in and from the woods." 1 The increased responsibility which these technological improvements places upon the workers should be reflected in their pay. This is the American way of sharing the gains from increasing productivity.

The hazardous character of the work in this industry is indicated by the Bureau of Labor Statistics data on injury-frequency rates, which show that the number of disabling work injuries per million employee-hours worked in 1953 was 44.3 for general sawmills and planing mills compared to an average for all manufacturing industries of 13.4. Surely the workers in this hazardous industry are entitled to more adequate pay.

IV. Exemption from wage and hour provisions of small logging mills creates unfair competition (Sect. 13 (a) (15))

(a) 1949 act exempted logging operations of less than 12 employees.—The 1949 act added an exemption to the one provided for forestry and lumbering operations incident to or in conjunction with certain farming operations. To get this exemption the operations must be performed by a farmer or only on a farm but only "as an incident to or in conjunction with such farming operations."

The new exemption removes all hour and wage limitations for "employees employed in planting or tending trees, cruising, surveying, or felling timber, or in preparing or transporting logs or other forestry products to the mill, processing plant, railroad or other transportation terminal, if the number of employees employed by the employer in such forestry or lumbering operations does not exceed 12."

This exemption covers all those planting or tending trees, cruising, surveying or felling timber. They seed, plant seedlings, prune, weed, prepare firebreaks, remove rot or rusts, spray and similar operations; those who estimate or report on the volume of marketable timber; those, who survey including chainmen, transit men, rodmen, and axmen; those who fell timber and prepare and transport logs including fellers, lumbers, skidders, buckers, loaders, swampers, scalers, and log truckdrivers. When preparing for transporting logs at a sawmill the employees are covered. Transportation up to the terminal or for further shipment, if performed as part of the exempt transportation, is exempt.

To be exempt, the crews engaged in the exempt operations who bring lumber to a sawmill or concentration yard must be employed by an independently owned and operated business and must not number more than 12 employees.

(b) Size of exemption.-In September 1953, the Wage and Hour Division estimated this exemption to have excluded some 108,000 persons.

(c) Complaints.-1. Exemption has promoted subcontracting in all parts of the country. Crew leaders have formed small groups of 4, 6, 8, 10, or 12 men. They are unorganized and exempt from the wage and hour law and have tended to depress the wage structure. They do not observe safety regulations.

Larger companies are breaking up their logging operations and letting out contracts to these subcontractors.

Smaller sawmills have stopped operating and let out their contracts to these crews of 8 to 10 persons with a capacity of 8,000 to 10,000 feet of lumber per day. They constitute a competitive threat to the existing operations and have resulted in the abandonment of legitimate operations in favor of smaller units which can get from under the wage and hour law.

2. Technological improvements facilitate this process since gang operations have established which require only 3 or 4 men, broadening the opportunity for such subcontracting groups.

3. Distinctions between bona fide and sham subcontracting groups are difficult to establish.

(d) Distinction unjustified.-1. The United States Department of Labor study of the effect of the 1950 minimum wage indicates that the exemption has been used little if at all in the southern integrated saw and logging mills with 12 or fewer logging operations. In the integrated mills, the percent of exempt loggers receiving below 75 cents an hour was not much more than that of the nonexempt sawmill workers. The report concludes that "the same rates were paid for jobs of comparable skills, training, experience, and responsibility whether or not employees were legally exempt from the minimum." (Results of the Minimum Wage Increase of 1950, p. 25.)

2. Bureau of Labor Statistics data indicate that logging workers employed in integrated sawmills with 12 or less logging workers have lower average hourly earnings than those in similar mills with over 12 logging workers. In April

1 Wage Structure, Southern Lumber Industry, April 1953, p. 1.

1953, the former averaged $0.83 and the latter, $0.90 per hour. There is no justification for this disparity. It leads to unfair competition and should be wiped out by the elimination of the exemption in section 13 (a) (15).

FACT SHEET No. 17

LOW-WAGE INDUSTRIES PROVIDE SUBSTANDARD "FRINGE BENEFITS”

"Fringe benefits," consisting of premium pay, pay for time not worked and various nonwage benefits like pensions and insurance, have assumed considerable importance in American industry. It has been estimated that the average cost per hour of fringe benefits in 1952 was 40.99 cents (Harvard Business Review, September-October 1954, p. 38). The low-wage industries, which would be most affected by the adoption of a higher Federal minimum wage, tend to lag behind the other industries in their fringe benefit provisions. This disparity in fringe benefits will not be affected by an increase in the minimum wage. No matter how high the minimum is, the fringe benefits will not be improved. 1. Workers in substandard-pay industries have below-average fringe benefits Available data on fringe benefits of all production workers in low-wage industries (union and nonunion) show that these workers enjoy fewer benefits than the average for all manufacturing. Comparison of the proportions of workers receiving substandard fringe benefits in the 10 low-wage industries surveyed by the Bureau of Labor Statistics in the past 3 years, with the corresponding proportions reported by the National Industrial Conference Board for all manufacturing companies in 1954 which tends to represent large higher paying industries and companies, (table I) shows the following:

(a) Only 7.4 percent of the companies in the NICB survey provided less than 6 paid holidays a year. The proportion of workers covered by such substandard practices in the low-wage industries varied from 19.1 percent in footwear to 94.1 percent in children's seamless hosiery.

(b) While 17.4 percent of the companies in the NICB survey had no second shift premium, the proportion without this premium in low-wage industries generally exceeded 50 percent. Only 15 percent of the NICB companies had second shift premiums of less than 5 cents an hour or 5 percent in women's seamless hosiery, the proportion was 58.3 percent; in synthetic textiles, 90.9 percent; and in cotton textiles, 99 percent.

(c) The proportion of companies in the NICB survey with no third shift premium was 21.4 percent, compared to proportions of 29.6 to 70.8 percent in most low-wage industries. Companies with third shift premiums of less than 10 cents per hour or 10 percent comprised 34.6 percent of the NICB sample; in the three low-wage industries for which data are available, the proportions of workers in plants with such premiums varied from 48.3 percent in wood household furniture (except upholstered) to 100 percent in cotton textiles.

(a) Only 1 percent of the manufacturing companies studied by NICB had no provision for paid vacations. Most of the low-wage industries covered by BLS reports had 13 or more percent of their production workers in plants with no paid vacations, going up to a high of 38.5 percent in children's seamless hosiery.

(e) The NICB survey indicates that 36 percent of all manufacturing companies had no pension plan; in the low-wage industries, the proportions of workers in plants with no pension plan varied from 57 percent (men's and boys' dress shirts and nightwear) to 100 percent (women's seamless hosiery).

(f) The companies in the NICB study which failed to provide insurance or pension benefits comprised 13 percent of all manufacturing companies. In most of the low-wage industries, the proportion was over 13 percent, 6 of the 10 industries having from 14 to 22.5 percent of their workers in plants with neither pensions nor insurance.

These findings are confirmed by a current study of the Bureau of Labor Statistics entitled "The Measurement of Expenditures on Selected Items of Supplementary Employee Remuneration." This study shows that the average expenditure per payroll hour for all fringe items in reporting manufacturing establishments in 1953 was 32.5 cents. Plants with average hourly earnings of less than $1.65 spent an average of 24 cents per hour; plants with average wages from $1.65 to $1.89 spent an average of 35.9 cents per hour; and plants with

average wages of $1.90 and over, spent an average of 37.8 cents per hour for fringe benefits. While this BLS study is an exploratory one and is subject to various limitations, including the fact that the data relate only to those establishments reporting the existence of, and data for, particular fringe benefits, it is indicative of the marked disparity in such benefits between low-wage industries and manufacturing as a whole.

2. Union plants in low-wage industries have lower fringe benefits than in highwage industries

Comparison of fringe benefits reported by the Bureau of Labor Statistics in its surveys of union agreements reveals the following:

(a) Manufacturing industries with the lowest average hourly earnings have below-average fringe benefits (table II). In 1953, only 4 percent of the production workers in all unionized manufacturing plants were employed in establishments which provided less than 6 paid holidays a year; the proportion of the workers employed in such establishments in the low-wage industries varied from 7 percent in furniture and fixtures and miscellaneous manufacturing industries, to 26 percent in the textile mill products and lumber and wood products industries.

(b) In 1952, only 18.6 percent of the production workers in union factories were not covered by a provision for premium pay for work on late shifts. The proportion of such organized employees was higher in all but one of the low-wage industries, with over two-thirds of the workers in leather and leather products, 71.9 percent in furniture and fixtures, and 99.8 percent in apparel and other finished textile products plans receiving no shift premium.

(c) While only 39 percent of the production workers in all union factories were employed in plants which provided a maximum of less than 3 weeks' paid vacation in 1952, the proportion of such workers in substandard-pay industries varied from 75 to 100 percent.

(d) Pension plans were provided to 78.1 percent of the unionized workers in high-wage industries who were covered by health and welfare programs in mid1950 while only 44.2 percent of the organized workers in low-wage industries were covered by pension plans (table III). The proportion of unionized workers covered by pension plans in low-wage industries varied from 13.7 percent in lumber and furniture to 46.7 percent in textiles, apparel and leather. In highwage groups, the proportion varied from 51.6 percent (stone, clay and glass products) to 81.1 percent (metal products).

TABLE I.—Proportion of production workers in selected low-wage industries and all manufacturing industries receiving substandard fringe

benefits1

Leather and leather products: Footwear.

March 1953.

19. I

(2)

(2)

000

15.0

15.0

57.0

13.0

13.5

13.2

91.5

22.5

1.6

1.6

91.3

20. 1

Furniture and fixtures: Wood household furniture (except up

TABLE II.-Comparison of selected fringe benefits in all manufacturing industries and those with below-average level of wages 1

: Fringe benefit data refer only to plants covered by union agreements. * Includes plants in which contract makes no mention of shift premium; refers to plants in which contract provides for multiple shifts.

3 Excludes plants in which maximum vacation pay is not stated in contract. Source: Bureau of Labor Statistics.

TABLE III.-Proportion of workers covered by pension plans among workers covered by collective bargaining provisions for health and welfare pensions, mid-1950 (Plants with union agreements)

WORKERS IN LOW-WAGE INDUSTRIES ARE ENTITLED TO HIGHER WAGES BECAUSE OF HAZARDOUS WORK AND RISING PRODUCTIVITY IN THEIR INDUSTRIES

I. Many low-wage industries and occupations are among the most hazardous It has been argued that wage earners are being paid in accordance with the value of their jobs. Certainly this thesis does not conform to reality in American industry with respect to compensation for the hazardous nature of work. A number of the most hazardous industries with the worst accident records pay very low wages and will be among the most significant beneficiaries of the current proposals for raising minimum wages. Similarly, in individual plants, the most hazardous occupations are frequently among the lowest paid.

The national average injury-frequency rate for manufacturing industries in 1953 was 13.4 per million man-hours. The average hourly earnings for manufacturing industries in 1953 were $1.77. Industries with earnings of less than