(a) conforms to the practical requirements of small-station operation. (b) conforms to the theory that market size is the most significant determinant of the level and structure of revenues and operating costs in local product market industries, and

(c) involves the use of a yardstick which will place all stations within a market on the same competitive basis insofar as a wage-hour regulations are concerned.

A market size formula is used by the following States in the administration of State minimum wage laws: Colorado, Kentucky, New Jersey, New York, South Dakota, Utah, and Wisconsin.

The formula uses the population estimates and definitions such as that of standard metropolitan county area developed by the United States Bureau of the Census.

The particular cutoff point is proposed because it seems to provide an equitable and readily understandable dividing line between socially and economically integrated units of population and units not so integrated which are frequently farm oriented. It also is a useful rule-of-thumb dividing line between medium size and larger size markets on the one hand and small markets on the other.

VII. EFFECT OF THE PROPOSED AMENDMENT

1. The number of establishments and the number of employees affected by the change will be relatively small:

Approximately 1,741 radio stations and 128 television stations are presently located in markets of less than 50,000 population falling outside of standard metropolitan county areas (see appendix, table 4).

These stations now employ approximately 15,000 employees who would no longer be subject to the overtime provisions of the act.

2. It is not expected that the proposed change will result in either significantly reduced compensation or a decline in employment opportunities for employees in affected stations:

Present practice in broadcasting at the small-station level is to pay a salary which includes an overtime factor for the average hours which are expected to be worked. The amount paid is dictated by the market conditions for the skill needed to do the job and not by either the minimum wage requirement or the overtime provisions of the act.

3. The proposed amendment will accord to small-market broadcasters the same flexibility of operation which is now accorded to the overwhelming majority of business establishments withing the small-market broadcaster's economic environment:

Those producing for intrastate consumption and the retail and service establishments, all of which are not subject to the overtime provisions of the act, make up the bulk of establishments within the small-market broadcaster's business environment.

Weekly, semiweekly, and daily newspapers with circulations of less than 4,000 within a limited area are now exempt from both the overtime and minimum wage provisions of the act. These papers are direct and immediate competition for radio and television stations. The proposal will give them equal treatment.

78155-56-24

APPENDIX

TABLE 1.-Average 40-hour1 weekly wages for 5 key nonexempt jobs in radio broadcasting, February 19551

Unpublished data from the National Association of Radio and Television Broadcasters. Based on standard metropolitan county areas and on population estimates, as of Jan. 1, 1955, in Sales Management's Survey of Buying Power (May 1955).

TABLE 2.—Average 40-hour1 weekly wages for 7 key nonexempt jobs in television broadcasting, September 19552

National Association of Radio and Television Broadcasters, Television: Wages, Hours, Employment 1955 (March 1956), pp. 4–31. Based on standard metropolitan county areas and on population estimates, as of Jan. 1, 1955, in Sales Management's Survey of Buying Power (May 1955).

TABLE 3.-Radio and television station employment size according to market

1 National Association of Radio and Television Broadcasters, Radio: Wages, Hours, Employment, 1955— pt. III, Summary and Aralysis (December 1955), p. 14; Television: Wages, Hours, Employment, 1955 (March 1956), pp. 4-31.

Based on standard metropolitan county areas and on population estimates, as of Jan. 1, 1955, in Sales Management's Survey of Buying Power (May 1955).

* Full-time employees only.

TABLE 4.-Distribution of radio and television stations by market size, Apr. 1,

1 Source: NARTB estimate based on FCC data. Includes on-the-air stations only. Based on standard metropolitan county areas and on population estimates, as of Jan. 1, 1955, in Sales Management's Survey of Buying Power (May 1955).

Excludes 76 independently operated FM stations. Includes 35 educational stations which do not sell time and 53 stations in the Territories of the United States.

Includes 18 educational stations which do not sell time and 14 stations located in the Territories of the United States.

TABLE 5.-Average weekly hours worked for 5 key nonexempt jobs in radio broadcasting, February 19551

1 Unpublished data from the National Association of Radio and Television Broadcasters. Based on standard metropolitan county areas and on population estimates, as of Jan. 1, 1955, in Sales Management's Survey of Buving Power (May 1955).

TABLE 6.—Average weekly hours worked for 7 key nonexempt jobs in television broadcasting, September 19551

1 National Association of Radio and Television Broadcasters, Television: Wages, Hours, Employment, 1955 (March 1956), pp. 4-31.

Based on standard metropolitan county areas and on population estimates, as of Jan. 1, 1955, in Sales Management's Survey of Buying Power (May 1955).

TABLE 7.-Distribution of radio and television stations by revenue size, 19541

1 Source: FCC data adapted by NARTB.

* Includes only television stations operating during full year of 1954. Data not available.

Mr. TOWER. The position of the association is that small-market radio and television stations should be exempt from the overtime provisions of the Fair Labor Standards Act. We do not propose that these stations be exempt from the minimum wage provisions of the

act.

We, in using the term "small market" refer to those stations which are in markets of less than 50,000 population, falling outside of the standard metropolitan county areas, as that term is used by the United States Bureau of the Census.

Senator DOUGLAS. Is that term clearly defined?

Mr. TOWER. That is clearly defined. This is a census concept, a census definition and is well recognized, I think, in this area.

Senator DOUGLAS. How many of the radio stations are small market? Mr. TOWER. By this definition we estimate that approximately 1,740 radio stations would be excluded from the overtime provisions of the act and about 129 or 130 television stations.

The total number of employees involved in this exemption, that is, employees now subject to the overtime provisions of the act who would not be subject to it, amounts to approximately 15,000.

Senator DOUGLAS. Thank you.

Mr. TOWER. The legitimate question is raised in connection with our proposal, why do these small-market broadcasters have a right to expect exclusion from the overtime provisions of the act? Two reasons, basically; the first is, of course, of major importance to these broadcasters themselves, and that is the fact that they have had many problems in adjusting to the overtime provisions of the act because of the type of business which they operate, and I shall touch upon that a little more later.

Secondly, and this is perhaps more important from the point of view of the Congress, which is dealing with the overall problem of coverage of the Fair Labor Standards Act, comparably situated businesses are, for the most part, at the present time excluded from the coverage of both the overtime and the minimum wage provisions of the act.

I would like, if I may, to touch very briefly on the broadcaster's wage-hour problems. First of all, why do broadcasters have particular difficulty? Why do these small-market broadcasters have particular difficulty in adjusting to the technical provisions of the overtime section of the law? The reasons, I think, are five.

First, a small number of employees, very small staff covering long hours on the air per day and per week-16 to 18 hours per day in radio

and 120 to 126 hours on the air per week, and on television 12 hours per day in the typical small market station, running to 84 to 90 hours per week.

Second, integrated operations, with most people performing more than 1 job, and some people performing 2 or 3 types of work.

Thirdly, creative people doing a creative job, and this fact makes it difficult to set any definite work schedule.

Fourth, public service character of the programing job which these small markets do, along with the other radio and television networks throughout the United States.

And, finally, unusual compensation practices which exist in the small-market radio and television stations.

This frame of reference, from a business and operational standpoint results in some really tough overtime problems and just very briefly I will sketch 1 or 2 of them. Perhaps the most difficult today, and this applies to almost all small-market radio and television stations, is that of the job of computing overtime pay for announcers and other employers who sell outside of stretch, as we call it, who combine announcing, a technical, or even a writing or secretarial job with part-time selling. The task of figuring out the regular rate of pay accommodating to the overtime requirement of the act in this type of situation is extremely difficult.

Secondly, applying exempt work definitions covering executive, administrative, professional, and outside sales employees, which because they are geared to larger enterprises in larger markets, are unfairly discriminatory to small-market employers generally, and to small-market broadcasters particularly. This difficulty will increase if the dollar standards for exempt work are substantially raised, as is now being considered.

Third, stabilizing compensation for nonexempt employees who, because of the nature of their duties, work a variable workweek.

Four, calculating overtime pay in the light of the unusual compensation practices in the industry.

These are the broadcasters' wage-hour problems and, very briefly, the reason for them.

Secondly, the question might be asked here why small-market broadcasters should be treated differently and why they should expect special consideration at this time. The reason, to us and to them, is quite simple. The small-market broadcaster is operating a local product market business.

From our reading of the legislative history of this act, it seems to us relatively clear that Congress, in 1938, had in mind excluding from the coverage of the act most local-product market industriesmost of the types of businesses that are in the small-market broadcasters business environment.

I would like to close these few brief remarks here this morning, if I may, with just a brief rundown of a personal experience I ran into last week, and I cite this because I think it is typical of the problems that small-market broadcasters have had in living with the overtime provisions of this act.

Senator, this particular situation happens to have taken place in Illinois. We did not make a safari to Illinois merely to develop information and ammunition for this hearing.