plant workers averaging under 75 cents an hour, from 24 to 5 percent, (3) an increase in the percent of workers averaging 75-77.4 cents an hour, from 9 to 23 percent, (4) no change in the proportion of workers earning from 77.5 cents to $1.249 an hour, and (5) an increase in the percent of workers earning $1.25 or more, from 13 to 17 percent.

The most substantial of these changes was the transfer of most of the workers earning below 75 cents an hour in 1949 to the 75-77.4 cents earnings class. A further significant aspect was the absence of other movement in the pay structure except in the highest-wage levels, those of $1.25 an hour or more. Apparently employers did only what was directly necessary to satisfy the amended requirements of the Act and little else (except to increase the hourly earnings of some higher-wage workers to $1.25 or more). Because the 75-cent rate appeared responsible for relatively marked adjustments at the lower end of the wage scale but only minor indirect changes at the upper end, its immediate impact narrowed percent wage differentials within the industry.

This compressing effect on the industry's wage structure is shown, too, by movements in occupational earnings (Table 14). The

1/ The 9 occupations in Table 14,

arranged from lowest to highest
average hourly earnings as of March-
April 1949, were selected from the
25 key positions in the industry be-
omse they contained relatively large
mmbers of plant workers and accu-
rately represented the behavior of
other low-, medium-, and high-rago
Jobs.

influence of the 75-cent rate appeared to be greater on the lower-wage occupations. Differences in increases among occupational average earnings were not large, but the pattern was fairly consistent. Hourly earnings advances in the four lower-paid jobs varied from 7 to 8 percent, in the five higher-paid positions from 0 to 5 percent. The shortrun impact of the minimum-rate increase thus narrowed percent wage spreads among occupations, though, partly because required adjustments to the 75-cent rate were on the whole not very great in fertilizer plants, the extent of such narrowing was not substantial.

Almost one-fifth of plant workers in the fertilizer industry were estimated to be employed in 1949-50 in establishments classified by their owners as engaged in intrastate commerce. Since employees engaged in intrastate commerce or in the production of goods for intrastate commerce are not covered by the requirements of the Fair Labor Standards Act, an investigation of their wages may throw some light on the indirect influence of minimum-wage legislation in areas outside the scope of such legislation. It may be recalled that the surveys of Southern sawmilling similarly permitted inspection of this sort of indirect consequence, in that case in connection with exempt logging workers.

Table 15 compares 1949 and 1950 wage structures in "interstate" and "intrastate" plants. Pay scales in plants with intrastate business were much the lower of the two. In 1949, average hourly earnings in the "intrastate" establishments were 76 cents compared to 96 cents in the "interstate" units and the proportion of "intrastate" workers averaging under 75 cents an hour was about half as against only onefifth for "interstate" employees.

Short-run changes in the wage scales of "interstate" and "intrastate" plants were similar to each other and to those for the industry as a whole. Both establishment types experienced a 5

cent advance in average hourly earnings and a wage-structure shift consisting primarily of a substantial transfer of workers from below 75 cents to 75-77.4 cents an hour. In both cases there were relatively minor changes at hourly wage levels from 77.5 cents up. The higher minimum thus evidently influenced noncovered wages since these rose along with covered ones.

1/ of which, in the "interstate" establishments, 2 cents represents the estimated cost of direct pay adjustments needed to raise to 75 cents an hour earnings below that amount. (Computed from source data for Table 15.)

whereas noncovered and covered fertilizer workers were employed by different operators in different plants. Personnel morale may suffer were an employer to differentiate in pay rates between employees simply because some are legally entitled to the minimum wage while others are not. To the extent this is an important factor, the minimum wage is more likely to affect the pay of non-subject employees when they work in places which also have a substantial proportion of subject employees than when they work in plants where most of the labor force are outside the scope of the Act. 1/

B. Regional wage effects

These effects are summarized in Tables 16 and 17, which arrange the regions in ascending order of average hourly earnings in MarchApril 1949. Table 16 shows an earnings increase between 1949 and 1950 in every region, with the largest percent advances in the two lowest-vage areas. But the increases in these two areas, the Southeast and Southwest, and also the increase in the third low-wage region, the Border States, were probably effected in a different

Another possible cause for the disparity in indirect effects of the higher minimum in the two i3dustries is that competition for logging workers may have been keener than that for fertilizer workers. But the fact that aver age earnings and wage structures in 1949 were similar for logging and sawmill workers in integrated mills but quite different for intrastate" and "interstate" fertilizer workers shows the greater tendency in the former for subject and nonsubject wage rates to move together.

way from those in the rest of the country. Increases in the three Southern regions appeared due chiefly to required adjustments to the higher minimum. This was evidenced by transfers between 1949 and 1950 of substantial proportions of Southern workers from below to 75 cents an hour or immediately above, and at the same time, relatively little change in the middle and upper wage-structure sectors (Table 17). Averageearnings increases in the five nonSouthern regions were likely caused by factors other than the higher minimum, including perhaps the longer-run labor-market influences noted earlier in this, chapter (see pp. 35-36 above). These five regions had very few workers earning below 75 cents an hour in 1949, and the wage-structure changes occurring between then and 1950 involved transfers of workers from the hourly earnings classes below $1.25 to that of $1.25 or more (Table 17).

Regional data permit more detailed analysis of the wagedistribution changes for the entire industry which are summarized in Table 13. It is likely that the shift between 1949 and 1950 of a substantial number of workers from below to the 75-cent earnings level or immediately above was caused mostly by wage movements in the lowwage Southern areas. At the same time, the pay movements in the nonSouthern areas were probably chiefly responsible for the 1949-50 Jump in the industry's proportion of workers earning $1.25 or more an hour.

In the three Southern regions where it caused significant lowerlevel wage adjustments, the higher minimum reduced percent wage

spreads within regional distributions.