Point, N. C.—have been dismal failures in a sales way due, we are told, to reaction against high prices. Our sales prices, like those of all furniture manufacturers, are based on a certain volume of business. We are not reaching this volume by quite some margin, which means we are, at present, operating in the red.

"While we are well above the present minimum of 40 cents, we are not up to the proposed 75-cent minimum, and any basic change in these rates will most certainly have to be passed on to the public, and we do not believe the public will accept any further advance in prices. This proposed change would compel us to put at least a 5-percent raise on our product prices immediately, with another raise in the near future, to cover the advances we would most surely get from our suppliers of raw materials.

"We are certain there is to be a leveling-off period, in which labor and prices will both have to be adjusted downward and we are inclined to believe that this period has already set in."

From a manufacturer of sporting goods.—-"Our prices would most definitely have to be raised a sufficient percent to cover the [minimum wage] increase. It is a waste of time to continue to talk of stopping inflation and at the same time continue to raise wages."

From the president of a company operating vegetable canning plants.—“The two main objections to the new law are (1) the 75-cent minimum wage, (2) the amendment to repeal the seasonal exemption. If we are not allowed to have seasonal exemptions like the law is today, it will cut our production 50 percent, or increase the price of our commodities 72 cents a dozen, basis No. 2's. A 75cent minimum would increase our cost 72 cents a dozen, basis No. 2's.

"If we operate on a full scale like we have in the past, there is 15 cents a dozen increase in cost due to the change in the Federal wage-and-hour law. Will the consumer be willing to pay for this increase?

"We do not receive the efficiency out of our class of labor that other canners do in other parts of the United States. We do not secure the number of cases per ton out of the various commodities that we pack that other canners secure in other sections. We have to operate on a cheaper wage scale in the Ozark territory in order to be competitive with other sections. It does not cost as much to live in the Ozark territory as it costs in New York, California, Oregon, and other parts. I cannot see how Congress could set a minimum wage for the entire United States without doing harm to certain sections.

"With a compromise of 60 cents, it would be all the Ozark canners cou'd stand without increasing the cost of their merchandise or without decreasing the prices paid to the farmers for raw material."

From a manufacturer of lumber and flooring.-"We are paying approximately 75 cents an hour now but many mills are paying considerably less, particularly east of the Mississippi River where they are only paying 45 cents to 55 cents on an average. This would unquestionably result in many of these mills shutting down which would be a bad thing for their employees, we should think. With business as it is now and prices as weak as they are, we believe it would result in the suspension of operations of a great many mills, at least temporarily."

From a manufacturer of dairy products.-"A minimum of 75 cents would increase the cost of our products to the customer approximately 3 percent. While our minimum is well above 40 cents, raising it to 75 cents would increase the wage scale throughout the plant and would lead toward more and more inflation. "The big way that it would affect us is that in buying milk and cream from the farmer, the added cost would have to be taken into account in arriving at the prices paid the farmer and of course their price would be lower compared to the markets, than it is at the present time. We buy milk and cream from several thousand farmers and if each of them had to take a cent or two less for the butterfat and milk they produced, it would mean a big reduction to the income of farmers."

From a manufacturer of petroleum products.-"Our minimum wage is already above this figure (75 cents). However, I believe such a mini.um would be definitely inflationary in character and I believe the higher the minimum wage, the more detrimental is the effect we get from another phase of Federal Government regulation of business.

"You can't legislate a profit into business and it follows that you can't regulate successiully by decree the expenses that go into the cost of products. It's being done, I admit, but I think it has no place in free enterprise. The more of that thing we get, the more socialistic we become."

From a manufacturer of yellow pine and hardwood lumber.-"We are no paying a minimum of 60 cents an hour and 50 percent of our products are selling for less than cost when they will sell at any price. When operating at full capacity, a 15-cents-an-hour increase would add about $15,000 a month to our pay-roll cost. For the past 3 months we have been going in the red paying a 60-cent minimum. We are striving to give our men 50 hours a week. Their weekly earnings now exceed 40 hours at 75 cents.

"Under a 75-cent minimum, we would have to raise wages straight across the board. There have always been certain differentials of pay between different jobs. We would have to lay off about 150 men, white and Negro. Our prices would have to go up about 20 percent and we will lose more business to our competitors, western woods and wood substitutes. We already have a buying recession and lowered prices."

From a manufacturer of fertilizers.—“In our small plant, we employ 2 white men and about 20 Negroes. Most of our Negro labor is of a very low class; they shovel materials and push fertilizer carts. We are paying this lowest class labor 60 cents an hour and most of them get some overtime each week. We feel that if a 75-cent minimum wage is enacted, it will have the following effects on our business:

"1. We will work absolutely no overtime. We will have to discharge at least five of our present employees.

"2. We will be forced to increase the price of our products to the consumer by approximately 10 percent.

"3. The entire wage structure of our plant would be forced higher by about 25 percent, which would be 300 percent above prewar level.

"4. Should a serious buying recession occur, we would be forced to part-time operation of our plant or to discontinuance entirely.

"We feel that it will be a lot better for our national economy to have enployees working at 40, 50, or 60 cents an hour when business recession comes than to have them not working at all."

From the manager of one of the largest agricultural-industrial operations in the world. "In our opinion, a 75-cent minimum will seriously affect the employment of large numbers of workers in the South, whose efficiency is low and who are not capable of intelligently handling machinery. We believe Southern wage differentials should be fully considered. A 75-cent minimum would cause great displacement of labor in the South by machinery and by more efficient individuals."

From a manufacturer of bauxite.-"The minimum rate in our bauxite industry is now $1.03 with very few on this minimum rate but I think many small indus tries in Arkansas would not be able to continue under a 75-cent minimum. In case of a depression or even a mild recession, I think unemployment would be increased and high wages don't help the man who has no job."

From a manufacturer of wooden cabinets.-"I feel strongly that a jump from present minimum to 75 cents is completely out of line and will be very detrimental to present industry in Arkansas and the South, in view of present decrease and apparent future decrease in living costs. Recommend holding minimum to 6 cents."

From a manufacturer of wooden handles.—“We feel that with national debt as high as it is, a certain degree of inflation is necessary. We would favor minimum rate of 60 cents or not to exceed 65 cents with provision for hiring at 10 percent less for a 60-day trial period.”

From a manufacturer of textiles.-"We doubt the wisdom of that high a min mum (75 cents) for any declining economy. It is more likely to aggravate unemployment than alleviate it."

From a manufacturer of cotton garments.-"A 75-cent minimum would very definitely affect our operation adversely here in . It would put us a long way out of line on a competitive market basis. Experienced operators on sewing machines in the new Arkansas plant are earning the same wage as those in the two northern factories. Our experienced help in Arkansas have a minimu hourly wage of 55 cents and a maximum based on their piecework ability. A change from 40 cents an hour to 75 cents on 75 percent of our employees in Arkansas now training would necessitate the closing of our plant as the make-up pay for these operators in a new operation such as ours would be too great for us to remain in the competitive market we are now experiencing."

From a manufacturer of shoes.—“Should a 75 cents minimum wage be enacted. we would immediately be thrown out of our price range which would automatically affect the public buying of our product. A 75 cents minimum would in

crease our labor cost approximately 12 percent and no doubt would carry the same effect on all of our material costs, which would specifically take us out of the $5 retail field and put us into the $6 retail field.

"At the present time, all of our buyers are trying to buy merchandise at a lower price and from the feel we get from our buyers, should we have to go into a $6 field, our volume would automatically drop and there is no way of telling how far this would go. We feel certain that we would be forced to curtail our production at least 33 percent, which would mean the elimination of approximately 130 people. We would definitely not be able to operate on a yearly basis but would be brought back to the old seasonal basis which means operating approximately 8 months per year. This would automatically increase the selling price of our merchandise.

"It is our opinion that with a 75 cents minimum, the country would be taking another step toward further inflation and in our industry, where production is now more than taking care of demand, we feel that many factories would have to go into bankruptcy."

From a manufacturer of hardwood veneers.—“A 75 cent minimum would result in an increase of only 5 cents in our minimum but our wages are now 15 cents to 20 cents higher than the majority of our competitors. Many of these competitors ship into a territory to which they have higher freight rates than we do. To put their wages up to ours will work a hardship on them. There should be some variation in wages to offset disadvantages of some locations.

A 75 cents minimum would bring about increases in our costs which would amount to about 8 percent of our selling price on box material. The paper box competition is already making inroads into this wooden-box business. We would have to eliminate all of our Negro women employes. There are about 16 women who would be replaced.

"The sudden increase to 75 cents would result in a 50 percent increase in labor cost in more plants than our men in Washington realize. This would be widespread enough in the South to upset the whole economy of small industry in the South. There is some reason for raising the minimum, but it should be done gradually, and we have thought that a 60 cents or 65 cents minimum now, with provision for another increase after a year and so on each year, would be the only practical solution."

From a manufacturer of mirrors.-"Most of our employes average more than 75 cents an hour. However, if the hourly minimum wage is increased to 75 cents, our whole wage structure will be thrown out of kilter, as those employees now earning more than 75 cents will expect proportionate increases. Such wage increases will swell our labor cost approximately 12 percent. We will have to reflect the increase in our selling price. An increase in price coming at a time when the public is already protesting the high cost of living would not be healthy. "Our Federal Government depends on industries for its revenue. If businesses can not operate at a profit, then there will not be any profits available to pay taxes."

From the president of a garment manufacturing firm.—We present herewith a projected effect caused by an increase in our present wage structure:

"We are currently paying in excess of the minimum of 40 cents per hour as a starting wage. We feel it will be necessary to continue our practice in this respect, no matter at what figure the minimum wage is set, in order to attract a better type employee.

"We are manufacturers of cotton wash apparel for misses and women. Our products are essentially necessities and not luxuries. They retail from $1 each to $5.98 each. The items we manufacture are principally blouses, dresses, smocks, nurses' and domestic uniforms, etc.

"We operate two plants in Little Rock, employing approximately 650 people. Of these, approximately 500 are white and 150 are colored, over 90 percent female. "Our computation made below is based upon aggregate figures rather than isolated garments for the reason that a few isolated examples might be misleading in that is impossible to get a true picture from just a few garments because of the wide variation in fabric and labor costs. We have therefore concluded that aggregate figures are a much safer yardstick.

"The figures below are based upon the following facts:

"(1) Our annual pay roll is approximately $1,000,000.

"(2) Our pay roll is approximately 25 percent of our manufacturing selling price.

"(3) The retailer's profit is estimated at 40 percent of the retailer's selling price.

"(4) A 65-cent minimum will increase our pay roll 36 percent annually. "(5) A 75-cent minimum will increase our pay roll 52 percent annually.

"EFFECT AT 65-CENTS-PER-HOUR MINIMUM

Our annual pay roll at present wage scale_

$1,000,0

Our annual manufacturing selling price---

Our annual pay roll at present wage scale_-_

Present retail selling price of our products, based on 40 percent mark-up.

4,000,0

6,666,666

1,000,000

Annual increase in wages to our employees, based on 65 cents minimum

360,000

Our annual manufacturing selling price‒‒‒‒‒

$1,000,0

Our annual pay roll at present wage scale

Present retail selling price of our products, based on 40 percent mark-up.

4,000,00

6,666.67

1,000,000

Annual increase in wages to our employees, based on 75 cents minimum-

520,000

Annual consumer penalty based on 75 cents minimum wage_.

3.406 97

"The above figures are computed in order to give the effect these respective wage increases will have upon the buying public. But it is also based upon the assumption that we are able to continue to produce at our present volume rate in the face of northern and eastern competition, which will not be as drastical affected as we are in this locality. It must be remembered that there are ro Vocational needlecraft training schools in this State-that all expenses of e ployee training must be borne by the employer and that there is no reservoir of skilled help whatever in this locality.

"There are many other factors which place us at a disadvantage with older industrialized areas and markets, and the element of wages is the only equal z « factor which we have to meet competition. We can certainly buy our raw goods no cheaper than competing manufacturers in the North and East. The process of manufacturing is carried on with much greater difficulty here than in older markets.

"Therefore the closer we come to complete wage parity with the North are East, the more difficult it will become for us to meet competition in our present stage of development. We again state that we need a wage differential not gain a competitive advantage but to keep from suffering a competitive disadvart

age.

"Assuming that the wage increases as above indicated will have no effect up our successful continuity of operation, it shows the penalty which the consum." public will have to pay on our products, which are basic necessities.

"The effect of the penalty upon the consuming public as shown is based up the assumption that our raw goods will increase in cost percentagewise about the same as our own costs will increase. We believe this to be the case, becaus the type of cotton textiles which we use in just as basic in the textile field as par garments are in the ready-to-wear field, and they are currently manufactured o as low a wage scale as exists in the field of textile operation.

"However, if there are no other added costs to our products than the increase in wages, based upon a 75-cent minimum, a penalty will still be borne by the suming public of a little better than 16 percent over the prices they are D paying.

"As we have been able to successfully meet competition on our present W.2 scale, we have been able to give continuous uninterrupted work to our ployees for the last 4 or 5 years. It is quite probable that the increase conte

plated under a 75-cent minimum will greatly disturb this continuity of work. It is highly probable, therefore, that the increase in pay to our employees which appears in the figures listed above might be entirely washed out by reason of spasmodic instead of steady work; and it is also probable that the annual take-home pay may actually be less than it is under present conditions."

NATIONAL ASSOCIATION OF REFRIGERATED WAREHOUSES, INC.,
San Francisco, Calif., February 8, 1949.

JOHN LESINSKI,
Chairman, House Committee on Education and Labor,

House Office Building, Washington, D. C.:

In the consideration of H. R. 2033, amending the Fair Labor Standards Act, the National Association of Refrigerated Warehouses desires to place before the committee the position of their industry and to request that exemption be granted them in the bill from the provisions of sections 6 and 7, for the following

reasons:

1. The refrigerated warehouses of the country composing the industry, are performing a 24-hour daily, 7-day weekly, service for the protection of perishable products of the farm, orchard, grove, range, sea, dairy, etc., both fresh and frozen, so vitally essential to the welfare of our Nation.

2. Legal liability of the industry is specially set forth in section 21 of the Uniform Warehouse Receipts Act; as follows:

"SEC. 21. Liability for care of goods.-A warehouseman shall be liable for any loss or injury to the goods caused by his failure to exercise such care in regard to them as a resasonably careful owner of similar goods would exercise, but he shall not be liable, in the absence of an agreement to the contrary, for any loss or injury to the goods which could not have been avoided by the exercise of such care."

To properly protect the perishable produce entrusted to his care the refrigerated warehouseman must operate 24 hours a day, 7 days a week. Without such operation, first, to provide the refrigeration and close maintenance of proper temperatures; and second, to receive, store, and deliver perishables, which for reasons beyond our control could not be handled in working hours specified in the act and normal to manufacturing or production industries; deterioration and loss of essential food would be involved, and if such losses were due to the failure of the warehouseman to carry out his legal obligation as set forth in the law stated above, the financial loss would possibly put him out of business.

3. Refrigerated warehouses must compete for labor in their respective areas and therefore must provide take-home pay comparable with that prevailing in their vicinity. It should also be borne in mind that the regular staff of these warehouses enjoy a large measure of job security and year-round employment that is absent in many industries.

4. The restrictions imposed by the present law have worked a hardship on many warehousemen for the reasons stated, and it is felt that the requested amendment is fair, reasonable, and in order.

The foregoing brief received the unanimous approval of the National Association of Refrigerated Warehouses in convention assembled at San Francisco, Calif., February 8, 1949, and is respectfully submitted herewith. Seventy-five copies are enclosed as directed on Thursday, February 3, 1949.

(Signed) J. P. JOHNSON, Chairman, Legislative Committee.

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