Mr. GUNTHER. I happen to be on the Board of National Lutheran Home for the Aged. Mr. SPRINGER. Is that within the District of Columbia? Mr. SPRINGER. At the present time I assume then that you are paying less than $1.25 in some of your categories? Mr. GUNTHER. I believe in some categories it is $1.05 an hour. Mr. GUNTHER. I am not really familiar with their books now but Mr. GUNTHER. No, sir, I have not. Mr. SPRINGER. Have you figured how much it would raise the percentage cost of that home? Mr. GUNTHER. We would have to guess at it. Mr. SPRINGER. Is this going to be any great amount of trouble to supply? Mr. GUNTHER. No, sir; I can ask the superintendent of the home to work up the figure. Mr. SPRINGER. I think this is fairly important for us to know what the effect is going to be rather than to say it is going to go up. It does not prove anything to the committee unless we have it in dollars and cents and what it is going to raise the cost of the home. On page 3 of your statement you say: Business volumes are increasing notably in nearby Maryland and Virginia, while some are declining and others barely holding their own here in the central city. Can you tell me what kind or type of business volumes are increasing more notably in Maryland and Virginia than in the District of Columbia? Mr. GUNTHER. Well, certainly, department stores- the category that Mrs. Sisco represents. That is a consistent trend there. The volume in the downtown stores go down and the volume in the suburbs goes up. Mr. SPRINGER. Do you think that is due to anything having to do with this law or the threat of it? Mr. GUNTHER. I do not think that that is particularly applicable. We are more interested in the fact that R. & D. industries that are coming in here-they don't come into Washington. They select spots in Maryland and Virginia. There are other reasons, too, and one of several reasons would be the workmen's compensation rates and a number of other things-unemployment compensation and workmen's compensation here are much more expensive than they are in either of the adjoining States. Mr. SPRINGER. It is your thought, then, that if you had a retail establishment come in-and I will be corrected by Mrs. Sisco if I am wrong—there is one right across the street from her that is being built now-Lord & Taylor is there and did locate within the District of Columbia. But now Saks Fifth Avenue is locating across the street in Maryland. They probably are going to pay far above the minimum. Do you believe this has had its effect in Maryland and Virginia, the things that we have had in the District along these lines that has made it competitively better to locate out in those areas? Mr. GUNTHER. Well, I can give you an example that is not related to department stores. They are more or less out of my line. But if you go through the areas of Maryland and Virginia that are building up rapidly, office buildings, you will find that it is very, very seldom that a Washington contractor is represented out there. The reason for that is this is just one of the factors-we are complaining there are variations in building costs and workmen's compensation costs and unemployment compensation that make it more favorable to locate outside. You won't find a Washington contractor working on one of those buildings out there. If you do it is a very rare thing. As an example, in workmen's compensation the rate on some classes of employment are as high as $28 per $100 a payroll in the District. That is heavy concrete work, whereas in Maryland they are approximately $5 and in Virginia $4 as compared to $28 under the laws that we operate under. That is one reason that the contracting business in Washington, except for that which Government provides, is presently well confined to the city limits. Mr. SPRINGER. You make another statement at the bottom of this same page as follows: They you are talking about business are encouraged to do this by suburban business experience showing among other things than in some lines of activity more competent personnel at comparable or lower costs can be more easily recruited and retained in nearby Maryland and Virginia than in the District of Columbia. That is a fact? Mr. GUNTHER. That is a fact. Mr. SPRINGER. What surveys have indicated this to you? Is this by the board of trade or what? Mr. GUNTHER. I know it is true as far as the banks are concerned. Would you say that was true as far as the downtown Washington area is compared with Maryland and Virginia for your store, Mrs. Sisco? Mrs. Sisco. We, of course, are in an area where the housewife performs a greater nucleus of our work force both from cost of transportation-she is near her home and many other reasons. It is more attractive for her to work in our suburban stores. This is very true. I can't say specifically it is on a wage rate basis, though. Mr. MULTER. Certainly, the person who lives outside the District takes a job outside the District and takes this into account-the difference that they are saving in fares and the cost of transporation. Mrs. Sisco. That is why I say, Mr. Chairman, I can't relate this specifically to a wage rate and I feel that there are many factors. I certainly agree with Mr. Gunther that in addition to this minimum wage there are many other costs to the employer doing business in the District of Columbia that are a handicap. You have to honestly say this. But I can't bring it down to the most simple terms and say the house wife chooses not to come into the District of Columbia simply because of wage rate. Mr. GUNTHER. I would like to clarify, if I may, Congressman Springer, this is not put in as anything to dig this bill. It is simply to indicate one reason why busenesses do go outside anyway. Then, if you had this tax or wage differential, then that just adds something else to the picture. Mr. SPRINGER. On page 5 you indicate were certain percentages. The Survey of Earnings conducted by the Labor Department at the request of the Senate District Committee showed that in the summer of 1962 in the categories surveyed 33.2 percent of all nonsupervisors-all nonsupervisory employees worked less than 40 hours a week; 23.7 percent worked less than 35 hours and 5.6 percent less than 15 hours. It is indicated that the hourly earnings of those working less than a full week are lower for those working full time of 40 hours or more. Now, you draw a conclusion. This would seem to support the conclusion that many of those on a less than full week schedule and on hourly rates of $1 or less are either handicapped, are merely working part time to supplement family incomes, or are so completely untrained as to be employable only at very low rates economically. Mr. GUNTHER. I think in the stenographic transcription of this the word "than" was left our after the word "lower." It should read: It is indicated that the hourly earnings of those working less than a full week are lower than those working fiul time of 40 hours or more. I am sure that was left out of there. Mr. SPRINGER. You mean the hour ones? Mr. GUNTHER. Yes. Mr. SPRINGER. Would that not be subject to the rates set by the Wage and Hour Board here, though we just had the testimony of them before? Mr. GUNTHER. The Wage and Hour Board, the Minimum Wage Board applies only to women in the first place. It does not occur with the men. Mr. SPRINGER. Just one other factor. You did testify about cost to, we will say, charitable and philanthropic institutions. But you also made the statement: I stated that enactment of this bill would curtail employment opportunities for students, the aged, and the handicapped. Now, in that sentence on page 4 are you referring to what we have just been talking about on page 5? Mr. GUNTHER. No, I should say not. Frankly, I don't know how the Labor Department survey was set up. She may know more about it than I do. But just in general, if your people are going to employ students or if you employ the aged, handicapped or those who are unskilled and you have some work that they can perform economically you pay them 75 or 85 cents or $1 an hour and if you are required by law to pay them $1.25, I believe it is true this would reduce their opportunities for employment. Mr. SPRINGER. Is that based on those figures there, 32, 23, and 5 percent? Mr. GUNTHER. I would not say so. I think that was put in there just to indicate that those who are not working a full workweek are being paid at the lower rates. I don't know that there is any direct. connection between that and the fact that this would reduce employment for those who now have it. Mr. SPRINGER. That is all, Mr. Chairman. Mr. MULTER. Are Woodward & Lothrop's employees unionized? Mrs. Sisco. Yes. Mr. MULTER. How about the banks? Are they unionized? Mr. GUNTHER. No, sir. Mr. MULTER. The banks are one of those peculiar segments of our industry, like many others, that cannot move outside of the District or outside of a State. We have had costs increase as you indicated in many areas. There has not been a single bank failure in the District of Columbia since the bank holiday. Mr. GUNTHER. No, sir. Mr. MULTER. There probably will not be any. Mr. GUNTHER. I hope so. Mr. MULTER. So the banks would not be hurt too much by this minimum wage bill? Mr. GUNTHER. No, sir. The banks would not be affected at all, as a matter of fact. I do not think there is a bank in town that employs anybody in that capacity at the minimum wage provided by this bill. I am not here as a banker, but as a representative of the board of trade. I will try to provide Congressman Springer promptly that information on the increase in the costs. Mr. SPRINGER. Could you send that to the clerk of the committee to be put in the record and I also would like to have a copy and I know the chairman would like to have a copy. (The documents referred to, subsequently submitted, follow:) Hon. ABRAHAM J. MULTER, SECURITY BANK, Washington, D.C., December 12, 1963. U.S. House of Representatives, Washington D.C. DEAR CONGRESSMAN MULTER: In response to your request at the hearing yesterday on H.R. 8423, I am able to advise you that the total number of officers and employees of all categories employed in banks in the District of Columbia as of the close of business December 11, 1963, was 4,488. For your information, I am enclosing a copy of a letter sent to Hon. William L. Springer today in regard to the increase in the costs of operating the National Lutheran Home for the Aged were H.R. 8423 to be approved in its present form. This is in response to Mr. Springer's request at the same hearing. Our bank regularly contributes to the support of the Hebrew Home for the Aged here, and a number of my friends are active on its board and auxiliary. I know that that home also has a constant struggle to keep up with increasing costs and I am sure that they would be glad to make similar information available to your committee, if desired. Respectfully, FRANK A. GUNTHER, President. Hon. WILLIAM L. SPRINGER, SECURITY BANK, Washington, D.C., December 12, 1963. U.S. House of Representatives, Washington, D.C. DEAR CONGRESSMAN SPRINGER: Dr. John C. Stuff, pastor-superintendent of the National Lutheran Home for the Aged, which is located in the District of Columbia at 18th and Douglas Streets NE., advises me that the increased cost of operating the home per year, were H.R. 8423 to become law, would be $35,217, or 7 percent based upon 1962 actual costs of all kinds. I enclose a copy of compilation prepared by Dr. Stuff and also a copy of a letter which he addressed on October 3, 1963, to Hon. Wayne Morse of the U.S. Senate giving other information in regard to the home. I have been a director of the Lutheran Home for over 6 years. In order to fulfill its job as a church home, it admits over 50 percent of persons whose assets and income are insufficient to pay for the cost of their maintenance as guests. In fact, many persons admitted do not even have the $250 admission fee and are on old-age assistance in States like Pennsylvania, where the assistance stops when they cross the State line en route to the home. Overhead of the Lutheran Home has risen steadily, just as the operating costs of every other type of business or institution has risen, and there is a constant struggle to maintain standards of healthful environment despite the rising costs. I feel certain that you would receive like information from all other institutions of similar type in Washington, and hope very much that if the bill is not disapproved in its entirety, at least a special effort will be made to exclude charitable organizations of this kind. Sincerely yours, FRANK A. GUNTHER, President. Payroll expense, National Lutheran Home Average hourly wage based on Sept. 3-Sept. 16, 1963- $1. 142 43. 1 1. 232 Average straight time payroll, 65 employees at 1.142X 40 hours. Average payroll for 65 employees at present rate__ Average straight time, 65 employees at 1.264 X 40 hours.. Average payroll for 65 employees at proposed rate. Average weekly increase.. Average yearly increase. Dietary Department* yearly increase (home expense) Total average yearly increase_ 2, 969. 20 248. 25 3217. 45 3, 286. 40 377. 81 3, 664. 21 3, 217. 45 446. 86 23, 236. 72 11, 980. 28 35, 217. 00 *Operated on premises by Hospital Services, Inc., under contract. All direct costs are passed on to the Home. 24 employees there. OCTOBER 3, 1963. Re 88th Congress, 1st session, S. 860. Hon. WAYNE MORSE, U.S. Senate Washington, D.C. MY DEAR SENATOR MORSE: To be sure we agree that your minimum wage proposal of $1.25 per hour is timely and just and we cannot conscientiously oppose it, but rather we commend it. We do urgently appeal that our home and similar homes be exempt from the provisions of section 3(b) for the following reasons: 1. The National Lutheran Home for the Aged ministers only to needy persons over 60 years of age. 2. It gives complete custodial care for 260 aging men and women whose average age is 81-plus and 181 of whom are indigent--and unable to pay the cost of their care. 3. It provides infirmary care for 125 patients attended daily by two physicians and 44 nurses. This care includes a regular dietitian, and weekly visits by a podiatrist and ophthalmologist, also full time director of occupational therapy. 4. Our services are predicated upon the basis of a 48-hour week for adequate nursing care and proper operation of all phases of our home: (a) Employees are given vacations with pay. (b) Employees are given free group hospitalization. (c) Employees are given sick leave with pay. 5. Our charitable institution depends upon benevolent gifts from our church: Our operating expenses in 1962 exceeded our operating income by $85,00. We expended in 1962 $507,000 in the District of Columbia to operate the home. 6. The 40-hour week and the time and one-half rate for over 40 hours would have serious and devastating effect upon the budget and future services of our home. It would mean an added cost in payroll for 94 employees in the amount of $35,217. 7. Our only alternative if the bill becomes law would be to circumvent this provision 3(b) by adding additional employees at the $1.25-per-hour rate with the view of avoiding the time and one-half hourly rate over 40 hours. It would likely mean our referring of many of the 74 applicants on the waiting list to homes in other areas. |