(The figures referred to are as follows:)

Employment in the New Orleans metropolitan area, and cities of Savannah, Ga., and Montgomery, Ala.

Annual averages of indexes of production-Worker employment in manufacturing

Senator ELLENDER. I made the statement yesterday, and I think it can be verified. As a matter of fact I have the data in my office somewhere, that of four concerns that were engaged in the manufacture of clothing two closed and there are only two there now. In respect to the lumber industry, why, a lot of those mills have closed because of this change, so is the case of these engaged in the gathering of resin and turpentine, and industries of that nature. We have had a decided decline in the number of factories and establishments due to the sudden shift in minimum wages.

Senator TUNNELL. Right there, when these figures are furnished, I would like to ask that we have the rate of wages that were paid at that time by those four companies, we will say, or in that neighborhood, if you cannot get them from those four companies, and the rate that is paid now in that community.

Mr. HINRICHS. I will see what I can do on that. That last may entail a little more difficulty as far as our data are concerned. I doubt that they can be gotten.

I would like to call your attention to one thing, Senator Ellender, if I may. I do not want to contradict your statement as to the effect of the minimum wage on a particular group of plants that I do not know as individual plants. I would like you to bear in mind, in look

ing at the employment figures in some of these industries that you have mentioned, the effect of the relatively low wage levels that had prevailed in those industries upon the ability of those industries to recruit labor. I am quite sure you will find, for example, that in connection with the cotton textile industry, which I know fairly well, that the decline of employment which has occurred in the last 3 years is probably primarily attributable not to absence of orders or the inability of the mills to sell profitably within the present market, but is due much more to the fact that workers who formerly had no alternative opportunity for employment have had an opportunity to move from the cotton textile mills to some of your munitions plants. I would be astonished if that were not one of the very important causes for the decline of employment in lumber in the South.

Senator ELLENDER. There is no doubt about that. For instance, you had a lot of cotton-mill workers who learned how to work on a drill press, or who learned welding, things of that kind; they learned that, I think, in some little 6 weeks' course that the Government gave through the South and other parts of the country. I understand the minimum wage there was $1.25 per hour-I am not certain-and of course you could not blame anybody from going from a job paying only 45 to 50 cents an hour to one paying $1.25. That is over now; the holiday is over; we have got to go back to normalcy. Mr. HINRICHS. I was talking a day or so ago with the operator of a group of mills, some located in the North and some in the South, who was saying that his chief present difficulty was in recruiting adequate labor for his orders on hand, either in his northern mills or in his southern mills.

Senator ELLENDER. Well, that was due to the fact that industries at that time were competing with each other in the labor market. As you know, when the war broke out, or before the war, in 1940-1941, welders were at a premium, and because of that higher wages were paid to those kind of workers than was paid to others. Such employment at much higher wages was a big drain on the lumber and turpentine industries, the cotton mills, the woolen mills, and also the sugar mills, in fact to many other industries paying less wages.

As a result of this labor shift from the cane fields and cane factories of Louisiana in the last 3 years some fellow invented a cane-cutting machine that is operated by 3 men and can do the work of 60 men. A cane loader was invented last year which can be operated by 1 man and does the work of 24 men, I think. Now, all of that has been done because of the shift of labor, and I believe that the higher wages demanded and actually fixed by law had something to do with it also.

Mr. HINRICHS. The news you have just given about the improvements of technology in the cane fields is one of the most encouraging things I have heard in a long time, because the method through which you get an opportunity substantially to increase the standard of living of people in the United States is to enable them to do a given amount of work with less labor, so that those who continue to be employed can be paid higher wages while those who are released are available for the production of alternative kinds of products. I think what you have been saying would make possible the payment of substantially higher wages than have prevailed for agriculture and would give higher rewards to the farmer, and God knows he needs them.

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Senator ELLENDER. That may be true as to the men who operate the machines. In other words, it is a decided advantage to the planter for him to pay $10 a day to the operator of a cane loader that saves the labor of 23 men at $3 a day each. The question is: Where will these 23 men who used to load cane at $3 a day go for employment? I am just wondering what is going to become of them.

Senator TUNNELL. The same question came up when the tractor was invented.

Senator ELLENDER. And the automobile.

Senator TUNNELL. The tractor plowed as much as 200 horses. Senator ELLENDER. That may be true. The tractors were turned from the fields in 1933. Farmers were on the verge of bankruptcy. Business was at a standstill. We had the greatest depression that ever struck us, and my fear is if we continue to make it impossible for industry to expand in a normal and on a sensible basis we will have a greater depression 5 years from now than we had in 1933. We may decrease the unit cost of production, but that is usually accomplished by labor saving devices and at the expense of the labor market. Larger plants can be built that will use the same amount of labor as a smaller plant, but produce more goods at a cheaper unit cost.

Sure, that is right. The tractor is a big labor-saving device, there is no doubt about that. It not only displaces farm labor but those who raise horses and mules. All of this means that sooner or later we will have to get some way to take care of those people who have been displaced.

Senator TUNNELL. Are there any questions?

Senator SMITH. Mr. Chairman, I would like to ask whether the witness has finished this very interesting report that he started yesterday? I don't know whether he has gone all the way through it. I was interested in some of the points here that he mentioned this morning. Have you finished your testimony?

Mr. HINRICHS. The staff of the committee had asked me to make available certain materials with reference to currently prevailing wages. The last page of my prepared testimony deals with the distribution of wage rates at the present time. I will be very glad to present that or to have it inserted in the record, depending on the convenience of the committee.

Senator SMITH. I am interested in the basic question, whether the minimum wage we are discussing is going to tend to unemployment in any part of the country. We do not want to throw people into unemployment if we make this too high. On the other hand, I am impressed with this reference to the cost of living as the basis for the new minimum wage.

You are talking constantly of the cost of maintaining a family. Do we need to establish the same minimum wage for an individual earner which we propose when we are using the family cost of living as our yardstick? I do not think you make any distinction, but I am a little troubled by what seems to be a difference from the standpoint of living costs.

Mr. HINRICHS. I do not know any way in which you can make a distinction. I do know in every one of the low wage industries you find large numbers of people engaged in those industries who are in fact the sole support of a family or else where the wife is forced to work simply because of the complete inadequacy of the husband's earnings.

There may very well also be individuals in those industries who do not have to support a family, although one of the things that is most striking in the studies which we have made and which also the Women's Bureau has made, is the extent to which people are dependent on the earnings of girls who are working, for example, in which the girl's earning is essentially the support for the family. The mere fact that the person is relatively young, unmarried and wears a skirt does not always distinguish her in her responsibilities from the male of the species. But I would not know, frankly, how to advise you if you wanted to separate the two categories and establish one wage for the support of a family and another wage for the support of people who are responsible only for their own support. Some countries paying low wages to all workers then have the state give a family allowance to the man with children. Even the level of cost for a single person is higher than is generally believed, although the Women's Bureau is better informed than I am on the cost of the budget for a single person. Senator SMITH. We want to find a basis on which the family can live in decency in this country, but I cannot reconcile the figure in my own mind that you use for the support of a family with the figure for the support of a person without a family.

Senator TUNNELL. There are so many millions who do have families and who are not aided by any other salary or wage that it seems to me you pretty nearly have to consider the fellow with the family who is the sole wage earner. I do not want to interrupt.

Mr. HINRICHS. Now, if I may pursue this point, I have said that it is my expert opinion that the evidence is conclusive on the side of the desirability of a standard of living even higher than would be represented by the 75-cent minimum wage, if there is any way in the world in which that can be done.

On the side of the practicability of a 75-cent wage, or 65-cent wage, you have obviously got to start by looking at the wages which are now being paid. There are certain points in connection with wage information where I think you can say conclusively that a 65-cent or 75cent minimum wage is immediately and obviously feasible. There are other points where you find that there are substantial numbers of people earning less than 65 cents. However, the fact that a number of people are earning less than 65 cents is not conclusive evidence that the wage cannot be paid. In order to determine feasibility in those areas you have got to study a whole series of factors, in which other people are much more expert than I. You, undoubtedly, are going to hear testimony on that subject. But you have got to take into account the existing profits in the industry, the feasibility of small price increases if they are indispensable to the attainment of your objective, the prospects for further increases in labor productivity, the contrast between the cost of production under efficient methods of production, and the cost of production currently obtaining with less efficient methods of production.

All of those factors have got to be taken into account before you are in a position to say, that a 65-cent wage is not feasible. So, what my wage information I think shows, to be precise about it and to distinguish it from the dogmatism which I took from the standard of living, is that in certain areas I can identify the definite feasibility of 65 cents, and I can identify the areas to which you may want to extend your studies.

Now, with that as a background, let me just review what the distribution of wages is in the manufacturing industries at the present time. For a variety of reasons, partly due to the minimum-wage legislation which we had on our books which made it possible and, indeed, mandatory to get wages up to at least 40 cents by 1945, partly due to price rises and the general increase of wages during the war, there has been a very marked change during the war in the number earning less than the minimum figure of 40 cents an hour. In January of 1941, for example, there were a little more than 1,500,000 wage earners in manufacturing industries who were making less than 40 cents an hour, and another 1,400,000 who were making between 40 and 50 cents an hour. Those figures are shown in the first column of the first table of the statement which I distributed yesterday. That means that about 3,000,000 people were making less than 50 cents an hour back in 1941. Senator AIKEN. How many were employed then, Doctor?

Mr. HINRICHS. About 9,500,000 in manufacturing industries. That is, a little over 30 percent at that time.

Now, in every industry covered by the Wage and Hour Administration a wage of 40 cents an hour, which is the maximum that it can order, has been ordered. So that it is fair to say that at the present time there are virtually no wage earners in manufacturing industries who are legally paid less than 40 cents an hour, and, actually-while I cannot speak on violations of the law-the pressure of the market has been such that, generally speaking, manufacturers have wanted to pay more than they were required to pay by the minimum wage law-not less. I therefore cannot give you any significant figure for the number now earning less than 40 cents an hour. At the present time only about 330,000 people in all manufacturing industries, out of a total of 12,000,000, today are earning less than 50 cents an hour. That is, it is a mistake to assume that the legal minimum at this moment has anything to do with the going wage structure. If you would ask as of today how much can manufacturing industry afford to pay as a minimum wage, without any question whatever, it would seem to me you could more or less start by saying, "Well, what are they paying?" They are paying that much. They are paying that voluntarily. The answer is there is almost no manufacturer paying any of his workers today less than 50 cents an hour.

Senator ELLENDER. Isn't that due to the fact that these manufacturers were in full production and that a little above 50 percent of their business was with the Federal Government as a purchaser? They took no chances. Could you compare such a condition with that which will prevail when we return to normal times?

Mr. HINRICHS. I am not completely expert here, Senator.

Senator TUNNELL. I understand that there are a number of witnesses who have come here from a distance. They are being kept at more or less of a hardship to them. We will hear those witnesses tomorrow, and we will ask Dr. Hinrichs not to come tomorrow morning. We will hear him at a later date, if that is agreeable to him.