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Mr. GREGORY. You have it in writing there, haven't you?
Mr. GREGORY. The committee is very anxious to get over to the roll call.
Mr. McLAUGHLIN. Mr. Chairman, could we not let the gentleman have 5 minutes, or a few minutes ?
Mr. GREGORY. Go ahead.
Mr. BERMAN. I also appear as the representative of the Union Made Garment Manufacturers Association of America, an association of wrk-clothing manufacturers with plants located all over the country and who produce approximately 95 percent of the work and service garments made in those plants.
We are in favor of this legislation because we believe in the fundamental principles of fair wage and decent working conditions. We are opopsed to wage cutting and hold that competition should be based on quality and service and not on wage cuts and sweatshop standards.
Some time ago the Congress passed legislation which requires the Government to purchase, and all contractors to furnish only materials and products which are made in the United States. This was done to protect American industry and American workmen and farmers. The Walsh bill has a similar and parallel interest—to insure a fair wage to those working on Government contracts and to protect manufacturers who maintain decent working conditions. These manufacturers seek no special consideration, they only ask that they be protected from unscrupulous factors who derive their main advantage from their ability to recluce wages.
This committee will be interested to learn what effect the present method of Government purchasing has had on the garment indusiry, particularly that branch which I represent, working clothing.
Government purchases in our field constituted a small percentage of the production until the advent of the C. C. C. and relief programs. These agencies for some time have been supplying their beneficiaries with work and service garments which normally found their way to these persons through retail stores. Now that millions of garments are being given free to the unemployed, our markets have been narrowed considerably and the only way we can hope to regain a portion
this market is to supply the Government purchasing agencies.
I will give you a specific example: To produce a dozen pair of overalls of the kind that the Government is buying in standard shops the price of the labor will be anywhere from $2.50 to $2.25 a dozen for the labor alone. In some shops in which the Government is now buying wages will be possibly 80 or 90 cents a dozen.
Now, fair manufacturers who are trying to maintain conditions in the industry cannot compete under those circumstances, and the whole question is as to whether this money that the Government has is to be spent to beat down working conditions and to destroy purchasing power of the people, or whether it is to be spent to maintain the chiselers who have been getting control of the country during the depression.
Mr. MCLAUGHLIN. Mr. Berman, may I ask you a questio: there! Mr. BERMAN. Yes.
Mr. MCLAUGHLIN. Are you getting any contracts now on the C. C. C.?
Mr. BERMAN. No, sir; we are not. Our industry is barred from that because we are not in a position to compete, because we are trying to maintain a reasonable or a fair standard, and that is why we are barred.
Mr. McLAUGHLIN. You are bidding on them, but you cannot get them?
Mr. BERMAN. Yes, sir; we are bidding on them and we cannot get them.
Now, why should manufacturers be blacklisted in effect because they are trying to put through the policy of the Government in increasing purchasing power and maintaining decent standards?
Mr. Chairman, I could say a great deal more, but I do not care to infringe on your time.
Mr. GREGORY. The Members are very anxious to attend a roll call. You may submit the rest of your statement for the record if you desire.
Mr. BERMAN. I would like to do that because it is in better shape.
A specific example will perhaps better serve to illustrate how the present method of Government purchasing has affected those garment manufacturers who have always maintained decent wage standards and working conditions, and has shut them out of securing their fair and proportionate share of this business.
When the Government decides that it needs to purchase a quantity of garments such as overalls (denim jumpers and trousers), the properly designated agency issues invitations to bid on the requirements. All of the materials such as cloth (denim), thread, buttons, buckles, labels, et cetera, are designated with ironclad specifications. The prices at which each bidder or garment manufacturer can secure these items is identically the same. They are staple materials and market prices are solidly established by their producers. It therefore can be seen that no bidder has any advantage over the others because of a possibility of making favorable purchases of raw materials. Construction details are likewise carefully specified and this permits no advantage to anyone for there is no possibility of leviation. The only place for a variation is in the labor cost and the bidder, who can chisel his labor to the point where he gets his garments made at the lowest labor cost, gets the order.
This regrettable and unfair situation has forced wages on Government garments to a low level, and the boldest wage cutters get these Government orders. Under the present system the Government is unknowingly forcing down wages in the garment industry. Wage cuts on Government orders reflect on wage scales for commercial garments. When a manufacturer achieves a low-wage level for Government garments, he applies the same measure of compensation to labor on other garments he produces. The effect of these wage cuts is then felt in competition on garments sold on the open market. The result of all this is that the standard of wages is continually lowered.
This rather briefly explains what has happened to the work-garment industry as a result of the Government policy of favoring the lowest bidder without regard for a wage policy.
The Walsh bill will correct this evil. It will give the garment manufacturer who pays decent wages an opportunity to secure some of the Government contracts and will help maintain a fair standard of wages in the work-garment industry.
(The statement submitted by the linoleum and felt-base manufacturing industry appears in full, as follows:)
STATEMENT ON BEHALF OF MEMBERS OF THE LINOLEUM AND FELT-BASE MANE
FACTURING INDUSTRY IN OPPOSITION TO S. 305.)
NEW YORK, N. Y., August 19. 1:93.7. This statement in opposition to the above bill is submitted on behalf of all of the members of the linoleum and felt-base manufacturing industry, a list of said members being annexed hereto.
This bill has been carefully considered, and the members of this inilustry ale unanimously cpposed to its passage for the reasons herein stated.
Attempts were made, under the National Industrial Recovery Act, to establish standards relating to conditions of employment, including hours and wages, on the ground that such standards were necessary to insure fair methods of competition. Such provisions were referred to as establishing fair methods of competition by requiring all competitors to conform to such uniform standards of employment. This bill, in effect, would produce the opposite results and bring about unfair methods of competition as regards conditions of employment.
In nearly every industry some, but not all, of the manufacturers engage i in the particular industry produce some materials and supplies and either sell them direct to the Government or to contractors or subcontractors for use in connection with Government contracts. In practically no instance does it single manufacturer sell the entire output of his plant for such Government con:racts. If he sold, which is the usual case, a portion of his output for Government contracts, he would be required, under this bill, to agree to work his employees the hours and pay them the wages required under this bill. Competitive conditions in the particular industry might make it impossible and impracticable, if not impossible, for him to differentiate between the employess working on materials and supplies for Government contracts and the rest of the goods produced in the same plant. Furthermore, any such supplier or Government materials would, in nearly every instance, be in competition with oth r manufacturers who may not be producing any goods for Government centracis, and the latter would not be required to observe the labor conditions set forth in this bill. The result would be utter lack of uniformity and create situations where unfair rather than fair methods of competition as applied to laber would develop. Certain changes in the code hour and wage provisions may be made in some instances which, under all circumstances, would be equitable and fair to all parties. Under these changed conditions a manufacturer may produce and put in stock a large amount of goods and later offer to sell the same to a contractor for use on a Government contract. Under this bill the manufacturer could not certify that the goods offered for sale wen made by labor under the standards of employment set forth in the nullifieil. applicable approved code for that industry.
The foregoing effects obviously would be produced by this bill. Clearly. it is an indirect attempt to try to compel all industries, in the production of all goods, to observe outlawed code wage and hour provisions. The natural, direct. and inevitable effect of the operation of this bill is to extend its scope beyond the actual labor employed in producing materials used for Government contracts. Even conceding that Congress may pass a law regulating hours an! wages of all employees engaged in producing materials used only for Goverument contracts (although. possibly, Congress has not that power), when that power is used clearly for the purpose of regulating labor conditions unquestionably beyond the power of Congress, the law will direct its attention to that phase, The undoubted purpose and necessary and inevitable effect of this will is a require observance of code labor provisions beyond those instances directly relating to Government contracts. That purpose and effect of the bill vitiates and invalidates the whole bill.
It is not only invalid, but unsound, and will result, as in the case of every invalid law, in greater and greater confusion and uncertainty in business dealings.
In opposing this bill, there is no thought of indicating in any way any change whatsoever in the basic policies as applied to labor, but merely to emphasize the fact that this bill is positively unfair and conflicts with even the code principles of unfair competition as applied to labor, for the obvious reason that it cannot be uniformly applied to all suppliers of materials for Government contracts.
Undoubtedly the same employees will be working on materials for both Government and private contracts. As explained, the bill has an extralegal effect of bringing pressure to bear upon any single manufacturer who might be interested in a Government contract so as to tend to force him to observe the labor provisions required by the bill as applied to all his employees, in order to get the Government contract. This he cannot do if his competitors who are not interested in the Government contracts are not observing those same standards. The bill has no direct force and effect whatsoever upon the competing manufacturers who are not interested in Government contracts. This will bring about a situation, as stated, which may properly be designated as unfair competition in these labor matters; and since this Federal law cannot be fairly, equitably, and uniformly applied to all purchasers of the commodities in ques ion, it may j roperly be termed as unjust. It will result in the curious, impractical, and anomalous situation of establishing competitive inequality by the Government's attempt to discharge a moral obligation through a Federal law and extralegal pressure. These objections to the bill are not saved by the provisions authorizing the President to make exceptions in accordance with the general and indefinite standards set forth in the bill.
In addition to the reasons furnished above, this industry is opposed to the bill because the constitutionality of the bill may be challenged and, as in every o‘her such case, confusion and uncertainty in business dealings is created until the law is either sustained or invalidated. Respectfully submitted.
LINOLEUM AND FELT BASE MANUFACTURERS ASSOCIATION, By JESSE R. SMITH.
R. E. FERRY, General Manager.
MEMBERS OF THE LINOLEUM AND FELT BASE MANUFACTURING INDUSTRY
Armstrong Cork Products Co., Lancaster, Pa.
The Paraffine Cos., Inc., San Francisco, Calif., and the Cott-A-Lap Co., Inc., Somerville, N. J.
Sandura Co., Inc., Philadelphia, Pa.
(Whereupon, at 5:45 p. m., the committee recessed until 10 a. m. the following morning, Tuesday, Aug. 20, 1935.)