The Washington times., 1938-07-02
WAGE-:H0UR Law
VALUE DOUBTFUL,
BUSINESS SAYS
Labor and U. S. Experts
Dispute Charges
By EDWARD B. LOCKETT
Copyright, 1898, by International
News Service.)


Government economists and
Labor Department researchers ex-
pect the wage-hour act to increase
employment and raise living
standards, but business is not SO
confident.
Predictions of trouble ahead
and serious complications were
plentiful among business and in
duStry leaders. Within the per-
sonnel slated to have a hand in
administration of the law, how
ever, optimistic feelings were evil
dent.
ECONOMIST EXPLAINS
Leon Henderson, WPA econo-
mist who is credited with having
played an important part in the
drafting of the act, had this to
say:
1T will tend to spread employ
ment, and thus increase the
total volume, and it will
come to the economic aid of a
class sorely in need of such aid.
1t should improve living stand
ards among a group of workers
who in the past have been mis-
erably paid for long hours of
work"
Labor, embracing both the CIO
and the AFL, believes a begin
ming has been made, and already
has made tentative plans to speed
erection of the highest possible
minimum wage standards.
Experts of the Brooking Insti-
tuition, private research founda-
ton, were optimistic.
FLUCTUATIONS FORESEEN
But business, exemplified in the
United States Chamber of Com
merce, had many fears. So did
some critics of the act in the field
of abstract economics and politics.
DR.. Claudius T. Murchison, preSi-
dent of the Cotton Textile Insti-
tute, predicted an artificially great
demand for products at the end
of each yearly period of the act,
just preceding operation of its
clause boosting wage standards
and lowering maximum hour pro-
visions.
"a series of violent fluctua-
tions can be confidently eX-
pected," he said.
The Manufacturers News Bu-
reau, Inc, an information service
sending out confidential bulletins
to it's clients, presented perhaps
the most vigorous criticism of the
new act.
LITTLE FELLOWS WARNED
I'm some industries it the
wage-hour act) will close down
many small plants" a Bureau
letter stated. "Other industries
insist they may be completely
wiped out; at 254O cents an
hour they cannot compete with
substitute products.
Larger firms, inclined to be
unconcerned since they pay all
employees above the 40 cents
rate, should not overlook the
hours provisions. When they
return to higher production and
must pay time and a half for
all overtime to all workers, they
will have a serious problem be-
cause a shortage of skilled labor
will hamper their efforts to in
crease the number of shifts"
United States Chamber of Com
merce economists, and a number
of economists representing vari-
GUS universities and colleges, have
criticized the law on the grounds
it will decrease employment and
will result in a rush of workers
to big cities.
CRITICISMS ANSWERED
International News Service car
ried these criticisms to the Labor
Department research experts and
economists, and got the other side.
"The law will not set up any
appreciable current of popula-
ton Capitalization" said divi-
sion chief in the section of the
Labor Department preparing
statistical and analytical studies
on the law. You must remem-
ber that the worker in the small
town frequently has many ties
that bind him there, such as
family, friends, social life. per
haps property.
Furthermore, lower wages in
a small town do not necessarily
mean lower living standard
than that provided at higher
wages in a thickly populated
center.
DIFFERENTIALS CITED
The differentials permitted, said
the Labor Department experts,
prevent extension of major bene-
fits to big business at the expense
of the little business man. They
pointed out that there was nothing
to prevent the administrator, and
industry committees he will
appoint, from making clear wage
distinction between the large en-
ployer and the employer of only
few men.
This" said one of the assist
ant chiefs in the division of
labor statistics, will permit the
administrators of the law to give
the little business man a break"
The majority of economists for
business and industry, as we'll as
labor and the Government, denied
that operation of the law would
reduce the general volume of en-
ployment.
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