The Daily Alaska empire., 1946-05-07
Wage Facts and Theories
New York Times

Elsewhere on this page publish letter from L. Metcalfe Walling Aoministrator of the Wage and Hour Division of the United States Department of Labor referring to this newspapers editorial of March 27 on the proposed minimum wage amendments
 l. We said that "the Administration does not even know how many workers are now getting less than 65 cents an hour and precisely where these work CTS are" This is The Bureau of Labor Statistics in collecting its regular monthly manufacturing wage figures does not reporting firms to report by brackesthcse getting less than 75 cents or 65 cents hour for example The Bureau of Labor Statistics did it is true present before the Senate Committee Labor and Education in September l945, estimates the number of workers in different wage brackets in seventeen industries The statistical method of irving at these estimates is too complicated to go mo here but presenting similar estimates arrived at by the same method in October, 1943, the bureau was careful to point that they subject to con- siderable margin of error" The same observation must be made of the new estimates.
 The bureaus estimates moreover cover only some 12 100000 workers in manufacturing industries; they do not about 10000000 agricultural workers or about 26oO0O00 non-agricultural workers outside ol factories though substantial part of the last group would have been covered by the proposed minimum wage amendments in their original form.
 9 The BIS overall estimates for manufacturing workers if correct, give no adequate notion ot what the cost effects employment of the proposed new minimums would be. They give no breakdown by size of plant size of community geographical loca- tion To show the incidence of the proposed bill on the South Professor John " Van Sickle, in an article on Geographical Aspects of a Minimum Wage in the spring issue of the Harvard Business Review, calls attention to the fact that in his State of Ten nessee in the first quarter of last year 42 cent O. workers in manufacturing as whole receiveo less than 65 cents hour In the apparel industry 43 Der of the workers earning less than 50 cents an hour 93 per less than 65 cents Is it realistic to suppose that all these workers could be raised to 65 cents an hour overnight without causing any ap- precable unemployment or industrial disruption?
 B. Another highly unreaistic element in the esti- mates presented by Government officials was thelr failure to allow for the we-known fact that an in crease in minimum rates pushes almost the entire wage rate structure above the minimum, because of the insistence of higher paid workers on maintaining existing differentials. The BIS estimated, for ex- ample, that wage rates in the lumber industry would be raised an average of per cent by 65-cents-an- hour minimum Not only was this estimate based the unrealstic assumption that there would be no increase in wage rates among those making more than 65 cens it took account of geographical differ ences Yet special study of the lumber industry by the BIS, published month later than this overall figure showed that less than per cent of lumber workers in the West received less han6 cents hour in August l944, 898 per cent of lumber workers in the South received less than 65 cents an hour When allow in addition for the fact that increasing the minimum rate pushes up rates above the minimum, the estimate of the Southern Pine Lumber Industry, that a 65-cent minimum would push up their direct labor costs at straight time by per cent but by 62.5 per cent, does not seem unreasonable.
 4 An incease in minimum wages from 40 to 65 cents hour represents wage increase of 622 per cent To believe that such increase be achieved overnight by stroke of the pen, without any bad consequences on production and employment, is
 have sublime faith in legislative fiat. Mir Walling
 tries to dismiss all apprehensons regarding the effect of this on employment by calling them "hoary.' But if the whole thing is easy all that what excuse is there for stopping at 65 5 cents? Why not forget "hoary' apprehensions entirely and make the hourly minimum ST. $2 $5, or what not?