5. We believe that the provision to permit an employee to institute legal proceedings for unpaid minimum wages and overtime compensation at any time within 5 years from the accrual of such liability, is subject to grave abuses and should be reduced to 1 year.

Mr. WELCH. In your statement, Mr. Murchison, you quote the Bureau of Labor Statistics, stating that there are 409,000 workers engaged in the industry.

Mr. MURCHISON. That is right.

Mr. WELCH. Of these 409,000 workers, what number are now receiving less than the 65 cents an hour provided in the bills under consideration by this committee?

Mr. MURCHISON. Our economist, Mr. Michl, who is here, may have an estimate of that.

Mr. MICHL. I cannot give an exact figure, but I would say the majority would be under 65.

Mr. WELCH. The majority would be under?

Mr. MICHL. The majority would be under 65. The last increase in wages came through a directive of the War Labor Board which fixed a minimum of 55 cents an hour for 49 mills. That has spread through part of the industry, but a substantial number of mills are still at the 50-cent level.

Mr. WELCH. Can you give the committee a break-down of the number who are now receiving less than the 65 cents provided for in the bill and their classification, whether they are skilled, semiskilled, or unskilled?

it.

Mr. MICHL. I cannot give you that now, but I can probably provide

Mr. WELCH. I would not expect you to give it now.

Mr. MICHL. We will have to get it, and if the Bureau of Labor Statistics has it, we can provide you with it.

Mr. WELCH. I think it would be well to have it, Mr. Chairman.

Mr. RAMSPECK. I do not know whether we have the figures already or not, but if the Bureau of Labor Statistics has them, they can be obtained.

Mr. ADAMS. Mr. Murchison, you indicate quite a wide variation in the labor cost, in terms of percentage of that cost to the value of the product. To what extent is that contributed to by obsolescence of the plants themselves? And also would you say that a modern plant with modern spindles would be able to absorb the cost of these wage increases without having to pass any of them on?

Mr. MURCHISON. I seriously doubt that that could be done under the present price structure because OPA has included these most efficient mills in their cost data. I seriously doubt that they could absorb it. There would have to be some price adjustment. I think the best evidence of that is that the last increase in wages that was granted by the War Labor Board necessitated an upward price revision which OPA based on an actual field study of costs among representative plants.

Mr. ADAMS. It is true, is it not, that. a substantial number of mills. that are represented by the total number of companies that your association represents, have obsolescent machinery?

Mr. MURCHISON. It is quite true that the machinery varies tremendously from one plant to another. Much of the machinery in the in

dustry is 20, 25 years old; that is quite true. That is true the world over and there is not much can be done about it now, because normally textile machinery manufacturers can each year produce about 5 percent of the existing equipment. In other words, based on their prewar output, it would take them 20 years to reequip the industry completely. Mr. ADAMS. But as time goes on, modernization of the mills would help them absorb increased costs?

Mr. MURCHISON. Undoubtedly.

Mr. ADAMS. That is correct, is it not?

Mr. MURCHISON. That, of course, would be correct, and we hope that that will be very substantial in the years that lie ahead, but it is not possible in the next 3 or 4 years, to any great degree.

Mr. FISHER. Mr. Murchison, do you know about what percent of your cost of production goes to labor?

Mr. MURCHISON. Yes, we have that here. It is 25.1 percent.

Mr. MICHL. For the entire cotton-textile industry, wages represent about 25 percent of the total value of the product. For individual fabrics that would vary roughly from about 15 percent to 40 percent of the value of the product. Expressed in another way, disregarding the raw materials and looking only at the value added by manufacture, wages represent about 60 percent of our total conversion cost.

Mr. MURCHISON. Which is a better way of looking at it, because of the very sharp increase that has taken place in the price of cotton during the past few years.

Mr. FISHER. That is all.

Mr. RAMSPECK. On that point, the price of cotton is fixed by law for 3 years after the war, is it not?

Mr. MURCHISON. Substantially so, on account of the loan.

Mr. RAMSPECK. In other words, it cannot go below a certain figure for 3 years after the war?

Mr. MURCHISON. That is right.

Mr. MICHL. But it can go up.

Mr. FISHER. It is now 9212 percent of parity.

Mr. MURCHISON. The loan rate; cotton itself is actually at parity and over, in some States.

Mr. FISHER. But the loan rate is 9212.

Mr. MURCHISON. That is right.

Mr. RAMSPECK. Mr. Murchison, if the committee should see fit to eliminate everything except consideration of the wage, and should fix that at 50 or 55 cents an hour, the industry you represent would not be particularly affected, would it?

Mr. MURCHISON. No; not seriously.

Mr. RAMSPECK. If there are no further questions, we thank you, Mr. Murchison.

The committee will recess until 10:30 tomorrow morning.

Mr. MURCHISON. Thank you very much, gentlemen.

(Whereupon the committee recessed, to meet on Tuesday, November

6, 1945, at 10:30 a. m.)

(The following matter was submitted for the record:)

A STUDY OF TEXTILE WAGES IN THE SOUTH

(Presented to the House Committee on Labor by William P. Jacobs, president, American Cotton Manufacturers Association, October 29, 1945, Washington, D. C.)

In order to fully understand the textile wage structure in the South it is necessary to consider all major contributing factors which combine to influence the environment of a wage schedule.

The need of wage increases or decreases depends upon a wide variety of factors existing in the area, such as the cost of living, standards of living, living conditions, working conditions, available markets for the manufacturers' products, the price which the market offers, length of apprenticeship, experience, education, and skill required, job content, the nature of the work, the general economy of the region, wage schedules of the region and of competitive industries in the region and in the world. These and other similar factors combine to demand and justify a given wage standard.

Thus the determination of a wage is a most complicated undertaking and one which requires not only a wide range of information but also a type of specialized skill in its analysis and adaptation.

Such skills are seldom available to legislative bodies and rarely ever are lawmakers equipped with adequate experience in a specific industry to guide them safely to such important conclusions as influence the incomes of so many men and women or the permanence of the industries which offer such men and women employment.

WAGE STRUCTURE COMPLICATED

It is safe, therefore, to assume in the beginning of this study that the determination of wages or wage minima, or wage standards, or the adoption of permanent governmental machinery to set wage classifications, is at best a most difficult undertaking and one in which Congress can easily do more harm than good.

Since the past is often a helpful guide in determining the future, it is sometimes also helpful in gaging the present. And so it may be worth while to glance at the trend of textile wages through the years passed and particularly through the upsetting period influenced by World War II and its preparatory period.

THE WAGE TREND

According to the Bureau of Labor Statistics of the United States Department of Labor, the average hourly earnings of southern textile workers has been according to the following schedule:

Thus during the war period the average hourly earnings of the southern textile mill workers have increased from 45.8 cents in December 1941 to 68.6 in July 1945, an increase of 49.7 percent.

If the comparison is extended back to the time when Great Britain entered the war so as to cover the United States war preparatory period, the figures would show an increase from 36.3 cents per hour in September 1939 to 68.6 in July 1945, or an increase of 88.9 percent. This comparison would appear to more fully reflect the abnormal increases which resulted from the war.

THE COST OF LIVING TREND

A comparison of the cost of living of wage earners by the National Industrial Conference Board at the time Great Britain declared war September 1939 shows

an index figure of 85.4 as compared with 1923 as 100. This figure compares with July 1945, 106.9, an increase for the entire war and war preparatory period of 21.5 index points, or an increase of 25.2 percent. This compares with the wage increase figure of 88.9 percent.

If the shorter period covering the time when the United States was at war is used, we have an index figure as of December 1941 of 93.2 to compare with the latest figure of July 1945 of 106.9 or an increase of 13.7 index points or 14.7 percent. This compares with the wage increase figure of 49.7 percent.

There is another interesting report of the National Industrial Conference Board bearing on this subject in the form of the increase in the cost of living of wage earners in 60 cities. These figures show an increase in index points from 100.6 in September 1939 to 128 in May 1945, an increase of 27.4 index points or 27.2 percent for the longer war period as compared with a wage increase figure of 88.9 percent.

For the shorter period this type of comparison shows an increase in index points from December 1941 to May 1945 of 110.5 to 128, an increase of 27.5 index points or 24 percent. This compares with the wage increase figure of 49.7 percent.

Of these 60 cities only 3 of them, Atlanta, Birmingham, and Macon, have textile mills, and only in Macon are textiles the major industry of the city. Nevertheless the percentage of increase in the cost of living of wage earners in these 3 cities is approximately the same as the average of the 60 cities. To be specific, the increase is from an average of 112.2 in December 1941 to 128.4 in May 1945 or 14.4 percent.

However, there are those who will say that the wage expressed in dollars and cents is misleading, because the dollar meanwhile has decreased in value by virtue of the increase in the cost of living. And so it is well to consider the record of the National Industrial Conference Board on this phase of the subject.

PURCHASING VALUE OF THE DOLLAR

In their Economic Almanac of 1945-6 they show the purchasing value of a dollar based on changes in the cost of living to be 117.1 index points in September 1939 as compared with 93.5 in July 1945, a decrease of 23.6 index points or 20.1 percent. This decrease compares with the wage increase in the same period of 88.9 percent. Thus the worker's dollar is now worth about 20 cents less than when Britain went to war, but he has just 12 cents less than twice as many of them.

1

The same comparison over the shorter period in which the United States was actually at war shows the index points of dollar value in December 1941 at 107.3 as compared with 93.5 in July 1945, a decrease of 13.8 index points or 12.8 percent. This compares with the wage increase in the period of 49.7 percent. Thus the worker's dollar today is worth about 13 cents less than it was pre-Pearl Harbor, but the worker has about half again as many more of them.

These figures are, in the main substantiated by the wage report of the National War Labor Board to the President on the wartime relationship of wages to the cost of living, dated February 22, 1945, which shows among other things that they calculate the cost of living showing an increase in January 1941 to October 1942 of 20.5 percent and from January 1941 to October 1944 of 29.5 percent. At the same time contrast these increases in the cost of living with a still greater increase in the average straight-time hourly earnings covering all types of manufacturing from January 1941 to October 1942 of 21.5 percent and from January 1941 to October 1944 of 36.7 percent.

All of the reliable figures available indicate that the wages of the textile worker in the South have increased considerably more than has the cost of living for these same workers. However, the figures available do not fully reflect the most recent increases in wages ordered by the War Labor Board in cases of cited mills and authorized by the War Labor Board in response to the voluntary applications of noncited mills. These increases, involving a minimum of 55 cents per hour, an increase of 5 cents across the board-that is, to workers of all classifications-a third-shift differential, and a week's vacation with pay, have found general adoption throughout the southern textile industry. The first two provisions have been more uniformly adopted than the last two, but the net result of these adoptions has been an increase of from 8 percent to more than 17 percent, depending upon the number of these four provisions adopted by the individual mill.

These adoptions have occurred within recent weeks. Had the attending increases been reflected in the figures heretofore quoted, the percentage increase

in the average hourly earning of the southern textile workers would have been even greater than the figures shown. Even now southern textile wages continue to increase. On the other hand, however, there are indications that within recent weeks the trend of the cost of living has been slightly downward. In their issue of September 1945 the Conference Board Business Record stated, in an article by G. M. Graybill, Jr., Division of Labor Statistics: "Relatively little movement was exhibited by the July cost-of-living indexes in the 63 industrial cities surveyed. Twenty-three cities showed an increase, while in 26 cities the index declined; 14 cities showed no change. The changes all fell within comparitively narrow limits, since the largest increase was 0.7 percent and the greatest decrease was 0.6 percent. Actually, less than one-third of the city indexes rose or declined more than 0.2 percent."

October 8, 1945, the Wall Street Journal quoted the National Industrial Conference Board, as follows: "Living costs during August dropped slightly from the 24-year high of June and July, according to the National Industrial Conference Board. The NICB index, which charts the cost of living for the average family of wage earners and lower-salaried clerical workers in the United States, stood at 106.6 (1923 equals 100), compared with 106.9 in June and July. The decline in the general index was due almost entirely to a drop of 0.9 percent in food costs."

Since the contemplated legislation on the worker's wage anticipates a future need, it is interesting to note the current developments in wages and in cost of living. There seem to be no factors on the horizon which would indicate a greater need to increase earnings than those which prevail today.

Thus the relative increase of the wage over the cost of living, while not entirely trustworthy for comparison, at least indicates strongly that the southern textile worker is better able to afford a higher standard of living today than he was before the war.

THE STANDARDS OF LIVING

Surveys made of the homes in textile mill communities before the war showed that some have electric refrigerators, many have automobiles, and practically all have radios. The nature and grade of furniture and other equipment in the southern mill home compares favorably with that owned by workers in most other major American industries.

There appear to be no competent studies which accurately portray the standards of living of the southern textile worker since the war. It is known, of course, that new automibiles, electric refrigerators, radios, and many other types of equipment were not available during the war. It may be assumed that some of the old equipment became useless as a result of long and continued use without replacement and adequate repair. For this reason therefore ownership of this type of equipment per person may appear to be reduced now as compared with the period when such items were new, plentiful, and purchasable. Such a circumstance, however, would not necessarily reflect a reduction in standards of living or a reduction in financial ability to afford such luxuries.

WHAT IS SUBSTANDARD

For several years efforts have been made by some inadequately informed economists to prove substandard conditions in the southern textile mill villages, but all such efforts have failed. The case has never been proven.

On the whole, as compared with other American industries and as compared with the nonindustrial communities near them, the southern textile-mill villages show most favorably. Clean streets, sewer, running water, electric lights, parks, playgrounds, swimming pools, adequate hospital, school, and church facilities abound and are the rule rather than the exception in southern textile-mill villages, and these factors added to the splendid climate, healthful altitude, trees, flowers, fresh gardens, cows, and poultry, with abundance of room, sunshine, and fresh air, indicate that the living conditions of the southern textile workers are superior to other regions.

The setting of a minimum wage by law can only be justified by an effort to correct substandards. No other circumstance will justify the entry of Congress into such a controversial field as wage-fixing.

If the living conditions of southern textile workers were on such a low level as to resemble the cabins of the backwoods farm tenants, the hovels of the city Negro slums, the crowded, filthy conditions of the Bowery in New York, or the unsightly, crowded, dirty slums of other industrial cities of the North