DELEGATION OF POWERS OF BOARDS TO CERTAIN GOVERNMENT AGENCIES TO CONTROL OF WAGES

The CHAIRMAN. I see you also have listed here on page 5 of the justifications a list of delegation of powers of the Boards to certain Government agencies to control wages subject to periodic review by the War Labor Board. We will place that in the record.

The CHAIRMAN. I wish you would give me a statement of what is involved in each of these agencies. Take the first one first.

Mr. DAVIS. The Wage Adjustment Board.

The CHAIRMAN. Yes. What is involved there?

Mr. DAVIS. The Wage Adjustment Board is for the building construction industries and it was already in existence when we came in, when the War Labor Board was set up; there was an agreement between Government and Labor and Industry in the building construction field. This Wage Adjustment Board had been set up by the Secretary of Labor under that agreement and the Executive order instructed us not to disturb that.

The CHAIRMAN. The principal delegation, apparently, is to the Wage Adjustment Board under the building construction trades, and I assume that relates both to Government and private construction while these other delegations relate to Government nonclassified personnel only?

Mr. DAVIS. That is right; that is exactly right. The Wage Adjustment Board is really an agent of the War Labor Board; it has been reconstituted; it has initial jurisdiction but appeals are made to the National Board on all wage adjustments in the building construction. industry, private and public.

The CHAIRMAN. Where is it located?

Mr. DAVIS. It is in Washington, in the Department of Labor.
The CHAIRMAN. And how is it constituted?

Mr. DAVIS. It has a tripartite set-up; three public men, three labor men, and three industry members.

The CHAIRMAN. And what is its authority?

Mr. DAVIS. Just exactly like a regional board acts in its relation to us; its decisions are appealable to us in the same way. It is like a district court's relationship to the court of appeals, exactly. They have initial jurisdiction; they either have a public hearing and develop

findings of fact and their decisions are appealable to the War Labor Board.

The CHAIRMAN. Do all these units of the Board have jurisdiction to handle both voluntary cases and disputed cases?

Mr. DAVIS. That is true of the Wage Adjustment Board.
The CHAIRMAN. To handle both?

Mr. DAVIS. Yes.

The CHAIRMAN. What about the other units?

Mr. DAVIS. No; that is the only one; and they do not handle disputed cases.

The CHAIRMAN. What proportion of the cases coming before the Board and its various units involve questions of increased wages?

Mr. DAVIS. We have had about 8,000 disputed cases and I think about 80 percent of these involve wages; that would be about 6,400. We have received up to the present time about 150,000 voluntary applications, not all of which, however, involve basic wage rate issues. The CHAIRMAN. That is about what percentage?

Mr. DAVIS. About 1 percent.

The CHAIRMAN. Of the cases that involve increasing wages what proportion would involve increasing prices?

Mr. DAVIS. About one-half of 1 percent.

The CHAIRMAN. One-half of 1 percent involves increase in price? Mr. DAVIS. One-half of 1 percent of those involving wages also involve price changes.

The CHAIRMAN. When the stabilization authority was given to the Board in October 1942, you had already developed the Little Steel formula. It is still being followed except for the variations which you told us about last year in cases of substandards of living, gross inequities within and as between plants, and the premium- and incentivewage plans?

Mr. DAVIS. Yes; the Little Steel formula is still in force.

The CHAIRMAN. With the exceptions that you have referred to heretofore?

Mr. DAVIS. Well, they are not exceptions to the Little Steel formula which is a limitation on general wage increases, and that Little Steel formula is still being adhered to.

There is another standard-I have not called it an exception, but it could be called an exception to the Little Steel formula-and that is, if a plant has an obsolete wage structure, it can reach the lowest brackets of the sound and tested rates and obtain more than 15 percent increase for the workers.

INCENTIVE AND PREMIUM WAGES

The CHAIRMAN. When you were before the committee last, the question of incentive and premium wage plans had not gone very far; it was still in process of development. You have had an opportunity in the meantime to observe it in detail. What is the situation now with reference to incentive and premium wages?

Mr. DAVIS. I am advised we have had over 2,200 applications for approval for incentive wages. We have laid down some general rules about them. Of course, there are limitations so that there is no increase in the unit cost of production and the Board has not attempted to determine the exact sum of the incentive wage. We

simply say that it must be within certain limits and let them work it out.

The CHAIRMAN. In how many cases have such wage plans been permitted?

Mr. KHEEL. I think they have been allowed in about 2,200 cases. The CHAIRMAN. What has been the effect both as to the prime purpose in increasing production and on wage stabilization?

Mr. KHEEL. From such reports as we have received-and we require the submission of reports within 90 days after the plan has been put into effect, it appears that the incentive has increased productivity.

The CHAIRMAN. It has increased production?

Mr. KHEEL. It has increased production.

The CHAIRMAN. And it has stabilized wages?
Mr. KHEEL. Yes.

The CHAIRMAN. In other words, you consider the results satisfactory?

Mr. DAVIS. Yes, as a general plan. Of course, you have got to make provision for certain limitations; if not, your incentive plan will not work.

CHANGE IN EARNINGS IN MANUFACTURING INDUSTRIES BEFORE AND AFTER WAGE STABILIZATION

The CHAIRMAN. What has been the effect of the action of the Board and its various units with respect to raising the total wage level of the country since the Stabilization Act went into effect?

Mr. DAVIS. If you take all the wages that we have approved and divide them into all the workers within our jurisdiction, the average increase has been slightly over 1 cent per hour.

The CHAIRMAN. Do you have any data at hand to indicate whether that total increase has been the result of your decisions and approvals or what it would have been if it had not been for their adverse decisions and disapprovals?

Mr. DAVIS. Well, we have something that throws light on that, I think.

I have a chart here and the black colors show the percentage, the increase in earnings from July 1941 to Sepetmber 1942; that is, 15 months prior to the Stabilization Act. Then the cross hatch shows percentages by which earnings increased in the 15 months following the passage of the act; you will see the increase after the act was very materially reduced. These cross hatches show the gross weekly earnings, the gross average hourly earnings, and the straight time average hourly earnings. And they have been cut in two as compared to the preceding 15 months.

Now it should be borne in mind, gentlemen, that except for the wage stabilization policy the tendency would have been just exactly the opposite to that, because it was in these months covered by the Stabilization Act that we have had a shortage of labor, a competitive bidding for labor.

The CHAIRMAN. I think we had better include that chart in the record.

(The chart is as follows:)

PERCENTAGE CHANGE IN EARNINGS
IN MANUFACTURING INDUSTRIES
BEFORE AND AFTER WAGE STABILIZATION
TWO EQUAL 15 MONTH PERIODS

PERCENT 28

PERCENT

NATIONAL WAR LABOR BOARD

WASHINGTON DC.

MARCH 14, 1944

STRAIGHT-TIME
AVER. HOURLY
EARNINGS

Note: WEIGHTED BY INDUSTRY MAN HOURS
OF EMPLOYMENT IN OCTOBER 1942
Source. BUREAU LABOR STATISTICS

Mr. DAVIS. Would you also like to include this chart covering the gross weekly earnings, gross average hourly earnings, and straighttime average hourly earnings in manufacturing industries? It goes along with the other one.

The CHAIRMAN. I think it should be in the record.

(The chart referred to will be found on following page.)

MAJOR WAGE AGREEMENTS EXPIRING IN THE NEAR FUTURE

The CHAIRMAN. Many industries enter into wage agreements with the labor organizations for specified periods of time.

Mr. DAVIS. That is correct.

The CHAIRMAN. At the expiration of these agreements frequently, I suppose, negotiations are entered into for a different kind of agreement than that just expired. Are there any such major agreements that are expiring or will expire in the near future that will affect the work of your Board?

Mr. DAVIS. Well, this is March. I cannot give you exact information on that, but I can give you a guess.

The CHAIRMAN. It would be approximate?

Mr. DAVIS. The biggest are the railroad and coal industries; they have been settled, at least, by agreement of the parties. We do not have the railroads, of course, but that has been settled for a year, and, I spoke about the coal cases.

The garment workers, I think, is one, and the textile workers and automobiles, generally. Quite a lot of them are coming up this month and the next.

CURRENCY OF WORK OF BOARD

The CHAIRMAN. Last spring the Board was given a supplemental appropriation to carry out its decentralization program and to take care of the increasing backlog of cases that had been built up at that time. Have you made use of that fund, and if so, have you been able to dispose of the backlog of cases on hand?

Mr. DAVIS. What we have been able to do so far, Mr. Chairman, is to get ourselves current and we are handling the cases as fast as they come in. The backlog is not growing; it has been reduced from about 25,000 to 16,000, and we feel at this time that with this equipment that we have we can reduce somewhat these 16,000 cases while we handle the others. Of course we cannot get down to zero.

The CHAIRMAN. What is the situation with respect to the work of the Board, the regional boards, and the panels, both with regard to dispute cases and voluntary cases. Is your curve rising, or have you about reached the total amount? Have you stabilized the work so it is largely kept current?

Mr. DAVIS. Here is our curve [indicating].

The CHAIRMAN. About what time of the year did you reach your peak?

Mr. DAVIS. That was about May of last year, or June of last year when the peak was reached. Then we got into production along about October and November; really it was November when we got to about this level [indicating] and we are still holding it. Now we want to pitch in and bring it down to another level somewhere between. You cannot get it down to zero.