Outside the compulsory systems of Australasia, the final appeal from arbitration boards lies with the head of the department. In the war department it is the secretary of war. In the street-cleaning department it is the commissioner. This is essential in any voluntary system of arbitration in public employment. The unions retain the right to strike if they are not satisfied with the arbitration, and therefore the head of the department must finally decide as against a strike, in case arbitration fails.

Another distinction between unions of public employees and those that deal with private employers is the attitude toward the closed shop. Government cannot discriminate between citizens, as can private employers, and must maintain the open shop. But, since government is not forced by competition to cut wages or lengthen hours, the unions do not need the protection which the closed shop gives them. Yet, under the compulsory systems of New Zealand and New South Wales, a preferential union shop is maintained, which approaches the closed shop."

3

In the United States there is a semblance of union preference in the statutory requirements of three states to the effect that the label of the typographical union be affixed to all public printing. However, in Maryland this law seems to have been disregarded, while in Montana and Nevada, the remaining two states, there have been no court decisions supporting the law, although it has been observed. In at least eight other states there have been court decisions adverse to discrimination in favor of organized labor, in regard to either employment on public works or the use of the union label on public printing,5 on the ground that the restriction of employment thus imposed is unconstitutional.

1 See decisions below.

New Zealand, act of 1908, Bulletin of the International Labor Office, Vol. III, 1908, p. 312. New South Wales, industrial arbitration act, Acts of Parliament, 1911-1912, No. 17.

'Maryland, Public General Laws 1911, Art. 78, Sec. 9; see also Laws 1910, C. 698, Art. 78; Montana, Revised Code 1907, Sec. 254; Nevada, Revised Laws 1912, Sec. 4309.

Reports of state officials do not carry the label.

'Illinois: Adams v. Brennan, 177 Ill. 194, 52 N. E. 314 (1898); Holden v. Alton, 179 Ill. 318, 53 N. E. 556 (1899); Fiske v. People, 188 Ill. 206, 58 N. E. 985 (1900). Iowa: Miller v. City of Des Moines, 143 Ia. 409,

(2) Cooperative Employment

An official recognition of organizations of public employees is found in the cooperative employment system. There are two principal methods, the first of which is the cooperative day labor system, as applied in New Zealand. This is a time and piece work system under which men out of employment arrange themselves in small groups, averaging about fourteen (the groups were at first, and occasionally still are, larger), select one or two "headmen," and enter into contracts with the government for sections of public work at "schedule rates" based on the estimates of government engineers in charge of the work. The plan seems to have worked well in New Zealand, but not so well in New South Wales, where it has been confined to the lowest and least efficient stratum of workers. Under the plan the government is responsible for the checking up and actual direction of the work. Evidently the group is not a real labor union.

The second form is found principally in France and Italy,' where workmen organize their own groups and, as such, contract for government work. The group constitutes, therefore, not a labor union, but a union of labor contractors. The officials of the government are not in charge of the work, but they turn it over to the groups, the plan being a modification of the competitive contract system rather than a variety of direct employment. The government authorities favor these societies in the placing of contracts, and the result has been a steady and appreciable growth in their number and undertakings.

122 N. W. 226 (1900). Tennessee: Marshall & Bruce Company ». Nashville, 109 Tenn. 495 (1902). Michigan: Lewis v. Detroit Board of Education, 139 Mich. 306 (1905). Georgia: Atlanta v. Stein, 111 Ga. 789, 36 S. E. 932 (1900). Nebraska: Wright v. Hoctor, 95 Neb. 342, 145 N. W. 704 (1914). Alabama: Inge v. Board of Public Works, 135 Ala. 187 (1902). Ohio: Cleveland v. Clements Bros. Construction Co., 67 Ohio St. 197 (1902).

Great Britain, Board of Trade, Labour Department, Report on Cooperative Contracts Given out by Public Authorities to Associations of Workmen, Parliamentary Papers, Vol. LXXX, 1896.

2 Victor von Borosini, "The Italian Triple Alliance of Labor," American Journal of Sociology, Vol. XIX, 1913-1914, p. 204 ff.

CHAPTER IV

THE MINIMUM WAGE

Minimum wage legislation marks a new stage in the long line of attempts to equalize the power of employer and employee in making the wage bargain. In contrast with conciliation and arbitration, either voluntary or compulsory, which take place only after a demand has been made by one party and refused by the other, minimum wage laws seek to regulate the wage rate before any dispute over the terms of the wage bargain has arisen. Moreover, interference by the state between the parties to the wage bargain through conciliation or arbitration usually implies the organization of the workers and the existence of collective bargaining. But in any modern industrial community large numbers of unorganized workers are found, still bargaining individually, employed at low wages and apparently unable to make any effective efforts themselves to improve their condition. If they are to be helped toward an equality in bargaining power with the employer, the state must take the initiative. This it does by setting standards below which wages may not be depressed -in other words, by passing minimum wage legislation.2

From a slightly different point of view the legal minimum wage fills a gap in our code of laws which protect the employee by regulating the conditions of employment. Minimum standards for safety and sanitation have been enacted in many states and the maximum length of the working day has often been fixed. Such safeguards have long been familiar and are

The industrial courts of Europe, previously described, employ conciliation in both collective bargaining and individual contracts.

? Modern minimum wage legislation is not comparable to the mediæval fixing of wages by justices of the peace, which prescribed not a minimum, but the actual rates to be paid. See "Coercion by Government," p. 141.

generally accepted as necessary and beneficial to the health and welfare of the workers. There exists also a considerable group of laws which determine certain conditions of the wage payment. For instance, the weekly payment of wages may be required or payment in "store orders" may be forbidden, as described in Chapter II. But any legislative interference with the wage rate was long in making its appearance, though equally essential to a complete code of legislative protection for the workers. Work may be done under safe and sanitary conditions for hours not too long, and payment of wages may be prompt and regular, but if the amount received is too small to secure the necessaries of life the worker's health and welfare are menaced. Therefore, the same motives which have caused most of our states to establish minimum standards to guard the worker against unsafe and unsanitary conditions have caused many of them to set up standards for protection against the evils of low wages.

But whether one emphasizes the protection to health and welfare afforded by minimum wage legislation or its equalization of the strength of the parties to the wage bargain it appears not as a novelty in legislation, but as an extension of principles whose enactment into law is of comparatively long standing.

I. ECONOMIC BASIS

That a large proportion of unskilled workers are paid wages far too low for decent self-support is a fact confirmed by many wage investigations and well known to those even slightly familiar with present-day industrial conditions.

(1) Low Wage Scale

It is the concensus of expert opinion at the present time that a weekly wage of $8 or more is necessary under urban conditions for the maintenance of a self-supporting woman in simple decency and working efficiency, and that a man with a wife and three children requires at least $15 to $20 weekly for their proper support. Yet a recent study on woman's

1See Howard B. Woolston, "Wages in New York," The Survey, February 6, 1915, p. 510.

2

wages in the United States concludes that 75 per cent. of female wage-earners receive less than $8 weekly, 50 per cent. less than $6 and 15 per cent. less than $4, and that these wages are further reduced approximately 20 per cent. through lost time and unemployment. The pay of unskilled male workers is at a correspondingly low level. Streightoff, in his discussion of American standards of living, estimates that at least six million adult men, married as well as single, receive less than $600 a year, or $12 a week. More intensive investigations bear out these figures. The United States Immigration Commission studied a large number of typical households representing both native and foreign-born in sixteen leading industries. More than half of the male heads of families earned less than $500 a year, and nearly two-thirds less than $600. More recently, the New York State Factory Investigating Commission examined the pay-rolls of over 2,000 stores and factories during the fall, winter, and spring of 1913-1914. Out of 57,000 women and girls, approximately 34,000, or 60 per cent., earned less than $8 in a typical week. Seven thousand out of 14,000 married men, or 50 per cent., earned less than $15.4

It seems, then, no exaggeration to say that the majority of low-skilled industrial workers in the United States receive wages too small for decent self-support. This fact explains the demand for minimum wage legislation as necessary to social welfare; the causes for the low scale form the economic basis which determines the extent to which the demand is practicable and the legislative standards enforceable.

(2) Economic Weakness of Low-Paid Workers

The almost entire absence of strong labor organizations and collective bargaining among this group of wage-earners

Charles E. Persons, "Woman's Work and Wages in the United States," The Quarterly Journal of Economics, February, 1915, p. 232. 2 Frank H. Streightoff, Distribution of Incomes in the United States, 1912, p. 137.

Arthur N. Holcombe, "The Legal Minimum Wage in the United States," American Economic Review, 1912, Vol. II, p. 33.

Howard B. Woolston, "Wages in New York," The Survey, February 6, 1915, p. 510,