Evening Star Newspaper, April 23, 1940, Page 36

B—18 Wallace and Fleming Tell How Labor Act Affects Farmers Forum Speakers Say Wage-Hour Law Helps By Increasing Markets’ Secretary of Agrlculmr'e ‘Wallace and Col. Philip B. Fleming, adminis- trator of the Wage and Hour Di- vision of the Labor Depsrtment, dis- cussed on the National Radio Forum last night the relalion of the Fair Labor Standards Act to agriculture. Arranged by The Star, the prografi was broadcast over a coast-to-coast network of the National Broadcast- ing Co. The broadcast was in dialogue form and the text follows: Col. Fleming—There is a com- munity of interest between the farmer and the industrial worker. In our highly integrated society, the welfare of each of us is dependent in some degree upon the welfare of every one else. Thus, the merchant is dependent upon the welfare of his customers, and the manufacturer upon the prosperity of the merchant. I know, Mr. Wallace, you've been preaching this for a long time. Secretary Wallace—We are de- pendent upon each other more than is generally realized. When the dry skies and hot winds of 1934 seared the corn belt, few city people thought that of any concern to them. But without enough corn for feed, many farmers had to sacrifice their live- stock. A year or two later city peo- ple paid higher prices for beef and pork—and, as a result, learned that the size of the corn crop did mean a lot to them. Since then we've de- veloped our ever-normal granary, which has resulted in the storage of lots of corn on farms, against other possible bad years. This corn is just as much a protection to the city people as to the farmers who pro- duce it. Labor Provides a Market. Col. Fleming—Just as consumers are affected by farm happenings, farmers are affected by what hap- pens to city labor. A young woman— let us say her name is Mary Smith— works in a New York garment factory. If she loses her job, she must be taken care of by friends or relatives or go on relief. She is no longer a good customer for farm | products. Secretary Wallace—If only one person lost a job, it would make little difference, but when one Mary Smith is multiplied by millions of Jobless workers, the effect of the| reduced buying power upon every- body is very great. City workers are consumers of farm products. Farm- ers raise wheat and vegetables and fruit to feed them, and cotton and wool to clothe them. The price the farmer receives for his products and the quantity he sells, is directly. af- fected by the ability of city workers to buy. How much farmers would gain if city labor were more fully employed at better wages was shown recently by Milo Perkins, head of our Federal Surplus Commodities Corp., in a speech on “The Challenge of Underconsumption.” He showed that two-fifths of our families live on less than $100 a month. They spend, on the average, not much more than 5 cents a person a meal on food. If incomes were increased 50 these families had $100 a month to spend, they could spend 10 cents a person a meal. This 5 cents per meal increase would add up to nearly a billion dollars more for farmers each year. Col. Fleming—That level of $100 & month is far above the minimum the wage and hour law sets. The present minimum—30 cents an hour for a 42-hour week—means only $12.60 a week at full time, or $650 a year— even if the worker is able to get em- ployment clear through the year, which is not always the case. Secretary Wallace—The economic bond between farmers and city workers is shown also by the rela- tionship between totai incomes for all farmers and all city workers. Back in 1929, when pay rolls were 12 billion dollars a year, farmers’ incomes also were about 12 billion dollars. Then, during the depres- sion, they went down together, until in 1932 both farmers' income and factory pay rolls were down to about 5 billions a year. Now they have both climbed up again to where they’re around 8 to 9 billion dollars. The farmer’s welfare is dependent upon the ability of city people to buy his products, just.as the welfare of city people is dependent upon the ability of the farmers to buy their products. Lahor Act Explained. Col. Fleming—It is evident then that the poorer the city worker, the poorer the farmer. As you know, the Fair Labor Standards Act of 1938—usually called the wage and hour law—is an effort to prevent people being employed at sweatshop wages. If Mary Smith had been paid $6 a week, for example, her pay, under the act, has been raised to $12.60, if she works the full 42 hours a week. Do you think that would benefit farmers? Secretary Wallace—Certainly I do, I think the Wage and Hour Act is a decided benefit to farmers. Not all farmers, unfortunately, understand how the law works. Certain groups have been able, apparently, to con- vince some farmers that the wage and hour law will injure them. For instance, reports came to me recently that some corn belt producers had been told they were going to have to pay more for plows, harrows and other farm machinery because of higher labqr costs under the wage and hour law. There are only three things wrong with those reports. First, there were practically no work- ers at all getting less than 30 cents an hour—the current minimum—in the farm machinery industry or in the steel industry, even before the law went into effect. Second, there ‘were no significant changes in aver- age pay per hour in either the steel industry or the farm machinery in- dustry during the past 12 months, a period in which the wage and hour law was in effect. Third, the prices of farm machinery have not been increased in this period; in fact, the prices of some machines have come down slightly. Objections Held Unjustified. Col. Fleming—You are quite right, Mr. Secretary. In most industries, the payment of better wages to those poorly paid workers at the bottom has had no appreciable effect on the level of labor costs or on selling prices. But the attack of some farm organizations against the act has been on the grounds that it might increase marketing or processing costs. Are those objeclions justified? Secretary Wallace—No, but I can see why farmers might be concerned. Some farmers object to higher wages or shorter hours for workers in d Forum, creameries, canning plants, packing plants, and sometimes even in flour mills, bakeries, groceries, or other concerns engaged in processing or marketing farm products. They argue that higher wages will mean a larger merchandising spread between producer and consumer, and thus lower prices to farmers, or result in smaller demand at retail. This argu- ment fails to recognize that the farmers’ income from sales is af- fected not only by marketing and processing costs, but also by con- sumer demand. And they also fail to realize that changes in the ability of consumers to buy have much | greater effect on farm prices than do marketing costs. For example, processing and marketing costs on the food bought by an average city workingman's family increased 12 | per cent during the recovery from the depression, from $172 in 1933 to $193 in 1937. But over the same period, the income of the average city family increased by 40 per cent, and its expenditures for food at re- tail went up from $264 to $353. This increase in city buying power from 1933 to 1937 much more than offset the increase in marketing costs, and the farmer’s income from the food | products bought by this average | family almost doubled, going up from | $92 in 1933 to $160 in 1937. | Some Want Cheap Labor. Col. Fleming—How then do you | account for the alarm of some farm- ers over the wage and hour law, which, of course, is designed to raise | wages for the low-paid workers, | thereby increasing consumer de- | mand? “ Secretary Wallace—Many of these objectors, I think, are quite sincere, ‘buL they have simply been misled. | Some of those who want cheap labor | want to make their profits out of the ‘ hide of labor. If profits are increased | at the expense of pay rolls, farmers suffer along with labor. A very large share of the pay received by those | with low incomes goes to buy food |and clothing. Workers receiving 30 | cents an hour or less spend almost } half their income for food and cloth- | ing. If their pay is cut, half of that | cut must come out of their expendi- tures for farm products. The well- | to-do spend much less for food and | clothing—only about one-eighth of their incomes. Every transfer of $10 from wage payments to excessive profits reduces retail expenditures for food and clothing by $4. Col. Fleming—Some business inter- | ests have gone pretty far in attack- ing the Wage and Hour Act. For | example, some of them have recom- mended that all city workers en- gaged in marketing, transporting, or processing materials derived from farm products should be excluded from the act That means that not only people who handle foodstuffs, but all those who are handling fibers or any other farm products, would be excluded. Secretary Wallace—That would exclude workers in the packing plants of Chicago and Omaha, work- ers in the great flour mills of Minneapolis and Buffalo, workers | handling cotton in tire factories or automobile plants and cotton mills, and workers manufacturing shoes. If every factory using farm products In any way were exempted, nearly half of all factory workers would be taken out from under the Wage and Hour Act. Over 1,000,000 in Processing. Col. Fleming—Some persons argue that only “a few thousand” workers would be affected if all those en- gaged in processing farm products were eliminated. That is absurd. Our computations show that there are at least a million and a half men and women engaged at some stage in the processing or marketing of farm products. Secretary Wallace—And farmers would lose, rather than gain, if wages were cut in those industries. It seems to me the Wage and Hour Act is Just an attempt to put a floor under wages in order to prevent exploita- tion of labor by paying such low wages that workers can hardly exist. Col. Fleming—That's right. The wage and hour law is not concerned with the minimum wage of persons who are already getting high ‘wages. Just as you, Mr. Secretary, through the farm programs, are attempting to put a floor under farmers' in- comes, the wage and hour law is attempting to put a floor under the income of the poorest paid industrial workers. You remember after N. R. A., some industries began to cut wage rates very sharply. In some industries, such as cotton clothing, the wage cutters began to get most of the business. Other manufacturers had to cut wages in turn. This went on until wages in some areas were forced down to where mill hands were getting only $5 a week. The wage floor established.by the wage and hour law forces manufacturers to stop this kind of thing. Secretary Wallace—One fact “you have just brought out is of particular wage and hour law does not affect the minimum wages of workers al- ready getting high pay, but aims at raising the pay for workers at the very bottom of the income scale. Unorganized workers, almost all of them. These city workers have had to pay city rents and city food and clothing costs from a few nickels a day. These are the workers who would buy more farm products if they could only get a little more money to buy with. That is one reason why many farmers should be interested in the success of the Wage and Hour Act. Col. Fleming—Some of the recent agitation against the Wage and Hour Act originated T&r with the can- ¥ interest to farmers. That is, the| THE EVENING STAR, WASHINGTON, D. C, TUESDAY,. Secretary Henry Wallace (left) and Col. Philip B. l‘lem.ing, wage-hour administrator, as they. spoke in the National Radio —=Star Staff Photo. _— e 0 ning industry or with those large corporations who run packing plants and food distribution lines and call themselves farmers because they grow farm products, which they pack, or merchandise. The Department of Labor made a recent careful study of vegetable canning in seven im- portant States. It showed that al- most half of the employes were paid less than 30 gents an hour last sea- son; 15 per cént were paid less than 25 cents an hour. But the study also showed that if all these workers were brought up to the 30-cent minimum the total labor costs would be in- creased only 6% per cent. Labor is a relatively small item in running a cannery—under 12 per cent of the total cost—much less than the cost of the tin cans in which the fruit or vegetables are packed. So this 6! per cent increase in labor costs would mean only three-fourths of 1 per cent increase in the canners’ total cost—certainly not enough to injure, generally speaking, either farmers or consumers. And to the extent that inability to exploit cheap labor forced the managers to adopt more efficient methods of operation, as it always has done heretofore, the effect on costs would be even smaller. Secretary Wallace—Your facts there check pretty ciosely with our figures on farm income, especially of those farmers who praduce fruits and vegetables—the very products where most of the wage and hour argument seems to center. Returns from fruits and vegetables were hardly affected by the Wage and Hour Act in 1938, as it was not until October, 1938, that even the 25-cent minimum wage went into effect. In 1939, on the contrary, that minimum was in effect most of the year, and in October, 1939, the 30-cent mini- mum became effective. Yet in 1938 farmers received $909,000,000 from the sale of fruits and vegetables, while in 1939 they received $995,- 000,000—almost exactly 10 per cent more. With a rising level of employ- ment and business activity, farmers oo ————— 1 For Well-Fitted Glasses of @ NUMONT ... Scientifically prescribed by our registered optometrist, ground in our own labora- tories. These two important factors mean correction of visual defects and restoration of perfect eyesight. OPTICAL Ml A- Leese COMPANY 614 9th St. N.W. NA. 5087 9, A Wednesday Special With the “Tang o' the Sea’’ 11:30 A.M. ‘Til Midnite L ERS gained much more from higher de- mand than they paid in higher marketing costs. Overtime lssue Discussed. Col. Fleming—We are certain, Mr, Secretary, that the operation of the wage and hour law to date has not resulted in any general increase of farm marketing costs. We realize that most farmers and wage earners receive only small incomes, and that to help labor by taking money away from the farmer certainly is no gain in our economic situation as a whole. Labor costs in the canning industry are s0 small that 30 cents an hour would add only an imperceptible amount to the price of the product. However, right now we are rein- vestigating to see whether any em- ployes of canning factories and the like are receiving the 30-cents-an- hour minimum wage to the disad- vantage of farmers. Secretary Wallace—I am sure that will be reassuring to farmers. But a good many of the complaints di- rected at the law seem to be con- cerned with the overtime provisions of the act. The necessity of paying time-and-a-half for hours. worked over 42 a week, they say, inflicts a real hardship, especially at harvest time, when processing and packing are at the seasonal peaks, Col. Fleming—That argument is based on a misunderstanding of the way the act works. It permits over- time work during seasonal opera- tions without paying the extra time- and-a-half rate, and there is ample flexibility to make that apply in any case where farmers might be hurt by limiting the hours. As it now stands the act provides that opera- tions in cheese factories (except proc- ess cheese), cotton gins and com- presses, milk plants, and many simi- lar industries, aré completely exempt from the hours limitations. In addi- tion, packing and canning of perish- able or seasonal fruits and vege- tables, and slaughtering and han- dling of livestock and poultry, are exempt from the maximum hours for 14 weeks, during which time only the minimum wage per hour applies. ‘The act also provides that any other industry can have its maximum hours raised up to 56 a week for a period of 14 weeks, if it shows that it is of a seasonal character. As a result of these provisions, either throughout the year for some in- dustries, or in other industries during the 14-week period, which is long enough to take care of the harvest period,. the hours provisions of the act do not apply at all or else permit the 56-hour work week maximum. I suspect that a good many people who | are complaining that the act makes it impossible for them to get enough labor, would find if they inquired that they are already allowed to have their people work a longer week than the 42-hour maximum without overtime pay, at least for the period of rush ‘work at the peak of the harvest. Secretary Wallace—One other thing that worries some farmers, I believe, is the fear that wage and hour legislation either applies now, or will soon apply, to their own hired man, You know that farm income is so low that most farmers would find it impossible to pay city wages under anything like present eco- nomic conditions. Do you feel this fear is justified? Farm Labor Not in Act. Col. Fleming—Neither the wage and hour law, nor any of the amend- ments to ‘it so far proposed, con- template including farm labor in the act. At no time has farm labor been included. I should like to emphasize that. Neither the farm- er's hired man, nor his harvest hands, nor his berry pickers, nor anybody employed by the farmer to work on the farm is in any way affected by the wage and hour law. Secretary Wallace—This fact, to- gether with your earlier statement of your ‘present policy, indicates that the wage and hour law will not increase farmers’ costs. But there areé other reasons why farmers should support the law, Farmers and wage earners are among the low-income groups of our population. Both have bene- fited from the progressive legisla- tion of the.last few years. Recent legislation for the protection of farmers could not have been en- acted had not congressional repre- sentatives of the city workers joined in supporting it. For example, 63 per cent of the city representatives voted for the original A. A. A. legis- lation in 1933. Sixty-three per cent of them voted for the revised A. A. A. program of 1938. I regret to say that the Congressmen from farm areas seem less disposed to support measures for industrial workers. ‘While 84 per cent of the urban Congressmen approved the wage and hour law in 1938, only 39 per cent of the rural Congressmen voted for it. I hope that farmers come to realize the necessity for increased .co-operation with labor, so that labor will continue to co- operate with farmers. I do not like PIANOS for RENT Good selection of new emall uprighte and spinets ¥ for rent ot from $S monthly wp Ao low rates 0a baby grands and consoles Money you pay e rental will be deducted trom price f you buy laer Call NAtional 3223 JORDAN'S Corner 13th & 6 Ss. to think of the consequences farmers and city workers were to pursue an,independent course, de- termined to get all they could for themselves without regard to the effect on the other fellow. Perhaps you would say this is & purely politi- cal consideration. Yet more selfish- ness, if nothing more, urges that the farmer should support measures for the protection of labor, and co- operate with labor in social steps to, the advantage of both, Businessmen Are Realistic, Col. Fleming—I was interested in what you had to say about the efforts of those who are trying to bias farmers against the wage and hour law. Would you consider that attitude typical, or representative, of tll;le Nation’s businessmen in gen- eral Secretary Wallace—No, I would not. I believe that most business- men, as well as most farmers and most industrial laborers, recognize that real prosperity for all can come only from a steadily increasing and balanced production of goods, of the kinds people want both in cities and on farms. we can continue such a steady rise in production and employment only if buying power of consumers will rise fast enough for sales to keep pace with the expanding output. While farm and labor programs try to put a floor under farm prices and city wages, they must not make us lose sight of the fact that in the end it is increased and balanced pro- duction that we must work for. There is always the danger that farmers will get so concerned with high prices per bushel, or labor with high wages per hour, or bu: WEDNESDAY SPECIAL, 50c DELICIOUS SEAFOOD PLATTER § Inc. Chowder, Oyster, _Scallops, 8hrimp. Crab Cake, Pilet Sole. F. F. - Potatoes, Rum Buns, Rolls, Beverage. THURSDAY SPECIAL, 85¢ WHOLE MAINE LOBSTER Inc. Shrimp Cocktail, Julienne Pot., Drawn Butter, Cole Slaw, Rous, Rum Buns. FRIDAY SPECIAL, §0c CRAB IMPERIAL PLATTER Inc. Chowder, Oyster. Scallops, Cole Slaw. Saratoga_Chips, Rum Buns, Rolls, Butter. Beverage. Try This Treat Supreme RAINBOW TROUT, 85¢ Get Acquainted With the Finest Steaks o Chops e Seafood Luncheons from 45c Dinne: 0c, 75¢, $1.00 Served 'Til Midnight Dally & Sunday 0ps. 418 12th St. N.W. Raw_Bar _ Mixed Drinks _Wines Poods Packed to Take Out ® Est, 1898 1 believe also' that ness with high profit per unit, that they will lose sight of the fact that what counts in income is not only how much you get per unit, but also how many units you sell. It is not prices or wage rates that are the real things, but men at work and useful goods and services produced and consumed. Both farm groups and labor groups have urged repeatedly that an effort be made to get all eco- nomic groups together on a program of increased employment and in- creased production. When indus- trialists can see their way clear to work with farmers and labor for in- creased and balanced output, that will prove the biggest single thing that can be done to increase the welfare of all. Col. Fleming—I am sure that we in the Department of Labor are grateful to you, Mr. Secretary, for what you have contributed to this discussion. Amendments to the wage and hour law are being pro- posed that would deprive about a million and a half workers of the .protection which Congress obviously intended to extend to them. Re- gardless of what political spokes- cannot believe that the pitiless ex- ploitation of any group of our peo- ple can work out to the advantage of another group. We are still, ali of us, citizens of America. We are all pretty much in the same boat. I am glad you feel that farmers and workers profit together and should stand together. And I hope the time will soon come when labor, ag- riculture and business will all work ALL FOR 75¢ Shad Roe and ALL FOR 65¢ Nothing Like It Anywhere at This Price ] || men for certain interests may say, I | NEW PRICE POLICY Find out how much less it costs NOW to dine with Washington’s best . . . 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