to a fine of $100. In all other states, employees who have not been paid the legal minimum rate may recover the unpaid balance through a civil suit. In America, then, the establishment of minimum wage rates is a long and fairly complicated process. First there is the investigation by the commission, then generally further investigations and deliberation by a representative wage board, next public hearings, and finally a possible court review before the minimum rate goes into effect. 5. RESULTS It is still alleged in some quarters that wages are fixed by economic laws, any legislative interference with which can result only in disaster. At present all that can be said is that experience covering twenty years in Victoria and shorter periods elsewhere has failed to confirm these dire predictions. (1) Changes in Wage Rates Perhaps the first question to be considered is whether the laws have succeeded in raising wage rates. Nearly all the evidence so far collected goes to show that they have. Some instances of failure are known. In Victoria, for instance, it has proved difficult to maintain the legal rate in the furniture trade among the Chinese, where neither employees nor employers welcomed the establishment of the wage board,1 and in England the custom of distributing work through middlemen, and the depression of the industry, led to evasions in the lace-finishing trade. Similar evasions have been suspected with regard to homeworkers in the British tailoring industry. But on the whole, in the different countries and in the various industries, the awards of the wage boards have been found to be effective. In Victoria, official reports show, 1M. B. Hammond, "Where Life Is More Than Meat," The Survey, February 6, 1915, p. 498. 2 Sixth Annual Report of the Anti-Sweating League, p. 6. 'See R. H. Tawney, Minimum Rates in the Tailoring Industry, 1915, pp. 202-210. average wage rates increased 7.6 per cent. in thirteen board trades in a period of about five years before awards were made, but 16.5 per cent. in these and in six additional board trades during a similar period after awards were made. In six trades a period of decline in wage rates became a period of advance after the making of awards. During the whole time wage-rate advances in twelve non-board trades amounted to 11.6 per cent. In the English chain-making industry 56.7 per cent. of the male mastermen and 61.3 per cent. of the journeymen earned less than 15 shillings a week in 1911. In 1913, after the award by the trade board, only 1.3 per cent. of the mastermen and 0.7 per cent. of the journeymen earned so little.2 In the branches of the English tailoring trade covered by the trade board, it is estimated that about one-third of the women and between one-fourth and one-fifth of the men have received increases in their earnings." In Washington the industrial welfare commission states that in twenty-four stores, before the minimum wage award, 1,758 women received less than $10 weekly, while after the award only 561 women received less than $10 weekly, the number of workers remaining approximately the same. A report of the United States Bureau of Labor Statistics on the effect of minimum wage determinations in Oregon retail stores indicated that average weekly earnings of women were 8.6 per cent. higher in the face of a business depression which caused an 8 per cent. decrease in the sales of these stores.5 A year after its decree in the brush industry, the Massachusetts Minimum Wage Commission found that only five, or 1 per cent. of the employees whose wage records it took, were receiving less than the legal minimum.6 1 Ernest Aves, Report to the Secretary of State for the Home Department on the Wages Boards and Industrial Conciliation and Arbitration Acts of Australia and New Zealand, 1908, p. 30. R. H. Tawney, Minimum Rates in the Chain - Making Industry, p. 83. R. H. Tawney, Minimum Rates in the Tailoring Industry, p. 95. • First Biennial Report of the Industrial Welfare Commission, State of Washington, 1915, pp. 13, 79. "United States Bureau of Labor Statistics, Bulletin No. 176, July, 1915, p. 33. Massachusetts Minimum Wage Commission, The Effect of the Minimum Wage Decree in the Brush Industry in Massachusetts, 1915, p. 5. (2) Changes in Wages above the Minimum - O It is frequently declared that legal minimum wage rates tend to become maximum wage rates, thus injuring those whom they are expressly designed to benefit. This does not, however, appear to be generally the case. Both the chief factory inspector at Melbourne, Victoria, and the secretary of the British Board of Trade declare that as far as their experience goes current wages are not held down to the minimum set by law. The former official even declares that "the average wage in a trade is invariably higher than the minimum wage." In one Victorian industry, clothing, after an award had been in force for six years, wages averaged nearly 20 per cent. higher than the legal minimum. The establishing of minimum rates in the clothing trades in Great Britain led in several districts to trade union action which fixed standard rates considerably above the legal minimum. In Portland, Ore., also, the United States Bureau of Labor Statistics found that the proportion of women getting more than the legal minimum increased after the law went into effect.4 2 3 (3) Effect on Unemployment – sĉight It is further argued against minimum wage laws that they force workers out of industry, either because the workers are considered by the employer unprofitable at the legal rate, or because they can be replaced by apprentices or by specially licensed workers at a lower rate, or perhaps because they have .3been active on the wage boards. While all three abuses have probably taken place at various times, they are not universal and are not inherent in the laws. On the first point, the testimony of the chief factory inspector at Melbourne, previously quoted, is that "this dislocation [of the less speedy workers] is not serious, and that as a rule things regulate 1 Irene Osgood Andrews, Minimum Wage Legislation, pp. 62-63, 77-78. 'Henry R. Seager, "Theory of the Minimum Wage," American Labor Legislation Review, February, 1913, p. 89. R. H. Tawney, Minimum Rates in the Tailoring Industry, p. 96. themselves fairly satisfactorily." The Oregon investigation made by the United States Bureau of Labor Statistics showed that experienced women workers were neither thrown out of employment by the operation of the law nor supplanted by men. In sixteen brush factories in Massachusetts the total number of women increased from 332 to 334 between 1913 when the first wage investigation was made and 1915, the year following the minimum wage decree; the number of men decreased from 472 to 417. The system of issuing special permits for less efficient workers to be employed at lower rates, which is provided for by most of the statutes, is undoubtedly helpful in making the adjustment. On the other hand, the displacement of adult skilled workers by apprentices or by defective workers at a lower rate can be checked by limiting the percentage of employees in any establishment who may work at such lower rates, as is already done in Minnesota with regard to defectives. The matter of discrimination against workers who serve on wage boards is more difficult to handle, although most American laws establish penalties for it. This discrimination is a severe handicap to securing a proper representation of the employees on wage boards. However, this is no serious argument against minimum wage legislation, as the same sort of discrimination often takes place against the leaders of the workers in any concerted movement for higher wages. From the side of employers it is frequently declared that minimum wage laws will put them under such a handicap that they will be forced to move to freer territory or be driven out of industry altogether. Neither seems to have taken place to any appreciable extent. The officials of the Victorian Chamber of Manufactures and of the Victorian Employers' Association, the two bodies which originally led the opposition to the wage-board system, now declare that 1Quoted by Irene Osgood Andrews, Minimum Wage Legislation, p. 63. 2 United States Bureau of Labor Statistics, Bulletin No. 176, pp. 8, 9. 'Massachusetts Minimum Wage Commission, Bulletin No.7, 1915, p. 11. they have no wish to see the system abandoned. In 1903 and 1904, eleven of the thirty-eight special boards then in operation in that country were established upon the application of employers. Only a single instance is recorded of a plant leaving the state because of the minimum wage law. In Great Britain, also, in the industries having wage boards, the "employers have not been ruined or even injured in their profits," and the board of trade reports that it is "not aware of any tendency of manufacturers to transfer their business to foreign countries, or in cases where lower wage rates have been fixed for Ireland than for Great Britain, to transfer their business from Great Britain to Ireland."5 The actual cost of the necessary changes is, after all, not burdensome. In Oregon retail stores the increased labor cost was found to be only three mills on each dollar of sales. In the Massachusetts brush industry both the amount of capital invested and the value of the product increased in the year following the decree.7 as not hindered" (5) Effect on Trade Unionism Certain trade union officials, especially in the United States, have feared that minimum wage legislation would hinder the trade union movement by enabling the workers to secure wage gains without the aid of organization. Their fears have not proved true. Instead, the formation of wage boards has 1 M. B. Hammond, American Labor Legislation Review, February, 1913, p. 113. 2 Victor S. Clark, The Labor Movement in Australasia, 1907, p. 147. "A brush manufacturer from England, who had recently come to Victoria to establish his business, was so enraged at the idea that the wages he was to pay were to be regulated by law that he moved across Bass Strait to Tasmania. What has happened to him since Tasmania has adopted the same system of wage regulation, I do not know."-M. B. Hammond, "The Minimum Wage in Great Britain and Australia," Annals of the American Academy of Political and Social Science, July, 1913, p. 32. John A. Hobson, "The State and the Minimum Wage in England," The Survey, February 6, 1915, p. 503. 5 Quoted by Irene Osgood Andrews, Minimum Wage Legislation, p. 78. |