement, wages for these unprotected workers at the bottom end of the city's wage distribution simply remain stationary or creep up belatedly over the years at only a fraction of the pace of general wage advances.

The widening gap between workers paid substandard wages and workers as a whole is not simply a matter of differences between covered and uncovered industries. Uncovered industries can and have raised wages steadily. But within these industries the lowest wage groups constantly fail to move up at all noticeably.

(The table referred to follows:)

Cost of living budget for a woman worker in the District of Columbia, September 1959, adjusted to May 1963 1

1

NOTE.-The major commodity and service items have been adjusted by the appropriate indexes of the Consumer Price Index for Washington, D.C. with the following exceptions:

1. Health: Computed on basis of current GHA dues of $1.15 per month plus assumed proportionate increase in other medical expenses.

2. Transportation: Based on current cost of tokens, D.C. Transit.

3. Insurance: No adjustment made.

4. Emergency fund: Increased by percentage increase in all other commodity and service items in budget.

COST OF $1.25 MINIMUM

Mr. MCGUIGAN. The probable impact on the weekly wage bill that would stem from an increase to $1.25 in earnings based on the Bureau of Labor Statistics study of earnings in selected industries (District of Columbia 1962) are hereby summarized. The wage bill for eating and drinking places would increase 25 percent; automobile repair, and so forth, 6 percent; motion picture theaters 15 percent; hospitals 4 percent; real estate 11 percent; hotels, and so forth 11 percent; laundries, and so forth, 6 percent; services to dwellings, and so forth, 4 percent; smallest increase in retailing 3 percent. Aside from eating and drinking places, the $1.25 minimum would have a minimal impact. That is to say that virtually all business establishments could well afford to pay a more adequate wage.

The data in this survey were collected in terms of establishmentsthat is, for each separate selling unit. This may not necessarily in

dicate the true ability to pay on the part of the concern, since profitability for multiple unit enterprises stems from all of its branches, not only one establishment. Thus, for example, there are any number of eating and drinking chains in this community which can afford to increase their wage leevls. As a consequence, the data in the Department of Labor's survey understate the capacity of such "chain" enterprises to pay a higher wage.

WELFARE COSTS AND SUBSTANDARD WAGES

We in the District of Columbia have long been faced with increasing budgets to meet the cost of public welfare. Too many of our citizens do not earn enough to be effective economic citizens; I mean that wages are so low for many thousands that they contribute little through the tax structure-and even may be receiving assistance from community agencies to help maintain a bare standard of living.

According to the annual report of the District of Columbia Department of Public Welfare, fiscal year 1962, 21.4 percent of the paternal factors and 40.8 percent of the maternal factors contributing to dependency, neglect, or delinquency of child at the time of application for child welfare services were directly attributed to low income. How much these budgets could be cut if only the welfare recipients received a decent wage-no one knows. No one escapes the burden of low wages. All of us pay an increasingly heavy burden in welfare costs; in health services to the indigent; in poor housing. As long as the wage earner is exploited by employers unwilling to pay a decent wage, we as taxpayers must in effect subsidize these employers by paying part of the added welfare costs.

BENEFICIAL FOR COMMUNITY

The bill would extend coverage to approximately 286,000 men, women, and minors in the District of Columbia not now covered by the FLSA. The needed humanitarian benefits flowing from the boost in buying power for the most ill-paid workers well justifies the minimum wage. But the minimum wage is valuable also for the economic contribution it will make to the health of our entire community's economy.

An increase in wages for the lowest paid workers would contribute substantially to a rising level of consumer purchasing power. For the lowest paid workers, increased earnings are immediately spent for necessities. Thus, the increased spending would have a multiplier effect throughout the area and in all probability would create more employment opportunities in our community.

The new minimum wage would stimulate less efficient industries and employers into a reexamination of their operations. In the absence of wage pressures most of them would ordinarily drift along on an outmoded or unrealistic basis, often satisfied to be subsidized by their employees. It would spur widespread improvements in management methods, products and the allocation of resources. Many a complacent firm has been jolted into changes which paved the way for a more prosperous and expanded operation.

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 posals involving any amendments.

pro

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.