Chart 14. INDEXES OF AVERAGE HOURLY EARNINGS FOR CLASSES OF SELECTED
INDUSTRIES, UNITED STATES, SPECIFIED YEARS 1938-51

workers were generally subject to minimum-wage legislation. The rest of the present chapter describes in greater detail

this and other aspects of the wage behavior between 1938 and 1951 of the industries selected for analysis.

Changes in Selected Industry Earnings, 1949-51

Table 45 shows in percent and cents-per-hour terms, for the selected industries and for all manufacturing activity, increases in average hourly earnings between 1949 and 1950, between 1950 and 1951, and between 1949 and 1951. The year 1949 was the last full one before the minimum-rate increase to 75 cents an hour became effective. The year 1950 was the first one in which economic activity was affected by required adjustments to the higher statutory minimum. It was a year also influenced by a general business upswing, which began after March and gained momentum from the North Korean attack in June. During second half 1950 and during 1951, inflationary pressures greatly outweighed the minimum-rate increase in influencing wages and other job conditions.

In 1949, average hourly earnings in the low-wage subject industries averaged higher than those in the low-wage non subject retail and service trades, but were slightly less than threefifths of the average pay in the selected high-wage employments. Between 1949 and 1950, the lowwage subject industries had the largest proportionate advance in mean hourly earnings, 5 percent, as against only 3 percent for the high-wage industries and 2 percent for the low-wage nonsubject 1/ In that year, nonsubject trades averaged hourly earnings of 88 cents, low-wage subject industries $1.01, and high-wage industries $1.75 (Table 43).

Over the entire three-year period 1949-51, the high- and lowwage subject industries had the same proportionate increases in mean average hourly earnings (13 percent) while the nonsubject retail and service trades lagged behind with an 8-percent advance. Most of the difference in gains between the low-wage subject and nonsubject industries probably was caused by the minimum-rate increase. Most of the difference in gains between the high-wage industries and the low-wage nonsubject ones may have been due to a tendency for initially higher rates to enjoy earlier or larger pay increments during this time of improving business conditions. The 1949-51 experience shows that lowpaid industries subject to minimumwage legislation were able to hold their own in percent earnings advances with high-paid industries while low-paid industries outside the benefits of such

influence during 1938-41, another period of substantial minimum-wage impact. The

Fair Labor Standards Act became effective October 24, 1938, with a minimum hourly rate of 25 cents. This rate was increased after the first year to 30 cents, with an hourly minimum of 40 cents scheduled to become the legal wage floor within a maximum of seven years from the effective date of the law--by October 24, 1945, that is. Before that date, the 40cent minimum was to be attained on an industry basis as rapidly as possible without substantially curtailing employment, and for this purpose an industry-committee procedure was set up. During the next few years, industry committees made many recommendations for rates ranging from 32.5 to 40 cents an hour. July 1944--more than a year before the end of the seven-year period--the 40-cent rate had been put into effect in all industries covered by the wage requirements of the Act (outside of Puerto Rico and the Virgin Islands).

By