First, there is the fear frequently expressed, that Wages Boards would increase unemployment, by pushing out of the labor market the less competent worker, who is unfit to earn even the minimum rate, and by giving the coup de grace to weak and tottering industries. The existing Wages Boards legislation of Victoria, makes special provision for the case of the old and slow worker. granted that there are individuals of this class who will be unable, under the new conditions, to find employment, even at special rates, there still remains the question whether it is not wiser, on purely economic grounds, to face boldly the necessity of maintaining for a while a certain number of persons physically or mentally incapable of fully maintaining themeslves, rather than of condemning to "half employment" an infinitely greater number of people who, given a fair chance, are perfectly able to earn their own living.

But sound economists who have carefully studied the subject do not hold that under a Wages Board system we should have a "net" reduction of employment. Since the first result of the establishment of such a system will be an increased wages bill, involving the transference of a fresh portion of wealth to the pockets of certain classes of workers, there must at once follow an increased purchasing power on the part of those workers and a raising of the general standard of consumption in the community. Workers will not only buy more, but better articles, and this movement must inevitably tend both to greater volume and greater regularity of employment.

With regard to those industries which are so deficient in capital or in organization that they can only maintain a precarious foothold in the competitive area by under-payment of the workers they employ, it is clear that the community would be better off for their disappearance.

Would the cost of production, and consequently the price of the article to the consumer, be greatly raised by the establishment of minimum rates? Daily experience shows that, in a considerable number of industries, there is a margin which could safely be drawn. upon for the levelling-up purposes of a minimum rate. Cases are not infrequently found, for instance, in trades employing women's labour at a sweated wage, where vigorous representation on behalf of the workers, acting upon a wholesome fear of publicity on the part of the employing firm, has produced a considerable increase, amounting on occasion to something like a doubling of the rate of pay. It must be remembered, further, that the cash margin is not the only one at the disposal of employers of labour. Human nature is lazy, and most people need some stimulus to enterprise. The

economy which is now too often effected by taking a penny or a halfpenny off the wages of the employes, would, were that method made impracticable by a Wages Board Determination, be otherwise contrived; by the introduction of improved machinery, by better organization, by checking the reckless waste which, where a vast quantity of very cheap articles are made by indifferent workers labouring desperately against time, swallows up a considerable amount of profit every year, and by abolition of the ruinous practice of selling under cost price in the case of certain of the articles manufactured, in order to make a market for the rest. Further, all industrial experience teaches that with the improvement of the workman comes improvement also in his work, even where this is highly specialized. Nor is cost of production necessarily lowest where the wages are low and the hours long.

Apprehension is often expressed lest the minimum wage, once established in an industry, should become the maximum in that industry; and assertions that this actually occurs have not been wanting. Again, there is much testimony from Victoria to support the contrary view. Opening, almost at haphazard, the latest Report of the Victorian Chief Inspector of Factories, we find, under the heading of the Aerated Water Trade Board, "The Determination is well complied with, the wages of many of the men and boys being above the minimum." A similar state of things is found to obtain at home in industries where minimum rates have been fixed by means of collective bargaining or arbitration under the Board of Trade. Here, too, the more skilled, industrious, and capable worker is able to earn a higher wage than that calculated on the average capacity of the average man or woman.

The last objection to be considered is what may be called the moral objection. Many of those who have not been brought into personal contact with sweated workers, and with the conditions under which sweated industry is carried on, deprecate the setting up of any machinery which appears to limit the opportunity for free bargaining between employer and employed. They are afraid that such machinery may destroy the spirit of enterprise, and that the assumption of responsibility in the matter of wages by the State will tend to weaken the personal relation between masters and men. To such objectors the best reply is an invitation to study the situation at close quarters and at first hand. They cannot then fail to perceive that the outstanding features in the present position of the sweated worker, especially when that worker is a woman, are absolute inability to bargain freely and total lack of independence. Such a worker must take the work offered, at any terms that may be

proposed, under penalty of an immediate drop into the abyss of destitution. The spirit of enterprise is rarely found to animate those who are working excessive hours for a bare pittance. As to the "personal relationship," it is useless to devise schemes for preserving it; for good or evil, it is practically a thing of the past. More and more, industry and commerce, like battleships, tend towards the "all big" type. Everywhere, the business that was formerly the affair of an individual or a family is now the result of the activities of an association or a limited company acting through its salaried

servants.

In a great number of cases the employer is practically powerless, even now, to deal personally with his employees. In time to come, as he becomes increasingly the instrument of great impersonal forces, financial and social, behind him, all capacity for such individual dealing will be taken from him. It is only by accepting, under the sanction of the State, the regulation of wages in those industries where it has hitherto gone unregulated, with such results in the shape of economic chaos and human degradation as we have been considering, that the best employer can save himself from being ultimately dragged down to the level of the worst. For him, as for his workers, an Act establishing Wages Boards would be a genuine measure of protection.

277. The Progress of the Minimum Wage25

BY FLORENCE KELLEY

Minimum-wage legislation was a favorite subject throughout 1913, when forty legislatures were in session, and state commissions were authorized to establish wage rates in California, Colorado, Minnesota, Nebraska, Oregon, Washington, and Wisconsin.26 Commissions were authorized to prosecute inquiries as to the desirability of such legislation or as to the living wage for women and minors in Illinois, Indiana, Ohio, and Connecticut. In 1915, New York, Missouri, and Michigan have made public the results of such inquiries.

Utah dispenses outright with commission and wage boards, and establishes a flat rate of wages specified in the statute for girls four

25Adapted from "The Case for the Minimum Wage: Status of Legislation in the United States," in The Survey, XXXIII, 487-489. Copyright (1915).

26 Massachusetts preceded the states enumerated by passing a law providing for a Minimum Wage Commission in 1912.

teen to sixteen years of age, for minors over sixteen years, and for adult women.

The commissions of Oregon, Washington, Massachusetts, and Minnesota have, during 1913 and 1914, promulgated wage rates, and the difficulties peculiar to our system of legislation are now conspicuously manifest.

The outstanding characteristics of American minimum-wage legislation compared with that of England, Australia, and New Zealand are three: the first is the omission of men; the second is its reference to the welfare of the people as a whole; the third, which is responsible for both the others, is its subordination to the courts on grounds of constitutionality, entailing the practice of placing upon American states the burden of proof that they are acting within the police powers when they create state wage commissions and wage boards or conferences. In several states the name "industrial commission" or "industrial welfare commission" is deliberately intended to suggest that here is no apparatus intended merely to facilitate haggling between employers and employees, but an organ of the whole of society created to serve the whole, by protecting the health and morals of women and minors.

This is especially conspicuous in the laws of Oregon and Washington with their preambles which set forth that: "The welfare of the state of Washington [or Oregon] demands that women and minors be protected from conditions of labor that have a pernicious effect upon their health and morals. The state of Washington, therefore, exercising herein its police and sovereign power, declares that inadequate wages and unsanitary conditions of labor exert such pernicious effect." The same principle underlies the laws of California, Colorado, Minnesota, and Wisconsin.

Only Massachusetts and Nebraska follow the precedent set by England and Australia in requiring that the commission, in making determinations, consider also the state of the industry, not exclusively the needs of working women. Yet these states express their sense of need that the public participate in the process of wage determination, Massachusetts by requiring that one member of the commission shall be a woman, and in a wage board, with an equal number of representatives of employers and employees, there must be one or more representatives of the public. Nebraska provides for a commission of four members, of which one must be a woman. Both Massachusetts and Nebraska limit to mere publicity the penalty for failure to pay the minimum-wage rates established by their state commissions, neither fine nor imprisonment being prescribed.

The Wisconsin statute provides that the advisory board shall be so selected as "fairly to represent employers, employees, and the public." Obviously the solicitude for representation of the public arises less from fear that its interests may be overlooked than from apprehension lest, without such representation, the courts may hold minimum-wage laws alien to the police powers of the state.

Despite these precautions, however, progress is for the moment halted. Until the decision of the United States Supreme Court becomes known, no legislature is likely to experiment further in the new field.27 But this is not all. The Minnesota rate-wage established October 23, 1914, to become effective November 23, has been met by a temporary injunction on the ground that "the questions presented are important and doubtful," and the pending decision. in the Oregon case will "doubtless dispose of all the main questions involved in the Minnesota statute."

Some opposition to minimum-wage legislation has come from employers. More surprising is the opposition found, here and there, among labor leaders. Samuel Gompers and others have opposed all wage-board legislation for men, and have exercised a mildewing influence upon such effort even when confined to women. But the younger men within the ranks of trade-union leaders show themselves either indifferent or favorable to it.

These circumstances-the extraordinary powers of the courts, and the attitude of certain labor leaders-explain the stage of the movement for minimum-wage laws in America compared with England and Australia. The case now pending before the United States Supreme Court to determine the constitutionality of the Oregon minimum-wage law will settle the fate, for years to come, of effort in this field.

278. The Futility of the Minimum Wage28

BY J. LAURENCE LAUGHLIN

The hysterical agitation for a minimum wage (today urged chiefly for women) has in it no conception of a relation between wages and producing power. It is unsound for several reasons which touch the very interests of the laborers themselves.

27 In the case of Frank C. Stettler and Elmira Simpson v. Industrial Welfare Commission of Oregon, the state Supreme Court unanimously upheld the constitutionality of the Oregon law. An appeal, however, was taken to the United States Supreme Court.

28 Adapted from "A Monopoly of Labor," in the Atlantic Monthly, CXII, 451-453. Copyright (1913).