in second quarter 1950. For the entire year 1950, productionworker employment in the industry averaged 122 thousand, a significant gain over the 1949 average of 103 thousand. 1/

B. Effects on capital expenditures

Of the 36 plants about which information on this subject was supplied, 7 introduced new machinery between September 1949 and October 1950. Four of these 7 establishments were located in Winston Salem-High Point, the lowest-wage area, two in MorgantonLenoir, and one in Martinsville. Approximate expenditures for such equipment ranged from 1,550 to $35,000. These figures are hard to interpret since no information was collected on whether this spending was incurred because of the higher minimum or for other reasons and there are no comparative statistics on capital investment in other periods.

C. Effects on hiring policies

Only 1 of the 36 reporting establishments indicated a change in hiring policy because of the higher minimum. This change involved the hiring of younger workers. The proportion of plant workers 50 years of age or older was the same in October 1950 as in March of that year in Martinsville and Morganton-Lenoir, but in Winston-Salem-High Point was smaller by one percent of total workers there.

1 Employment figures from U. S.

Department of Labor, Bureau of Labor Statistics, Division of Manpower and Employment Statistics.

D. Effects on hours of work

No information is available on scheduled workweeks, but weekly hours actually worked by production workers in the manufacture of wood household furniture (except upholstered) showed no change after the higher minimum went into effect, averaging 42 in last quarter 1949 and in both first and second quarters 1950. Average weekly hours of production workers in 1950 as a whole averaged 42 compared to 40 in 1949. 1/

E. Effects on product prices

The wholesale-price index for wood household furniture, the chief product of most of the surveyed Southern plants, is shown for the months July 1949 through December 1950 in Table 42. 2/ This index rose from 100 during last half 1949 to 101 during first quarter 1950 and 102 during second quarter 1950. After the Korean outbreak in mid-1950, it climbed rapidly. Whether the higher minimum was in any way responsible for the slight price advance during first half 1950 is uncertain. One argument against the possibility is that wholesale prices for upholstered household furniture, a relatively high-wage industry probably little affected by the amended minimum, also rose slightly during first half 1950 (Table 42). Furthermore,

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

2/ There is no price index available specifically for nompholstered wood furniture. The index for wood household furniture is the closest substitute, being based almost entirely on nomipholstered items.

Cost of Living

competition from other sections of the nonupholstered wood furniture industry may have prevented the Southern segment--presumably the only one experiencing much direct influence from the higher minimum--from passing along legally required pay increases, which were very small anyway, to buyers in the form of price ad

vances.

Summary of Effects

The influence of the amended minimum on wood furniture (except upholstered) manufacture in three Southern areas was relatively small and the pattern of its consequences sometimes irregular. The higher statutory rate caused

larger increases in lower-level wages than in upper-level ones within each region, and so served to narrow percent wage spreads between the two levels. This narrowing process was continued between March and October 1950 because of the general practice then of granting pay increases in uniform cents-per-hour amounts. But in Winston Salem-High Point, the area where the influence of the minimum is most clearly seen because it was the lowest-wage region with the greatest impact, most of the higher minimum's contracting effect on occupational wage spreads seems to have been offset by July 1952 by the larger percent increments given to the better-paid jobs after

October 1950.

The short-run impact of the new minimum caused a percent rise in average hourly earnings in Winston Salem-High Point but not in the two higher-wage regions; this reduced pay-level differentials between the former and the others. But the amounts involved were very small, and over the entire period 1949-52 there was

little widening or narrowing of differences in earnings levels among the three regions. These levels were fairly similar to start with and remained so.

In keeping with the minor nature of its wage consequences, the 75-cent rate appears to have had no marked nonwage impact in the industry.

Soon after the new minimum went into effect, some establishments were reported experiencing difficulties in adjusting to it. This fact was brought to the attention of the Divisions through correspondence addressed to them, to other Government agencies, and to Congressmen, and through reports appearing in trade publications, business magazines, and newspapers. The Divisions carefully checked into each instance of reported hardship, usually by field investigations, to determine the extent, if any, of adverse impact. The present chapter summarizes the findings of these examinations.

In the process of investigating every alleged problem case, the Divisions made surveys of establishments engaged in oyster canning in the Gulf area, hand manufacturing of cigars, rawsugar producing in Louisiana, and also of 41 establishments scattered through various industries and parts of the country. Almost a third of these 41 plants were engaged in some form of apparel manufacture, over a fifth in some kind of food or tobacco processing. Nearly half of the 41 were located in the South, as was much of the hand-cigar activity and all the oyster-canning and rawsugar industries.

The establishments studied are not a representative sample of subject industries generally and their experiences under the Act cannot be considered typical.

Instead they represent reported cases of major unfavorable adjustments, and conclusions concerning them should be so interpreted. Other establishments and industries, unless their problems were not disclosed to the Divisions, were either not so substantially affected or else could more easily ad just to the consequences of the new minimum.

It is estimated that the activities studied because of reported hardships employed a maximum of about 38,000 workers in 1950. These workers were distributed as follows: 15,000 in Gulf oyster canning, 10,000 each in Louisiana raw-sugar producing and in the hand manufacture of cigars, and 3,000 in the 41 individually surveyed plants. These are very small numbers when compared to estimates of the Divisions of 21 million employees covered in 1950 by the minimum-wage provisions of the Act and of 1.3 million employees receiving direct pay increases because of the minimumwage increase in that year. As already indicated, other plants than those surveyed may have felt seriously adverse effects because of the amended minimum, but if so, their difficulties were not revealed to the Divisions.

Effects on Closings, Curtailments, and Employment Policy

Perhaps the most severe effects were felt among the oyster canneries of the Gulf area. Several facts are noteworthy in assessing the impact there: (1) fish canning had been exempt from