STATISTICAL APPENDIX

TABLE V.-Ratios of southern to northern wages (charts 1 and 4)

1 Figure calculated on basis of percentage change from 1903 to 1904 according to data in Bulletin No. 4 pp. 43-44.

2 Not comparable with preceding figures as the number of employees covered in 1904 in both South North was more than double the number in 1903.

3 Shift from average hourly earnings to average of union wage rates.

A change in occupational basis from 1907 on. See explanation.

Based on laborers only.

6 Basis of calculation different from 1910 on. See explanation.

7 August.

Average of data for first and second half of March.

* Averages for last 6 months of 1936, first 6 months of 1937, and last 6 months of 1938.

10 Average for first 9 months.

TABLE VI.-Other southern textile States compared with North Carolina (chart 3)

1 Alabama added to South Carolina and Georgia. Without Alabama the 1906 figure is 99.04 compared with 99.18 including Alabama.

* Alabama added to South Carolina and Georgia.

TABLE VII.-South-United States furniture wage ratios1 (chart 5)

1 Southern averages from wage-rate and earnings surveys made by the Southern Furniture Manufacturers' Association, except for October 1937, which is based on data in U. S. Bureau of Labor Statistics Bulletin No. 669, 1940, p. 29. Average hourly earnings of the furniture industry as a whole have been used as the base for both the wage-rate and the hourly-earnings ratios. These data for the United States have been taken from U. S. Bureau of Labor Statistics Bulletin No. 669, 1940, pp. 19, 20; and, after 1938, from issues of the Monthly Labor Review under "Trend of Employment and Pay rolls."

APPENDIX

EXPLANATION OF STATISTICAL SERIES

Foundry and machine-shop trades.-Based on average hourly earnings (18901907) and union wage scales (1907-22) for blacksmiths, boilermakers, machinists, and iron molders. Data for the following cities were used: For blacksmiths (North Buffalo, Chicago, Indianapolis, and Pittsburgh; South: Atlanta, Charleston, Memphis, and New Orleans); for boilermakers (North: Boston, Bridgeport with Providence and Philadelphia substituted in 1907 and 1913, respectively, Chicago, and Indianapolis; South: Atlanta, Memphis, Mobile with Birmingham substituted 1905 on, and New Orleans); for machinsits (North: Buffalo, Cincinnati, Milwaukee, Newark, and Philadelphia; South: Atlanta, Dallas with Houston substituted 1916 on, Nashville with Memphis substituted 1907 on, New Orleans, and Richmond); and for iron molders (North: Boston, Indianapolis, Pittsburgh, and Providence; South: Atlanta, Memphis, Mobile with Birmingham substituted 1905 on, and New Orleans).

The selection of southern cities was governed by the availability of data for the city each year from 1890 to 1922. Northern cities were selected on the bass of geographical distribution, size, and availability of continuous data for the period. Many southern and northern cities had to be discarded for lack of con tinuous data. Whenever it was necessary to substitute another city, care was taken to make certain that the wage for both cities was identical or approximately the same for the preceding year.

There is a shift from an hourly earnings to wage-rate basis in 1907. The dif ference for that year is indicated in the table. The data since 1907 are for the middle of each year.

In calculating the North-South ratios, a ratio for each trade was calculated separately from simple averages for all cities and then a simple average of the ratios for the 4 trades was used to derive the combined figure.

Sources of data: Listed p. 274 of Bulletin No. 604, U. S. Bureau of Labor Statistics, 1934.

Building trades.-Based on average hourly earnings (1890-1907) and union wage scales (1907-42) for bricklayers, carpenters, plasterers, and plumbers. Data for the following cities were used: For bricklayers (North: Buffalo, Cleve land, Detroit, Indianapolis, Newark, Milwaukee, and Providence; South: Atlanta. Charleston, Houston with Dallas substituted 1907 on, Jacksonville, Memphis. New Orleans, and Richmond); for plasterers (North: Buffalo, Cleveland, Indianapolis, Milwaukee, and Providence; South: Birmingham, Charleston, Jacksonville, Memphis, and New Orleans); and for plumbers (North: Buffalo, Cleve land, Indianapolis. Milwaukee, and Newark; South: Dallas, Memphis, New Orleans, and Richmond).

The basis for selection of cities and the methods of calculation were the samE as for the foundry and machine-shop trades. The figure for 1907 was 94.8 o either an hourly-earnings basis or a wage-rate basis. Since 1907 the data are for the middle of each year. (Sources of data: Those listed page 153 of Bulletin No. 604, United States Bureau of Labor Statistics, plus Bulletins 515, 566, 625 657, 674, 680, and 730, and Monthly Labor Review, September 1932, page 638, Sep tember 1933, page 662, and November 1935, page 1169.)

Cotton textiles. Based on average hourly earnings for loom fixers, weavers (male), weavers (female), and frame spinners (female) for 4 northern States (Massachusetts, New Hampshire, Rhode Island, and Maine) and 4 southern States (North Carolina, South Carolina, Georgia, and Alabama) for the years 1890 to 1913. Each State was weighted by the number of employees reporting and a ratio of the South in percentage of the North was calculated for each of the four occupational categories, which in turn were combined into a simple average. Data for Alabama was available only after 1903. Sources of data are indicated on page 363 of United States Bureau of Labor Statistics Bulletin Ne 604.

For the period 1913 to 1928, use has been made of the North-South ratios pre sented by A. Ford Hinrichs and based on weighted averages for all occupation It was necessary to convert his figures to the South as a percentage of the North. Source: Monthly Labor Review, May 1935, page 1173.

For the period 1928 to July 1937 use has been made of North-South ratios also presented by Dr. Hinrichs and based on unweighted averages for all occupations. Source: United States Bureau of Labor Statistics Bulletin No. 663, 1938, page 72 From July 1938 on, use was made of the monthly statistics of average hourly earnings in the cotton-goods industry reported by the Bureau of Labor Statisties for Northern and for Southern States. A South-North ratio was calculated for each month, from which simple averages for 6 months or a year were computed. The shifts in 1913 and 1928 had practically no effect upon the level of the ratios. In 1913 the four occupations' ratio and the Hinrichs' figure both stood at 72.8. The average of the four occupations' series from 1914 through 1926 was 67.0 compared with 66.9 for Hinrichs' weighted series. For 1928 the four occu pations' series was 69.5, Hinrichs' weighted series was 69.6, and his unweighted series was 69 3. The next five figures in each series (1930 to August 1934) averaged 77.5, 79.1, and 77.1, respectively.

Use of gross average hourly earnings rather than straight-time average hourly earnings makes little difference in the ratios. For example, straight-time average hourly earnings figures computed by the Bureau of Labor Statistics give the fol lowing results: 83.5 for 1941, 84.0 for 1942, and 82.0 for 1943.

Farm wages.-Computed by dividing the simple average for 10 Southern States (Tennessee, Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, and Arkansas) by the average for the United States as a

whole for two items, “wage rates of farm labor per month without board” and "wage rates of farm labor per day without board." The monthly and daily series were then combined by simple averaging. After 1922 the July figure was used for the monthly data and the October figure for the daily series.

Sources of data: Farm Wage Rates, Farm Employment and Related Data, United States Department of Agriculture, Bureau of Agricultural Economics, January 1943, and Farm Labor, United States Department of Agriculture, July 14 and October 13, 1944.

Blast furnaces.—Based on average hourly earnings for two occupations, keepers and top fillers (1890-1907) and skip operators (1907-35). A ratio was calculated for each occupation, South Central region in percentage of North Central region (1890-1907) and Southern district in percentage of Great Lakes and Middle West district (1907-35). The two series were combined by simple averaging. Since 1907 the data are for a pay-roll period in the first half of each year, usually in March, April, or May.

Sources of data: Those listed page 238 of United States Bureau of Labor Statistics Bulletin No. 604, plus Bulletin No. 567, Bulletin 604, page 544, and Monthly Labor Review, April 1936, page 1034.

Lumber. Based on average hourly earnings for band sawyers, edgermen, and laborers in representative sawmills. Separate ratios for each of the three occupational categories were combined by simple averaging. For the period from 1800 to 1907 the ratios were calculated as follows: Edgermen and laborers, the weighted average of south-Atlantic and south-central regions divided by the average for the north-central region; band sawyers, the average for the southcentral region divided by the average for the north-central region. For the period from 1910 to 1932, the simple average for six Southern States (Alabama, Florida, Louisiana, Mississippi, North Carolina, and Texas) was divided by the simple average for six Northern States (Maine, Michigan, Wisconsin, Minnesota, Oregon, and Washington) in each of the three occupational categories, and the resulting three ratio series were combined by simple averaging. Inclusion of far Western States with high wages causes this 1910-32 series to be on a somewhat lower level than the 1890-1907 series. Data for the intervening years (1907-10) between the two series were available only for laborers in five Southern States (Alabama, Florida, North Carolina, South Carolina, and Tennessee) and five of the six Northern States. A series was calculated for laborers for the years 1907 to 1910 and was converted to the 1910 figure for the combined three-occupational series. Since 1910 the data are for the middle of each year in which they were collected, except for 1919 and 1921 when they were scattered over a large number of months.

Sources of data: Those listed page 455 in United States Bureau of Labor Statistics Bulletin No. 604, plus Bulletins Nos. 560 and 586.

Southern textile States compared with North Carolina.-The textile and farm wage ratios, in percentage of North Carolina figures, are simple averages of the textile and farm wage ratios for each of the three States (South Carolina, Georgia, and Alabama). The individual State ratios were computed from simple averages of the hourly earnings averages for the four occupational groups (loom fixers, male weavers, female weavers, and female frame spinners) in each State, divided by similar averages for North Carolina. In the case of farm wages, the individual State ratios are simple averages of ratios (the State in percentage of North Carolina) for wage rates of farm labor per month without board and wage rates of farm labor per day without board. Beginning with 1923, the July monthly figures and the October daily figures were used in calculating the ratios.

EXHIBIT 81

TEXTILE WORKERS UNION OF AMERICA,

AFFILIATE OF THE CONGRESS OF INDUSTRIAL ORGANIZATIONS,

Mr. CHARLES KRAMER,

New York, N. Y., October 27, 1945.

Senate Committee on Wage and Hour Law,

Senate Office Building, Washington, D. C.

DEAR MR. KRAMER: Enclosed you will find the following materials which I request that you place in the record:

1. 'Wage increases do not mean price increases," a copy of which I gave you.

2. A list of the references referred to as appendixes. I discussed the matter with you, and we agreed it would be necessary to file all of the appendixes in the record. I thought it would be wise to make the references clear so that persons desiring to identify them may be able to do so.

3. Statements of the United States Employment Service concerning the problem of the difficulties of reconversion and placing workers at the present time. 4. A copy of Mr. McDermott's statement, which should be added to the record. Very truly yours,

SOLOMON BARKIN

WAGE INCREASES DO NOT MEAN PRICE INCREASES

(By Solomon Barkin, chairman, CIO Committee on Revision of Wage and Hour Law, October 18, 1934)

Wage increases do not mean price or cost increases. Current wage rises will generally require no price adjustments. Moreover they themselves will provide the base for lower costs. Unless these higher minima, such as are proposed, are established, we shall reduce and threaten the possibilities for postwar prosperity and full employment.

We have had an economy of $160,000,000,000. It is fast slipping through our hands. We must save it by a bold wage program which will guarantee higher wages.

The basic reasons for believing that no price increases are required to shoulder the proposed 65-cent minimum have already been summarized in our basic statement.

1. Prices are not set by cost; they are set to secure the greatest profit. Many of them now provide sufficient margin to absorb both the proposed wage adjustments and greater ones.

2. The profits in American industry are stupendous. In 1944 they amounted to $25,000,000,000 before taxes and $10,000,000,000 after taxes. These allow for vast profit margins within which to absorb wage increases.

3. Labor cost is so insignificant in many industries, amounting to less than 10 percent of the value of the product, that it can be absorbed without affecting material cost.

4. Costs are not fixed; they are dynamic. During the war tremendous strides were made in man-hour output. Management has learned many new techniques of production. They are applying them in their peacetime industry. The experi ence of World War I will be repeated. During the next 3 years man-hour output may well increase at the rate of 10 percent per year. Management will offset these wage increases by greater attentiveness to its own production processes s that it will overcome the costs and probably reduce the unit costs even below those previously existing. Industry after industry has repeated the experience. It is the keystone of American manufacturing progress. It is the basis for our export trade. The highest paid American industries are in the best position to export goods to the lowest wage countries.

5. The higher paid worker is the most efficient worker.

6. Large volume is essential to low cost. Without high wages there cannot be a market equal to the productive capacity of industry. Characteristic American industry makes its greatest profit at high capacity operation. It sets its normal profit rates on the assumption of low operating rates. By assuring an adequate market for capacity production through high wages, American industry is guar anteeing itself a consumer, low unit costs, and corresponding higher total profits. High operations permit higher wages.

7. Current reductions in labor costs through elimination of overtime pay, higher earnings in vacation pay calculations, down grading, lower incentive yields, more careful labor selection and supervision, and a steadier work force will allow industry to increase wages without any effect on costs.

8. Higher wages stimulate better labor relations and lay the foundation for labor-management cooperation, which can result in the introduction of vast economies.

MEMORANDUM NO. 1

High wages are key to low unit costs

Unit costs are not fixed. They are amenable to control and to reduction. The key to American industrial advance is that volume reduces costs. The greater