The social discontent that has erupted as a result of the high cost of living stems from the fact that the present wage scale is geared to a standard that is outmoded, and at complete variance with present-day needs. The wage earner is constantly faced with this fact. Without a minimum wage bill, there can be no hope toward stabilizing his economy. In addition, he must be subjected to the infectious evil of substandard hiring practices that tend to capitalize on social discontent. Where there is no law, or no change in an old law, the wage earner has no legal reason to expect to earn more. By the same token an employer who knows this, has no legal reason to pay any more than the existing law requires. Obviously, the door is open to variations and frustrations too numerous to mention where both employer and employee are concerned. Operating within the District, we have certain agencies that have nothing to offer a wage earner except an opportunity to render services that add up to many man-hours of labor, but offer very little in compensation for time expended. These agencies are engaged in what would seem to be speculative or questionable business ventures that do nothing but exploit the unsuspecting. As an example of what I feel is unfair utilization of labor, I refer to my letter of May 18 to Hon. Wayne Morse. Attached to that letter were two advertisements clipped from the Evening Star newspaper, indicating the need for personnel to "telephone for dollars." Upon my personal application to one of the ads (near the end of 1962), for part-time employment, I learned that the telephoning was part of a sales promotion project to stimulate the circulation of the Evening Star newspaper. While the ad stated that it was possible to earn a certain amount of money, the fact is that how much I earned depended on how many subscriptions I could solicit within an hour. This was further dependent upon whether a subscriber continued his subscription for at least a 6-week period. There was no salary or wage agreement-only a commission on each subscription would be earned. The first week's commissions were to be held in escrow to allow for the likelihood that a subscriber might cancel all or part of his subscription. While there may be no reason why one should not work on a commission only basis, I feel that anyone who is hired to do a job, should be paid a stipulated amount for time spent on that job, especially when the time is satisfactorily utilized to perform that job. Another venture, perhaps similar but even more unpalatable than the first, was an offer to me (in the fall of 1962) to make telephone sales from my home. This too, was in reply to a newspaper advertisement. The agent was located in a second floor office, above a store at 9th and D Streets NW. His first require ment was that I must have an unlimited telephone. My instructions and a sales talk were mailed to me. The prospective customers were in my telephone directory on certain pages from which I was told to work. The items to be sold were a dictionary, too monstrous and voluminous for average home use, and a Bible. The dictionary was shown to me when I was interviewed, but a copy of the Bible was not available. Further instructions were to contact the agent "only" after at least five people agreed to have a salesman call at their homes. The commission in this instance was to be paid after the sale and delivery of the merchandise. When I asked myself, "How would I know and when would I know a sale had been completed?" I had to admit that I couldn't be sure at all. Also, I had to admit that the minute I started working from my home, I might well be paying for the privilege; particularly, since the agent had relieved himself of any overhead expenses where I was concerned. To me, it seems understandable that such time-consuming, invasive operations as these, can do nothing but breed contempt for the job itself. In both the above illustrations, compensation is controlled by a third or fourth transaction requiring more time and effort that could easily result in a total waste of both. I believe that passage of the proposed minimum wage bill would greatly diminish or help to discourage this type of operation. As a parent, I see S. 860 as protection against an unnecessary evil. Such protection would discourage the misuse and abuse of the intellect of all parties concerned. Such unethical business practices are especially damaging to the intelligence of our youth. They are a discredit to the intelligence of those who conceive of such ideas, and as insult to the intelligence of those whose privacy is invaded through the telephone. Because of the invasive nature of this practice, many unsuspecting citizens are caught unaware and beguiled of their basic right to purchase what, where, and when they please. The proposed $1.25 minimum wage would encourage honest effort on the part of individuals who would work but who might prefer a handout that could easily be the equivalent of the inadequate wage that might be imposed upon them. The bill would definitely increase the ability of the present taxpayer to meet many basic needs. It would also serve as a guide to our future taxpaying citizens, who must learn to measure their social and economic progress by just weights and balances, and not by a yardstick that may be ever so straight but, unless it is extendable, can never measure more than just a yard. Thank you for this time in the interest of the public. HOSPITAL COUNCIL OF THE NATIONAL CAPITAL AREA, INC., Washington, D.C., October 8, 1963. Hon. WAYNE MORSE, Chairman, Subcommittee on Public Health, Education, Welfare and Safety of the District of Columbia Committee, Old Senate Office Building, Washington, D.C. DEAR SENATOR MORSE: In accordance with the instructions for filing additional statements on S. 860 for the record, I have attached herewith the statement of the Hospital Council for the record. As an operational procedure which requires the hospital industry to earn in advance the necessary income to meet such expenditures, I would like to endorse the compromise position of a two step or stage wage adjustment as set forth by Commissioner Walter N. Tobriner. This also will permit a greater time period for Congress to act to permit the District Government to purchase at cost the hospitalization services it requires for the indigent population. Sincerely yours, WILLIAM M. BUCHER, Executive Director. STATEMENT OF WILLIAM M. BUCHER, EXECUTIVE DIRECTOR OF THE HOSPITAL Its purpose is to provide a vehicle whereby these area hospitals can most effectively work together in providing the highest quality of service at the most economical cost. Therefore, as a representative of the hospital industry, we are deeply concerned with the economic health of the community as well as that of our hospital work force. We employ some 15,000 full- and part-time individuals who fill positions including some 123 professional and nonprofesional job classifications. In testifying in support of an amendment to the existing minimum wage legislation of the District of Columbia, we feel it essential that the committee be fully aware of the problems and pressures which have in the past and will continue in the future to affect hospital industry wages. A brief history of hospital wages reveals that in 1946, the average annual wage of hospitals in the Nation lagged some 97 percent behind that of industry. Hospitals prior to this period were historically notorious for poor wages and working conditions. In general, the reasons for this would include little emphasis on quality of service and personnel since the hospital was oriented more to custodial care rather than scientific cure. Also, hospitals depended rather heavily upon charitable contributions to finance services since the prepayment insurance industry had not yet become popular as a payment vehicle. Prior to World War II, little opportunity existed in general industry for the female worker, thus there existed little competition with the hospital for her services. With the advent of the explosive manpower needs of American industry in the years following World War II, hospitals were caught in an extremely poor competitive position. They had to offer more than free room and board plus spending money to attract and retain their work force. At the same time the financial support of hospitals commenced through prepayment mechanisms to expand throughout the general public. Working hours were reduced from approximately 48 hours per week in 1946 to 40 hours in 1958. Broader and more realistic annual and sick leave benefits were provided. Wages alone amounted to the greatest single factor of the overall cost increase. Nationally, for example, wages increased from $4.98 in 1946 per patient-day to $21.54 per patient-day in 1961, or some 333 percent, while nonwage costs increased from $4.41 to $13.44 for the same period, an increase of 204 percent. By 1981, however, hospital average wage differential with that of industry still showed a gap of some 31 percent. In terms of straight averages, hospital wages increased 173 percent while the industrial average increased 81 percent. The technological and other services of today's hospital require and will continue to require an increased level of work skills and education. This will require further wage and salary adjustments in addition to those necessary to meet the increasing industrial wage average. Hospital services and costs are often criticized because of the increases during recent years. Comparisons are made with increases in costs of products of industry and also with hotel services. There is expressed the erroneous assump tion that greater productivity and mechanization common to industry could and should be applied to reduce hospital service costs. A look at hospital services and the hospital's purpose within the community is essential at this point. Hospitals render individualized care to sick people 24 hours each and every day. There exists no opportunity to shut down certain operations when utilization falls off. The highly specialized nature of these services precludes hiring during peak periods and laying off employees during low periods as is common to industry. Further, standby services and equipment which are costly to staff with the required three shifts of employees may be used only occasionally yet must be available in case of need. Diagnostic machinery and the continuous advances in medical techniques have in a number of instances reduced treatment time but any savings incurred as a result of this have been absorbed by the requirement of more personnel in number and more highly skilled technicians with attendant higher wages. Therefore, automation, which industry has utilized to increase productivity and absorb a good part of increased wage costs, just cannot be applied to hospital services. With between 60 and 65 percent of the hospitals' costs identified as personnel costs any comparison to industrial cost fluctuations has little justification. Because of this factor alone, the relationship between hospital wages and the consumers' price index causes an adversity of impression. In support of increasing both the minimum wage and the employee coverage as called for within S. 860, we believe that this legislation will serve to bring hospital wages into a more realistic relationship to industry. We also believe that this will be of considerable value to resolve the competitive advantage the industrial and indeed the Federal market has over the hospital employment market. Without question it will help temper certain costly problems relating to employee turnover and dissatisfaction because of inability to take home a minimum standard living wage, We believe, however, that Congress has a further responsibility than this piece of legislation as it relates to hospitals, and we ask your personal vigorous efforts to resolve the problem of totally unrealistic District of Columbia government reimbursement for indigent patient services. Presently our sick private patients are forced to become "captive philanthropists" because of increasingly heavy losses incurred by charity patients and the less-than-cost reimbursement by the District government for certified eligible indigent patients. Patient-day losses incurred under this program amount to upward of $10 per patient-day and up to 50 percent of the costs incurred in rendering clinic services to eligible patients. I will be pleased to furnish your committee additional detail on the District of Columbia medical charities program for the purchase of hospital care for the indigent population. The board of trustees of the hospital council as prominent representatives of our entire metropolitan area have acted to endorse this proposed legislation. We need the help of Congress within the District of Columbia budget in order to be enabled to finance such wage adjustments. I appreciate this opportunity to appear in support of this legislation. CASHTOWN, PA., October 4, 1963. Hon. WAYNE MORSE, Senate District Committee, Senate Office Building, Washington, D.C. SENATOR MORSE: This letter will express my interest in the minimum wage bill presently under consideration by your committee. I ask that this letter be given to the committee members for their consideration. Each reference in the letter is documented adequately in the record. One member of the District of Columbia Minimum Wage Board informed me that that body "always held the employer guilty until proven innocent." Shortly after that, I was ordered before the district attorney, at which time the charges against my firm and myself were dropped because there was no basis for them. It is my understanding that your interest in this bill extends to the control which employees of the Minimum Wage Board might have over employers in the District. Whether or not Minimum Wage or Wage and Hour for the U.S. Department of Labor looks into an allegation by an employee, the assumption always appears to be that the "employer is guilty until proven innocent." I have personally borne the burden of more than 3 years of effort to clear my name, which began with a false charge against me by the Minimum Wage Board, and which the Minimum Wage Board referred to the Department of Labor since my firm had Federal contracts in excess of $10,000. After a loss of approximately $200,000, and after seizure of moneys due my firm and myself at a crucial moment (seizure being made by the Labor Department), it has been admitted, that I have been falsely charged. (The attached letter from Senator Pell, uses the term "perjury.") In addition, evidence proving my innocence has disappeared regularly from the files, including the district court files after it was sent there for review. I have spoken to numerous businessmen having similar experiences, and we all agree that the integrity of the staff is such that any bill extending their authority ought also to have a provision to safeguard an innocent businessman from the aggressive Robin Hood instincts of a member of the staff of the Minimum Wage Board, or any agency acting under its authority. I do not feel that as many businessmen would object to the minimum wage figure if they knew that there would be some possibility of defending themselves in a court of law. For this reason, I think the bill ought to contain a provision that any finding be reviewable in the court of appeals and that where an employer has been found to have been charged falsely with violation of the minimum wage law, that the employee making the charge not be given the services of the district attorney (as having been a Government witness) in defending himself against punitive action by the employer. In my case, investigators have made obviously false statements concerning hours worked, wages paid, and when my attorney refuted these false statements, the written proof disappeared from the administrative hearing. Payroll books, time cards, motion card in the district court affidavits and the like have disappeared at various times, and only at times that their presence would clear my firm and myself. I am prevented, and any businessman is prevented from court action against the employee who has been untruthful, or the staff member who uses his story regardless of the facts, to make charges against a businessman. In such case the district attorney merely refers to the Barr-Mateo case and states that the employee was a witness for the Government, and he is permitted to go free, without as much as a statement that he was in error. At this very moment an affidavit has been submitted by a local parish priest, that a former employee of mine had made a contrary statement to him than made by him under oath at the administrative hearing in my case. Though everyone knows the statement is false, there is nothing than can be done to clear my name of its effect. And though I have proven that employees were working elsewhere (personnel records) when they swore they were working for me, they are not even required by law to change their story, because they were witnesses for the Government. Remove this unfair immunity and you will go a long way toward reducing the need for any minimum wage enforcement staff. My case in the U.S. district court, which began with a complaint to the District of Columbia Minimum Wage Board, latterly found to be without foundation, has cost me my business, $200,000 loss, and my reputation. And though even your fellow Senate Labor Committee member admits that perjury was used against my firm, I do not have the right to ask that the record be corrected. But, clearly, under law, I am entitled to it. So are the other business entities who, after all, are at least as entitled to belief as the complaining employee, notwithstanding the Board member who has held otherwise. Sincerely, DAVID A. WALSH. I I О |