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121 percent in high-wage employments. The extent of the minimum-wage influence is probably most clearly seen by comparing advances between low-wage subject and nonsubject industries. While the subject group is manufacturing and the nonsubject one is retail and service trade, the two groups nevertheless appear roughly comparable in wage behavior so that variables other than the minimum would tend to affect their pay structures similarly. To the extent this is so, the minimum had a definite upward influence on lowwage covered earnings because the generally subject activities gained more than those not subject.

The nonsubject retail and service trades had a 1938-51 percent advance in average earnings about the same as that for the high-wage industries. Since the latter received larger percent pay increments in every time span analyzed except 1942-45, it is doubtful whether the low-wage trades could have held their own over the entire period without the favorable conditions peculiar to the World War II years. Even with the wartime boost, the 1938-51 percent advance in average earnings for these trades was less than that for all manufacturing industries as a group.

World War II conditions favorably affected earnings also in. the low-wage subject activities. 1/ With qualifications, discussed below in Chapter 8, p. 111, footnote 1.

This factor, plus the upward influence of the minimum wage, resulted in a larger percent earnings gain between 1938 and 1951 for the low-wage subject activities than for either the highwage industries or all manufacturing industries as a group, despite an apparent tendency for higher-level earnings to advance faster than lower-level ones during periods of economic revival or boom. It appears that the earnings position of the low-pay subject industries relative to the high-pay or the all-manufacturing industries definitely improved when the minimum-wage pressure was substantially present, and, except during the war, tended to worsen when this pressure was substantially absent.

Virtually the entire 193851 interval was one of rising or high-level employment; the data do not show how declining or stable economic movements might affect the relationship between high and low wages.

When converted to realwage terms, earnings increases between 1938 and 1951 showed that workers in low-wage industries within the benefits of the Act enjoyed a gain in real purchasing power nearly equal in cents-per-hour terms to that received by workers in all manufacturing industries as a group, slightly more than that received by employees in high-wage incastries, and twice that achieved by employees in low-wage trades outside the advantages of the Act.

Conclusions

Though causing significant payroll increases, the 75-cent rate had only very minor determinable effects on employment and other nonwage variables in the five low-wage manufacturing industries surveyed. Even within as selected a group of establishments as those with reported adjustment problems, the nonwage consequences of the 75-cent requirement were on the whole not very substantial. The Korean development undoubtedly helped the affected firms meet their higher wage bills.

The short-run wage impact of the 1950 minimum-rate increase was greater on earnings of lower-wage workers, industries, regions, plants, and occupations. It therefore tended to narrow percent earnings differentials within industry, regional, and plant wage structures, and among industries, regions, occupations, and plants. Lower-paid units were everywhere brought closer to higher-paid ones, percentagewise. In two industries substantially within the Act, the impact of the minimum extended indirectly to wages of nonsubject employees, especially where the employees worked in establishments which had subject workers also.

The wage increase to 75 cents an hour after January 1950 was accompanied by a marked concentration of workers at or very near the 75-cent level, especially in industries where time rates formed. the basic pay system. Short-run indirect effects on wages already equal to or higher than 75 cents an hour were not great.

After March 1950, economic influences other than the minimum predominated and affected wage relationships in a manner generally opposite to the short-run impact of the 75-cent rate. Because of this, some of the relative advantages gained by lower-paid workers had been lost by the time of the final surveys taken.

A comparison of changes in hourly earnings between 1938 and 1951 in 17 selected industries showed that the minimum-wage influence appeared chiefly responsible for a larger percent increase, in both money and real terms, for low-wage industries subject to the Act than for the other industries analyzed. Here again, the percent earnings advances of workers in low-wage activities tended to fall behind those of workers in higherwage activities when the upward pressure of the minimum was not a dominant factor.

CHAPTER 2

EFFECTS IN THE SOUTHERN SAWMILLING INDUSTRY

Background Data

The industry discussed in this chapter includes those establishments in 14 Southern States primarily engaged in sawing rough lumber and timbers from logs or bolts, or resawing lumber into smaller dimensions. In order to measure the effects of the 75-cent minimum in the industry, field investigations were made by the U. S. Bureau of Labor Statistics both before and after January 25, 1950. The earlier survey was taken during the last quarter (October-December) of 1949, the later survey during March 1950. Only mills with at least eight workers were studied. In 1949-50 there were about 5,300 Southern sawmills of such employee size, with an estimated total of 180,000 workers. Slightly over one-tenth of these mills, with nearly one-fourth of the 180,000 workers, were included in the sample for each survey. 2/

Southern sawmilling is part of Industry Group 2421, "Sawmills and Planing Mills, General," which in turn is part of Major Group 24, "(Manufacture of) Lumber and Wood Products (Except Furniture) of the Standard Industrial Classification (SIC) oode of the Executive Office of the President, Bureau of the Budget, Nov. 1945.

The 14 Southern States in which were looated the mills discussed in this ohapter are the following, classified by region: Southeast: Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee; Southwests Arkansas, Louisiana, Oklahoma, Texas; Border States: Kentucky, Virginia, West Virginia.

2/ Findings from the two investigations have already been published by the U. S. Bureau of Labor Statistios in its Wage Structure Series 2, No. 76, Lumber in the South 1949 and 1950.

A third payroll investigation of Southern sawmills with eight or more employees was made during April 1953; its results throw light on the industry's wage pattern as it existed more than three years after introduction of the 75-cent minimum.

Wage Effects of Minimm-Rate Increase

Because the March 1950 field study of the industry was taken within two months after the 75cent rate took effect, it shows only the immediate, short-run consequences of the higher minimum. This is an obvious limitation. But any later attempt to isolate minimum-wage effects would have been generally confused by the intervention of numerous other economic pressures arising from the business upsurge in this country after first quarter 1950, especially after the North Korean invasion in June 1950. The March 1950 data, by contrast, reflect substantially the minimun-wage impact.

A. General and occupational wage effects

Tables 3 and 4, and Chart 2, point up the relatively low wages paid in the industry before introduction of the 75-cent rate. During last quarter 1949, 69 percent of plant workers earned less than 75 cents an hour and even average hourly earnings in the industry (69 cents) were below this amount. The adjustments required by the minimum-rate increase were thus significant.

These adjustments included a marked alteration in the industry's wage distribution, caused chiefly

Table 3. Percent distribution of plant workers in Southern sawmills, by average hourly earnings, three payroll periods 1949-53

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Source:

U. S. Department of Labor, Bureau of Labor Statistics. Data for 1949 and 1950 from Wage Structure Series 2, No. 76: Lumber in the South 1949 and 1950, Tables 4 and 5, pp. 9-10. Data for April 1953 from press release of August 14, 1953.

Table 4. Increases in average hourly earnings of plant workers in Southern saw

milis, 1949-53

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Sources Computed from data of U. S. Department of Labor, Bureau of Labor Statis tios. Data for 1949 and 1950 from Wage Structure Series 2, No. 76: Lumber in the South 1949 and 1950, Tables 4 and 5, pp. 9-10. Data for April 1953 from press release of August 14, 1953.

22

Chart 2. PERCENT DISTRIBUTION OF PLANT WORKERS IN SOUTHERN SAWMILLS,
BY AVERAGE HOURLY EARNINGS, THREE PAYROLL PERIODS 1949-'53
PERCENT OF PLANT WORKERS

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