Retail Clerk's Union, received all of their contract increases on their due dates. The skill differentials within these stores between the Clerks and Meat Cutters narrowed from $49.30 a week in 1971 to $17.30 a week in 1973.

There was no "separate labor market theory" or "competition between chains argument" for the Committee allies to fall back on in determining what wage rates A & P in New Orleans should have paid from 1971 to 1972 and, certainly, historic wage and skill relationships with the Clerks in the same stores dictated a different consideration for Meat Cutters. But these arguments fell on deaf ears. Instead, the Committee allies found non-union wage levels to be a suitable rationale to hold down Meat Cutter wage rates. Yet, differences between union and non-union wage levels for Retail Clerks in New Orleans did not impede the operation of their wage increases!

DALLAS WAREHOUSE CASE

In Dallas, we have two examples of the arbitrary and unfair decisions of the Committee allies. We shall discuss the warehouse case first. Our Union has under contract the meat distribution plants located within the A & P, Kroger, and Safeway grocery warehouses in Dallas. In the same warehouses, the Teamsters Union has the bargaining rights for the grocery employees and the Machinists Union has the contract covering mechanics. Employees in the various bargaining units are separated by only as much as a swinging door.

The Teamsters' and Machinists' contracts in the Dallas warehouses were untouched by the old Pay Board in 1972 and, consequently, operated according to their full contract terms. However, the wages of Meat Cutters bargaining unit employees in these same warehouses were cut by a total of 40 cents an hour. The Meat Cutters appealed to the Food Wage and Salary Committee, but to no avail.

As a further and glaring example of this gross discrimination, consider what happened to the wage rates of fork lift drivers. We have fork lift drivers in our bargaining unit in the warehouses and so do the Teamsters. Their jobs in the two bargaining units are virtually identical. Because of the wage cut ordered in our contract, fork lift drivers receive 16 cents an hour less than those in the Teamsters' bargaining unit from January to June 1972, 21 cents an hour less from June to November 1972, 41 cents less from November 1972 to June 1973, and 621⁄2 cents less from June to November 1973. The same sharp reversals in wage relationships occurred in other job classifications in the two bargaining units where jobs are virtually identical.

Wage rate differences for skilled jobs in our bargaining unit and in the Machinists' bargaining unit were sharply accelerated by the Committee allies' action. From 1968 to 1972, for example, mechanics averaged approximately 30 cents more than our Meat Cutters. From February to August 1972, however, the wage spread increased to 66 cents and from August 1972 to February 1973 to 71 cents. In February 1973, the spread increased further to 91 cents, and in August 1973 it was more than one dollar per hour. The Committee allies did not even consider these relationships relevant.

DALLAS RETAIL CASE

Our Dallas warehouse members did not have a monopoly in getting the back of the hand from the Committee allies. Our retail members in the city did too. Over the last decade, the Dallas retail Meat Cutters' contracts have been patterned directly after the ones in Houston. Representatives of the Dallas Local Union have been physically present in the Houston negotiations and have signed essentially the same contract two or three weeks later. The same major food chains-Safeway, Kroger, A & P and Shop Rite operate in both Dallas and Houston. The warehouses discussed above service both the Dallas and Houston stores.

Nevertheless, the Committee allies decided that Dallas is "a separate labor market" from Houston when they considered the retail Meat Cutters contract. The Committee's public members permitted only a small wage adjustment for Dallas without any retroactivity. The result was that Meat Cutters in Dallas lost more than $1,500 over the life of the contract-$1,500 that Meat Cutters in Houston received because their contracts had not been cut by the old Pay Board.

In their report to the Administrator permitting the small wage increase, the public members seemed to have their tongues in their cheeks as they wrote: "Nevertheless we feel equity requires some adjustment before the end of the contract year (1973) so that new negotiations (in Dallas) can begin with unionized Dallas meatcutters in a reasonable relationship to unionized employees in other areas of Texas. The adjustments recommended would put Dallas cutters at $4.98, 10 cents ahead of San Antonio, a less organized and lower wage area. It would leave them 17 cents behind Houston, a more highly organized area. In the absence of a strict tandem relationship, it is hard to be dogmatic about the precise amounts that are appropriate."

If the Dallas rates were in some reasonable relationshp when the contract negotiations began, that relationship should have been maintainable--especially if it is a historic one. Houston was clearly the bench mark. At no time, did the Local Union ever claim any tandem or other relationships with San Antonio. San Antonio, in fact, was always in a wage-catch-up relationship with Dallas. In November 1971, for example, a Meat Cutter in San Antonio received $1.142 an hour less than a journeyman in Dallas.

In comparison, it is interesting that the Committee allies totally ignored wage rates in other parts of Louisiana, such as Shreveport, Lake Charles and Boussier City, in their decision affecting Meat Cutters in New Orleans. The Union pointed out that the vast majority of Meat Cutters outside New Orleans and throughout the rest of the state were receiving $5.15 an hour, or 72 cents more than Meat Cutters in New Orleans. And the Committee allies in their Louisville decision totally ignored the specific tandem relationship which the old Pay Board cited in its decision.

MINNEAPOLIS CASE

A further example of the Committee's allies' incomprehensible logic and capricious actions, is the decision affecting retail Meat Cutters in Minneapolis. They were denied a 20-cent an hour wage increase even though they performed virtually the same skilled work as the Meat Cutters in the same Local Union who work in the Minneapolis wholesale meat industry. The decision to cut the retail store rates came after the Committee had approved the identical wage increases over the same time period in the agreements of both the wholesale industry and a large independent retailer operating in that city.

The approved contracts were negotiated after and patterned directly from the retail agreement. What is more, retail Meat Cutters gave up substantial overtime-hour guarantees and significant premium pay provisions contained in their previous agreement to get the contractual wage increases. But all of these facts presented to the Committee allies were of no avail.

The allies' real reason for cutting the retail rates in Minneapolis was apparently summed up in one sentence of their decision: "The straight-time hourly rates in these contracts are some of the highest in the country for these classifications in the industry." The actual fact is that Meat Cutters in Chicago and Detroit and other metropolitan areas in the Midwest are earning more!

The Committee allies' concern over high wage levels contrasts sharply with their lack of bother over low wage levels. Meat Cutters in Miami, Florida, for example, are today the lowest paid in any other metropolitan area in the entire country as a result of being held back by economic stabilization decisions. Their wage rates were so low that these skilled employees were leaving the industry for better-paying, lower-skilled jobs in construction and elsewhere. The Committee allies, in their benevolent consideration, however, continued these workers as still the lowest paid in the country.

NO RULE OF LAW

In St. Louis, our Meat Cutter members have lost more than $1,000 out of their contract since January 1972 because the Committee allies refused to recognize the historic collective bargaining relationships that have existed between St. Louis and East St. Louis. Not only did the St. Louis members lose $1,000 which East St. Louis Meat Cutters received, but the rate for a Journeyman in St. Louis is now $7.00 a week less than the rate for the very same employee in East St. Louis. All this is in spite of the fact that companies operating in both cities transfer employees from St. Louis into East St. Louis and vice versa.

These examples are by no means the exceptions. They are actually patternsetting cases as a result of which thousands of workers have lost millions of

dollars. The equity and flexibility promised food workers in Phases III and IV have been a fraud. If those words mean anything to the Committee allies, then equity has been considered in relation to the lowest common denominator (nonunion wage levels) and flexibility has meant the right to operate under shifting ground rules. Rules are made and then changed and then ignored.

Some of the very basic rules of the Economic Stabilization Act itself have been flagrantly ignored by the Committee allies. For example, the Act stipulates that productivity and cost of living were among the factors to be considered. The Committee allies have consistently ignored these points when they have been introduced by the Union. In Dallas, for example, the cost of living, according to the Bureau of Labor Statistics, is higher than in Houston. But this fact was absolutely of no relevance to the allies. In Detroit, where Meat Cutters will get approximately an 8¢ an hour wage increase in this contract year, the Union argued that significant productivity increases occurred because of the increased flow of boxed meat into the retail stores. Yet, the Committee allies never even demanded a single statistic from the companies. The Union has filed an unfair labor practice and persisted in its demands that this information be brought before the Committee.

Under old Pay Board rules, wage increases could be put into effect and then challenged by either the employers or the Council itself. These rules were changed so that wage increases must now be announced in advance. They cannot be paid if they exceed 5.5 per cent until they are specifically approved by the Committee. The Committee allies have even prohibited payment of the automatic 5.5 per cent in some situations, such as in New Orleans, until it has reviewed wage rates. The snail's pace of the Committee and the bureaucracy delayed the consideration of that increase for months and months.

In our testimony last year, concerning the operations of the old Pay Board, we discussed at length the long delays and the bureaucratic foul-ups which occurred. We gave specific examples in case studies. In this testimony, we have concentrated on the arbitrary and capricious nature of the decisions against our members. That does not mean that the Committee allies and the Cost of Living Council staff now work efficiently-even if adversely. Quite the contrary!

The long delays, the loss of documents and the bungling continue. The mess is messier. A worker is kept waiting for months, perhaps a year and more, before he finally hears that he has suffered a pay cut from the contract rate. The cut has been enforced against him often by representatives of the very same companies which bargained and agreed on the contract originally. What is more, whatever increase is allowed may not be made retroactive. The worker pays for the delay.

This is what the new flexibility and equity of the Cost of Living Council has meant to our members in 1973 and part of 1974.

III. END WAGE CONTROLS

The so-called economic stabilization program has been even a greater fraud in the food industry in Phases III and IV than in the previous I and II. Farm prices are specifically exempted from controls. Other food prices are not controlled in any meaningful way. Profits are allowed to mushroom. But wages are controlled very effectively with management playing a major role in this "stabilization."

Inflation has not and is not lessened in any way by the workers' sacrifices. In the food industry, inflation accelerates at an ever quickening pace. Perhaps the wage cuts are not even meant to affect inflation. They may be meant simply to increase corporate profits at the expense of wages. It is vital that this Committee remembers that the money from the wage cuts does not go into a public fund or some charity for the poor, but simply into corporate treasuries.

To be very frank, workers have been had. They know it. They do not like it. They are not going to permit the process to continue.

The so-called economic stabilization program has taught them that contracts are not sacrosanct and that their government and their employers are not to be trusted. Their observance of the law has been made a mockery as they suffer more and more from wage cuts, on the one hand, and accelerating inflation, on the other.

AMALGAMATED RECOMMENDATIONS

We suggest that Congress play fair with these workers now. We suggest that it attempt to win back their faith. Since wage controls have been in effect for more

than two years and price and profit controls have not, we recommend that wages be allowed to rise. We urge that prices and profits on the other hand, be controlled for a change. Perhaps then, food price inflation, which has only accelerated during the period of effective wage control, may be stemmed.

If the Committee will not take this fair step to make up for the suffering which has so far been caused workers, then we suggest that you drop the controls entirely. In actual fact, you will be dropping only wage controls, because the others exist in fraudulent name only.

The CHAIRMAN. We will have to suspend for the present.

We had agreed at this time to take up a bill, unanimously agreed, a resolution by Mr. Rees of California. The question is whether or not the committee will adopt it as a supplement to the rules of this committee.

[After a brief recess the hearing continued.]

The CHAIRMAN. Now we will go back to the witness.

Is James B. Minor here?

If you want to file your statement Mr. Minor, you can do so today. Otherwise, if you want time, it will have to be at a later time. We have a bill coming up under the 5-minute rule.

STATEMENT OF JAMES B. MINOR, CHAIRMAN, WAGE-PRICE STABILIZATION COMMITTEE, AMERICAN BAR ASSOCIATION

Mr. MINOR. Could we possibly have 2 minutes?

The CHAIRMAN. No. If we give you a few minutes we will have to give the others. We are going to give them all permission to file their statements now. If they want to file a subsequent statement before the committee passes on the bill, they may do so.

If you want to get through with it now, you can file your statement. You have a statement, do you not?

Mr. MINOR. Yes, sir.

The CHAIRMAN. It will be given the same consideration as if you testified.

Mr. MINOR. We will file our statement now.

The CHAIRMAN. Without objection, Mr. Minor will file his statement at this point in the record.

[Mr. Minor's prepared statement on behalf of the American Bar Association follows:]

PREPARED STatement of JAMES B. MINOR, CHAIRMAN, WAGE-PRICE STABILIZATION COMMITTEE OF THE AMERICAN BAR ASSOCIATION REGARDING LEGISLATION TO EXTEND THE ECONOMIC STABILIZATION ACT OF 1970

Mr. Chairman, members of the Committee, the American Bar Association appreciates the opportunity to appear before you today to make the following remarks about certain administrative procedure matters under the Economic Stabilization Program.

My name is James B. Minor and I am an attorney practicing in Maryland and the District of Columbia. I am Chairman of the Wage-Price Stabilization Committee of the Section of Administrative Law, American Bar Association. During Phase II, I served as a consultant to, and later as General Counsel of, the Price Commission. Accompanying me today are Mr. Marion Edwyn Harrison of the District of Columbia bar who is Chairman-elect of the Section of Administrative Law, who is also serving as Acting Chairman of the Section during the recuperation of its Chairman, Frank Wozencraft of Houston, from injuries; and Mr. Jeffrey Burt of the District of Columbia bar, who is a member of the Committee.

At the Annual Meeting of the American Bar Association held in August 1973, in Washington, D.C., the following resolution was adopted by its House of Delegates:

"Be It Resolved, That it is the opinion of the American Bar Association that legislation be enacted which provides that after an aggrieved party has exhausted his currently established administrative remedies under Economic Stabilization Programs, he should be entitled to a quasi-judicial hearing before an independent administrative law judge appointed by the Civil Service Commission. If the judge determines that a violation exists, he may recommend assessment of a civil penalty to the agency, which has the ultimate power to assess the penalty. Either party to such a proceeding should be entitled to a review by the Temporary Emergency Court of Appeals, and the District Court proceeding provided by present legislation should be eliminated.

"Be It Further Resolved, That the President of the Association or his designee is authorized to seek the enactment of appropriate legislation to effect the foregoing objectives."

The Administrative Law Section has been designated to present this matter before the Congress.

The intent of this resolution is to accord full procedural protection to persons who are involved in administrative proceedings before an Economic Stabilization agency to determine whether there has been a violation of Program regulations.

As a background to situations to which this resolution is addressed, it is necessary to examine the history of administrative proceedings under the Act since November 1971. In the interest of providing broad powers to effectuate the purposes of the Economic Stabilization Act of 1970, as amended, Congress empowered the President or his delegate "to issue such orders and regulations as he deems appropriate. . . to (1) stabilize prices, rents, wages and salaries...” Section 203 of the Act. That section has been consistently interpreted by the various agencies administering the economic stabilization program to authorize the issuance not only of rules and regulations of general applicability, but also orders citing persons for violation of specific provisions of those agency regulations. Those orders have uniformly required persons to undertake affirmative action to correct the violation and have frequently included punitive sanctions as well (c.g., the imposition of a monetary penalty, etc.).

The administration of the Phase IV economic control program in particular and the delegation of authority to issue remedial orders to district directors of the Internal Revenue Service, highlight the extent of the Executive's discretion in these matters. Thus, for example, district directors of IRS have been empowered to issue orders which include provisions requiring persons to reduce prices to the extent necessary to lower revenues by an amount equal to "three times" the amount of revenues derived from price increases. Those orders may also include a provision that "immediately upon receipt of this order [the firm] may not increase the selling price of any goods or services . . . unless [the firm] first advises the Internal Revenue Service of its intent to raise such prices and receives the express written approval of the district director to do so." Phase IV Handbook Revised, Training 7610-01 (Rev. 9-73), Pgs. 4-27.

Vesting the Executive with authority of this kind is extraordinary when measured by either the standards established in other federal regulatory programs or with reference to the price control programs in effect during World War II and the Korean conflict. Thus, under the Emergency Price Control Act of 1942, the Administrator apparently exercised no similar authority, and enforcement was limited to applications to a court to enjoin any acts or practices constituting a violation. We are aware of no other Federal regulatory program where powers of this nature have been exercised.

For example, the contrast with the provisions of the Federal Trade Act serves to illustrate the exceedingly broad authority granted the economic stabilization authorities in these matters. Prior to finding a firm in violation of the Federal Trade Act, the Federal Trade Commission is required to grant a full adjudicative hearing with all of the procedural protections set forth under the Administrative Procedure Act (discussed in more detail infra). Even after the Commission has found the company in violation, an order does not become final and effective until after an opportunity to seek full judicial review in both a federal appellate court and the Supreme Court.

Although a person subject to an order under the program may seek judicial