the upward economic pressures developing during that year, especially after the start of the Korean conflict in June. These pressures generally frustrated the attempt of the November 1950 survey to determine the longer-run, less immediate consequences of the higher statutory minimum. 1/

A. General and occupational wage effects

According to Table 19 and Chart 4, over one-third of the plant workers were averaging below

In this chapter the period August 1949 to Maroh 1950 is considered the "short run," August 1949 to November 1950 the longer mn."

Table 19. Percent distribution of plant workers in men's dress shirt and nightwear establishments, by average hourly earnings, United States, three payroll periods 1949-50

August Marah November 1949 1950 1950

(percent of plant workers)

75 cents an hour in August 1949 but only 4 percent received that little in March of the following year. The short-run direct impact of the higher minimum was thus to raise average hourly earnings of onethird of the plant workers from below to at least 75 cents. Most of these workers shifted to an averageearnings rate of 75-84.9 cents an hour.

An accompanying indirect effect was to put an additional 7 of every 100 plant workers in the middle sector of the wage distribution, from 85 cents to $1.249. This effect may have been due to the piece-rate system of payment common in the industry. 1/ Where firms increased their piece rates to enable slower workers to earn at least the 75-cent hourly wage, faster workers already making 75 cents or more an hour at the old rates also were able to raise their average earnings. There was little short-run change in the upper end of the wage structure, only 1 more of every 100 plant workers receiving $1.25 or more an hour in March 1950 than in August 1949. To the degree that lower wages were raised by larger percent amounts than higher rates, narrowing of wage spreads occurred.

37

75-84.9

Chart 4. PERCENT DISTRIBUTION OF PLANT WORKERS IN MEN'S DRESS SHIRT & NIGHTWEAR ESTABLISHMENTS, BY AVERAGE HOURLY EARNINGS, UNITED STATES, 3 PAYROLL PERIODS 1949-50

According to Table 20, the direct pay adjustments needed to raise to 75 cents an hour earnings below that amount involved an estimated wage-bill increase of 5 percent. This required increase accounted for most of the actual upward shift in average hourly earnings between August 1949 and March 1950 of 8 percent (or 7 cents, from 88 to 95 cents). A further 7-cent earnings advance occurred between March and November 1950, from 95 cents to $1.02. This latter advance, in that it involved increments to hourly rates already above 75 cents, was accomplished in a different manner from the earlier one. During the MarchNovember period, 13 percent of all plant workers raised their average hourly earnings from the 75-84.9 cents class to 85 cents or more, over half of them (7 percent of all plant workers) advancing to the $1.25-or-more category (Table 19 and chart 4). Many of these increases were in uniform percent amounts and this tended to maintain percent wage differentials which had been narrowed by the short-run impact of the higher minimum.

Probably the major cause of the increases in average earnings in the industry between March and November was the concurrent generally rising wage trend in the United States. Average hourly earnings between March and December 1950 rose by 12 cents in all manufacturing industry (from $1.42 to $1.54), and by 6 cents in the manufacture of apparel and other finished textile products (from $1.20 to $1.26). 1/ Many variables affected the wage structure in men's dress shirt and nightwear manufacture after March 1950 and it is hard to trace or assess the longer-run influences solely attributable to the higher minimum.

The short-run compression of industry wage spreads because of the 75-cent rate is further evident from the reduction in percent differentials between job earnings. These earnings were raised more in low-wage occupations than in high-wage ones, increases between August 1949 and March 1950 ranging from 14 percent in the lowest-paid job to 1 percent

1 U. S. Department of labor, Bureau of Labor Statistics, Monthly Labor Review, Table C-1.