before the subcommittee indicated that the survival of smaller logging [87] enterprises would be placed in question with the unqualified repeal of all present exemption provisions. H.R. 10518 provides coverage under the act for tipped employees. We are in full agreement with the principle of this extension. However, the requirement that employers must pay wages at least equal to 50 percent of the minimum wage regardless of how much the employee receives in tips seems to us unnecessary and inequitable. A restaurant owner for example would be required to pay a waiter $0.87 per hour even though the latter may receive $3 an hour in tips. The objective of the act is to bring all wages above bare subsistence levels and it is our view that a more effective and less burdensome alternative can be provided in the service industry area. Tipped employees obviously are those who must meet the public. They generally possess greater skill than employees working behind the scenes. No employer can permit for long a situation in which his most basic employees covered by minimum wage are paid more than his skilled employees who meet the public. It is our belief that coverage of tipped employees would have to be either inequitably applied or administered by numerous wage-and-hour officials striving to apply their interpretation to thousands of entirely different circumstances. A third concern we would point out involves provision for student wage rates at 85 percent of the minimum wage. With the painful awareness of widespread unemployment among out Nation's youth, it is our belief that employers would be discouraged from hiring young people under the bill's present minimum wage rate increase. Again the committee has not acted prudently in its consideration of the potential danger in such action. Unemployment is consistently higher among youth simply because they are the least skilled and experienced. To force employers to pay wages in excess of an employee's productive value is simply not in keeping with the primary economic objectives of the Act. We are gratified that double pay for overtime was eliminated from this bill. Not a single witness made a persuasive case that imposition of double penalties for overtime would increase employment. We congratulate the many, many witnesses who gave thoroughly documented testimony that the double penalty provisions would have the precise opposite impact its proponents desire. Extension and strengthening the Fair Labor Standards Act holds promise for great progress in raising the economic well-being of millions of Americans. However, this can only be realized by accurate care with measured change in keeping with the Act's policy of eliminating "conditions detrimental to the maintenance of the minimum standard of living *** without substantially curtailing employment or earning power." We suggest that such care was not taken in the above-mentioned provisions of H.R. 10518 and that more reasonable alternatives should be incorporated into the legislation. ALBERT H. QUIE. 2. HOUSE REPORT No. 1366, 89TH CONGRESS, SECOND SESSION, TO ACCOMPANY H.R. 13712 MARCH 29, 1966.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. POWELL from the Committee on Education and Labor, submitted the following REPORT [To accompany H. R. 13712] The Committee on Education and Labor, to whom was referred the bill (H.R. 13712) to amend the Fair Labor Standards Act of 1938 to extend its protection to additional employees, to raise the minimum wage, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The amendment strikes out all after the enacting clause and inserts in lieu thereof a new text which appears in the reported bill in italic type. INTRODUCTORY STATEMENT The Fair Labor Standards Act of 1938 was enacted on June 25, 1938. It is a forerunner to today's war on poverty. The basic policy of that Act is contained in its second section: FINDING AND DECLARATION OF POLICY SEC. 2. (a) The Congress hereby finds that the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing com- (b) It is hereby declared to be the policy of this Act, The bill seeks to implement the policy of the Act by (1) extending the benefits and protection of the Act to an estimated 7,243,000 workers engaged in commerce or in the production of goods for commerce, or employed in enterprises engaged in commerce or in the production of goods for commerce, and (2) providing an increase in the minimum wage. The bill provides that the minimum wage for those employees presently covered by the Act will be $1.40 an hour beginning February 1, 1967, and $1.60 an hour beginning February 1, 1968. The proposed minimum wage for newly covered workers (other than those employed in agriculture) will be $1 an hour beginning February 1, 1967; $1.15 an hour beginning February 1, 1968; $1.30 an hour beginning February 1, 1969; $1.45 an hour beginning February 1, 1970; and $1.60 an hour beginning February 1, 1971. For newly covered agricultural workers the bill provides a minimum wage that will be $1 an hour beginning February 1, 1967; $1.15 an hour beginning February 1, 1968; and $1.30 an hour beginning February 1, 1969. Thus, the proposed new wage floors will be reached gradually within 2 years from now for those presently covered by the Act and for certain Federal employees and Federal service contract employees; 5 years for those, other than agricultural workers, who will be newly covered by the Act; and 3 years for newly covered agricultural workers. The wage increases provided by the bill were geared to considerations of correcting and as rapidly as practicable eliminating labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers without substantially curtailing employment or earning power. It is firmly believed that these gradual increases, approximately equivalent to productivity increases in recent years, can be absorbed by the national economy as easily as all previous increases in the minimum wage. [4] TABLE 3.-Proposed overtime protection for newly covered employees (excluding agricultural employees) A newly covered employee must receive compensation at a rate not less than 11⁄2 times the regular rate at which he is em- Effective date ployed for hours of employment in excess of— The General Subcommittee on Labor began public hearings on the Fair Labor Standards Amendments of 1965 on May 25, 1965. Hearings were concluded on July 21, 1965, after 25 days of hearings during which testimony was received from 97 witnesses, including the Honorable W. Willard Wirtz, Secretary of Labor, and other witnesses from government, labor, industry, and other interested groups. In addition, more than 100 statements were submitted for the official hearing record. In its executive sessions last year, the subcommittee also considered the testimony received from 78 witnesses during approximately 5 months of hearings held in 1963 and 1964 on proposed amendments to the Act. On August 4, 1965, the subcommittee concluded 6 days of consideration in executive session and reported a bill to the full committee. On August 25, 1965, the Committee on Education and Labor reported the Fair Labor Standards Amendments of 1965 (H.R. 10518). Reconsideration of the aforementioned amendments began early in 1966 by the General Subcommittee on Labor. Several changes were embodied in a new bill (H.R. 13712) which was introduced on March 16, 1966, and reported by the subcommittee the following day. On March 21, 1966, the Committee on Education and Labor ordered reported favorably that bill (the Fair Labor Standards Amendments of 1966) with an amendment. The committee amendment is in the form of a new text. The discussion and analysis that follows is a discussion and analysis of the committee amendment, and all references to the bill are references to the committee amendment. HISTORY OF THE ACT On June 25, 1938, one of the Nation's basic labor laws was enactedthe Fair Labor Standards Act of 1938. The first statutory minimum wage was established at 25 cents an hour for the year beginning October 24, 1938. It was made applicable to all employees, not specifically exempted, who were engaged in commerce or in the production of goods for commerce. The original Act provided that the statutory minimum wage would be raised to 30 cents an hour beginning October 24, 1939. A procedure was established for raising the minimum wage by stages to a level of |