And, Mr. Chairman, you have got to understand that these people deal in large item sales. These are sales which run into a lot of money. I refer to the furniture and home furnishings and appliance stores; they are not turning out a handkerchief for 25 cents. They are selling freezers, furniture, bedding. When they make a sale it often runs into hundreds of dollars. Yet we find even in these businesses that 4 percent receive less than 75 cents an hour, 14 percent receive less than $1 an hour, and 35 percent receive less than $1.25 an hour.

As can be seen from these figures, however, even in these branches of the retail industry, extension of coverage would provide substantial needed protection to many workers.

We also find that those stores which pay the lowest wages use the greatest amount of part-time employees. Thus, in October 1956, we find that 39 percent of the workers in variety stores and drug and proprietary stores worked part time. Thirty-one percent of those in food stores and in apparel and accessory stores worked part time, and 20 percent of all department store workers were part-time employees. On the other hand, we find that in the industries which paid a little more money, many employees were compelled to work more than 40 hours a week without overtime pay. So that in October 1956, we find that 40 percent of the workers employed by building materials and farm equipment dealers, and 48 percent of those employed by automotive dealers and gasoline stations, and more than 30 percent of those employed by furniture, home furnishings, and appliance stores worked 48 hours or more per week with no overtime

pay.

Thus, we find that it is the workers in the lower paying stores who most need the protection of coverage under the minimum wage section of the Fair Labor Standards Act, and it is the workers in the other sections of the retail industry who are in special need of the protection the act affords against long hours of work without overtime pay.

All retail workers, of course, are affected by the loss of purchasing power that has resulted from the steadily rising cost of living. As is well known, the Bureau of Labor Statistics cost-of-living index has been rising steadily in recent years and currently stands at an all time high. Indeed, the present high cost of living probably affects retail works more than most other groups of workers, because the wages of most other workers have risen much more rapidly and to substantially higher levels than those of retail workers.

The fact that average hourly earnings of production workers are more than one-third higher than the average hourly earnings of retail

workers is a complete reversal of the situation that prevailed in 1938 when the Fair Labor Standards Act was passed. At that time, average hourly earnings of retail workers were higher than those of production workers. Thus, both absolutely and relatively, the need of retail workers for protection under the act has steadily become more serious and urgent.

This need can no longer be ignored by Congress. It should be met squarely and forthrightly at the earliest possible moment.

Mr. Chairman, there are three principal arguments which opponents of extension of coverage to retail workers make in support of their position.

The first of these arguments is that retailing is not an interstate industry and is not, therefore, a proper subject of regulation by Congress. This argument contends that the regulation of minimum wages and maximum hours of retail workers should be left to the States.

The fact is that the States have had more than 20 years since 1938, when the Fair Labor Standards Act was passed, in which to enact and put into effect minimum wage and maximum hours regulations applicable to retail workers. Yet with the exception of a few States, the States have completely failed to do so. Most retail workers are still not covered by any effective minimum wage or maximum hours regulation.

It is only fair to point out that this is due, in no small degree, to the fact that the same people who argue that minimum wage and maximum hours regulation in retailing is a State, not a Federal function, also bitterly oppose State legislation.

Of course, the workers that are represented by our union, and by other unions in the retail field, are protected to a substantial extent by the standards written into the the collective bargaining agreements under which they are employed. But it is obvious, Mr. Chairman, that our efforts to write decent standards into our contracts are severely handicapped by the fact that retail workers generally have no legal minimum wage or maximum hours protection, and consequently receive lower wages than any other workers in our economy.

There is also another answer to the argument that the Congress should not undertake to regulate the minimum wage and maximum hours of retail workers because retailing is not an interstate business. I submit, Mr. Chairman, that it has many times been decided by Congress and the Congress' actions in such instances have been upheld by the courts that enterprises that affect interstate commerce are proper subjects for Congress to regulate where a need exists-such as the low wages and inadequate living standards of many retail workers. Under S. 1046, the Fair Labor Standards Act would apply to the employees of a retail enterprise only if the annual gross sales of such enterprise exceed $500,000 or if at least $50,000 worth of its sales is made to industrial or commercial customers, as distinguished from ultimate consumers.

Can anyone fairly content that an enterprise that does a business of $500,000 annually does not affect interstate commerce? Or that when a substantial part of its business serves industrial or commercial customers, its operations do not affect interstate commerce? The National Labor Relations Board has already adopted and applied a test of $500,000 annual sales as the yardstick for determining whether

it will exercise jurisdiction in labor disputes involving retail establishments under the Taft-Hartley Act. Thus, such legislation is supported by both precedent and example.

It is perhaps worth repeating at this point-and this is one of the arguments thrown in our face year after year-that this bill will not affect small business. Retail businesses with sales of less than $500,000 a year are not affected by this bill. Nor are retail businesses in which the only employees are the owner of the business and his parents, spouse, or children. A provision of the bill specifically exempts these so-called "mom and pop" stores. And maybe it is about time the chambers of commerce stopped shedding crocodile tears for these "mom and pop" stores, because I think you will be interested, Mr. Chairman, to know that, in our experience in organizing these small "mom and pop" stores, we have no problems with wages. They pay the highest rates of pay because, in order for them to exist and compete against the big stores, they seek out, select and pay for the most competent help. And competent help does not fit into the category of a dollar or a dollar and a quarter an hour.

So we have no problems in small stores, in the "mom and pop" store; if they employ one or two sales people, generally these are highly competent and experienced sales people who can demand and get proper salaries. So we do not have those problems with the "mom and pop" stores.

It is also argued that application of minimum wage and maximum hours standards in retail enterprises will subject these enterprises to undue hardships and will result in loss of jobs for retail workers and higher prices for consumers. These arguments are equally without foundation.

Can anyone seriously believe, Mr. Chairman, that it would be an undue hardship for concerns like F. W. Woolworth Co., J. J. Newberry Co., J. C. Penney Co., Sears, Roebuck & Co., Montgomery Ward, Safeway Stores, Lerner Stores Corp., Walgreen Co., R. H. Macy Co., and so forth, to be compelled by law to meet decent minimum wage and maximum hours standards? I do not think so. If you will refer to my previous testimony, you will find that these companies and others like them are among the giants of American industry and will be the ones principally affected by S. 1046.

It has already been shown that application of the minimum wage to workers in the retail industry should have hardly any impact on the prices of goods sold in retail stores. In 1956, a special staff study prepared for this subcommittee by Dr. Fred H. Blum of the University of Minnesota, estimated that no more than one-half of 1 percent increase in selling prices would absorb the full amount of the increased cost of doing business in the retail industry as a whole if this industry is brought under the minimum wage.

An even smaller impact can be expected today as a result of today's generally higher wage levels and increased production. Certainly, the giant enterprises that dominate the retail distribution industry ought to be able to adjust without undue hardship or dislocation of employment to an increase in costs that, measured in terms of sales, may amount to less than one-half of 1 percent.

Such an increase cannot, I submit, be regarded as inflationary by any reasonable standard. The small increase in costs that would re

sult from enacting S. 1046 will mean greater purchasing power in the paychecks of nearly 2 million low-paid retail workers. These workers need this increased purchasing power to buy food, clothing and other necessities they sorely lack today. They will not-they could not even if they wanted to save the extra dollars that coverage will bring them because even these extra dollars will leave them short of the earnings they need to achieve a decent level of living according to American standards.

Mr. Chairman, we reject the idea that the Nation can be spared the dangers of inflation only at the expense of inadequate purchasing power in the hands of the lowest paid of our citizens. It is not inflationary to make sure that people have enough income to enable them to achieve a "minimum standard of living necessary for health, efficiency, and general well-being."

Again, Mr. Chairman, may I express our deepest appreciation for this opportunity to present to you the views of the Retail, Wholesale & Department Store Union on this urgently needed legislation.

Senator KENNEDY. Thank you, Mr. Greenberg.

I was interested in the figures indicating that as of October 1956, 40 percent of the workers employed by building materials and farm equipment and 48 percent of those employed by automotive, as you suggest, worked 48 hours or more per week.

I would imagine most of those workers get $1.25, and if they do, they probably work in excess of 40 hours. Is that right?

Mr. GREENBERG. That is the point we make, that while they get higher wages, they need the coverage; that is the point there, that they need the coverage of the act on hours.

Senator KENNEDY. Mr. Greenberg, based on your experience, if retail employees are covered and the minimum wage is increased to $1.25, you do not think it would cause disclocation?

Mr. GREENBERG. We are certain it will not cause dislocation.

Senator KENNEDY. What about the upward pressure on wages of those people now getting $1.10 to $1.25, which is not a bad wage, I guess, in the retail stores today; is it?

Mr. GREENBERG. I would not call it a good wage.

Senator KENNEDY. It is not a good wage, objectively speaking, but it is not a bad wage for this industry.

Mr. GREENBERG. No. As a starting wage it is not a bad wage, but it is certainly far from a good wage.

Senator KENNEDY. Do you think enactment of S. 1046 will cause any impossible problems in the retail industry?

Mr. GREENBERG. No. There obviously will be some upward pressure by those people who are today receiving $1.25 so that they will move forward. I am sure we want something like that to happen.

The reason we today consider the retail worker on the lowest rung of the economic ladder is because of the fact that we have so many who are making less than a dollar. If everybody was making a dollar and a quarter, obviously, when we went in to bargain for those people whom we have organized, we would be able to get them a fairly attractive wage.

Senator KENNEDY. How many people work in a retail store that does a business of $500,000 a year? That sounds rather large, but how many people would be working in such an enterprise?

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Mr. GREENBERG. It all depends on the business. If it is a small wares store, such as ladies' outer apparel, you might need 12 or 15. Senator KENNEDY. That many?

Mr. GREENBERG. Yes, because they sell a small item. They will sell hose at a dollar a pair, and you have got to chop a lot of wood to take in $500,000.

On the other hand, if you are in an appliance store or a furniture store, you might take in $500,000 with five people.

Senator KENNEDY. It would take at least that many. That is a reasonably good-sized store.

What would you estimate the profit was on $500,000 in the retail clothing store?

Mr. GREENBERG. Yes.

Senator KENNEDY. What would you say the profit was?

Mr. GREENBERG. At least 10 percent.

Senator KENNEDY. Ten percent. You figure they would be making about $50,000 out of that.

Mr. GREENBERG. Yes, I think that would be a conservative estimate. Senator KENNEDY. Net?

Mr. GREENBERG. I would consider that a conservative estimateyou are talking about the ultimate profit? Yes, I consider that a conservative estimate. He could not very well operate, and he would not operate for less than that.

Senator KENNEDY. Well, their capital would probably be

Mr. GREENBERG. The capital for a $500,000 business-I do not want to set myself up as an expert, because I never was fortunate enough to own one of those stores-but with a normal turnover of 3 timeswell, some places we turn over 10 times a year, but let us assume you get a normal turnover in bulk items, of 3 and 4 times a year, this would require a conservative investment of $100,000.

Senator KENNEDY. I want to thank you very much. I thought your statement was very good. You have had considerable experience in this field. I am also very glad you had these two men with you. Mr. GREENBERG. Thank you, Senator.

May we take a few more minutes of your time? We have two very short statements by two members of our union.

Senator KENNEDY. Surely. We would be glad to have them.

Mr. GREENBERG. Senator, here alongside me is a member of our union, Miss Mary Lovejoy, of local 615 in Bessemer, Ala. She would like to

Senator KENNEDY. She is from Alabama?

Mr. GREENBERG. She is from Bessemer, Ala. She is a member of our local 615, and she has a short prepared statement.

Senator KENNEDY. How about the young lady with her?

Mr. GREENBERG. The young lady alongside her is Mrs. Martha Gregory, a member of local 357 in Anderson, Ind.

Senator KENNEDY. Do you have a statement to read, Miss Lovejoy?

STATEMENT OF MARY LOVEJOY, BESSEMER, ALA.

Miss LOVEJOY. I do, yes, sir.

Senator KENNEDY. Go ahead.

Miss LOVEJOY. My name is Mary Lovejoy. I live at 1712 Second Avenue, Bessemer, Ala. I work for the S. H. Kress Co. in Bessemer.