SALARIES AND EXPENSES

Mr. SHRIVER. How much of an increase for 1967 are you requesting for salaries and expenses?

Mr. LUNDQUIST. The personnel compensation on page WH5, $414.800 additional. The total is $875,000 additional with some deductions in other items through that listing on WH5.

MANAGEMENT IMPROVEMENT REDUCTION

Mr. SHRIVER. On page 11 of the justifications where you have the total of savings, you mention $118,200 results from suspension of wage surveys conducted by the Bureau of Labor Statistics. This is all concerning management improvement reduction. The question is, why do you call it management improvement reduction?

Mr. LUNDQUIST. It may be a temporary management improvement, that is true, in that we suspend these wage surveys now because we are unable to proceed along the lines that we had been proceeding in executing the Walsh-Healey wage determination program. So that this does result in a lower budget since we will not have the determination program.

I suspect one could debate as to whether this is management improvement or just good management for this year.

Mr. SHRIVER. A little later on the same page we talk about savings of $70,000.

Mr. LUNDQUIST. Yes.

Mr. SHRIVER. This is for reductions in expenditures for travel and supplies. Why do you call these savings?

Mr. LUNDQUIST. This is management improvement. We are saving this because we are dispersing the investigative staff to more points throughout the country making it easier for them to get to the work sites. We cut down on the amount of travel and per diem costs. We are just trying to manage a little better by having them be a little. more frugal with supplies and other things that they would use. Mr. SHRIVER. That is all I have, Mr. Chairman.

Mr. FOGARTY. Mr. Flood?

ADEQUACY OF BUDGET REQUEST

Mr. FLOOD. I get the impression that you are barely keeping your nose above water in this whole operation. I get the impression that you may get your nose below the waterline during the next year. I see that your total number of establishments investigated in 1964 is 56.000-plus. In 1967 it will be 56,000 flat. You are down.

That puts your nose right on the waterline. We have been hearing all week. from the Secretary of Labor down through the ranks, to the various bureaus in the Labor Department, and we have been reading in presidential messages and a flurry of reports and Commission memorandums that are coming un here, that the economy is booming. Unemployment is down to unbelievable low levels. There are shortages of workers in certain areas even in the unskilled. There is an increasing, progressively worsening shortage of semiskilled workers and without any doubt in the skilled. The line is going up. There are, especially in the defense area, popping up like hyacinths in the spring

all over the country, a rash of backyard garage establishments as subsubcontractors with this labyrinth of defense contracts that will be going out.

I have been sitting on the Defense subcommittee for 20 years. I can just imagine what is going to happen.

You will not be able to put a glove on them, will you?

Mr. LUNDQUIST. No, but I hope we can put a bare hand on them and grab those in violation.

Mr. FLOOD. What are you, Houdini? You said you would do only 56,000 in 1967. That is the year I am talking about. Fiscal 1967 is the year I am talking about, and so are you. Your estimated total number of investigations will be 56,000. You did 56,370 in 1964. You are going down.

If what I say is so, or if that develops, and it can not miss, then you will drown. You won't even be in the ball park. You won't even make as many investigations in 1967 according to your own report as you made in 1964, and in 1967 I am telling you about these new operations which will be springing up like mushrooms all over the lot. Mr. LUNDQUIST. Of course, we are

Mr. FLOOD. What will you use-mirrors?

Mr. LUNDQUIST. We use our best ingenuity to go to those firms that are in violation, and our findings in this first half year would indicate that in spite of the fact we went to 28,203 during the first half year, we found in those firms $46 million in back wages due, so that this is the return of the violation findings in relation to establishments investigated which is much greater than it was in 1964 and 1965.

Mr. FLOOD. Your operation reminds me of the story of the election in one of my precincts where a very famous political character was sitting as judge of elections. It was a tough and close mayorality fight. One of the men came rushing in about half past 8, all excited with his entourage with him, pad and pencil out. How am I doing here? How am I doing?

This judge of election character drops his glasses down to the end of the nose, looks at him, and says "Who are you?" He knew damn well who he was.

He said, "I am Mr. X."

"Well, you had 64 votes."

They all rushed out like a cloud of steam.

The race is close. Around half past 11 he came back, this is in the old paper ballot days, when they counted one paper at a time, and it took a long time. The same candidate rushed in with the same crowd, really on fire now, really excited because it is a horserace.

Loudly and almost hysterically he yells "How am I doing here?": The old guy, judge of elections, puts the glasses down again and says "Who are you?

He told him, "Mr. X."

"You got 64 votes."

"I had 64 votes at half past 8."

The judge said "You're holding your own, aren't you?" In that district he was lucky.

What's the difference between you and poor Mr. X-who, by the way, was defeated. You're not going to hold your own.

Mr. LUNDQUIST. Congressman Flood, I know these things are seri

ous matters.

Mr. FLOOD. Sure they are or you would not be sitting there.

CONFUSION ABOUT ENTITLEMENT UNDER THE LAW

Mr. LUNDQUIST. There are people who are legally due money under the statute enacted by the Congress.

Mr. FLOOD. Why can't people who are entitled to a minimum wage and/or overtime decreed by an act of Congress, in cases where there is no question of doubt as to what they are entitled to-they worked the following hours, are entitled to the following pay, and so on—why don't they get it? There are thousands and thousands of them. What is the matter? What kind of a railroad is this?

Mr. LUNDQUIST. In part I would say philosophically that the law limiting coverage, and there are only about 29 million out of 47 mil lion covered in the work force that could be covered under the wage and hour law, and that causes confusion in the minds of the employees themselves, in the minds of employers.

Mr. FLOOD. Confusion about what?

Mr. LUNDQUIST. As to whether they are entitled to the benefits of the law.

Mr. FLOOD. How could they be confused?

Mr. LUNDQUIST. Laundry workers, for example, write to us and send very pathetic letters which we wish we could do something about. Mr. FLOOD. This is traditional. That is a classic condition. Mr. LUNDQUIST. There are others.

Mr. FLOOD. Why should this confusion exist in the minds of laundry workers year after year after year after year, owners or workers? How could there possibly be confusion? How could that possibly continue to exist and why isn't it taken care of?

POSSIBLE ACT EXTENDING COVERAGE

Mr. LUNDQUIST. President Johnson asked the Congress last year, and we are asking Congress again this year, to enact legislation to put these people under the law.

Mr. FLOOD. That will be the next question. If and when Congress passes one of the various minimum wage and/or extension of coverage acts and chances are better than even that some such law will be passed this year, either a minimum wage to $1.75 or a compromise on $1.50, or no increase in minimum wage but a straight extension of coverage-what in the world will happen to you? Will you jump off the bridge?

Mr. LUNDQUIST. I won't do that, but I will be asking for more funds. to enforce the statute, and I would hope that request would be approved.

LEVEL OF ENFORCEMENT OF EXISTING WAGE AND HOUR ACT

Mr. FLOOD. You can't enforce the one in front of

you.

Mr. LUNDQUIST. We think we are doing pretty well.

Mr. FLOOD. That is not responsive.

The fact of the matter is that you cannot enforce it on this budget as you present it to us today. How can you? The answer is "No." Mr. LUNDQUIST. There are those who are violating the law

Mr. FLOOD. The answer is "No." Is it not?

Mr. LUNDQUIST. I would not want to say that it is

Mr. FLOOD. Answer yes or no and then talk for the rest of the morning and talk yourself out of it.

Hr. LUNDQUIST. I will say

Mr. FLOOD. Don't be evasive. Can you enforce the existing wage and hour law on the budget you just presented to this committee? Did you hear what I said?

Mr. LUNDQUIST. Yes.

Mr. FLOOD. Then answer it.

Mr. LUNDQUIST. No, not as well as I would want to enforce it.

FOCUS OF INVESTIGATIONS ON SMALL BUSINESS

Mr. FLOOD. All right. Obviously you are concerned in all these investigations, from what I have just heard you say and from what little I can gather from your statement, with what is known as small business under the accepted definition of a plant of under 500 employees. Mr. LUNDQUIST. Yes.

Mr. FLOOD. Who in the world ever thought up that definition? In a district like I come from 500 people is a big, big deal-wow. Anyhow, some long-haired joker up here decided that it is 500. This has baffled

me.

What percentage of your operations deal with plants over 500? Mr. LUNDQUIST. Very, very small. Our normal investigative activity would take us into that kind of a firm in only rare instances. Mr. FLOOD. Do you get complaints from any and all sources against firms over that figure?

Mr. LUNDQUIST. Yes, we do.

Mr. FLOOD. Are they sacred cows, or what?

Mr. LUNDQUIST. No. We find violations in those larger firms, but the tendency is that these are the automated firms. These are employers of skilled workers. Their tendency is to be unionized to a greater extent, and the violations in a general sense would not be found in the larger firms. It is the smaller firm that generally, from our experience, is in violation.

TENDENCY OF CERTAIN MANAGERS TO VIOLATE THE LAW

Mr. FLOOD. How generally do you discover-or would you have any reason to have statistics on this, just off the top of your head, if you do not have surveys on it, and I don't know why you should have but you have big ears and you can read-how generally is it a fact that any firm that is in trouble with you also has liens being filed against it for failure to meet unemployment compensation payments, failure to make payments to sinking funds, and what not?

Mr. LUNDQUIST. I think that is a very good question.

Mr. FLOOD. That is why I asked it.

Mr. LUNDQUIST. It represents the concept that managers who would tend to violate the wage and hour law are managers who would try to violate almost any law.

Mr. FLOOD. Precisely. Are these plants generally nonunion?

Mr. LUNDQUIST. That are in violation?

Mr. FLOOD. Yes.

Mr. LUNDQUIST. Generally, yes.

SOURCE OF USUAL COMPLAINT

Mr. FLOOD. What is the source of most of your complaints?

Mr. LUNDQUIST. The usual complaint comes from a nonunion worker, a former employee in an unskilled job, working in a firm that is in a nonmetropolitan area, and to a greater extent the tendency is to have that firm located somewhere in the southern area of the country.

Mr. FLOOD. A good answer. You covered the whole outfield with that one. It was a good answer.

METHOD OF REPORTING COMPLAINT

How does it start? How is it generated? Where does it begin? What happens to it?

Mr. LUNDQUIST. In many instances

Mr. FLOOD. Here is this person you are talking about. He is no longer an employee and he has met generally all the conditions precedent which you have established in answering my question. What happens? He is sitting on the back porch. What does he do?

Mr. LUNDQUIST. He might call us up at the local field office, and we have 100 of them, or he might know the local investigator who is working out of a little room in the post office and he might have his telephone number there, and he might call the man and tell him, or he might sit down and laboriously write it out, or

Mr. FLOOD. What would he do with it if he wrote it out? Where would he send it?

Mr. LUNDQUIST. He would send it to the nearest wage-hour office. Mr. FLOOD. If he has enough ingenuity to write the letter he can find it out without trouble?

Mr. LUNDQUIST. Yes, and in some instances he might walk in.

ATTITUDE OF INVESTIGATORS

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Mr. FLOOD. What do your records and reports show on complaints about the attitude and conduct of your field people in these 100-plus areas? Are they long-haired, flat-heeled, Cadillac-driving, mink coatwearing social workers?

Mr. LUNDQUIST. We find generally our complainants feel that our investigators are socially minded people.

Mr. FLOOD. Are they?

Mr. LUNDQUIST. Yes.

Mr. FLOOD. Where do you get them?

Mr. LUNDQUIST. We hire these people off the Federal service entrance examination roster. We concentrate on economics, business school, political science, and other business majors.

Mr. FLOOD. This must be a tough job.

Mr. LUNDQUIST. It is a tough job for the salary they receive.

STARTING SALARY OF INVESTIGATORS

Mr. FLOOD. What is the starting salary?

Mr. LUNDQUIST. GS-5 and 7.

Mr. FLOOD. What does that mean?