(The following material was received for the record:) WASHINGTON, D.C., March 9, 1962. Hon. JAMES ROOSEVELT, The Shipbuilders Council of America views with serious concern the ultimate effects which would accrue with the enactment of H.R. 9656 to expand the Davis-Bacon act to include fringe benefits in prevailing wage determinations and H.R. 9657 to expand the 8-hour law so that law in effect would duplicate the Fair Labor Standards Act. The council submits there is no justification for enactment of either bill and would appreciate the incorporation of this telegram in the record of the hearings. EDWIN M. HOOD, President, Shipbuilders Council of America. NATIONAL ASSOCIATION OF MANUFACTURERS Hon. JAMES ROOSEVELT, DEAR CONGRESSMAN ROOSEVELT: We appreciate the opportunity to present the views of the National Association of Manufacturers in connection with your bill, H.R. 9656, and the companion bill, H.R. 5622, which has been introduced by Congressman Fogarty, to amend the Davis-Bacon Act. Under the provisions of these bills, a new subsection would be added to the Davis-Bacon Act by defining the terms "wages," "minimum wages," etc., as used within this statute so as to include both the basic hourly rate of pay and specified fringe benefits in determining the prevailing wages to be paid laborers and mechanics under the type of government contracts embraced within this statute. In our view, this proposal constitutes a distortion of the basic purpose for which the Davis-Bacon Act was enacted and will result in excess additional costs on Government contracts subject to its provisions. It will further distort most gravely the basis for the computations of payments for overtime, holidays, vacations, and the like. The congressional debates of 1931, and the legislative history of the DavisBacon Act, indicate a congressional intent to prevent, during this depression period, a disruption of local employment conditions through the importation of lower-priced labor in connection with Government contracts. In the intervening years, the manner in which this statute has been applied and enforced by the Department of Labor has resulted in a distortion of this basic intent. The manner in which prevailing wage rates are presently determined and the broad concept of the term "area" has had the effect of arbitrarily and unrealistically raising many local wage rates with the consequent disruption of the local economy in many areas of the country. To add to this concept, as presently applied, the element and cost of so-called fringe benefits will be to further compound and distort the intent of this statute. A great deol of statistical information has already been placed in the hearing record relating to the distortions in local wage rates with resulting effect on the economy of various communities so that we will not further belabor that aspect of the issue. However, such statistical studies and testimony merely point up that the addition of the cost of fringe benefits to these basic labor rates would serve only to compound the problems. The use of the Davis-Bacon statute arbitrarily imposes higher labor costs on the construction of public works projects, with the resulting higher costs to U.S. taxpayers. In a continuing period of intensive Government procurement and Government public works projects, the addition of such arbitrary costs to the already exhorbitant and alarming cost of maintaining the Federal establishment is totally unrealistic and fiscally unsound. The addition of fringe benefits, as contemplated in the bill at hand, is an entirely new concept of "prevailing wages," particularly since fringe benefits are by no means uniform. While it is true that the National Labor Relations Act makes "wages, hours, and other terms and conditions of employment" issues for arms-length collective bargaining, it does not follow that this same principle of law is equally applicable to a statute which has a different underlying motivation. The argument is made that contractors who do not have welfare programs can come into a local area and underbid employers who have bargained on welfare benefits for their employees. This can also work in reverse, with the resultant impact on other local industries and the local economy and the forced injection of disruptive wage practices. In any event, we urge that free collective bargaining when there is a union contract is the most responsible means for determining whether and what fringe benefits, if any, should be utilized to compute rates of pay. Much has been said about the protection of workers in a locality. With the current strength and sophistication of the union movement and the adequae remedies afforded both labor and management under the National Labor Relations Act, it no longer seems necessary to protect workers by Government fiat. The Congress should consider protection of the taxpayer by seeking to minimize the cost of Government in evaluating legislation of this character. There seems also inherent in the proposed legislation an undesirable impetus to inflation. Amendments of the character embodied in H.R. 9656 and H.R. 5622 contribute nothing by way of clarification of the confusion and uncertainty which presently exist as a result of overlapping and outmoded statutes. These problems of overlap are so severe that we suggest the best legislative remedy would be to repeal the Davis-Bacon Act, as well as the Walsh-Healey Public Contracts Act. We respectfully request that these views be made a part of the official hearing record. Very truly yours, DONALD J. HARDENBROOK, President. CHICAGO, ILL., March 9, 1962. Hon. JAMES ROOSEVELT, Chairman, Subcommittee of House Education and Labor Committee, House of Representatives, Washington, D.C.: We have just been advised of House bill, H.R. 9656, and I wish to advise you that this association heartily supports this amendment to the Davis-Bacon Act. We would be most happy to have a representative of this organization testify in support of this bill. GEORGE A. MILLER, Mason Contractors Association of America. Hon. JAMES ROOSEVELT, PITTSBURGH, PA., March 6, 1962. Chairman, Subcommittee of House Education and Labor Committee, House of Representatives, Washington, D.C.: Re House bill on Davis-Bacon, H.R. 9565, and House bill on time and a half after 40 hours, H.R. 9647, scheduled for hearing March 8 and 9, 1962. The fabricator-erecter members of the Pipe Fabrication Institute hereby wishes to register their endorsement and wholehearted and unequivocal support of this legislation. If desired, the institute is willing to send a representative to testify in support of these bills. N. F. YOUNG, Executive Secretary, Pipe Fabrication Institute. Hon. JAMES ROOSEVELT, JOINT INDUSTRY PROGRAM COMMITTEE, Chairman, Special Subcommittee on Labor, Committee on Education and Labor, DEAR MR. CHAIRMAN: The Joint Industry Program Committee of the Plumbing & Pipe Fitting Industry adopted the following resolution at its regular meeting on March 13, 1962, on behalf of its member organizations which are Mechanical Contractors Association of America National Automatic Sprinkler & Fire Control Association National Constructors Association National Lead Burning Association Refrigeration & Air Conditions Contractors Association Pipe Line Contractors Association United Association of Journeymen & Apprentices of the Plumbing & Pipe RESOLUTION Whereas we find ourselves in unanimous agreement concerning legislation now before Congress to amend the Davis-Bacon Act and the 8-hour laws: Therefore be it Resolved, That the Joint Industry Program Committee of the Plumbing & Pipe Fitting Industry hereby recommends the immediate enactment of H.R. 9656, a bill to amend the Davis-Bacon Act, as amended, and for other purposes; and be it further Resolved, That the committee also recommends immediate enactment of H.R. 9657, a bill to establish a standard 40-hour workweek on construction work done under contract for, or with the financial aid of, the Federal Government; and be it further Resolved, That a copy of this resolution be sent to Representative James Roosevelt, chairman of the Special Subcommittee on Labor of the Committee on Education and Labor which is now holding hearings on these bills. As general chairman of the committee, and in accord with its direction, I am submitting a copy of the above resolution, with a request that it be incorporated in the record of the hearings on H.R. 9656 and H.R. 9657. Respectfully yours, FRED W. BARTH, General Chairman. Representative JAMES ROOSEVELT, COMBUSTIONEER CORP., Arlington, Va., March 6, 1962. Chairman, Subcommittee on Labor Standards of the House Education and Labor Committee, Old House Office Building, Washington, D.C. DEAR CONGRESSMAN: As president of the Sheet Metal Contractors Association of the District of Columbia, an organization of over 30 employers engaged in the construction industry, I would like to go on record that our organization is in fabor of the adoption of the amendment of the Davis-Bacon Act (H.R. 5622, H.R. 9656) to include fringe benefits in the prevailing wage rate. Yours very truly, D. S. SHYTLE. STATEMENT IN BEHALF OF THE INDUSTRIAL RELATIONS DEPARTMENT OF THE ELECTRONIC INDUSTRIES ASSOCIATION This statement is submitted, in behalf of the Industrial Relations Department of the Electronic Industries Association, to oppose amendments to the DavisBacon Act as proposed in H.R. 9656, introduced by Representative Roosevelt, chairman of this subcommittee. The Electronic Industries Association is the national trade association representing approximately 350 manufacturers of electronic equipment, both commercial and military. The EIA Industrial Relations Department consists of member companies' representatives dealing with labor and industrial relations matters. EIA's membership includes companies covering the entire gamut of electronic products. Because approximately 50 percent of these products are sold to the military departments and other Federal agencies, and because electronics are a large part of the cost of missiles and space vehicles, we naturally are concerned with the effects of the Davis-Bacon Act at missile and space sites and with an amendment which we believe will produce harmful effects on the economy and will be contrary to policies, supported by the Congress and the President, seeking to restrain wage increases which would contribute to inflation. This bill, if enacted into law, could clearly produce inflationary results. We particularly wish to call the subcommittee's attention to the provision of the bill that requires that consideration be given only to union-negotiated fringe benefits "* * * 'prevailing wages' shall include: (1) the basic hourly rate of pay; (2) the rate of payments by a contractor or his subcontractor to a fund established by bona fide collective bargaining agreement between such contractor or subcontractor or his representatives and laborers and/or mechanics or their representatives, jointly administered * * * for the purpose of providing, either from principal or income, or both, for ***" named fringe benefits. It would seem clear from the language of the bill that, in determining "prevailing wages," the Department of Labor would be required to consider only union-negotiated fringe benefit rates, and not fringe benefits supplied to nonunion employees, for there must be a bona fide collective bargaining agreement to establish the fund into which fringe benefit payments are to be made. Therefore, such union-negotiated fringe benefits, although they might not otherwise be truly prevailing in the local area, would appear to be made prevailing by definition, through the amendments proposed by this bill. Under section 1 of the regulations for administering the Davis-Bacon Act, the term "prevailing wage rate" is defined as: "(1) The rate of wages paid in the area in which the work is to be performed, to the majority of those employed in that classification in construction in the area similar to the proposed undertaking; "(2) In the event that there is not a majority paid at the same rate, then the rate paid to the greater number: Provided, Such greater number constitutes 30 percent of those employed; or "(3) In the event that less than 30 percent of those so employed receive the same rate, then the average rate." Since it appears that only union-negotiated fringe benefit rates could be included in determining the prevailing wage rate for the local area, the “average rate," where less than 30 percent receive such union-negotiated benefits, would apparently be merely the average of those who actually receive the union-negotiated benefits, and not an average struck by including union and nonunion fringe benefits, for under the terms of the bill, there is no wage rate covering fringe benefits except those "established by bona fide collective bargaining agreement." This would result, therefore, in the possibility that a very small percentage of unionized employees receiving an enormous fringe benefit package could result in automatically requiring the payment of this large amount under any Davis-Bacon contract in the area. The effect of this bill would be a payment, by one means or another, of the equivalent amount found in union-negotiated hourly pay and fringe benefit packages, with resulting possible acceleration of inflationary wage increases at enormous expense to the Government and public. As a major step in increasing the Nation's space and missile program, we suggest that the Special Labor Subcommittee give consideration to eliminating the delays caused by jurisdictional disputes at missile and space sites. We recommend that the subcommittee incorporate the "Holland report" (Missile Site Public Contracts Advisory Committee) recommendations in this bill. These recommendations, we believe, provide fair and impartial standards and criteria, and a basic and general guide to interpretation of the Davis-Bacon Act at missile and space sites that would be administratively workable and capable of satisfactory application at the various levels of decisionmaking, resulting in reasonably unform identifications of what work constitutes "construction, alteration, and repair" under the Davis-Bacon Act. We believe this will tend to dispel much of the confusion as to what the law means as applied to missile and space sites and would contribute greatly to the more efficient and expeditious accomplishment of missile and space site work. The "Holland report" recommendations are therefore strongly endorsed by the Industrial Relations Department of EIA. Consequently, we heartily support the testimony of Congressman David T. Martin on this subject when he appeared before your subcommittee. CONCLUSIONS For the foregoing reasons, the Industrial Relations Department of the Electronic Industries Association strongly urges that the Special Labor Subcommittee of the House Education and Labor Committee seriously consider and oppose the provisions of H.R. 9656 as an amendment to the Davis-Bacon Act requiring Government construction contractors to meet prevailing area standards on fringe benefits as well as wage rates. We recommend this action as necessary in the national interest to prevent harmful effects on the economy and to prevent acceleration of inflationary wage increases at enormous expense to the Government and the public. Furthermore, we recommend the incorporation of the "Holland report" recommendations in H.R. 8656. Respectfully submitted. W. GERARD TUTTLE, Director. STATEMENT OF NATIONAL CRUSHED STONE ASSOCIATION The National Crushed Stone Association, with headquarters in Washington, D.C., is a nationwide nonprofit trade association of producers of crushed stone and related products. NCSA makes this statement in opposition to the proposals embodied in H.R. 9656 and 9657 on behalf of its members, many of whom are small businesses. Frequently a stone producer will at the same time be engaged in producing stone for use in interstate commerce, furnishing stone to the Government under a supply contract and performing a portion of the work called for by a Government or federally financed construction contract. As a result, stone producers are subject to the full impact of the myriad, often conflicting requirements of the Federal labor standards laws. An appreciation of the extent of their exposure to this patchwork of laws can be gained from even a brief examination of the accompanying chart entitled "Possible Applicability of Federal Labor Standards Laws to Stone Producers by Type of Job."1 Consequently, the association is opposed to any legislation which would further extend the scope or subject matter of the Federal labor standards laws and increase thereby the already oppressive burdens its members suffer under them. A considerable portion of the crushed stone produced by the association's members is supplied either to Government or federally aided construction projects. Hence, they have a direct and vital concern and interest in the principles of this proposed legislation. H.R. 9656 H.R. 9656 proposes the extension of the Davis-Bacon Act to require payment of certain fringe benefits as part of prevailing wages. At present the DavisBacon Act requires that all laborers and mechanics engaged in Federal construction exceeding $2,000 be paid not less than the wage rate determined by the Secretary of Labor to be prevailing in the particular locality in which the work to be performed for the type of work in question. Almost without exception Congress has, in enacting Federal-aid legislation, required that the Davis-Bacon prevailing wage rates also be paid to laborers and mechanics engaged in private construction financed in whole or in part by Federal funds provided for by such legislation. Hence, the scope of application of its principles is very broad. Under the proposal contained in H.R. 9656 the Secretary of Labor would be authorized to determine a "fringe benefit rate" for inclusion in the prevailing wage rate. Presumably, the fringe rate would be determined (in some manner not specified in the bill) by the Secretary from "the rate of payments by a contractor or his subcontractor" into a pension, benefit, or welfare fund. Con 1 This chart appears in the copyrighted publication of NCSA entitled "The Stone Producer and Federal Labor Standards" which had to be prepared because of the enormous confusion which had been engendered by these laws in their diverse application to our members. |