The Wages of Farm and Factory Laborers 1914-1944 9780231898140

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STUDIES

IN HISTORY, ECONOMICS, PUBLIC

AND

LAW

Edited by the FACULTY O F POLITICAL SCIENCE O F COLUMBIA UNIVERSITY

NUMBER 518

THE WAGES OF FARM AND

FACTORY

1914-1944

BT

D A N I E L J . A H E A R N , JR.

LABORERS

T H E WAGES OF FARM AND FACTORY LABORERS 1914-1944

BY

DANIEL J. AHEARN, JR.

AMS

PRESS

NEW

YORK

COLUMBIA UNIVERSITY STUDIES IN THE SOCIAL SCIENCES 518

The Scries was formerly known as Studies in History, Economics and Public Law.

Reprinted with the permission of Columbia University Press From the edition of 19-45, New York First AMS E D I T I O N published 1968 Manufactured in the United States of America

Library of Congress Catalogue Card Number: 78-76649

AMS PRESS, INC. N E W Y O R K , N . Y. 1 0 0 0 3

DO WILLIAM T .

SHIELDS

T E A C H E R AND F R I E N D

ACKNOWLEDGMENTS T o many persons I owe my thanks. Professor Leo Wolman of Columbia University read the manuscript in its many revisions and made numerous suggestions and criticisms. Without his ready aid, I could not have completed the work. Professor Paul F . Brissenden of Columbia University also read the manuscript and he, too, made a great number of valuable suggestions and criticisms. Many government officials were kind enough to answer promptly my requests for detailed information: Leon E . Truesdell and Alba M. E d w a r d s of the Bureau of the Census; Isador Lubin, A . F . Hinrichs, and H u g h S. Hanna of the Bureau of Labor Statistics; Peter de Vries, E . T . Cook, M. C. Merill, and Shelby Thompson of the Department of Agriculture; H o w a r d B . Meyers of the Federal W o r k s A g e n c y ; all sent me information which I needed. Dr. A . M . E d w a r d s was especially helpful. Mr. H . L . Sanford, manager of the Research Department of the New Y o r k Federal Reserve Bank, compiled from office schedules a wage record which extended from 1 9 1 3 to 1 9 3 1 . Dr. R . G. Hurlin of the Russell Sage Foundation, not without some inconvenience to himself, explained the makeup and coverage of his study of the wage rates of unskilled labor. T o all these people, and to my friends—especially Jane L . Covle, George H. Leonard and Joseph Wolin—who helped to lighten my task, I am deeply grateful. D A N I E L JOSEPH A H E A R N , JR.

7

TABLE OF CONTENTS PAGE ACKNOWLEDGMENTS

7

CHAPTER I Introduction

17 CHAPTER

II

The Available Data—Statistics of the Number of Farm Laborers and Factory Laborers CHAPTER

III

The Available D a t a — W a g e Statistics for Farm Laborers and FactoryLaborers CHAPTER

89 V

Recovery and Stability, 1922-1929 CHAPTER

134 VI

Depression and Revival, 1929-1944 CHAPTER

143 VII

Annual Earnings, Money and Real CHAPTER

180 VIII

Wages, Production, and Productivity CHAPTER

52

IV

Inflation and Deflation, 1914-1922 CHAPTER

22

203 IX

Summary and Conclusions

218

APPENDIX

227

BIBLIOGRAPHY

231

INDEX

241

9

LIST OF CHARTS PAGE

I. Movement of W a g e Rates of Farm Laborers and Factory Laborers, 1914 to 1939

20

II. Movement of Farm Prices and Farm W a g e Rates, 1914 to 1922..

94

III. Movement of Farm Prices and Farm W a g e Rates in Selected Areas, 1914 to 1923

103

IV.

Movement of Farm Prices and Farm W a g e Rates in Selected Areas, 1925 to 1939

II

152

LIST OF TABLES PAGE

1. Number of Hired Farm Laborers as shown in the Census Reports 1910, 1920, 1930, 1935, and 1940

25

2. Number of Farm Laborers as estimated by Private Investigators, 1910, 1920, 1930, and 1935

27

3. Gainful Workers in Agriculture, 1910, 1920, and 1930

30

4. Gainful Workers in Agriculture, by Sex and by Age, 1920 and 1930

32

5. Regional Distribution of Hired Farm Laborers, 1910, 1920, 1930, 1935. and 1940

33

6. Per Cent Distribution of Hired Farm Laborers by Age, Sex, and Color, 1920 and 1930

36

7. Number of Laborers in Manufacturing, 1910, 1920, 1930, and 1940, with their Distribution by Industrial Groups

41

8. Per Cent Distribution by Geographic Regions of Gainful Workers in Agriculture, and, Manufacturing and Mechanical Industries, 1920 and 1930

42

9. Per Cent Distribution of Farm Laborers and Factory Laborers, by Age, Sex, and Color, 1920 and 1930

46

10. Comparison of Rate? of Unemployment of " Operatives" and " Laborers—not otherwise specified" in Manufacturing, by Industrial Groups, April 1930

49

11. Farm W a g e Rates, Daily Without Board, U. S. Average and Selected Regional Averages, 1914, 1920, 1929, 1933, and 1939

57

12. Employment-Tenure of Farm Laborers, by Regions, 1917 and 1927

61

13. Per Cent Distribution of Employment-Tenure of Farm Laborers in the United States, and in Selected Regions, March 1940 and September 1939

62

14. Hourly Earnings of Drawing-Frame Tenders and of Laborers in Cotton Goods Manufacturing, North and South, 1933, 1937, and 1940

76

15. Hourly Earnings of Drawing-Frame Tenders and other Semiskilled Workers in Cotton Mills, 1914, 1916, 1920, 1937, and 1940

77

16. Farm W a g e Rates, Hourly Earnings, and Hourly Wage Rates of Unskilled Laborers in Manufacturing and Road Building, 1914, 1920, 1929, 1933, and 1939

87

17. Per Cent Changes in Wage Rates of Farm and Factory Laborers, 1914 to 1922

89

13

14

LIST

of

t a b l e s PAGE

:8. Index Numbers of F a r m Income, F a r m Prices, and F a r m W a g e Rates, 1919 to 1922

9'

19. Index Numbers of F a r m W a g e Rates, by Regions, 1920

92

20. Index Numbers of F a r m Prices of Cotton Lint and Cotton Seed, and, of F a r m W a g e Rates in the Cotton Belt, 1914 to 1922

97

21.

Index Numbers of F a r m Prices and F a r m W a g e Rates in T e x a s and Georgia, 1914 to 1922

98

22. Index Numbers of W h e a t Prices and F a r m W a g e Rates in W e s t North Central States, 1914 to 1924

100

23. Index Numbers of W h e a t Prices and F a r m W a g e Rates, Kansas, 1914 to 1924

101

24. Index Numbers of F a r m Labor Force, F a r m W a g e Rates, and F a r m Prices, 1914 to 1921

108

25. P e r Cent Change from Preceding Y e a r in F a r m Labor Force, in F a r m W a g e Rates, and in F a r m Prices, 1915 to 1921

109

26. Index Numbers of H o u r l y W a g e s Selected Industries, 1919 and 1920

113

27. Index Numbers of H o u r l y Manufacturing, 1920

of

Earnings of

Unskilled Unskilled

Laborers, Laborers

in in

28. Changes f r o m Preceding Y e a r in the Hourly Earnings of Unskilled Laborers, 1914 to 1920

:i4 116

29. Index Numbers of H o u r l y Earnings of Unskilled Laborers, by Industries, and by Regions, 1914 to 1920

118

30. Regional Differences in the Hourly W a g e Rates of Common Laborers in R o a d Building, 1915 to 1920

125

31. T h e Standard Deviations of A v e r a g e Hourly W a g e s of Unskilled Laborers, 1914 and 1920

126

32. H o u r l y Earnings of Skilled and Unskilled W o r k e r s in Manufacturing, 1914, 1920, and 1922

127

33. Index Numbers of Real W a g e s of Farm Laborers and Factory Laborers, 1914 to 1922

132

34. H o u r l y Earnings of Factory Laborers and Daily W a g e Rates of Farm Laborers, 1924 to 1929

134

35.

Per Cent Increases in Money W a g e s and Real W a g e s of F a r m Laborers and Factory Laborers, 1914 to 1929

139

36. Hourly W a g e Rates of Farm Laborers, Hourly W a g e Rates and Hourly Earnings of Factory Laborers, 1914 and 1929

142

L I S T OF

TABLES

15 PAGE

37. Index Numbers of Production, Prices, Employment, and Wages, 1933, 1937. and 1939 38. Index Numbers of Farm Prices and Farm W a g e Rates, 19127 to 1940

145 148

39. Farm Employment of Family W o r k e r s and Hired Workers, 1929, 1933, 1937, and 1939

iSS

40. Hourly W a g e Rates and Hourly Earnings of Unskilled Factory Laborers, July 1929 to July 1933

157

41. Hourly W a g e Rates and Hourly Earnings of Unskilled Factory Laborers, July 1933 to July 1939

164

42. Index Numbers of Money Wages, Cost of Living, Real W a g e s of Farm Laborers and Factory Laborers, 1929 to 1939

172

43. Index Numbers of Farm Prices and Farm W à g e Rates, October 1939 to October 1944

174

44. Money W a g e s of Farm Laborers and Factory Laborers, October 1939 t 0 October 1944, with Index Numbers of Money Wages, of Cost of Living, and of Real Wages, October 1939 to October 1944

176

Index Numbers of Farm W a g e Rates, Hourly W a g e Rates, and Hourly Earnings of American Workers, 1920, 1929, and 1939 . . .

181

46. Comparison of Per Cent Changes in the W a g e Rates of Farm Laborers and Factory Laborers, 1914 to 1939, and by Selected Periods

182

47. The Full-Time Monthly Earnings of Factory Laborers and Farm Laborers, 1925

185

48. Estimated Full-Time Annual Earnings and Actual Annual Earnings of Factory Laborers and Farm Laborers, 1914, 192s, and 1939 . .

187

45.

49. Index Numbers of Actual Annual Earnings, Cost of Living, and Real Annual Earnings of Factory and Farm Laborers, 1925 and 1939

189

50. Index Numbers of Output per Manhour in Manufacturing, Hourly Earnings of Manufacturing Employees, Output per Farm Worker, and Farm W a g e Rates, 1914, 1919, 1929, and 1039

213

51. Index Numbers of Output per Manhour in Manufacturing, Real Hourly Earnings of Manufacturing Employees, Output per Farm Worker, and Real Farm W a g e Rates, 1914, ;giQ, 1929, and 1939

217

CHAPTER I INTRODUCTION DISTRIBUTION of income is one of the most important problems in economics. The kernel of that problem is wages and their changing course over periods of time. Profits, interest, and entrepreneurial withdrawals must also be examined before the complete picture of a nation's material welfare can be viewed; but, of all the shares of national income none approaches wages in significance. M o r e than ninety per cent of American workers must look to this form of income alone as the fund out of which they can buy the goods and services they need. W a g e rates and earnings in the past thirty years underwent a complete transformation. During W o r l d W a r I almost all wage rates climbed to new peaks. In the precipitous deflation of 1 9 2 0 22 they dropped but few sank to their pre-war levels. A f t e r a strong recovery they remained comparatively stable until the Great Depression ( 1 9 2 9 - 1 9 3 3 ) when they again declined. In the subsequent revival period, wage increases were moderate in some instances, exceptionally large in others. Although no two industries throughout these years experienced identical wage changes, there is a similarity of movement in the various manufacturing industries. But between the movements of farm and factory wages there are striking contrasts. T o compare the wages of farm laborers with those of factory laborers f r o m 1 9 1 4 to 1944 is the purpose of this study. Most of our inquiry centers about the fact that the wage rates of factory laborers between 1 9 1 4 and 1 9 3 9 increased 200 per cent, whereas the wage rates of farm laborers hired by the day without board increased only 9 per cent. Needless to say, the earnings of factory laborers and f a r m laborers were deeply affected by these changes in their wage rates. According to our computations, the actual annual earnings of f a r m laborers hired by the day without board rose on the average only $ 7 between 17

l8

WAGES

OF F A R M

AND

FACTORY

LABORERS

1914 and 1939, while those of factory laborers increased $328.x The difference between these two increases in actual annual earnings is traceable in large part to differences in the magnitude of increases in wage rates rather than to differences in regularity of employment. Once the differences in the increases of wage rates are analyzed, it is a comparatively simple matter to trace the changes in annual earnings. Thus, most of this monograph deals with changes in wage rates. From wage rates we turn naturally to the question of annual earnings, money and real. Manufacturing was not the only industry to triple wage rates between 1914 and 1939. In mining, transportation, and building construction, the increases in wage rates were approximately the same size. Farm wage rates, alone of all those for which there is available a continuous record, had no substantial increase between 1914 and 1939. Yet in the first part of that twenty-five year period, that is from 1914 to 1920, the wage rates of farm laborers had a relative advance almost as great as the one in manufacturing (Chart I ) . Divergence in these two wage rates first appeared in the post-war deflation (1920-1922) and by 1929 they were far apart. Then in the Great Depression (1929-1933) farm wage rates collapsed and touched a level lower than that of 1914. And, so incomplete was their revival that in 1939 they were still 30 per cent lower than in 1929. Not so the wage rates of factory laborers; in 1939 they were 23 per cent higher than in 1929 (Chart I ) . Since the index numbers of farm wage rates plotted in Chart I refer to daily wage rates without board, a question about the 1914-1939 variations in monthly wage rates without board might easily arise. Their course was only slightly different from that of the daily wage rates; on a 1914 base their indexes were 220 in 1920, 170 in 1929, 86 in 1933, and 120 in 1939. 1 See Chapter V I I , Table 48, page 187. The average actual annual earnings (cash and perquisites) of farm laborers were $188 in 1914 and $195 in 1939. T h e corresponding figures for factory laborers were $47^ ik 1914 $804 in 1939.

INTRODUCTION

19

T h e indexes of hourly wages o f unskilled factory workers depicted in Chart I refer to hourly w a g e rates for the years 1 9 1 4 t o 1920, and to hourly earnings f o r the period 1921 to 1939. 2 H o u r l y w a g e rates, of course, are not necessarily the same as hourly earnings, but, f o r the moment, let us regard relative changes in the hourly earnings of factory laborers as the relative changes in their hourly w a g e rates. T h e substitution, as w e shall see in Chapters I I I and V I , is not as unwarranted as it might seem on first sight. A s Chart I reveals, neither the w a g e rates of farm laborers nor those o f factory laborers ran an unbroken course. E a c h had its ups and downs, each had its o w n peculiar movements. Y e t , each had this in c o m m o n : their course f r o m 1 9 1 4 to 1939 is divisible into three phases—the extraordinary rise from 1 9 1 4 to 1920 with its subsequent deflation, the comparative stability which followed the recovery of 1922, and, finally, the depressionrevival changes of 1929-1939. W a g e movements in each of these three periods are discussed individually in Chapters I V , V , and V I . T h e latter chapter also contains some information about wage movements from October 1939 to October 1944. T h e sources and nature o f the available data are treated in Chapters II and I I I . 2 In Chart I, the wage indexes of factory laborers refer to hourly wage rates (1914-1920) and to hourly earnings (1921-1939). Data for 1914 to 1920 were drawn from the quarterly surveys of the Federal Reserve Bank of New York about the hiring wage rate per hour paid to male unskilled laborers in New York. 1914 is the base of measurement for the period 1914 to 1920. The wage indexes for 1921 and the years thereafter to 1939 refer to the hourly earnings of male unskilled laborers in manufacturing as recorded by the National Industrial Conference Board. July 1914 is the index base for the years 1921 to 1939. Although one series refers to hourly wage rates, the other to hourly earnings, both have identical entries for July 1914 and July 1920. Thus, for male unskilled workers:

July 1914 July 1920

Hourly Wage Rates (F.R.B.N.Y.) 20c. 53c.

Hourly Earnings (N.I.C.B.) 20c. 53c.

Both of these wage series are discussed in Chapter III.

20

WAGES CHART

I.

OF

FARM

MOVEMENT

AND

OF \ V A C ; E

FACTORY

FACTORY

RATES

LABORERS,

(Index Numbers:

LABORERS

OF F A R M

1914

TO

LABORERS

AND

1939

1914=100)

Unskilled laborers. Manufacturing, Hourly Earnings form Wage Rates, Daily, Without Board 1914 »=100

350

1 1 I

r- "" *

1 i i 1

Ji /

/ / /

v

K \

\ \ »

! 1

V 1

/

!

/s

V

\

1914

1920

1925

1930

1935

T h e index numbers underlying the figures in this c h a r t will be f o u n d in the Appendix, Table A .

1939

INTRODUCTION

21

W h i l e w a g e rates f o r m the core o f this study, to o m i t discussion about annual w a g e s w o u l d be to leave o u r

survey

materially incomplete. Attention, therefore, must be g i v e n to the annual earnings, money and real, of farm laborers and factory laborers and that topic is the subject matter of Chapter V I I . W h y did the w a g e rates o f factory laborers triple at a time w h e n farm w a g e rates barely managed to hold their o w n . T h a t question, dealing as it does with the w a g e rates of many millions of A m e r i c a n workers, is obviously an important one. A n y reason w h i c h can serve to explain the w a g e rate increases of both f a r m laborers and factory laborers is entitled to great consideration, especially a m o n g those economists w h o , during the 1930's, insisted that the shortest w a y out of the depression w a s to raise w a g e rates. Chapter V I I I suggests reasons for the extraordina r y difference of changes in the w a g e rates of farm laborers and factory laborers. T h i s monograph is primarily a statistical analysis of the v a r y i n g course of two important w a g e rates. T o complete the task, such as it is, has been much more difficult than it appeared to be at the start. N o thesis, in the ordinary sense of that w o r d , is set forth. Reference is often made to the movements in f a r m prices as a w o r k i n g explanation of the movements in f a r m w a g e rates. This, o f course, is not a novel theory but no one to our knowledge has given it the detailed examination found in the following pages.

CHAPTER II THE AVAILABLE DATA—STATISTICS OF THE NUMBER OF FARM LABORERS AND FACTORY LABORERS BETWEEN 1910 and 1940 the number of farm laborers did not remain constant. E v e r y decade produced some change in both the total number and the internal composition of this group of workers. Factory laborers also varied in number. A n d within that group also there occurred a wide variety of changes. W h a t those changes were, form the subject matter of this chapter. A t our disposal are statistical data which are not absolutely precise. T h e basic materials come from reports and investigations which faced a number of problems in the collection and interpretation of the evidence. T h i s fact is a handicap but it should not discourage the reader. W e are interested, not in w a g e changes which appeared from season to season or from year to year, but rather in the more pronounced variations which transpired in a quarter of a century. N o w it is almost common knowledge that agriculture and manufacturing between 1914 and 1939 underwent a series of vast changes. During those years, did the wage rates of farm laborers and factory laborers increase by the same amount? If not, what was the amount of the difference, and, what reason or reasons can be given for the difference? These questions are our principal concern, and, in truth, the available data are sufficient to furnish reliable answers. Information about farm laborers is sparse. A t infrequent intervals the Departments of Agriculture and Labor have published statistics about them but nowhere are there enough data to frame a complete and continuous picture of this group of w o r k ers. W i t h i n the past decade, these agencies, and more particularly the W o r k s Progress Administration, have issued studies about the number, employment, and income of farm laborers, and, undoubtedly, the future will see more complete and accurate information about them. A t present, however, the main source 22

NUMBER

OF F A R M

AND FACTORY

LABORERS

23

of information about farm laborers is to be found in the Censuses of Population 1910, 1920, 1930, and 1940 and in the Agricultural Census of 1935. N U M B E R OF F A R M LABORERS

T h e Bureau of the Census in printed instructions furnished to its agents states: A person who works on a farm for someone else but not as a manager, tenant, or cropper should be reported as a farm laborer.1 There are two kinds of farm laborers, those who work on the " home farm " and those who " work out." O u r sole interest is in the latter group, and, relatively little mention will be made of the " home farm " laborers. W h e n in the following pages the term farm laborer is used, it will be taken to mean those who " work out." These workers will be referred to as farm hired hands, farm wage workers, or, simply, as farm laborers. Neither farm tenants nor croppers are classified as farm laborers. Both workers have their own specific Census classification. Some odd jobs about the farm are done by children, particularly at planting and harvest time, but they, like the farmer's wife, are not enumerated as farm laborers. All these distinctions may be too elementary for some readers. H o w ever, judging from loose statements which are made from time to time in the press and on the radio it seems that they are worth remembering when the term " farm laborer " is used. Every Census from 1910 to 1940 encountered problems in counting and cataloguing farm laborers. Analysts of census data have discovered that some workers report as their usual occupation their present occupation whether or not it is the one at which they are regularly employed. January, the month in which were taken the 1920 Census and the Agricultural 1 1 5 t h Census of the U. S., 1930, Population, Volume V , " General Report on Occupations," p. 30, Instructions 196. T h e same definition was used in 1920 and 1910.

24

W A G E S OF F A R M

AND FACTORY

LABORERS

C e n s u s of 1 9 3 5 , is a v e r y slack m o n t h f o r f a r m e m p l o y m e n t . P r o b a b l y s o m e w h o w e r e actually f a r m laborers w e r e r e g a r d e d b y census a g e n t s in 1 9 2 0 a n d 1 9 3 5 as w i t h o u t occupation, or, a s g a i n f u l l y e m p l o y e d in some industry other than a g r i c u l t u r e . A p r i l is a m o r e satisfactory m o n t h for e n u m e r a t i n g

farm

w o r k e r s a n d it w a s in this m o n t h that the Censuses of 1 9 1 0 a n d 1 9 3 0 w e r e taken. H o w e v e r , u n e m p l o y m e n t w a s o n the increase at the t i m e of the 1 9 3 0 C e n s u s . T h e C e n s u s o f U n e m p l o y m e n t taken at that time s h o w e d that 3.7 per cent o f all the f a r m w a g e w o r k e r s , w h o w e r e able and w i l l i n g to w o r k , w e r e then out of a j o b . F u r t h e r m o r e , there w a s a net m i g r a t i o n to the f a r m s at this t i m e a n d m a n y f a r m laborers w e r e displaced by the f a r m e r ' s k i n w h o h a d returned f r o m the cities. H o w large this displacem e n t w a s is u n k n o w n but it is k n o w n that f a r m laborers e x perienced m u c h u n e m p l o y m e n t at this time. E x a c t l y w h a t e f f e c t these e v e n t s h a d upon the e n u m e r a t i o n and c o u n t i n g of f a r m l a b o r e r s in 1 9 3 0 w o u l d be impossible to say. T h e C e n s u s ( 1 9 4 0 ) w a s also taken in a period of

Sixteenth

unemployment.

I n d e e d , 4 1 1 , 6 2 0 f a r m laborers in M a r c h 1940 w e r e either seeki n g j o b s o r w e r e e m p l o y e d o n public e m e r g e n c y w o r k . 2 T h e T h i r t e e n t h C e n s u s of 1 9 1 0 overcounted the n u m b e r of w o m e n e n g a g e d in f a r m i n g — b o t h unpaid f a m i l y w o r k e r s a n d w a g e w o r k e r s . F r o m 1 9 1 0 to 1 9 2 0 the number of w o m e n in f a r m i n g fell 4 0 per cent, m a l e w o r k e r s decreased o n l y 9 per cent. 3 T h e decline in the n u m b e r of male w o r k e r s is u n d e r s t a n d able in v i e w of the fact that in 1 9 2 0 a great m a n y male f a r m l a b o r e r s h a d not yet returned f r o m the armed f o r c e s or f r o m f a c t o r y e m p l o y m e n t . N o such reason appears f o r the t r e m e n d o u s decline of 40 per cent s h o w n for f e m a l e w o r k e r s . A c c o r d i n g t o the C e n s u s B u r e a u , a c h a n g e in the instructions issued in the 1 9 1 0 C e n s u s and a loose interpretation of the instructions w e r e 216th Census of the U. S., 1940, Series P-14, No. 13, October 29, 1943, Table 1, p. 7. 3 14th Census of the U. S., 1920, Population, Volume IV, " Occupations," p. 35. The number of male farm laborers (working out) between 1910 and 1920 declined 19.8 per cent, the women farm laborers declined 37.2 per cent. Ibid., Table, 4, p. 22.

N U M B E R OF F A R M A N D F A C T O R Y L A B O R E R S responsible f o r the 1 9 1 0

overcount.4

25

T a b l e 1, L i n e 2, s h o w s that

b e t w e e n 1 9 1 0 a n d 1 9 2 0 the n u m b e r of hired f a r m laborers decreased b y a b o u t 600,000. T h i s " decrease " is attributable t o the o v e r c o u n t of f a r m w o m e n in 1 9 1 0 , and, secondly, " to the fact that d u r i n g the w a r l a r g e n u m b e r s of them [ f a r m l a b o r e r s ] l e f t the f a r m s f o r the factories o r the military service a n d h a d not returned t o the f a r m s or been replaced there b y o t h e r s at the date o f the census."

5

L a t e r in this chapter it w i l l be s h o w n that children b e t w e e n ten and fifteen y e a r s o f a g e f o r m e d 3.1 per cent of the h i r e d f a r m laborers in 1 9 2 0 a n d 2.4 per cent o f the total in 1930. I n the C e n s u s of 1940, only those w o r k e r s 1 4 y e a r s o f a g e a n d o v e r w e r e e n u m e r a t e d as m e m b e r s of the labor force. A s s u m i n g that 1 per cent o f all the f a r m laborers in 1940 w e r e o v e r ten b u t less than f o u r t e e n y e a r s o f a g e , then it could be said that a p p r o x i m a t e l y 20,000 f a r m laborers w e r e not enrolled in the 1 9 4 0 C e n s u s a s they w o u l d h a v e been in 1930, 1920, a n d 1 9 1 0 . T h e data set f o r t h o n L i n e 6 o f T a b l e 1 refer to the n u m b e r of f a r m laborers 14 y e a r s of a g e a n d o v e r as a d j u s t e d to the classifications o f the 1 9 4 0 Census. A l l other data refer t o f a r m laborers 1 0 y e a r s of a g e a n d over. TABLE

1.

N U M B E R OF HIRED F A R M LABORERS AS S H O W N IN T H E C E N S U S REPORTS,

1910, 1920, 1930, 1935,

AND

1940

(000 omitted)

Line Line Line Line Line Line

1 2 3 4 5 6

1910 1920 1930 1930 1935 1940

Census« Census11 Census0 Census" Census (Agric.)«... Census'

1910

1920

1930

2637 2637 2895 2637

2055 2336 2055

2733

2659

2217

2606

1935

1646

1940

2312

*lSth Census of the U. S., April 1910, Population, Volume IV, p. 91. These workers are called " Farm Laborers—Working Out." 4 Ibid., p. 24. 5 Ibid., p. 13.

26

WAGES

OF

FARM

AND

FACTORY

LABORERS

Within any given year the number of farm laborers is elastic. At harvest time, unpaid family workers on subsistence farms and unemployed laborers of the city seek work in the fields. Furthermore, the migratory workers in agriculture are *14th Census oj the U. S., January 1910, Population, Volume IV, p. 35. These workers are called "Farm Laborers—Working Out." For an explanation of the decrease between 1010 and 1020 see ibid, p. 13, and, also p. 20. c lBth Census oj the V. S., April 1930, Population, Volume IV, p. 7. These workers are called " Farm Laborers—Wage Workers." The Census Bureau points out—" Since, in 1020 and in 1010, only farm laborers on general farms were distinguished as working on the " home f a r m " or " working out," farm laborers on dairy farms, stock farms, truck farms, poultry farms, etc., who were, in fact, working on the " home farm " as " unpaid family workers" were not included in the group " farm laborers (home farm)." Hence, as here compiled for 1920 and for 1910, the number of farm laborers classified as " Wage workers" probably is somewhat too large, and the number classified as " Unpaid family workers " probably is somewhat too small." Ibid., p. 7. F A R M LABOBEBS BT A G E , S E X , AND COLOB,

1920

ANO

1930. 1920

Children (age 10 to 15)» Children (age 10 to 17)» Female Workers' Negro Workers

3.1% 9.6 23-3>»

1930 2.4% 82 62 19.7«

*16th Census oj the U. S. 1930, Population, Volume IV, Table 45, pp. 88-88.

»Ibid., Volume IV, Table 22, p. 44, Line 7. c Ibid., Volume IV, Table 3, p. 7. & 14th Census 0/ the U. S., 1910, Population, Volume IV, Chapter 3, Table 5, p. 343, Line 12. • 16th Census oj the V. S., 1930, Population, Volume IV, Table 13, pp. 28-29. T o some readers it may seem incorrect to consider the f a r m laborer an unskilled worker. Undoubtedly, the average A m e r i can farmer exercises skill and knowledge which far surpass that of most skilled factory workers. H i s hired hand, however, performs routine tasks for which little training is required, the main qualification for the j o b being physical ability to w o r k long and strenuously. A f t e r some years the hired hand m a y develop a knack of doing more and better work, f o r which he may be rewarded by extra pay. If he goes to work on larger farms, where he must operate tractors or other machines on which he is expected to make minor repairs, he is, of course, to be considered a skilled worker. Likewise, some jobs in fruit orchards and on poultry farms demand specialized knowledge and judgment too exacting to be considered unskilled work. H o w e v e r , between 1 9 1 0 and 1940, about 50 per cent o f all the farm laborers were employed in the Cotton Belt where the w o r k of the farm laborer is unskilled. Cotton chopping and cotton picking is laborious w o r k which requires no training and only a minimum of intelligence. O n the other hand specialty farms, such as orchards and nurseries, employed in the same period about thirty-five thousand f a r m laborers, or, about one per cent of the total.

NUMBER

OF F A R M

A N D FACTORY

LABORERS

37

Alba M. Edwards classifies farm wage workers as unskilled laborers in accordance with the following definition Unskilled occupations are considered to include those the workers in which require no special training, judgment, or manual dexterity, but supply mainly muscular strength for the performance of coarse, heavy work. 18 Cotton picking, cotton chopping, weeding, wheat threshing, hay pitching and fruit picking, by this definition, are unskilled occupations and most jobs of the greater number of farm laborers fall into this general category. N U M B E R OF FACTORY LABORERS

Those workers listed in the census reports as " Laborers— not otherwise specified " in manufacturing are also regarded by Edwards as unskilled workers. Freely conceding that a complete classification of workers by skill is impossible, he nevertheless maintains that the problems of classification are less difficult where physical strength is the main requirement of a given occupation. " In fact, it is believed that only those occupations in which the expenditure of muscular force is an important characteristic can be properly classified by skill." 14 Apparently, then, more reliance can be placed upon the accuracy of the unskilled labor classification than upon other classifications. Unskilled factory laborers are not reported in the census volumes as such but, as " Laborers—not otherwise specified " in manufacturing. A few words about the census instructions in reporting these workers will, therefore, be pertinent. Census enumerators are cautioned to avoid general or indefinite terms when reporting the occupation of a worker. A worker is not to be classified as a mechanic, a clerk, or a laborer, but, as the case may be, a carpenter—building con13 A. M. Edward, A Social-Economic Grouping of Gainful the United States, p. 2, U . S. Bureau of the Census, 1938. 14 Ibid., p. j.

Workers

of

38

W A G E S OF F A R M

AND

FACTORY

LABORERS

struction, a cashier — restaurant, or a laborer — steel mill. Furthermore, and this is important for us to remember, " the term ' l a b o r e r ' should be avoided if any more precise statement of the occupation can be secured." T h u s , the census number of factory laborers depends, in part, upon the terminology of industry, and the extent to which workers know the name of their occupation. A n unskilled worker m a y call himself a laborer when he is actually a twister-tender in a cotton mill, or, in pride, m a y report himself as a machinist when, in reality, he merely cleans the machine. T h e skill and patience of the enumerators are also important determinants of the true total of these laborers. I f they be careless or negligent, the reported count of laborers will differ widely from the true number. It is impossible to secure a complete picture of the unskilled labor force in manufacturing. E v e n in the Census certain practices might have led to a slight undercount or overcount of the factory laborers. F o r example, a frequent form of return was, " Laborer, odd j o b s , " w i t h no statement as to whether the worker w a s employed on a farm or in a factory. Such a worker was classified as a f a r m laborer if he lived in an unincorporated place and there was no evidence that he was w o r k i n g in a mine, construction gang, lumber camp, or at other non-agricultural w o r k ; and he w a s considered to be a " general or not specified laborer " in manufacturing if he lived in an incorporated place.1® T h i s procedure is somewhat mechanical and it may have led t o some error in the count of both the farm laborers and factory laborers. T h e Census of 1920 stated that " through the operation of this rule most of these errors were corrected." i a Most industries in the past thirty years have expanded their laboring force. Between 1 9 1 0 and 1930 the number of laborers in automobile production increased almost 800 per cent, those in electrical goods over 300 per cent. Laborers in automobile 1514th Census of the U. S., 1920, Population, Volume I V , p. 13. 16 Ibid.

NUMBER

OF F A R M

AND

FACTORY

LABORERS

39

repair shops of 1 9 1 0 were not even separately tabulated but were included in the group " other iron and steel factories," and, as late as 1920, the laborers of the rayon mills were placed in the category " not specified textile mills." On the other hand, plants producing saddles as well as those which made pianos and organs did not employ as many laborers in 1930 as they did in 1 9 1 0 . Now, even if the count of laborers in these various industries had been absolutely accurate in 1 9 1 0 (or in 1 9 2 0 ) , the census figure would have been representative of a few years at most, because the Census is a " s p o t " picture of the working force and tells nothing about intercensal changes. The time of the 1920 Census, January, was a serious handicap in estimating the number of farm workers for that year. It also affected the enumeration of factory laborers, particularly in those industries subject to extreme seasonal fluctuations. It is certain, too, that large numbers of those who usually pursued seasonal occupations, but who were not at work at these occupations at the date of the census enumeration (January 1 ) , had not taken up other occupations but were temporarily unoccupied; and it is believed that many of the Fourteenth Census enumerators construed their instructions too strictly and returned as having no occupations workers, especially workers in seasonal occupations, who were but temporarily unemployed.17 One group of laborers was admittedly overcounted in the 1920 Census. The vegetable and fruit-canning industry in January employs a much greater number of laborers than in other months, and their reported increase from 1 9 1 0 to 1920—over 250 per cent—reflects seasonal change rather than decennial growth. Unemployment affected the Fifteenth and Sixteenth Census enumeration of factory laborers. The Census of Unemployment taken in April 1930 revealed that many factory laborers 17 14th Census of the U. S., 1920, Population, Volume IV, p. 22.

40

WAGES

OF F A R M

AND

FACTORY

LABORERS

were then unemployed. In four industries—cigar and tobacco, electrical machinery and supply, iron and steel, and r u b b e r — the unemployment rate of factory laborers was 10 per cent or higher. Some laborers may have reported themselves as without occupation in the Census of 1930 when in fact they were merely unemployed at the time. Unemployment dragged on and on in the 1930's and it seems that lack of employment may have caused many factory laborers in the Census of 1940 to report themselves as without occupation. Data in Table 7 show that in 1940 there were reported only 1544 thousand factory laborers. T h i s was 38 thousand less than in 1910. It is difficult to believe that the decline between 1930 and 1940 was actually as great as the Census reports indicate. From 1910 to 1930, the number of factory laborers had a percentage increase (32.4 per cent) similar to that of " a l l " workers in manufacturing. " A l l " manufacturing workers continued to increase between 1930 and 1940 but the number of laborers is reported to have declined more than 500 thousand. Possibly some factory laborers in 1940 are in the group "occupation not r e p o r t e d " — t h e total of which is over 1.2 million workers. But that does not appear to be a complete explanation of the 1930-40 " decline." Some of it may be apparent not real. It would seem that many workers who in the 1930's and in 1941 and 1942 were employed as factory laborers did not report themselves as such in the Sixteenth Census ( 1 9 4 0 ) . W e do not know and have no way of knowing how many of them did so. The largest employer of unskilled laborers between 1910 and 1930 was the " iron and steel, machine, and vehicle " group which by itself accounted for approximately 30 per cent of the total. This group together with " lumber and furniture " claimed about 48 out of every 100 factory laborers. T h e other laborers in manufacturing were strung out through many industries (See Table 7 ) . E v e r y m a j o r group of manufacturing industries in 1930 employed more laborers than in 1910. Clothing, textiles, foods, paper and printing, showed increases of more than 50 per cent,

N U M B E R OF F A R M A N D F A C T O R Y L A B O R E R S

41

a n d chemicals a l m o s t d o u b l e d its l a b o r i n g f o r c e b e t w e e n 1 9 1 0 a n d 1930. T A B L E 7. NUMBER OF LABORERS IN MANUFACTUBING, 1910, 1920, 1930, AND 1940, WITH THESB DISTRIBUTION BY INDUSTRIAL GROUPS. (000 omitted)

Total INDUSTRY Iron and Steel, Machine, Vehicle Lumber and Furniture Clay, Glass and Stone Food and Allied Textile Chemical and Allied Metal (except Iron and Steel)... Paper, Printing and Allied Leather Cigar and Tobacco Clothing Miscellaneous

1910«

1920«

1930«

Average % Distribution 1940» 1910-1930

1582

2270

2098

1544

483 317 155 101 87 81 45 40 35 16 10 211

730 321 125 170 153 134 68 67 55 35 13 400

662 334 146 155 121 152 62 69 39 21 15 323

» 15th Census of the U. S., 1930, Population, 3, pp. 43-44.

100.0% 31.4% 16.7 7.4 7.0 6.0 62 2.9 2.9 2.1 1.3 .6 15 4

Volume V, Chapter 2, Table

*>16th Census oj the U. S., 1940, Series P-14, No. 13, Octber 29, 1943, Table 1, p. 7, Industrial breakdown for 1940 is not comparable with those of preceding censuses. T h e g e o g r a p h i c c o n c e n t r a t i o n of f a c t o r y l a b o r e r s is a s pronounced a s the f a r m laborers'. A b o u t

5 0 out of e v e r y

m a n u f a c t u r i n g w o r k e r s a r e e m p l o y e d in the M i d d l e

100

Atlantic

a n d E a s t N o r t h C e n t r a l S t a t e s . T h i s figure relates not t o f a c t o r y l a b o r e r s alone but to all f a c t o r y w o r k e r s b o t h skilled a n d unskilled. B u t quite o b v i o u s l y the laborers w o r k e d in the same plants w h i c h e m p l o y e d " all " w o r k e r s . I n the n e x t table the r e g i o n a l distribution of " all " m a n u f a c t u r i n g w o r k e r s is c o m -

42

W A G E S OF

FARM

AND

FACTORY

LABORERS

pared with that of " all " farm workers. T h e geographical concentration of " a l l " farm workers by direct comparison w a s found to be identical with that of " a l l " f a r m laborers, so identical in fact, that the data o f Table 8 can be regarded as indicative of the regional concentration of

f a r m laborers and factory

laborers. F a r m laborers are concentrated in the three southern regions, factory laborers in the Middle Atlantic and East North Central States. In direct contrast to each other, the southern states employ about 50 out of every 100 farm laborers but only 20 per cent of the factory laborers, whereas the Mid-Atlantic and East N o r t h Central States engage about 50 per cent of the factory laborers and only 20 per cent o f the farm laborers. TABLE

8.

P E R C E N T D I S T R I B U T I O N BY GEOGRAPHIC R E G I O N S OF G A I N F U L W O R K E R S AGRICULTURE, AND, MANUFACTURING AND

IN

MECHANICAL

I N D U S T R I E S , 1 9 2 0 AND 1 9 3 0 . «

Agrie. New England Middle Atlantic East North Central... . . . . West North Central... . . . . South Atlantic .... East South Central .... West South Central... . . . . Mountain Pacific

2.1% 6.0 14.9 15.6 19.8 16.7 16.7 3.9 4.1

1920 1930 Mfg. & Mech. Agrie. Mfg.&Mech. 12.7% 29.7 24.7 75 95 4.1 4.6 1.8 5.4

2.0% 5.6 13.9 162 18.8 17.0 175 4.1 45

105% 28.2 25.6 7.1 10.4 45 5.4 15 6.6

« 15th Cenava oj the U. S., 1930, Population, Volume V, Chapter 2, Table 9, p. 55. T h e Census of Manufactures for 1925 and 1935 shows practically the same regional concentration of factory employment. T h e Middle Atlantic States in 1925 employed 29.7 per cent and, in 1935, 28.6 per cent of all manufacturing workers. T h e East N o r t h Central States employed in the same years 27.9 per cent and 28.6 per cent.

NUMBER

OF F A R M

AND

FACTORY

LABORERS

43

T h a t wage rates and earnings are relatively high in northern states is a fact of almost common knowledge a m o n g workmen. I n 1939 average hourly earnings of m a n u f a c t u r i n g workers in the East N o r t h Central States were 100 per cent higher than in the " lower south."

18

T h e entrance w a g e rate of male com-

mon laborers in those states amounted to 55.9 cents an hour, whereas

in the " lower

south"

it w a s

only

30.5

cents. 1 9

Occasionally some southern laborers travel northward in search of w o r k , but many never leave because they lack funds. In a country as large as the United States, the distance between available employments is an important reason for the relative immobility of unskilled laborers. T h e y realize they m a y journey far f r o m home and spend all their meagre cash to reach other labor markets only to find them oversupplied with their type o f labor. Regional w a g e differentials present fascinating problems for investigation but they cannot be discussed in this study. T h e w a g e evidence given above is presented merely to supplement the data regarding the regional concentration o f factory laborers. U p to this point it has been assumed that unskilled factory laborers were comprised only of those workers listed in the census as " L a b o r e r s — n o t otherwise specified " in manufacturing. N o w we must examine that assumption. A s we have seen, the problem o f cataloguing and counting factory laborers was rather difficult for the census officials. Perhaps that is w h y Carl Hookstadt, when he reclassified the occupation statistics of the 1920 Census, did not offer his o w n count of factory laborers but transcribed their number

directly

f r o m the census

as

18 Census of Manufactures, 1939, Man-Hour Statistics for 171 Selected Industries, p. 8, U. S. Bureau of the Census, and U. S. Bureau of Labor Statistics, March 1942. The East North Central States paid 74.9 cents an hour, the " lower south " paid 37.3 cents. Ibid., p. 8. 19 E. K. Frazier and J. Perlman, " Entrance Rates of Common Laborers, July 1939," Monthy Labor Review, December 1939, p. 1453. The "lower south" comprises South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, and Arkansas.

44

W A G E S OF F A R M A N D F A C T O R Y

LABORERS

" Laborers not otherwise specified " in manufacturing. 20 Alba M. Edwards in 1938 after many years of patient work published an occupational reclassification of the working population. 21 One of his groups is entitled " Unskilled Workers— factory and building construction laborers." B y subtracting the number of laborers in building construction as shown in census reports, we can secure his estimate of the number of unskilled laborers in manufacturing. In 1930, these totaled 2,948 thousand laborers which is much greater than the 2,098 thousand laborers appearing above in our Table 7. Why the tremendous difference? Both totals are from the same volume of the 1930 Census of Population but from different tables therein. The total appearing in our Table 7 is derived from data found in Volume V , Chapter 2, Table 3, of the Fifteenth Census where the factory laborers are listed as " Laborers—not otherwise specified," in manufacturing. The total of 2,948 thousand laborers given by Dr. Edward is from Volume V , Chapter 7, Table 2. In that table, classification is by industry. Each important industry is there taken as a unit and every worker in the industry is classified thereunder, although some may be in manufacturing pursuits and others may be in transportation. For example, under the carpetmill industry there is listed the number of laborers, loom-fixers, stenographers, and teamsters who work in that industry. B y combining the number of laborers in a specific industry with other listed occupations, which he considered unskilled, Edwards arrived at his estimate of the unskilled laborers in that industry. A specific example of his counting and classification practice will show why his total is so large. The charcoal and coke industry an 1930 reported 4,733 " laborers." To this number of laborers, Edwards added 43 " draymen and teamsters," 189 20 C. Hookstadt, " Reclassification of the United States 1920 Occupation Census by Industry," Monthly Labor Review, July 1923, p. 4, U. S. Bureau of Labor Statistics. 21 A. M. Edwards, A Social-Economic Grouping of the Gainful Workers of the United States, U. S. Bureau of the Census, 1938.

NUMBER

OF F A R M

AND FACTORY

LABORERS

45

" firemen," and 705 " furnacemen," all of whom worked in that industry. Thus, his total for unskilled laborers in the charcoal and coke industry is not 4,783 which we took as the total, but 5,720. 22 B y combining and counting the laborers in each particular industry, he secured his grand total of 2,948 thousand laborers in manufacturing. Which is the better process ? It would be most rash to claim that the workers classified in the census as " Laborers — not otherwise specified " in manufacturing are the only unskilled laborers in manufacturing. However, if we accept the figures of Edwards, we must bear the following points in mind: ( 1 ) his estimates are made up primarily of " Laborers — not otherwise specified" and he made no attempt to revise the census count of them, ( 2 ) his figures include certain workers who are engaged in transportation and not in manufacturing, e. g., draymen, and teamsters, ( 3 ) his estimates include occupations which by other investigators might be regarded not as unskilled, but as semi-skilled. Many firemen and some furnacemen, for example, use more judgment and skill than that ordinarily used by common laborers. It is of course impossible to say flatly that this or that number exactly represents the true total of all the unskilled factory laborers or those in any given industry. We are left, therefore, with two main alternatives: ( 1 ) we can accept the estimates of Edwards but in so doing we must remember how they were made, or, ( 2 ) we can accept the original census data, but we must remember that these figures relate only to " Laborers — not otherwise specified " in manufacturing. The number of children employed as factory laborers is practically negligible, and the number of women laborers declined between 1920 and 1930. Both women and children have far more representatives among farm laborers than among factory laborers. Negro workers, however, number about one-fifth of each group. The next table shows the breakdown of farm hired laborers and factory laborers according to age, sex, and color. 22 Dr. E d w a r d s explained his technique in & letter to the writer.

46

WAGES

OF F A R M

AND F A C T O R Y

LABORERS

The data of 1 9 1 0 are not presented because of the overcount of women and children at that time. TABLE

9.

P B B C E N T D I S T R I B U T I O N o r F A R M LABORERS AND FACTORY L A B O B I B S , B T AGE, S E X , AND COLOB, 1 9 2 0 AND 1 9 3 0 .

Farm Laborers Children (10-15)» . . Children (10-17)» . . Women« NegTo a

3.1% 9.6 23.3

1920

Factory Laborers 1.8% 6.8 19.1

1930 Farm Factory Laborers Laborers 2.4% 82 62 19.7

0.7% 4.4 4.5 20.4

«16th Census 0/ the U. S , 1930, Population, Volume IV. Table 45, pp. 86-88. *>16th Census of the V. S., 19S0, Population, Volume IV. Table 22. p. 44, Line 7. clSth Census of the U. S., 1930, Population, Table 3, p. 7.

Volume IV, Chapter 1,

14th Census of the V. S., 19i0, Population, Volume IV, Chapter 3, Table 5, p. 343, for negro agricultural laborers in 1920. 16th Census of the U. S., 1930, Population, Volume IV, Chapter 1, Table 13, pp. 28-29, for negro agricultural laborers and negro factory laborers in 1930. The entry for negro factory laborers in 1920 was computed by rearranging data in A Social-Economic Grouping of the Gainful Workers of the Untied States, 1930, pp. 13, 7, A. M. Edwards, U. S. Bureau of the Census, 1938. This figure refers to negro laborers in manufacturing and in building construction.

The earnings of a worker are influenced by unemployment and short-employment. Unfortunately, the unemployment of factory laborers is a topic which has never been studied by any government agency. The unemployment data collected in April 1930 and in March 1940, relating as they do to those months alone, cannot be used to interpolate estimates of previous unemployment. Using methods developed by Douglas and by Wolman and Givens we tried to estimate the course of unemployment of factory laborers between 1 9 1 4 and 1939. The effort was in vain. Although they make ingenious use of the materials at hand their

NUMBER

OF F A R M

AND

FACTORY

LABORERS

47

methods cannot be used to measure the unemployment of factory laborers f o r a n y appreciable length of time. Douglas, a s one of his t w o m a j o r steps, first computed the normal labor supply of all m a n u f a c t u r i n g w o r k e r s . 2 3 F r o m this he subtracted the number of w o r k e r s actually employed and regarded the remainder as the number of unemployed w o r k e r s in manufacturing. W e cannot use this technique because it is impossible to ascertain the normal labor supply of unskilled f a c t o r y laborers. These w o r k e r s f o r m a peculiarly fluid g r o u p , and, as D o u g l a s himself points out, unskilled laborers " are more o r less interchangeable."

34

E v e r y year there comes to m a n u f a c t u r i n g a

new g r o u p of employables—youths, f a r m w o r k e r s , immigrants, and store clerks, most of w h o m must start as unskilled laborers. W h a t their number is no one knows. Y e a r s of prosperity bring an additional influx but depression y e a r s might see no net decline because the number leaving the g r o u p might be matched, and more than matched, by the number of unemployed skilled workers who of necessity must hire out as common laborers. Without trustworthy estimates of the normal labor supply of factory laborers, it is impossible to compute by the D o u g l a s method their annual unemployment between 1 9 1 4 and

1939.

W e do not presume to criticize the unemployment estimates of Douglas. H i s study on real w a g e s is a brilliant land-mark in labor literature. A n d in Chapter V I I w e use the estimates he made about the unemployment of unskilled laborers in

1914

and in 1 9 2 5 . W e simply say that f o r unskilled f a c t o r y laborers no accurate estimates can be made of their annual labor supply for the years between 1 9 1 4 and 1 9 3 9 . T h e W o l m a n - G i v e n s estimates of manufacturing unemployment 1 9 2 0 to 1 9 2 7 compute the number " attached " to manufacturing and also the number actually employed 23 P . H . D o u g l a s , Real

Wages

Houghton Mifflin Company, 1930.

in the United

States

therein. 3 5

1890-1926,

p. 43I0,

24 Ibid., p. 430. 25 L . W o l m a n , Recent

Economic

Changes

in the United

States,

Chapter

VI, p. 469, McGraw Hill, 1929. See pp. 469-78 for " A New Estimate of

Unemployment," 1920 to 1927, made by M. B. Givens.

48

W A G E S OF

FARM

AND

FACTORY

LABORERS

T h e p r i m a r y source of their i n f o r m a t i o n a b o u t the number of m a n u f a c t u r i n g w o r k e r s a c t u a l l y e m p l o y e d is t o be f o u n d in the C e n s u s of M a n u f a c t u r e s f o r 1 9 2 1 , 1 9 2 3 , a n d 1925. N o w , w e c a n n o t t a k e these census figures a n d s a y t h e y represent the n u m b e r of l a b o r e r s e m p l o y e d in m a n u f a c t u r i n g , since they include besides t h e m the skilled a n d semi-skilled w o r k e r s .

For

s o m e y e a r s the p e r c e n t a g e c h a n g e in these n u m b e r s could be r e g a r d e d as r e p r e s e n t a t i v e of the p e r c e n t a g e

c h a n g e in the

n u m b e r of unskilled l a b o r e r s e m p l o y e d . T h i s a s s u m p t i o n could be m a d e f o r the y e a r s 1 9 2 3 , 1 9 2 5 , 1 9 2 7 a n d 1 9 2 9 , because in those y e a r s the biennial c h a n g e s in m a n u f a c t u r i n g e m p l o y m e n t w e r e n o t l a r g e a n d n e v e r e x c e e d e d s i x per cent. T h e difficulty arises w h e n the s a m e a s s u m p t i o n is m a d e f o r t h o s e y e a r s w h e r e i n o c c u r r e d t r e m e n d o u s c h a n g e s in m a n u f a c t u r i n g

employment,

e. g . , 1 9 2 9 t o 1 9 3 3 , 1 9 1 9 t o 1 9 2 1 , w h e n u n e m p l o y m e n t g r e a t l y increased, o r 1 9 3 3 to 1 9 3 7 , 1 9 2 1 t o 1 9 2 3 , w h e n e m p l o y m e n t w a s o n the rise. I n those y e a r s ( a n d w e notice that t h e y n u m b e r t w e l v e out of the eighteen f r o m 1 9 1 9 t o 1 9 3 7 ) the unskilled laborers probably d i d not h a v e the s a m e rate of u n e m p l o y m e n t or re-employment as that experienced by " all "

factory workers.

Skilled

w o k e r s a n d m a n y semi-skilled w o r k e r s a r e m o r e likely to be r e l a i n e d 011 tHe p a y r o l l in periods o f depression than are laborers. U n : k i l l r . l lal o r e r s nre g e n e r a l l y the

first

to b t laid o f f .

C l e a r and u n m i s t a k a b l e proof of these statements is to be f o u n d in the G r e a t D e p r e s s i o n as earlv as A p r i l 1930. T a b l e 10 c o m pare? the rates of u n e m p l o y m e n t of f a c t o r y " O p e r a t i v e s — n o t o t h e r w i s e s p f c i f i e d , " and. f a c t o r y " L a b o r e r s — n o t

otherwise

specified " at that date. T h e term " O p e r a t i v e " in T a b l e 10 m a y be taken to include the semi-skilled w o r k e r s of m a n u f a c t u r i n g a n d t h o s e skilled w o r k e r s w h o are not e x p l i c i t l y n a m e d in the census tallies. T h e term " L a b o r e r s — n o t o t h e r w i s e specified " r e f e r t o unskilled laborers. I n this case the t e r m " u n e m p l o y ment " refers t o t h o s e w o r k e r s w h o w e r e r e a d y a n d w i l l i n g t o w o r k , a n d w h o w e r e l o o k i n g for j o b s but w h o were then out of w o r k . — * h a t is the " C l a s s A " u n e m p l o y m e n t of the census s u r v e y .

1930

NUMBER

OF F A R M

AND

FACTORY

LABORERS

49

I n only t w o industries, clothing, and lumber and furniture, did unskilled laborers have a rate o f unemployment notably lower than that of the " O p e r a t i v e s " ( T a b l e 1 0 ) . T h e d i f f e r ence in the unemployment rates of electrical machinery and TABLE

10.

COMPARISON OP RATES o r U N E M P L O Y M E N T OF "OPERATIVES" AND "LABORERS— N O T O T H E R W I S E SPECIFIED" I N

MANUFACTURING,

INDUSTRIAL GROUPS, APRIL,

"

Chemical and Allied Cigar and Tobacco Clay, Glass and Stone Clothing Electrical Machinery and Supply Electrical Light and Power Plants Food and Allied Iron and Steel Metal Industries (except Iron and Steel) Leather Lumber and Furniture Paper, Printing and Allied Rubber Textile

BT

1930*

(2) Percent (2) (1) Operatives" "Laborers" is over (1) 3.9% 92 7.1 6.0 12.7 3.9 6.7 7S 7.7 6.7 8.0 4.9 7.7 65

6.9% 14.0 8.6 5.4 12.5 6 J5 8.4 10.0 8.1 7.3 5.4 5.9 10.9 72

76.9% 52.1 21.1 —10.0 — 1.6 66.6 253 28 2 5.1 8.9 —325 20.4 415 107

» U. S. Census of Unemployment, April 1930, Volume II, Table 3, pp. 15-16, U. S. Bureau of the Census, 1930. supply is so small as to be negligible. N o r should much importance be ascribed to the data o f clothing because the unskilled laborers of that industry a r e small in absolute number and extremely small in proportion to the skilled groups. T h e lumber and furniture industry is the important exception to the almost universal rule that in A p r i l 1 9 3 0 the rate of

unemployment

among unskilled laborers in specific industries w a s substantially greater than that of operatives. Conversely, in the revival phase of the business cycle, skilled worker? are apt to be rehired sooner than are the unskilled. Since these things are so, the employment statistics of the

50

W A G E S OF F A R M

AND

FACTORY

LABORERS

Census of Manufactures cannot always be used to measure the changing employment of unskilled factory laborers. They can, however, be used to fashion rough estimates of the minimum unemployment experienced by factory laborers in 1921 and again in 1933. The number of wage earners in manufacturing declined about 30 per cent from 1929 to 1933. If we are willing to accept this figure as an estimate of the minimum unemployment sustained by factory laborers in 1933, we could compare it with the 20 per cent unemployment experienced by farm laborers in the same year. The latter figure is derived the same w a y — t h a t is, by measuring the decline in the employment of hired farm workers from 1929 to 1933. Needless to say, tht procedure of using declines in employment as a measure of unemployment is open to justifiable criticism. Employment statistics do not tell anything about the number of workers seeking jobs. Secondly, in depression years the employment data merely state the average number of workers on the payroll, and, necessarily, of course, say nothing about the length of actual working time. In years of active business it could be assumed that workers were employed for the standard (full-time) work week. T o make the same assumption for depression years would be to disregard concrete evidence that many factory workers then suffer a considerable loss of possible work hours within the week and within the year. Expediency is, admittedly, the main justification for using employment data to show changes in unemployment and when so used in the following pages the reader will be pleased to remember the limitations of the procedure. Statistics of unemployment and employment are currently published by the National Industrial Conference Board. T h e data of unemployment relate to the entire working force, not to manufacturing or agriculture alone. Both these industries are covered in the statistics of employment but the employment of factory laborers is not separately reported. One set of data issued by the Conference Board will be of great service. T h i s series states the average actual hours worked per week by un-

NUMBER

OF

FARM

AND

FACTORY

LABORERS

51

skilled male workers in manufacturing.3® In addition to their primary use, these data can also be used to visualize broad changes in unemployment. SUMMARY

The census enumeration of both farm laborers and factory laborers was a difficult process in 1910, 1920, 1930, and 1940. The number of laborers reported in the census may be subject to some inaccuracy. Both groups of laborers are geographically concentrated; the farm laborers in the South and the factory laborers in the Middle Atlantic and East North Central States. Women and children form a much larger proportion of farm laborers than they do of factory laborers. Negroes form about 20 per cent of each group. There are no continuous unemployment statistics for either farm laborers or factory laborers. The employment data for farm laborers are adequate but only in rough broad outline can the changing employment of factory laborers be estimated. 26 National Industrial Conference Board, Wages, Hours, and Employment 1» the United States 1914-1936, N. Y., 1936. This information is given for the average of 25 manufacturing industries and for each of the industries. Data for 1914 are for July alone. Data for 1920 are for the last seven months, and for 1922 for the last six months. See also Wages, Hours and Employment in the United States, 1934-1939, N . I. C. B., 1940.

CHAPTER III THE A V A I L A B L E D A T A — W A G E STATISTICS FOR FARM LABORERS AND FACTORY LABORERS FOR the years 1914-1939 the statistics of farm wage rates are ample, continuous, and reliable. Agents of the Department of Agriculture in all forty-eight states annually reported the wage rates actually paid to farm laborers. Less ample and less continuous are the statistical wage data of unskilled factory laborers. Indeed, for the years 1915-1919 the laborers of many industries are not covered at all. For the post-war period, however, the coverage is adequate and the data are continuous. W A G E D A T A FOR F A R M

LABORERS

The Department of Agriculture furnishes almost all the present information about the wage rates and income of farm laborers. From time to time a few state governments have published wage data about their farm laborers, but nowhere is this information continuous or complete. Beginning in 1886, the Department of Agriculture collected data showing the monthly and daily wage rates paid to farm laborers. U p to 1909 there was little regularity in these wage reports; thereafter annual reports were made. In 1923, the Department began to make quarterly surveys. A s it now stands, the farm wage series shows the monthly wage rates, with and without board, the daily wage rates, with and without board, for the entire country, for each of the nine geographic regions, and for every one of the forty-eight states. All this material, together with other statistics about farm laborers, was compiled by the Bureau of Agricultural Economics in January 1943 and published in a handbook entitled Farm Wage Rates, Farm Employment, and Related Data. Unless otherwise specified, 52

SOURCES

OF

WAGE

STATISTICS

53

all data about farm wage rates will be drawn from this handbook. In J a n u a r y 1939, the national averages were revised to include more wage data from the states of the F a r West. Since California and other states of the Pacific region pay higher wages than do other regions the revised indexes stand somewhat higher than the unrevised—about 1 5 points higher in 1 9 3 0 and about 8 points higher for the years between 1 9 3 0 and 1 9 3 9 . F r o m 1 9 1 4 to 1 9 2 1 , however, there is practically no difference between the revised and the unrevised data. Reference is made in Chapter I V to an " old series." T h i s wage series contains not four entries but s i x : monthly wage rates with and without board; daily wage rates at harvest with and without board; and daily wage rates not at harvest with and without board. When the quarterly wage surveys were instituted in 1 9 2 3 , the four daily entries of the " old series " were merged into the two daily series currently reported. The Department also reports a weighted average f a r m wage rate per month. This is computed by combining the two monthly wage rates with the two daily wage rates after the latter have been converted to a monthly wage rate by a conversion factor of 20 — the estimated number of f a r m working days in a month. 1 The

final

figure,

after this combination, gives the

average wage rate per month for a specified quarter of the year. T o secure the annual average, the four quarters are then averaged with the following weights: April ( 1 ) , J u l y October ( 5 ) , and January of the following year

(5),

(1).

The farm wage data are especially suited to a study of this kind. In the opinion of Hale and Gastineau 1 The Department of Agriculture because of weather conditions estimates that the a v e r a g e number of farm working days per month is 20. " T h e day rates are multiplied by 20 to make them equivalent to the monthly rates." Farm

Wage Rates, Farm

Employment,

of Agricultural Economics, 1943.

and Related

Data, p. 15. U . S. B u r e a u

54

WAGES

OF F A R M

AND

FACTORY

LABORERS

The wage rate data find their most significant and reliable use in measuring changes in wage rate levels over time.2 T h e y realize that the crop reporter, when submitting estimates of the actual wage rates paid in his locality, may forget those paid to the young, the aged, and the inefficient workers, and report the rates paid to the efficient, able-bodied worker. But " It is doubtful if such a tendency would produce any marked upward bias in the data reported in the principal areas of staple crop production since rates become more or less standardized in any given community as a result of the competition among farmers for the existing labor supply." 3 Furthermore such a tendency would be persistent in the data. Thus, where the purpose is to study farm wage movement over periods of time the data can be used with confidence. The original record of f a r m wage rates are schedules sent to the Department of Agriculture by crop reporters. In October 1 9 3 9 , about 70 thousand farmers were asked for crop and wage information, approximately 21 thousand returns came back with data about wage rates. Crop schedules sent to fruit, truck, and dairy farm reporters do not carry questions about wage rates. These specialty farms, however, are covered, at least partially, because the crop reporters are asked to submit the wages paid in their locality, not merely those paid by themselves. Local wage rates are merged into state rates which in turn are used to compute regional averages. In October 1924, for example, the 35,463 wage reports were made up of returns f r o m every state. Moreover, from those states which employ the greater number of farm laborers came the greater number of reports. The statement of one crop reporter of ( s a y ) North Carolina, in October 1 9 3 9 , about the wages paid to a f a r m laborer hired by the day, without board, was averaged with 2 R . F . Hale and R . L. Gastineau, Reliability and Adequacy of Farm Wage Rate Data, p. 6, Agricultural Marketing Service, U. S. Department of Agriculture, 1940. Much of the information found in this and the next five paragraphs of our text is taken from this bulletin. 3 Ibid.,

p. 5.

S O U R C E S OF

WAGE

STATISTICS

55

353 similar reports from the same state. B y the averaging process the tendency of some crop reporters to overstate ( o r understate) the actual prevailing w a g e would tend to be offset by opposing tendencies. Throughout a given state, there are many farm wage rates paid which are a b o v e — a n d b e l o w — t h e average rate. Pennsylvania, in October 1939, was quoted as paying on the average $2.29 a day to a farm laborer w h o worked without board. T h i s w a s an average of 492 wage reports, the lowest of which w a s $1.25, the highest $3.75. T h i s range in wage rates is undoubtedly a large one, yet a statistical analysis of the 492 reports from Pennsylvania

showed that the probable error of

the

average, $2.29 a day, was 1.6 cents or 0.7 per cent. Statistically speaking, the chances are ninety-nine to one that the average w a g e rate of a much larger group of reports obtained in Pennsylvania at the same time and under the same conditions, would not have differed f r o m the reported w a g e rate of $2.29 by more than 2.8 per cent. 4 A f t e r an extensive analysis of monthly and daily wage reports from a number of states at various periods of time, Hale and Gastineau concluded: In a majority of cases e x a m i n e d . . . , the relative probable errors of the reported wage rates are less than one per cent." T h i s statement assumes, of course, that the individual reports of the w a g e rates are representative of those actually paid. A r e they representative? It would seem so. T h e crop reporter knows the wage rate he is paying, and has a good idea of local wages rates. Some of his laborers may have worked on other farms in the surrounding district, and it would not be long before he would learn how much they had been paid elsewhere. Such information would be most useful in j u d g i n g the general level of w a g e rates in his community.

A l s o , the crop reporter

4 Ibid., p. 16, Table 7, and p. 6. 5 ibid., p. 6, and see pp. 11-17, for selected illustrations of the size of the wage sample, the measures of dispersion, and the probable errors of the average wage rates.

56

WAGES

OF

FARM

AND

FACTORY

LABORERS

since he is a voluntary reporter is generally above the average farmer in public-spirited interest and knowledge of local conditions, and in all likelihood he would tend to familiarize himself with prevailing prices, plantings, and local wage rates. Some farm laborers, hired merely for a harvest season, are paid by the piece. They receive (say) five cents a bushel to pick apples, or, one dollar to cut and shock an acre of corn. Since no information about piece rates was collected by the Department of Agriculture until 1934, the time coverage of this wage series limits its use in a study of this kind. W i t h their November reports, the crop correspondents of cotton states are asked to report the average wage rate paid for picking one hundred pounds of seed cotton in " your immediate locality." In 1924, when this wage series began, the nine principal cotton states sent in 3,202 reports. The number of these reports vary from year to year; in 1929 there were only 1,554 reports but for 1934 and 1939 respectively, there were 5,920 reports and 7,642 reports. The result of a statistical analysis of the cotton picking reports should inspire confidence in their u s e — " In the analysis of cotton picking rates, the error of the mean amounts to considerably less than one-half of 1 per cent." 8 A striking feature of farm wage rates is the wide dispersion of the regional averages about the national average, a characteristic shown by monthly wage rates, daily wage rates, and piece rates. A t this point, we must acquire some notion about the size and persistency of this dispersion and the data of Table 11 are presented for that purpose. Note that the South Atlantic states pay a daily rate 25 per cent less than the national average, and approximately 50 per cent less than the Pacific region. S o do the East South Central states. New England's wage rate runs about the same as those of the Middle Atlantic states. If the monthly wage rates, either with or without board, were used the regional differences would be as wide as those shown in Table 11. 6 Ibid., p. 6, and see also pp. 20-22.

S O U R C E S

OF

W A G E

57

STATISTICS

TABLE 11. FARM

WAGE R A T E S ,

DAILY

W I T H O U T BOARD, U .

S.

AVERAGE AND

REGIONAL AVERAGES, 1 9 1 4 , 1 9 2 0 , 1 9 2 9 , 1 9 3 3 , AND

United States .. Middle Atlantic South Atlantic . Pacific

SELECTED

1939*

1914

1920

1929

1933

1939

$1.43 1.66 1.04 2.07

S3.46 4.06 2.70 4.68

«2.25 3.52 1.73 353

Sl.ll 1.74 .84 1.87

$1.56 2.29 1.18 2.71

100 157 76 168

100 147 76 174

Index Numbers: U. S. Average = 100 United States Middle Atlantic South Atlantic Pacific

100 116 73 145

100 117 78 135

100 156 77 157

" Farm Wage Rates, Farm Employment, and Related 13, U. S. Bureau of Agricultural Economics, 1943.

Data, pp. 3-4, 5, 9,

W h i c h o f the f o u r f a r m w a g e series should be used in a w a g e s t u d y is a q u e s t i o n to be a n s w e r e d b y the purpose of the inv e s t i g a t i o n . T o s h o w the annual e a r n i n g s of the a v e r a g e f a r m laborer it w o u l d be necessary to d r a w o n both the m o n t h l y a n d the daily series. A l s o , account must be taken of the p e r q u i s i t e s g i v e n to f a r m laborers. Perquisites are received by t h o s e w o r k i n g b y m o n t h or d a y , either w i t h o r w i t h o u t b o a r d . T h e y a r e of s o m e w o r t h to the laborers a n d should be included in estim a t e s of their a n n u a l earnings. I f the p u r p o s e o f the w a g e s u r v e y is to c o m p a r e trends in f a r m w a g e rates w i t h those o f m a n u f a c t u r i n g , it is best

to

use daily w a g e rates, w i t h o u t board. O t h e r w r i t e r s h a v e n o t used this series but their purpose is to be noted. i . M o n t h l y w a g e rate w i t h o u t b o a r d and daily w a g e

rate

without board. a. T h e s e t w o series w e r e used by the U n i t e d

States

B u r e a u of L a b o r Statistics to compute the real inc o m e o f a g r i c u l t u r a l w o r k e r s f r o m 1909 to

1926.7

D a i l y w a g e rates were converted into m o n t h l y rates b y a c o n v e r s i o n factor of 2 0 — t h e estimated n u m b e r 7 Monthly Labor Reznew, September 1926, p. 115.

58

W A G E S OF F A R M

AND

FACTORY

LABORERS

of farm working days in the month. The worth of perquisites was not included in the figures. Since perquisites are an integral part of the income of farm laborers it would seem necessary to account for them before arriving at a complete estimate of the income, money or real, of farm hired hands, b. Douglas also used these two series to compute the monthly wage rates and subsequently the weekly wages of farm labor. 8 He, too, did not include perquisites. 2. Monthly wage rate without board. In a comparison of the money wages of farm laborers and of manufacturing workers, Hopkins used this series. He pointed out however that his comparisons " are likely to be misleading because hours of work are different as between city and farm; the buying power of the dollar is higher in the country; and the farm worker may receive some perquisites from his employer which are difficult to evaluate satisfactorily." 9 3. Monthly wage rate with board. Professor Warren and Pearson used this series to show differences between farm wages and city wages. 10 4.

Weighted average wage rate, per month. This series, which combines monthly and daily wage rates, is now used by the Bureau of Agricultural Economics to show a comparison of farm wages and factory wages from 1909 to the present. 11

In the face of such experienced and diligent authority it is not easy to speak. However, the daily wage rate, without board, 8 P. H . Douglas, Real Wages in the United States, 1890-1926, pp. 185-8,

1930. 9 J. A . Hopkins, Changing Technology and Employment p. 3, U . S. Bureau of Agricultural Economics, 1941. 10 G. Warren and F. Pearson, The Agricultural 11 The Agricultural

in

Agriculture,

Situation, p. 225, 1924.

Situation, U. S. Bureau of Agricultural Economics.

S O U R C E S OF W A G E S T A T I S T I C S

59

seems to be the best series to use in comparing secular movements of farm wage rates and the wage rates of unskilled factory laborers. Factory laborers are paid an hourly or a daily rate of pay, and, with either wage rate, the daily rather than the monthly rates of farm laborer are the more comparable. One might imagine that monthly wage rates equal the daily wage rate multiplied by 20, and that therefore the monthly rate would serve as well as the daily rate. That supposition is incorrect. For almost all the years between 1914 and 1939, the daily wage rate multiplied by 20 gives a monthly rate which is less than that reported as the monthly rate, except in the years 1917 to 1920 when daily wage rates increased much more rapidly than monthly rates. T o use either the monthly or daily wage rate, with board, would necessitate the tremendous task of estimating the value of board and perquisites from 1914 to 1939. Such an estimate would be almost impossible to make, and even if it could be made, how could such a wage rate be compared with that paid to factory laborers who receive neither board nor perquisites? N o such difficulty is presented by the daily wage rate without board. It is a money wage rate and it can easily be reduced to an hourly rate by dividing by ten- or eleven- as the case demands. Finally, the authority of the Bureau of Labor Statistics supports our position. In 1928, the Bureau stated: " W a g e rates, by day, without board, are, of course, the more nearly comparable with the wage rates of industrial workers." 12 Most of our analysis of farm wage rates, therefore, will be in terms of daily wage rates without board but some reference will be made to changes in monthly wage rates. In so doing a double purpose will be served. It will be instructive to compare changes of the monthly with the daily wage rates. Secondly, between 1914 and 1927 more than half of all farm laborers were hired by the month and something therefore must be said about their wages. 12 Monthly Statistics.

Labor Review,

May 1928, p. 118, U. S. Bureau of Labor

6o

W A G E S OF F A R M

AND FACTORY

LABORERS

Only two studies have been made of the employment-tenure of farm laborers. The first survey ( 1 9 1 7 ) covered six classes of workers—those hired by the month, with and without board, and, those employed by the day, at harvest and not at harvest, either with board or without board. T o make the 1917 data comparable with those of the 1927 survey it was first necessary to combine the four daily wage series into the two shown in Table 12, and, to compress the nine regions of the 1927 survey into the six regions found in the 1917 survey. Every region between 1917 and 1927 experienced profound changes in the tenure of farm employment. Particularly notable was the increase in the proportion of farm workers hired by the month without board. In only one region was this increase less than 100 per cent. In 1917 those hired by the month without board formed the least proportion in all regions. H o w different the situation was in 1927 is shown in Table 12. Recalling the data of regional concentration of farm laborers, we estimate that approximately 50 per cent of all the farm laborers in 1927 were engaged by the month without board. Between 1917 and 1927 the proportion of farm laborers hired by the month, with board, changed the least. Even in this group, however, there was an increase of 34 per cent in the Far West, and, in the South Atlantic and South Central states a decline of 26 per cent. Everywhere the percentage of laborers hired by the day, with board, had the greatest declines. Thus, we would expect a sizable increase in the proportion hired by the day without board, yet every region, except the South Central, had a decrease in that category. What did increase was the proportion of farm laborers hired by the month without board and everywhere this increase was a substantial one. A s of 1927, approximately 66 per cent of all farm laborers were hired by the month (Table 1 2 ) . The lowest'proportion of monthly laborers existed in the South Central states and even there it was 53 per cent of the total. Therefore, to show changes in farm wage rates, some evidence must be introduced

S O U R C E S OF W A G E S T A T I S T I C S

6l

T A B L E 12.

E m p l o t m e n t - T b n d h e op Farm Labobebs, b t Rbqions, 1917 and 1927. Per cent Change 1917-1927

1 9 1 7 «

1927»

N o r t h Atlantic— Monthly with board Monthly without b o a r d . . . Daily with board Daily without board

393% 165 232 21.0

385% 38.0 7.0 165

South Atlantic— Monthly with board Monthly without b o a r d . . . Daily with board Daily without board

33.7 17.2 25.7 23.4

25.0 39.0 15.0 21.0

— 255 +120.2

Monthly with board Monthly without b o a r d . . . Daily with board Daily without board

29.0 17.0 245 295

215 315 10.0 37.0

— 253

East North C e n t r a l Monthly with board Monthly without b o a r d . . . Daily with board Daily without board

44.8 15.1 26.3 13.8

44.0 32.0 13.0 11.0

52.7 9.4 29.7 82

52.0 19.0 23.0 6.0

— 1.4 +102.1 — 22.4 — 26.9

37.4 95 30.6 225

515 20.0 11.5 17.0

+ 34.4 +1105 — 625 — 245

— 2.0% + 1 3 0 . 3 —

70.0

—

21J0

—

3 1 . 6

—

1 0 3

South Central— +

853

— 592 +

25.4

—

1.9

+ 1 1 1 . 9 —

50.6

—

3 0 3

West North C e n t r a l Monthly with board Monthly without b o a r d . . . Daily with board Daily without board Far Western— Monthly with board Monthly without b o a r d . . . Daily with board Daily without board

» Monthly Crop Reports, Volume IV, No. 3, March 1918, p. 24, U. S. Department of Agriculture. b Income Parity for Agriculture, Part 2, Section 1, Expenses oj Hired Farm Labor, p. 12, footnote 8, Bureau of Agricultural Economics, U. S. Department of Agriculture. North Atlantic includes New England and Middle Atlantic. South Central includes East- and West-South Central. F a r Western includes Mountain and Pacific states.

62

WAGES

OF FARM

AND FACTORY

LABORERS

from time to time about the wages of monthly workers. Data about daily wage rates alone are not enough. This is true despite the shifts in employment-tenure which transpired between 1927 and March 1940. It is difficult to compare the data shown in Table 1 2 with that recorded by the S i x teenth Census for March 24-30, 1940 and for September 24-30, 1939. The employment of farm laborers is extremely seasonal, being twenty per cent less than ' normal' in March, and eleven per cent higher than ' normal' in September. 18 The peak employment of the farm year occurs in October, when to bring in the harvest, many extra day laborers must be hired. Thus, we would expect that the proportion of monthly laborers, as of October 1, would not be as great in March. TABLE

13.

P B B C E N T D I S T R I B U T I O N OF E M P L O Y M E N T - T E N U R E OF F A R M LABORERS I N T H E U N I T S » STATES, AND I N SELECTED R E G I O N S , MARCH AND S E P T E M B E R

Hired by month Hired by day or week. Other hired labor

1940

1939*

March 1940 North U.S. South Central

September 1939 North U.S. South Central

42.2% 30.6% 47.9 58.1 10.0 11.4

235% 49.9 26.4

58.9% 35.7 5.4

161% 54.0 30.0

375% 47.4 15.2

*16th Census oj the V. S., 1940, Agriculture, U. S. Summary, Second Series, Table 26, pp. 27-28, lines 16, 20, 24, 28, for March 1940, and lines 17, 21, 25, 29, for September 1939. Other hired labor includes " piece or contract labor." South includes the South Atlantic, and East- and WestSouth Central. North Central includes East- and West-North Central regions.

It is surprising to find that between March and September the proportion of day laborers varied so little. Yet, if we consider the piece and contract laborers who form the " other labor group " to be day workers then it appears that, in September 1939, more than 75 per cent of all farm laborers were hired by the day. 13 E. E. Shaw and J. A. Hopkins, Trends in Employment in Agriculture, 1909-36, Table 2, p. 17.

S O U R C E S OF W A G E S T A T I S T I C S

63

One important conclusion about farm employment-tenure can be drawn directly from the Sixteenth Census: in March 1 9 4 0 a greater proportion of farm laborers were hired by the day than in 1927. This is true of the national totals, and true also of both the North Central states and the South. Nor does the averaging process used to compute the data of Table 1 3 hide anything which might belie this statement. In 1927, the South Central states had a greater proportion of day laborers than any other region—47 per cent; in March 1940, the proportion was 60 per cent. The corresponding figures for the South Atlantic region are 36 per cent in 1927 and 55 per cent in 1940. So also was it in both the West- and East-North Central states. The latter region in 1927 employed only 24 per cent of its farm laborers by the day, in March 1940 the proportion was 3 7 per cent. Every single region showed the same tendency. If to the day group we add all or even the larger part of the " other hired labor " group, then the present trend toward day labor would appear even more pronounced. Farm laborers it appears are losing one of their most valuable assets—tenure. Perhaps the next decade will reverse the trend but there is nothing at hand to indicate that fact. Indeed, the opposite is true. Cotton picking machines will speed the process, and so will other machines. S T A T I S T I C S OF R E A L W A G E S

Money wages are one thing, real wages are another. It matters little that the money wages of a worker increase 100 per cent if, at the same time, retail prices increase by the same amount. If retail prices increase more than wages, then workers suffer a loss in real wages. In terms of purchasing power, the money wages of the farm laborers from 1 9 1 4 to 1 9 3 9 had some unusual gyrations. For example, in 1922, daily wages rates of farm laborers were 44 per cent higher than in 1 9 1 4 but real daily wage rates were 3 per cent lower. Changes in real wages are usually derived by dividing indexes of money wages by indexes of prices paid for commodities.

64

W A G E S OF F A R M

AND

FACTORY

LABORERS

The retail price data to be used in measuring changes in real wages of farm laborers are taken from the reports of the Bureau of Agricultural Economics which, as one part of its numerous studies about income-parity for agriculture, has thoroughly reworked the data on prices paid by farmers, broadened the former coverage of the series, and realigned the weighting factors. 14 This price series is divided into two parts: a) Commodities Used for Living, b) Commodities Used in Production. Because farm laborers rarely buy farm machinery, feed, fertilizer and other production materials used by farmers we have omitted all price data about "Commodities Used in Production." The price data we shall use are for commodities bought by farmers " for living." This price index, derived from the price changes of eighty-nine commodities, is made up of five constituents, which, with their weights, are Food (39), Clothing ( 2 2 ) , Automobiles, Gasoline Oil and Tires ( 1 7 ) , Household Supplies ( i o ) , Furniture and Furnishings ( 7 ) , Building Materials (5). 1 8 These weights were assigned by the Bureau of Agricultural Economics on the basis of actual expenditures of the farm class. Of all commodities, Food and Clothing together constitute 61 per cent of the total. Factory laborers, like the hired hands of the farm, experience every now and then a change in real wages. Ordinarily, the real wages of factory workers are measured in terms of hourly wages, and, for the most part, that practice will be followed here. Some reference, however, will be made to real weekly wages, because their course from 1 9 1 4 to 1939 was much different from that of real hourly wages. Much confusion has arisen from a failure to distinguish between these two different types of income. Therefore, to prevent any misunderstanding about 14 Index Numbers of Prices Paid by Farmers for Commodities, 1910-1938, Income Parity for Agriculture, Part 3, Section 5, 1939, U. S. Bureau of Agricultural Economics. See also Index Numbers of Prices Paid and Prices Received, U. S. Bureau of Agricultural Economics, July 1941. 15 Ibid., Tabic 3. For the price data used and the method of construction, see pp. 18-23.

SOURCES

OF

WAGE

STATISTICS

65

the term " real wages " of factory laborers we shall use the term " real hourly wage " or " real weekly wage " as the case demands. T h e Bureau of Labor Statistics, in 1941, published a study entitled " Changes in the Cost of Living in Large Cities in the 18 T h i s bulletin is a detailed exposiUnited States 1913-1941." tion of variations in the cost of living experienced by wage earners and lower salaried workers. Within this category come, of course, the unskilled laborers in manufacturing. A large city is defined as " all metropolitan areas and all cities over 50,000 population not included in metropolitan areas." 17 Price data from this bulletin will be used to measure changes in the real wages of factory laborers. These price data include a weighted index for " a l l items,'' 198 goods and services, together with separate indexes, which, with their weights, are Food ( 3 3 . 9 ) , Clothing ( 1 0 . 5 ) , Rent ( 1 8 . 1 ) , Fuel, Electricity and Ice ( 6 . 4 ) , Housefurnishings ( 4 . 2 ) , and Miscellaneous (26.9). 1 8 About three-fifths of the laborers' incomes are spent on Food, Clothing, and Rent. WAGE

S T A T I S T I C S FOR F A C T O R Y

LABORERS

The term " wages " has come to have many meanings, among them hourly wage rates, hourly earnings, weekly wages, annual earnings, real wages. Unless at the outset a settled meaning is given to the word, confusion can easily result. When used in reference to factory laborers, the term " wages " will be understood to mean hourly wage rates or hourly earnings. 16 U . S . B u r e a u of L a b o r S t a t i s t i c s , B u l l e t i n 691, 1941. 17 Ibid.,

p. 39.

18 Ibid.,

p. 25. F o r the c o n s t r u c t i o n of t h e C o s t of L i v i n g I n d e x see pp.

15-26. T h e w e i g h t i n g f a c t o r s w e r e derived f r o m field studies of the a c t u a l expenditures of w a g e e a r n e r s a n d l o w e r s a l a r i e d w o r k e r s . S e e , Money bursements

of

Wage

Earners

and

Clerical

Workers,

1934-36,

Dis-

Summary

V o l u m e , B u l l e t i n 638, U . S . B u r e a u of L a b o r S t a t i s t i c s , 1941. B u l l e t i n s 636, 637, 639, 640 a n d 641 c o n t a i n d e t a i l e d a n a l y s e s of the consumption tures of t h e 14,469 families c o v e r e d in t h e i n v e s t i g a t i o n .

expendi-

66

WAGES

OF F A R M

AND

FACTORY

LABORERS

Hourly wage rates are not always the same as hourly earnings. W a g e rates are the compensation paid for a definite amount of time worked or for a definite amount of product. Thus, we say Smith gets 40 cents an hour, or in another case, 30 cents a ton. Often, the hourly wage rate of an unskilled worker will also be his hourly earnings, but, occasionally the earnings may contain both the wage rate and extra compensation for overtime work or incentive payments. One part of the wage data at our disposal is reported as hourly wage rates, the greater part, however, is recorded as hourly earnings. Usually, wage rates are not available and, of necessity, we are forced to regard changes in hourly earnings as the best available measure of changes in hourly wage rates. A s stated above, hourly earnings may contain the hourly wage rate plus (or minus) extra compensation, so that this substitution of earnings for the rate may seem to be a questionable if not a deceptive technique. Admittedly, it could lead to deception. But, it is well to remember that many factory laborers for the greater part of the period 1914 to 1939, rarely received any overtime pay for overtime work but instead worked the extra time at the straight hourly rate. Many of them, furthermore, had little opportunity to secure additional pay for increased production because their jobs were simple routines. While it is true that they were included in some incentive wage plans, the primary coverage of those plans was semi-skilled and skilled workers. In some instances it is possible to compare relative increases in the hourly earnings of factory laborers with those in their wage rates, and we shall notice how close together earnings and rates moved. Finally, some checks can be used in considering an increase in hourly earnings as an increase in hourly wage rates. Suppose it is found that the hourly earnings of common laborers in automobile plants increased 160 per cent between 1914 to 1929. The first step is to ascertain the number of hours worked per week in 1 9 1 4 and in 1929. If it is found that these hours exceeded the number in the standard (full-time) work w e e k —

SOURCES

OF W A G E S T A T I S T I C S

67

beyond which overtime would be paid—then we must ascertain, as far as possible, the overtime rate, and then try to estimate its effect on the hourly earnings. I f , on the other hand, these laborers worked less than the standard number of hours a week in both periods, then, we could feel secure in the belief that the hourly earnings did not contain any extra pay for overtime at either period, and, that the increase in the hourly earnings (160 per cent) was representative of the increase in the hourly wage rate. A specific example will clarify this point. The standard work week of all workers in manufacturing in July 1914 was 55.0 hours, the actual work week of the male unskilled laborers was 52.7. 19 Subsequently, the standard (full-time) work week of manufacturing was shortened. By 1939 it was 40.3 hours, at which time the average unskilled laborer worked 38.6 hours per week.20 Obviously, the average unskilled laborer had no overtime in either July 1 9 1 4 or in 1939. Between those two dates their hourly earnings increased 193 per cent, and since they had no overtime at either period it would seem that the increase in hourly earnings provides a fairly accurate picture of the increase in their hourly wage rates. Data about the standard work week in manufacturing are scarce. Such as they are for the year 1 9 1 4 to 1939, they show that the average factory worker did not work much overtime. According to the National Industrial Conference Board, the standard work week of specific manufacturing industries, was rarely exceeded by common laborers.21 And Professor Wolman believes that their records " probably understate somewhat the length of the full time week in manufacturing during the 19 Wages in the United States, 1914-1927, p. 37, National Industrial Conference Board, 1928. T h e Conference Board does not compute the standard work week (nominal w e e k ) for male unskilled laborers, but only for " a l l " workers. 20 Wages, Hours, and Employment in the United States, 1934-39, and p. 118, National Industrial Conference Board, M a r c h 28, 1940. 21 The Conference Board discontinued data about the standard work week f r o m 1931 through 1936.

p. 116,

(nominal)

68

W A G E S OF F A R M A N D F A C T O R Y

LABORERS

whole period 1920-38 for which they are available." 22 This understatement, when we use the data of the Conference Board, affords us a margin of safety in statements about the full-time (standard) work week. Occasionally, the common laborers of some industries worked overtime. In such an instance, after stating the hourly earnings, we shall explicitly point out the excess of the standard work week over the actual work week. If the difference is slight, say 4 per cent or so, it need given no concern because the overtime payment would not be large enough to affect the wage rate in any appreciable degree. If it be great, one which clearly shows that the laborers were working many hours overtime, then, that fact will be explicitly pointed out. Weekly wages were studied by Douglas, Hurlin, and Coombs in their surveys of the wages of unskilled laborers. W e study hourly wages because the principal aim of our survey is a comparison between the wage rates of factory laborers and farm laborers. The farm wage rate is a pure wage rate, containing no extra compensation. S o also is the hourly wage rate. O n the other hand, the weekly wages of a factory worker is a product of his hourly wage rate times the number of hours actually worked. This latter figure varies from time to time and is constantly influenced by a number of factors, among them, unemployment, injury, sickness, or intermittent lay-offs. None of these factors is found in the daily wage rate of farm laborers. A n d it is a simply process to turn this daily rate into an hourly rate. Divide it by ten or eleven according to the number of hours worked per day by farm laborers. The wages of unskilled factory laborers to be used in this study are those paid to male workers. In the factories some of the unskilled workers are women but no mention will be made of their wages. S o often will the term " hourly earnings " be used, that it is advisable to explain briefly how such a figure is computed. 22 Leo W o l m a n , Hours of Work in American Industry, p. 7, National Bureau of Economic Research, Bulletin 71, N e w York, 1938. (Italics o u r s ) .

S O U R C E S OF W A G E S T A T I S T I C S

69

Hourly earnings are derived by division. Weekly, semi-monthly, or monthly payrolls are divided by the number of laborers coered in the payroll, and the quotient is then divided by the number of hours worked by these laborers. The result is called the average hourly earnings of these laborers. Following are the sources of the wage data of laborers in manufacturing:

unskilled

Hourly W a g e Rates or Hourly Earnings A . Government Sources 1. U . S. Department of Labor—Bureau of Labor Statistics a. W a g e s and Hours Bulletins b. Entrance W a g e Rates of Common Laborers 2. U . S. Department of Agriculture — Bureau of Public Roads 3. Federal Reserve Bank—Second Reserve District, New York B. Private Agencies 1. National Industrial Conference Board 2. United States Steel Corporation 3. Engineering News Record Weekly Earnings A . Government Sources 1. U . S. Department of Labor a. Wages and Hours Bulletins 2. Federal Reserve Bank—Second Reserve District, New York B. Private Studies 1. 2. 3. 4.

National Industrial Conference Board R. G. Hurlin W . Coombs P. H. Douglas

70

W A G E S OF F A R M A N D F A C T O R Y

LABORERS

S i x states—Massachusetts, New Y o r k , New Jersey, Pennsylvania, Delaware, and Wisconsin—began to issue about 1 9 2 5 wage series of the weekly earnings of manufacturing workers but none of them issued separate reports about the wages of common laborers. T h e state series, therefore, offer no pertinent information for us. A leading source of information about the hourly earnings of unskilled factory laborers is the wage bulletins published by the United States Bureau of Labor Statistics. Many of these bulletins, unfortunately, contain no information about unskilled workers, and, some which do, were not issued regularly enough to be of any use to us. Some industries were surveyed only once or twice. Those bulletins which have adequate and continuous or fairly continuous wage data about unskilled laborers are the studies which deal with iron and steel, woolen and worsted goods, cotton goods, lumber saw mills, slaughtering, foundries, and furniture. Of all wage bulletins the most satisfactory for our purpose are those which deal with iron and steel mills. F r o m 1 9 1 4 to 1 9 3 1 , there are available the hourly earnings of common laborers in the steel mills of Pittsburgh, the East, the South, and the Mid-West. 2 3 These sectional data are given f o r various departments of the steel industry, e. g., blast furnaces, open hearth furnaces, and sheet mills. Enough information is thus recorded to trace out secular movement of the laborers' hourly earnings in many departments of steel plants located in different regions of the country. After 1 9 3 1 , no further wage bulletins for this industry were issued. The Monthly Labor Review, however, has comparable wage data for 1 9 3 3 , 1934, 1 9 3 5 , 1 9 3 7 and 1938. 2 4 23 United States Department of Labor, Bureau of Labor Statistics, Bulletins 218, 26S, 305, 353. 381, 442. 513. 5^7- For the 1917 data see the Monthly Labor Review, March 1918, pp. 29-51, at p. 33. For a convenient tabulation of all these data, by departments, and by regions, from 1913 to 1931, see Bulletin 567, p. 16. 24 See the following issues of the Monthly Labor Review: For 1933 and 1935. April 1936, pp. 1027-60; June 1936, pp. 1615-38; July 1936, pp. 112-49;

S O U R C E S OF W A G E S T A T I S T I C S

71

W a g e bulletins about steel mills usually contain the following definition: The term " Common Laborer " throughout these wage studies has been confined as far as possible to laborers wholly unskilled and more or less a floating gang, who worked in or about the mill proper but upon whose work the mill was not primarily dependent for operation. The other unskilled employees usually receive the common-labor rate though not treated as common labor in this report. 25 T h e hourly wage figure for these common laborers is their hourly earnings which " includes both the earnings of time workers and those of tonnage or piece workers."

29

In 1926, the Bureau of Labor Statistics began to issue annually the entrance wage rates paid per hour to male common laborers in twelve manufacturing industries. The make-up and coverage of this wage series will be discussed at another place in this chapter. One of the industries covered in these annual surveys was the iron and steel industry, the data of which can be linked with those found in the wage bulletins. A comparison of the two wage series reveals a close similarity of wage rates and earnings of common laborers in iron and steel mills. Hourly Earnings * 1926 1929 1931

Hourly Wage Rate

41.4 41.4

b

42.7 cents 42.5 41.8

» U. S. Bureau of Labor Statistics, Bulletin 567, p. 18. b Ibid., Monthly Labor Review, September 1926, p. 73 for 1926; October 1929, p. 172 for 1929; November 1931, p. 196 for 1931.

August 1936, pp. 435-52; September 1936, pp. 655-77 (summary). For 1934, June 1937, p. 1533. For 1937 (annual earnings), October 1940, pp. 823-33. For 1938, August 1940, pp. 421-42; September 1940, pp. 709-26. 25 Bulletin 567, p. 15. 26 Bulletin 442, p. 19.

72

WAGES

OF F A R M

AND

FACTORY

LABORERS

Woolen mills employ a group of workers called " dyehouse laborers." They may be called kettle men, pale men, or vat men, but " one and all simply do common labor " and " all get a laborer's rate of pay." 27 From 1 9 1 4 to 1932, the Bureau of Labor Statistics in biennial surveys reported the average hourly earnings of dyehouse laborers in seven states—Maine, Massachusetts, New Hampshire, Connecticut, New Jersey, New Y o r k , and Rhode Island. 28 Prior to 1930, no wage survey covered the southern woolen mills. This is understandable. Some woolen mills in the 1 9 2 0 s shifted to the South Atlantic states but the greater proportion remained in the northeast. The 1927 Census of Manufactures showed that about 88 per cent of all the woolen mills' workers were then located in the Northeast. A f t e r 1932, no further wage data for dyehouse laborers are available. They are not included in the annual surveys of entrance wage rates paid to common laborers. Bulletins 694 states that male unskilled workers in northern woolen mills received 43.9 cents an hour in 1938, 2 9 a figure which probably includes the average hourly earnings of dyehouse laborers and also those of other unskilled workers. In lumber mills there are laborers who " perform general unskilled work in the various departments of the establishment." 30 Wage data about them were recorded in nine wage bulletins. From 1 9 1 3 to 1932, there is a record of the hourly earnings of laborers in the lumber mills of twelve states—Alabama, Florida, Georgia, Mississippi, Louisiana, North Carolina, Pennsylvania (no data 1 9 2 8 - 3 2 ) , Maine, Michigan, Wisconsin, Oregon, and 27 Bulletin 128, pp. 1 2 3 - 4 28 Bulletins 190, 238, 261, 289, 327, 377, 443, 487, 533, 584. Bulletin 604, p. 409 and p. 566, has a neat summary of the hourly earnings of these laborers from 1914 to 1932. 29 Bulletin 694, p. 358. 30 Bulletin 560, p. 72.

SOURCES

OF

WAGE

STATISTICS

73

California. 31

This wide geographical distribution affords us the opportunity of measuring regional variations in the wage changes of factory laborers in the same industry. Furthermore, these data are especially good for comparison of the wages of factory and farm laborers employed in a given state. From 1926 on, the Monthly Labor Review published the entrance wage rate per hour paid to male common laborers in lumber saw mills. Thus, it is again possible to compare an hourly wage rate with hourly earnings: Hourly Earnings * 1928 1930 1932

Hourly Wage R a t e

30.3 cents 29.1 20.5

b

31.7 cents 31.6 215

» U. S. Bureau of Labor Statistics, Bulletin 588, p. 5. Ibid.; Monthly

Labor Review,

October 1928, p. 97, for 1928; November

1930, p. 188, for 1930; October 1932, p. 918 for 1932.

Once again, a close agreement between hourly earnings and the hourly wage rate is to be noted. Wage changes from 1913 to 1932 of these laborers will be drawn from the wage bulletins and the changes from 1926 to 1939 will be taken from the series in the Monthly Labor Review. A large number of laborers are employed in the thirteen departments of slaughtering and meat packing houses. Their hourly earnings are almost identical throughout the various departments and the variations which do appear are generally limited to a penny an hour. These workers may be called floor cleaners, washers, taggers, or toe pullers, but in the wage bulletins of the Bureau of Labor Statistics they are classified as laborers.32 For 1917 and 1921 and then biennially to 1931, the Department of Labor reported the hourly earnings of these workers by departments and by cities.33 31 Bulletins 153, 225, 265, 317, 3^3. 413, 497, 560, 586. Bulletin 604 a t p. 464 and p. 573, summarizes these wage data, by states, 1914 to 1932. 32 Bulletin 576, p. 7. 33 Bulletins 252, 294, 373, 421, 472, 535, 576.

74

WAGES

OF F A R M

AND

FACTORY

LABORERS

From the wage awards made by Judge Samuel Alschuler in the first World War, it is possible to construct a wage series for these laborers from 1 9 1 4 to 1920. 84 This series can be readily linked to the one found in the wage bulletins. The procedure was a simple one: the "Alschuler Series " provided data up to and including December 1920. For the years 1921, 1923, 1925, 1927, 1929, and 1931 data were secured by averaging the hourly earnings paid to laborers in all thirteen departments of the industry.85 As in the case of steel and lumber, we compared the average hourly earnings from the wage bulletins with the hourly wage rates found in the Monthly Labor Review, with the following results: Hourly Earnings • 1927 1929 1931

45 2 403

Hourly Wage Rate

b

41.7 cents 42.0 41.7

• U. S. Bureau of Labor Statistics, Bulletin 576, pp. 7, 8, 10, 13, 17, 18, 20, 22, 25, 27, 30, 33, 36. "Ibid., Monthly Labor Review; (or 1927 see March 1927, p. 88; for 1929, October 1929, p. 172; for 1931, November 1931, p. 197.

The similarity of wage rate and hourly earnings is not as close as in steel and lumber. The earnings exceeded the wage rate by three cents an hour in 1927 and in 1929. Therefore, wage changes of this industry for the year 1926 and thereafter will be taken only from the surveys of entrance wage rates. Wage data about laborers in cotton goods manufacture are not continuous. In 1 9 1 6 there were reported the hourly earn34 The wage awards for the meat packing industry were made by Judge Alschuler at various times. See the Monthly Labor Review, May 1918, p. 116; September 1918, pp. 189-90; March 1920, pp. 113-4; July 1920, pp. 101-5. 35 Bulletins 294, 373, 421, 473, 535 and 596. The Monthly Labor Review, September 1939, pp. 936-959, has hourly earnings of the meat packing industry for December 1937. At p. 953, there are data for male unskilled laborers. For annual earnings of unskilled workers, see the Monthly Labor Review, December 1939, pp. 1470-1482, at. p. 1475, and pp. 1478-81.

SOURCES OF WAGE S T A T I S T I C S

75

ings of " laborers " in the finishing department of cotton goods mills.*® T h e next entry is for 1937. A g a p like this of twentyone years renders the t w o isolated quotations practically useless. Perhaps the m a i n reason f o r this scarcity o f w a g e data is the fact that the labor force in the cotton g o o d s industries is made up primarily of semiskilled workers.* 7 T h i s industry is one o f the largest employers of A m e r i c a n workers, and if possible, it should be represented in every w a g e study. L a c k of data stymied us, until it was found after considerable investigation that it would be possible to use the hourly earnings of drawingframe tenders to represent relative changes in the hourly earnings of unskilled labor. D r a w i n g - f r a m e tenders are classified as semi-skilled workers. Hence, our decision is immediately opened to criticism. It is, of course, a make-shift, but it can be justified on t w o g r o u n d s : ( 1 ) the type of w o r k performed by drawing-frame tenders and, ( 2 ) the level of their hourly earnings as compared w i t h those of laborers ( 1 9 3 3 and 1940) and with those of semi-skilled w o r k e r s ( 1 9 1 4 to 1 9 4 0 ) . T h e work routine of the drawing-frame tender is a simple one, entailing a minimum of skill. In cotton mills, the raw cotton is first cleaned, and is then machined into a preliminary thread called a sliver. T h e n follows the combing process wherein the long fibers are separated from the short fibers, and next are laid parallel and w o u n d on to rollers set into cans. T h e next step is called d r a w i n g , which is a process designed to wind the rope of cotton slivers to a specific fineness. T h e drawing frame is a machine which unwinds the cotton slivers from feeder cans, and, over m o v i n g rollers, twists them into single 36 Bulletin 239, pp. 16-17. After 1916, the wage bulletins of cotton goods did not cover finishing departments. 37 In 1930, cotton mills employed 311,391 semi-skilled workers, and only 57.736 unskilled laborers. A. M. Edwards, A Social Economic Grouping of the Gainful Workers of the United States, p. io8, U. S. Bureau of the Census, 1938.

76

W A G E S OF F A R M A N D F A C T O R Y

LABORERS

slivers of exact fineness and even density, and, then rewinds them into another set of cans. When these cans are filled, the drawing-frame tender removes them. Also, he replaces the feeder cans when they are emptied. H e must mend the breaks in the sliver and he knows when to do this because the drawing frame stops automatically whenever a sliver breaks. The Bureau of Labor Statistics states that he is " not required to work hard nor is his constant attention required." 3 8 N o doubt he must exercise some slight skill, but evidently not much. In northern cotton mills the hourly earnings of drawingframe tenders are extremely close to those paid laborers therein at such varied times as J u l y 1 9 3 3 , April 1 9 3 7 , and September 1940. The largest wage difference between these two occupations occurred in J u l y 1 9 3 3 and then it was only 1 . 1 cents an hour. TABLE 14. HOURLY E A B N I N G S OF D R A W I N G - F R A M E T E N D E R S AND OF LABORERS I N COTTON GOODS MANUFACTURING, N O R T H AND S O U T H , 1 9 3 3 , 1 9 3 7 , AND 1 9 4 0 .

1933* Drawing-Frame Tenders.... Laborers

North 1937 b 1940 c

25.6c. 4 3 3 c . 245 42.7

1933»

425c. 425

South 1937" 1940«=

19.1c. 37.0c. 36.5c. 15.6 255 32.7

» Monthly Labor Review, March 1935, pp. 15-16. Data refer to July 1933. »> Bulletin 663, p. 97. Data refer to April 1937. ' Monthly Labor Review, December 1941, p. 1507. tember 1940.

Data refer to Sep-

In the southern mills, however, the laborers in 1 9 3 3 and also in 1940 received about 3.5 cents an hour less than drawingframe tenders. And in 1 9 3 7 , the wage difference between the 38 Bulletin 239, pp. 157-8. Wage data for drawing-frame tenders will be found in Bulletins 190, 239, 262, 288, 345, 371, 446, 492, 539, 663. Data for 1932, 1933, 1934, appear in the following issues of the Monthly Labor Review July 1932, pp. 150-56; March 1935, pp. 15-16; and December 1941, pp. 15061507 for 1940 data. Bulletin 604, pp. 372 and 561 has a convenient summary of the average hourly earnings of drawing-frame tenders, by states, 1914-1932.

S O U R C E S OF W A G E

STATISTICS

77

t w o occupations amounted to 11.5 cents an hour. W e can only point out that the average hourly earnings of 25.5 cents an hour paid in 1937 to the male laborers in the southern mills was an exceptionally low wage, even for a low-wage industry like cotton goods. W i t h the exception of learners, who are not regarded as regular workers, there was only one other worker in the southern mills w h o received less—the female sweeper. She received 22.9 cents an hour. Unskilled male workers were then being paid 36.2 cents an hour (Creelers) and 33.3 cents an hour ( R o v i n g M e n ) . There is no denying the fact that laborers in southern mills made only 25.5 cents an hour in 1937, and that this wage was substantially lower than that paid to drawing-frame tenders. But, the other unskilled male workers in the southern mills were receiving approximately 35 cents an hour. A n d this was two cents an hour less than that received by drawing-frame tenders in the same mills. Between 1914 and 1940 the hourly earnings of drawingframe tenders were consistently lower than those paid to other workers who are classified as semi-skilled. Frame spinners and speeder tenders, both semi-skilled workers, were paid 15 cents an hour in 1914, drawing frame-tenders received but 11.6 cents Over the years the occupational differential did not decrease, being as large in 1940 as it was in 1914 and 1916. T A B L E

15.

H O U R L Y E A R N I N G S OF D R A W I N G - F R A M E T E N D E R S

AND O T H E R

SEMI-SKILLS)

W O R K E R S I N COTTON M I L L S , 1 9 1 4 , 1 9 1 6 , 1 9 2 0 , 1 9 3 7 , AND 1 9 4 0 .

Drawing-Frame Tenders. Spinners, " F r a m e " Speeder Tenders Slubber Tenders

1914»

1916"

1920«

1937»

1940^

11.6 c. 15.0 15.3

12.6 c. 16.4 17.4 19.2

42.7 c. 47.5 53.3 55.1

43.3 c. 47.0 49.8 53.9

42.5 c. 46.3 47.9 54.6

« Bulletin 539, pp. 3-7. b

Bulletin 663, p. 97.

c

Monthly

These entries are for northern mills alone.

Labor Review, December 1941, p. 1507.

78

W A G E S OF F A R M

AND FACTORY

LABORERS

It may be said, then, that the hourly earnings of drawingframe tenders afe roughly midway between those of other semiskilled workers and those of laborers. The nature of our substitution must be kept in mind: relative changes in the hourly earnings of drawing-frame tenders will be used to represent relative changes in the hourly earnings of unskilled labor. Whenever we compare the money earnings of unskilled laborers in cotton goods with those of other occupations we shall not use the wages of drawing-frame tenders but those of laborers for such years as they are available. The boot and shoe industry is also made up largely of semiskilled workers, their ratio to unskilled laborers in 1930 being approximately 11 to 1 . " Thus, some difficulty was to be expected in locating wage data of unskilled laborers in that industry also. The ten biennial surveys of the shoe industry ( 1 9 1 4 - 1 9 3 2 ) contain no wage data for 'laborers' or for unskilled workers classified as such.40 Bulletin 670 (1939) has wage data for a number of unskilled workers, among them " laborers, indirect," but earlier bulletins did not cover these workers. Also included in the 1939 survey as unskilled workers are " shoe cleaners " 41 and for these workers there are biennial wage data from 1920 to 1932. But no comparable data for shoe cleaners or other unskilled workers from 1 9 1 4 to 1920 are available. Nor is the boot and shoe industry covered in the studies of entrance wage rates paid to common laborers. Consequently the time coverage of this industry is not very complete for present purposes. The Industrial Survey in Selected Industries in the United States, 1919, records the average hourly earnings of laborers in the foundry shops of many states.42 Biennial wage bulletins 39 A. M. Edwards, A Social-Economic Grouping of Gainful Workers of the United States, p. 104, U . S. B u r e a u of the Census, 1938. 40 Bulletins 232, 260, 278, 324, 374, 450, 498, 551, 579. 41 Bulletin 670, p. 43. 42 Bulletin 265, p. 220.

SOURCES

OF

WAGE

STATISTICS

79

issued from 1923 to 1933 reported the wages of unskilled laborers in foundry and machine shops, 48 but, after 1933, comparable surveys are of limited scope. 44 Foundry and machine shops are covered in the surveys of entrance wage rates paid to common laborers, but it is impossible to join these figures with those in the wage bulletins because the two series are too far apart. In 1927, according to the wage bulletins, laborers in foundries had hourly earnings of 49.1 cents, those in machine shops had 45.6 cents. In the same year, according to the series in the Monthly Labor Review, laborers in foundries and machine shops were paid an entrance hourly rate of 37.8 cents. The differential between the two wage series in 1929 and 1932 was just as large. Obviously the two series were made from different samples—so entirely different that it would be misleading to link them. Until 1939, the Bureau of Labor Statistics published no wage data for unskilled laborers in the hosiery industry. Bulletins 504, 452, 376, 328, and 265 reported wage data for a number of occupations in this industry but in none of them were there any entries for unskilled workers. A t first we decided to follow the example of Coombs, and, like him, use the wages of the " boarder " in hosiery mills and of the " presser " in underwear plants to represent the trend of wages paid to unskilled labor. Both the boarder and the presser are semi-skilled workers. Coombs frankly stated that " the justification is the common one of expediency." 45 Investigation of the wage data shows that the hourly earnings of these workmen are com43 Bulletins 362, 422, 471, 522, 570. W a g e data for 1933 will be found in the Monthly Labor Review, D e c e m b e r 1933, p. 1462. 44 T h e data published in the Monthly Labor Review, January 1936, p. 31, cover " a l l " workers in foundry and machine shops for 1935 and 1936. N o data appear there for unskilled workers. T h e y are included in the data of 1938-9 in the Monthly Labor Review, N o v e m b e r 1940, pp. 1211-12, and p. 1219. 45 W . Coombs, The Wages of Unskilled Labor in Manufacturing in the United States, p. 75, N e w York, 1926.

Industries

80

WAGES

OF

FARM

AND

FACTORY

LABORERS

paratively high, in some cases even higher than those paid to other semi-skilled workers. It seemed doubtful, therefore, that the secular change of their wages from 1914 to 1939 would truly represent changes in the wages of the unskilled. For example, in 1914, boarders in hosiery mills received 23.0 cents an hour, pressers were paid 21.3 cents. 48 F e w workers in those mills were paid as much as 20 cents an hour. A further complicating factor appeared with the structural change within the hosiery industry. Today, the full-fashioned branch, which is almost entirely dedicated to women's stockings, has a general wage level approximately 100 per cent higher than that of seamless mills. A n d the difference in the hourly wages of the boarder in the two branches of the industry is as large. In September 1938, the boarders, automatic, of full-fashioned plants had average hourly earnings of 75.9 cents, 47 the boarders of seamless factories had but 37.6 cents. 48 W h i c h wage is comparable with the data of 1 9 1 4 ? N o answer could be found to that question. The unskilled laborers of hosiery and the knit goods will be covered from the wage records of the National Industrial Conference Board. For 1929, 1931, and 1937, there are available the hourly earnings of laborers in the furniture industry. 49 N o comparable wage data are available for the years before 1929. Either because they contained no data about unskilled laborers, or because such data, when reported, were too widely scattered in time, we decided not to use any wage figures from the wage bulletins covering carbuilding, glass and clay, printing and publishing, men's clothing, silk and rayon, cane sugar refining, cigarettes, cement, bread and baking, paper and pulp, and motor vehicles. Some of these industries will be covered but from a different source. 46 Bulletin 504, p. 4 for boarders, and p. 8 for pressers (underwear and hosiery). 47 Monthly

Labor Review,

48 Ibid., June 1930, p. 1397. 49 Bulletins 526, 571. 669.

May 1939, p. 1158.

S O U R C E S OF W A G E S T A T I S T I C S

8l

In 1926, there appeared for the first time an annual wage series of the hourly wage rates paid to male unskilled laborers in manufacturing. This series appears each year in the Monthly Labor Review under the title " Entrance W a g e Rates of Common Laborers." 50 A common laborer is specifically defined as one who " performs physical or manual labor of a general character and simple nature, requiring no special training, judgment, or skill." 5 1 T h e Bureau of Labor Statistics points out that because all employers do not place the same interpretation on the term " common laborer," the data cover some unskilled workers other than common laborers. The entrance rate of pay means the lowest hourly wage rate paid to male common laborers when newly hired. T h i s is a specific definition printed on the questionnaires sent out by the Bureau. Both high-wage industries and low-wage industries are represented in these surveys. In 1926, for example, the general average of eleven manufacturing industries was 40.1 cents an hour. About this average there was a wide dispersion; petroleum refining paid 47.9 cents an hour, lumber saw mills paid 33.6 cents. 82 T h e range of variation about the average in other years was no less wide. 50 U . S. Bureau of L a b o r Statistics . T h i s w a g e series will be found in the following issues of the Monthly abor Review: September 1926, pp. 72-4

M a r c h 1936, pp. 698-706

M a r c h 1927, pp. 86-8

April 1937, pp. 940-1

October 1928, pp. 95-8

December 1937, pp. 1491-7

October 1929, pp. 171 -3

J a n u a r y 1939, pp. 162-175

November 1930, pp. 186-9

December 1939, pp. u s o ^ ^ s

November 1931, pp. 194-7

J a n u a r y 194-1, pp. 1-23

October 1932, pp. 916-9

J a n u a r y 1942, pp. 149-173

October 1933, pp. 932-6

F e b r u a r y 1943, pp. 313-28

December 1934, pp. 1452-5

April 1944, pp. 804-15

51 Ibid., J a n u a r y 1941, pp. 1 and 2. 52 Ibid., September 1926, p. 74.

82

WAGES

OF F A R M

AND

FACTORY

LABORERS

In 1926, eleven manufacturing industries were c o v e r e d — automobiles, brick tile and terra cotta, cement, electrical machinery, foundries and machine shops, iron and steel, leather, lumber saw mills, paper and pulp, petroleum refining, and meat packing. A t various times other industries were added — chemicals, fertilizer, glass, paints and varnishes, rubber tires and inner tubes, and soap. A f t e r 1935, wage data for the electrical machinery industry no longer appears. Thus, at the present time, sixteen manufacturing industries are covered. Building construction, a separate entry, is not included in the average for the manufacturing industries. Each annual report gives detailed explanations about the sources of data, and the scope and method of the study. Lately, the wage rates are given by states and by regions, which materials afford us the opportunity of comparing the wage rates of farm and factory laborers in particular states. For example, the wage rates of farm laborers in South Carolina can be compared with those paid to factory laborers in that state. From 1932 to the present, the Bureau of Labor Statistics has also published the average hourly earnings and the average weekly earnings of all workers in manufacturing. N o separate entries appear for male unskilled laborers, so that, for our purpose the usefulness of these data is limited. They can be of some use; with them the expansion of manufacturing wages from 1933 to 1939 can be measured. They can also be used in Chapter V I to measure the course of " all " factory wages between 1939 and 1944. The Department of Labor is not the only federal agency which publishes wage data for common laborers. T h e Bureau of Public Roads of the Department of Agriculture records the hourly wage rates paid to unskilled labor in road building. From 1915, when this series began, to 1922 the data included some wage reports on farm labor. From 1922 through September 1932, the data are based upon reports of federal-aid

S O U R C E S OF W A G E S T A T I S T I C S

83

projects; thereafter they are drawn from various emergency highway construction projects.®8 This series of hourly wage rates is of great use to us because it contains continuous data for the nine geographic regions of the United States as well as an average for the whole country. With the regional wage rates before us we can compare them with those paid to farm laborers in a given region, measuring either differences in amount per hour or per day, or, relative changes over periods of time. The New Y o r k Federal Reserve Bank, in 1921, collected data about the hiring wage rate per hour paid to male unskilled laborers employed by sixteen companies. 84 Data were collected every quarter of the year until January 1931. From 1922 on, the entries covered from sixteen to twenty companies, some of which were engaged in building construction or railroad transportation. Back to 1913, by quarters, these wage surveys were carried, but for ten companies only. W . R. Burgess who made the original study stated: Restricting the figures to the hiring rate for male common labor results in an exceedingly narrow spread in the distribution shown by returns. The hiring rate for the last return in December 1921 was identical in the case of eight (out of ten) establishments. The probable error is thus reduced to a minimum in spite of the small number of firms reporting." 53 T h e wage data for 1915-1931 will be found in the Survey of Current Business, 1936 Supplement, p. 4 2 ; for the years 1922 to 1939 see the ¡940 Supplement, p. 45 and see p. 184, column 1, footnote 6, for an explanation of the coverage of this wage series. Monthly wage data, a f t e r 1939 to the present, will be found in the Survey of Current Business. I n recent years these wage figures have been compiled by the Federal W o r k s Agency, Public Roads Administration. 54 T h e Federal Reserve Bank of N e w Y o r k , Second Reserve District, N e w York. These data were furnished to the writer by the Research Department of the bank. 55 W . R. Burgess, Index Numbers for the W a g e s of Common Labor, Journal of American Statistical Association, Volume 18, March 1922, p. 102. In this article at pp. 101-103, there is a full discussion of the make-up and method of this wage survey. At p. 103, one finds the weekly earnings of these laborers, by quarters, f r o m July 19:4 to J a n u a r y 1922.

84

W A G E S OF F A R M

AND

FACTORY

LABORERS

An obvious limitation of this wage series is the fact that it covers New York alone. It has this merit: its quarterly entries enable us to see clearly the wage changes of unskilled laborers which occurred at the various stages of World War I. Most of the other data covering these years are biennial entries. A quarterly series such as this one permits close examination of the wage changes before and after April 1917, and those which occurred after the Armistice of November 1918. So much for government sources. Three private organizations publish information about hourly wage rates or hourly earnings of male unskilled laborers—the National Industrial Conference Board, the United States Steel Corporation, and the Engineering News Record. Of all wage surveys, government or private, those published by the National Industrial Conference Board are the most complete in coverage and the most continuous.58 This organization publishes a number of wage series, one of which reports the average hourly and weekly earnings of male unskilled laborers in manufacturing. Unskilled labor is specifically defined in these surveys as work for which no previous training is required. The coverage of the wage surveys was gradually widened so that by June 1936, 1,886 plants employing 1,532,000 workers in twenty-one industries were reporting hourly and weekly earnings. For the cotton goods industry the wage entries refer to the northern cotton mills alone. At one time wage data from southern mills were collected but were later discontinued, because the Conference Board decided that the number of reports from the South was insufficient. 56 M. A. Beney, Wages, Hours, and Employment in the United States, 1914-1936, National Industrial Conference Board Studies Number 229, New York City, 1936. Chapter II deals with the scope and method of collecting data. See also Wages, Hours and Employment in the United States, 19341939, March 28, 1940. Data after 1939 to the present will be found in the Economic Record. Other wage studies of the Conference Board are: Wages and Hours in American Manufacturing Industries, July 1914-January 1922, 1922; Wages in the United States, 1914-1926, 1927; Wages in the United States, 1914-1927, 1928; Wages, Hours, and Employment in the United States, July 1936-December 1937, June 1938.

S O U R C E S OF W A G E S T A T I S T I C S

85

There is a single wage entry for 1 9 1 4 — J u l y — a n d no data thereafter, until June 1920, when the series resumes by months up to the present time. There are however no entries for the first half of 1922. The United States Steel Corporation has recorded the basic hourly wages of common laborers in Pittsburgh during the years 1913-1915, and in the Pittsburgh and Chicago districts subsequently. 87 This wage figure is an hourly wage rate with the exception of the months from October 1918 to July 15, 1921, when it represents hourly earnings. A f t e r October 1938, this series was no longer published. The Engineering News Record reports the hourly wage rates paid to common laborers in the construction industry in twenty large cities. 58 Union wages actually paid are recorded except where non-union jobs predominate. Obviously, this wage series, since it deals with building construction alone and not with manufacturing, is of limited use to us. The major sources of information about weekly earnings of factory laborers are the wage bulletins of the Bureau of Labor Statistics and the wage records of the National Industrial Conference Board. Three studies have investigated the weekly wages of unskilled workers for part of the period here under review. W . Coombs in an excellent monograph compiled data about weekly wages of unskilled factory laborers from 1890 to 1924. 69 57 The United States Steel Corporation furnished these data to the U. S. Bureau of Foreign and Domestic Commerce which published them in the Survey of Current Business. See the Survey of Current Business, ¡932 Supplement, pp. 7 0 - 7 1 ; the 1936 Supplement, p. 4 2 ; the 1938 Supplement, p. 50, and also p. 1 7 7 , column 2 , note J , for an explanation of this wage series. 58 The Engineering News Rccord collects these data and furnishes them to the U. S. Bureau of Foreign and Domestic Commerce, which publishes them in the Suri'ey of Current Business. See Survey of Current Business, 1936 Supplement, p. 4 2 ; the 1938 Supplement, p. 5 0 ; the 1940 Supplement, p. 4 5 , and also p. 183, column 2, footnote i, for an explanation of this wage series. 59 W . Coombs, The Wages of Unskilled Labor in Manufacturing Industries in the United States, 1890-1924, New York, 1926. Chapter 2 is devoted to " The Sources of Information."

86

W A G E S OF F A R M

AND FACTORY

LABORERS

R . G. Hurlin studied the weekly earnings of all unskilled laborers from 1820 to 1920. 90 Along with data from seven manufacturing industries, he included wage figures from building construction, railroads, and farm harvest labor. T h e subject of Hurlin's study was the hundred-year trend of weekly wages paid to " a l l " unskilled laborers not merely those in manufacturing. O n the whole his figures for the years 1890 to 1910 are fairly close to those reported by Coombs but from 1911 to 1917 there are notable differences of five to ten per cent between the two surveys. Douglas in order to derive weekly wage data for all unskilled laborers used the Hurlin series up to 1920, and, for the years thereafter to 1926, spliced to it the weekly wage data of male unskilled laborers in manufacturing as published by the N a tional Industrial Conference Board. 91 S U M M A R Y OF W A G E C H A N G E S 1 9 1 4 TO 1 9 3 9

A t this point the principal question of our investigation must again be stated. What has been the course of wage rates paid to farm and factory laborers between 1914 and 1939? Out of this single question a host of other questions arise, only a f e w of which will be answered. From 1914 to 1939 the daily wage rate without board of farm laborers increased 9 per cent, monthly wage rates, with or without board, rose 21 per cent. Most manufacturing industries trebled the hourly wage rates or hourly earnings of unskilled labor in the same period (See Table 1 6 ) . Even the socalled " low-wage " industries doubled and in some cases more than doubled hourly earnings. Cotton goods, commonly re60 This study was made by Dr. Hurlin for the Russell Sage Foundation. Information about the coverage of the study was courteously furnished by Dr. Hurlin. 61 Paul H. Douglas, Real Wages in the United States, 1890-1926, 1930. At. pp. 175-178, Professor Douglas explains his procedure of fusing the " Hurlin S e r i e s " with that of the National Industrial Conference Board. F o r a comparison of the " Hurlin Series " with the " Coombs Series " from 1890 to 1920 see ibid., p. 175.

S O U R C E S OF WAGE S T A T I S T I C S

87

garded as the typical low-wage industry, raised the hourly earnings of unskilled labor from 1 6 . 8 cents in J u l y 1 9 1 4

to

3 6 . 2 cents in 1 9 3 9 . These data refer to northern cotton mills. In southern mills between 1 9 1 4 and 1 9 3 0 the average d r a w i n g frame tender of North Carolina, South Carolina, A l a b a m a and Georgia experienced a rise of 1 3 5 per cent in hourly earnings. Unskilled laborers in those mills probably had a w a g e advance of approximately the same size. A n d road building between 1 9 1 4 and 1 9 3 9 raised the hourly w a g e rates of common laborers from 2 0 cents to 4 0 cents. TABLE FABM

WAGE R A T E S ,

HOUBLT

16.

EARNINGS

AND HOURLY

WAGE

RATES

OP

U N S K I L L E D LABOBEBS IN MANUFACTURING AND ROAD BUELDINO,

1914, 1920, 1929, 1933,

09

^

i ^ t F S A

£INO Y E A S I N T H E LABOUSS, 1014

1915 1916 1917 1918 1919 1920

Hotntx/r

T O 1930.

Steel»

Meat Packing»

0.0 +3.9 +6.0 +95 +7.4 +4.1

0.0 +3.6 +62 +85 +123 +1.7

(IN

EARNINGS

or

UNSKUJD

CENTS)

New York City« Road Building +0-5 +3.8 +2.1 +9.0 +7.1 +105

• U. S. Steel Corporation. Survey oj Current Business, 1936 p. 42.

+3.0 +5.0 +8.0 +5J0 +8.0 Supplement,

b Monthly Labor Review, May 1918, p. 116; September 1918, pp. 189-90; March 1920, pp. 113-14; July 1920, pp. 101-5. These data are computed from the wage awards of Judge Samuel Alschuler.

«Federal Reserve Bank, Second Reserve District, New York, N . Y. These entries were secured by measuring the wage changes from July of the preceding year. The data were supplied to the writer by the courtesy of the Research Department of the Bank. 4 Bureau of Public Roads, U. S. Department of Agriculture. See Survey oj Current Business, Supplement 1936, p. 42. No data are available for 1914.

T o portray adequately the uneveness of the total wage movement from 1 9 1 4 to 1920, a monthly wage series drawn from a large number of representative industries would be needed. But not even for one industry does such a wage series exist. Most wage surveys made at this time by the Department of Labor were biennial and in two cases (woolen goods and cotton goods) there was a triennial gap between the surveys. The first entry in the wage records of the National Industrial Conference Board is for July 1 9 1 4 , the next is for June 1920. The

INFLATION

AND

DEFLATION

II7

closest approximation to a monthly wage series are the quarterly reports of the New York Federal Reserve Bank on hiring wage rates paid to male common laborers. A s can be readily seen in the preceding table, the year-to-year wage changes of New York laborers were roughly equal to those in steel, meat packing, and road building in 1916, 1918, and 1919 and for the two-year period 1919-1920. Hence, a general idea of the uneven wage movement in factories from 1914 to 1920 can be secured from the New York data. In the second half of 1917 the New York wage rates rose very sharply. For six months after the armistice they remained stationary until July 1919 when they again swung upward. The total increase of 165 per cent (19141920) in the New York wage rates is divisible into three intervals: from July 1914 to the Declaration of War they increased 30 index points; from April 1917 to November 1918 they advanced 73 index points; and rose another 62 points from the Armistice to the third quarter of 1920. REGIONAL W A G E

CHANGES

Not only in New York and in other centers of manufacturing but throughout the entire land the unskilled factory laborers had unprecedented wage increases. No less than Massachusetts and Pennsylvania, the states of the South, of the Mid-West and of the Far West, doubled and in many cases almost tripled the hourly wages of unskilled labor. Relatively measured, the wage increases within the industries were everywhere enormous but nowhere were they identical. Of all the industries for which there is a wage record steel had the least regional variation in the total relative wage change of common laborers. Even here, however, eastern steel mills between 1914 and 1920 increased the hourly wages of common laborers 17 index points more than did the southern steel mills (Table 29). Before dismissing this fact as just another example of the numerous wage differences between the north and the south it may be advisable to study the data set forth in Table 29. Woolen goods had a greater range of total relative increases

I l 8

WAGES

OF

FARM

AND

TABLE

FACTORY

LABORERS

29.

INDEX NUMBERS o r HOUBLT EARNINGS OF UNSKILLED LABOBEBS, BT INDUSTRIES, AND BT REGIONS, 1914 TO 1930. (1914 = 1914

1915

IBON AND STEEL«...

100

99

Eastern Great Lakes . . . Pittsburgh . . Southern

100 100 100 100

99 99 100 98

100) 1916

1919

1920

163

256

280

177 165 157 152

256 248 252 226

289 288 279 272

1917

1918

WOOLEN GOODS'"

New York New Jersey . . . Massachusetts . Rhode Island . . Connecticut . . . Maine New Hampshire

100

123

100 100 100 100

123 123 121

205 181

402 365

193 186 158

361 348 325

112

197 172

319 307

100

101

159

399

100

106 123 116 120

173 187 224

393

100

153

393 385 339 317

107

173

297

123 121

100 100

COTTON GOODSC

South Carolina. North Carolina Massachusetts . Maine Rhode Island .. Georgia Alabama

100 100 100 100 100

211

LüMBBB d

Washington Oregon Mississippi Alabama California Louisiana

...

100 100 100 100 100

87

223

87 93 84

218 217

96

190 181

192

100

96

U. S. Average 100 E. So. Central. 100 South Atlantic. 100 E. No. Central. 100 W. So. Central 100 Middle Atlantic 100 W. No. Central 100 New England.. 100 Pacific 100 Mountain 100

100

115

100 100

106 114

100

114

100

106 120

ROAD BUILDING*

100 100 100 100 100

112 125 106 112

140 142 150

180 192

138 131

186 175

150

190

136 155

180

205 212

195 173 169

205 200 181

138 138

193

205 233 229 205 225

245 267 264 252 250 250 248 245 231 212

INFLATION

AND

DEFLATION

119

than did steel. A n d every woolen g o o d s state shown in the next table is in the northeast region. Compare the relative w a g e changes of the N e w Y o r k woolen mills w i t h those of

New

Hampshire or Maine. These differences are greater than any which occurred within the steel industry. T h e evidence f r o m the cotton mills is bewildering. S o u t h Carolina had the greatest relative wage increase in the industry, a neighboring state, A l a b a m a had the least. Massachusetts, the leader in the north, had an increase which was less than that of South Carolina. T h e woolen and cotton industries must not be regarded as exceptions. Table 2 9 shows that the lumber mills o f Mississippi had relative w a g e increases which were almost identical w i t h those of Oregon. In road building, the East South Central region and the South Atlantic states had relative w a g e increases greater than those of any other region, and the W e s t South Central region had a w a g e increase equal to that of the Middle Atlantic and one which surpassed N e w England's. Obviously, any generalization about regional variations in the total relative w a g e increases of unskilled laborers from 1 9 1 4 to 1920 would be impossible to make. It would seem best to say about regional w a g e changes what has already been said about industry w a g e changes. In every region, the total w a g e changes were substantial, up to 1 9 1 7 the w a g e increases were comparatively small, thereafter they became much larger. »Bulletin 567, p. 16, U. S. Bureau of Labor Statistics. No data are available for 1916 or 1918. •> Bulletin 604, p. 409, U. S. Bureau of Labor Statistics. No data are available for 1915, 1917 or 1919. c Bulletin 604, p. 372, U. S. Bureau of Labor Statistics. These data refer to the hourly earnings of drawing-frame tenders. No data are available for 1915, 1917 or 1919. d Bulletin 604, p. 464. For Oregon data see Bulletin 225, p. 34, and Bulletin 265, p. 359. Here 1914 is assumed to be the same as 1913. No data are available for 1916, 1917 and 1918, or for 1920. * Bureau of Public Roads, U. S. Department of Agriculture. See Survey of Current Business, Supplement 19S6, p. 42. No data are available for 1914. Here 1914 is assumed to be the same as 1915.

120

WAGES

OF

FARM

WAGE

AND

FACTORY

LABORERS

DIFFERENTIALS

F o r all these w a g e variations no single explanation can be given. H o w e v e r , a possible reason for them can be disposed o f : the great difference in the w a g e changes of unskilled laborers 1914-1920 cannot be traced to any deliberate effort by government or by industry to equalize wage rates. N o r can it be said that the final effect of all the various w a g e changes was an actual equalization of the wage rates of unskilled labor. O n the contrary, the wage differentials of unskilled labor were much greater in 1920 than in 1914. T h i s topic is extremely broad and the following evidence about it must necessarily be brief. T h e federal government established in 1 9 1 9 a u n i f o r m rate of $3.44 per day for unskilled laborers in government arsenals. 24 F o r other employees, it made no attempt to equalize w a g e rates, or even to advance their w a g e rates to keep pace with the rising cost of living. Generally speaking, the wage increases received by government employees between 1 9 1 7 and 1920 were much less than those received in private industries and " S u r v e y i n g the whole situation, it does not seem too much to say that the Government's only policy in regard to wages has been to have no policy." 2 8 Manufacturing has always had an enormous range of hourly wage rates and hourly earnings of unskilled labor. In

1914

some factory laborers received as much as 28.8 cents an hour, others as little as 16.8 cents. A s of 1920, the average hourly earnings of unskilled labor in manufacturing were 52.9 cents. A b o u t 10 cents an hour more was paid in rubber goods, boot and shoe mills paid 6.6 cents less. S i x of twenty-one industries then paid less than 50 cents an hour, nine industries paid more than 55 cents.

Numerous examples of inter-industry

wage

differentials in 1920 or in 1 9 1 4 could be readily cited from the 24 Monthly Labor Review, October 1919, pp. 126-30, U. S. Bureau of Labor Statistics. 25 Ibid., June 1920, p. 34. See pp. 19-35 f ° r a review of the salary changes of government employees between 1917 and 1920.

INFLATION

AND

DEFLATION

121

w a g e reports of the Bureau of Labor Statistics or o f the N a tional Industrial Conference B o a r d

But it would be pointless

to do so. W a g e differentials of unskilled factory labor have always existed. T h e question i s : W e r e the differences in the hourly wages of factory laborers g r e a t e r — o r less—in 1920 than in 1 9 1 4 ? W a g e differentials can be shown 1 ) by comparing the wages of one industry with another or with the average w a g e , 2 ) by computing the standard deviation o f the average w a g e and determining its change over time.

T h e latter method is the

more informative. In 1914, the average hourly earnings of unskilled factory laborers in twenty-one industries amounted to 20.3 cents.

S o m e industries paid less than 18 cents an h o u r —

cotton goods, furniture, hosiery and knit goods. Others paid as much as 22 cents or more—agricultural implements, electrical goods, paper and pulp. T h e standard deviation of the average hourly earnings o f unskilled factory laborers in 1 9 1 4 was 3.1 cents. W h e n hourly earnings rose between 1 9 1 4 and 1920 the standard deviation did not decrease. Instead, it increased and by 1920 it was 5.0 cents.2® Since the comparison involves units of measurement which are absolutely identical, i. e., average hourly earnings of unskilled factory laborers, the standard deviation of 1 9 1 4 can be directly compared with that of 1920. W h e n this is done, it appears that the inter-industry wage differential of unskilled factory laborers was greater in 1920 than in 1914. O f more importance is the following evidence about intraindustry

w a g e differentials of unskilled laborers. In every one

of the following industries the standard deviation of the average hourly earnings was much largfer in 1920 than in 1914. ( S e e Table 3 1 ) . 26 Both these standard deviations were computed from the wage records of the National Industrial Conference Board. The formula used to compute jt the standard deviation is, in this case, standard deviation a = - y ^ where d equals deviations from the average, and N equals the number of items in the average.

122

WAGES OF

FARM

AND

FACTORY

LABORERS

Woolen Goods: Massachusetts, the center of woolen-goods manufacture, in 1 9 1 4 paid less per hour to dyehouse laborers of woolen mills than did Maine, New Hampshire or Connecticut. In 1920 she paid more than any of them. On the other hand, New Jersey preserved its wage differential over Massachusetts and increased it from 1.5 cents per hour in 1 9 1 4 to 6.0 cents in 1920. All these states are in the Northeast, a region which is known to have comparatively high wage rates. Once again, it is possible to compare two standard deviations: in 1 9 1 4 , the standard deviations of the hourly earnings of dyehouse laborers in woolen mills was 1.3 cents, in 1920 it was 3.6 cents.27 Iron and Steel: In 1907, Pittsburgh steel mills paid common laborers hourly earnings of 15.4 cents, southern mills paid 13.0 cents. Between 1907 and 1 9 1 4 this differential of 2.4 cents grew to 4.4 cents and subsequently widened to 13.4 cents by 1920. Less spectacular but, to be noted nevertheless, is the increase in the wage differential of the Pittsburgh area over the eastern region. This grew from 3.4 cents in 1 9 1 4 to 7.9 cents in 1920. The standard deviation of hourly earnings of common laborers in iron and steel was 1.7 cents in 1 9 1 4 , six years later it was 5.9 cents.28 Cotton Goods: From this industry come the classic examples of intra-industry wage differentials. Wage rates and earnings of northern cotton mills have always been higher than those in the South. So much attention has been paid to this particular fact that another fact of equal importance may have been overlooked. There are many examples of wage differentials within the textiles-states of the North, and also, within the South. Intra-regional wage differentials exist in cotton goods and in 27 U. S. Bureau of Labor Statistics, Bulletin 604, p. 409. The states included in the above data are: Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island. The average hourly earnings of dyehouse laborers in these states were 16.1 cents an hour in 1914, and 55.5 cents in 1920. 28 U. S. Bureau of Labor Statistics, Bulletin 567, p. 16. The region included in the above data are: Pittsburgh, Eastern, Southern, Great Lakes and Middle West.

INFLATION

AND

DEFLATION

123

some instances they are greater than those which prevail between the North and the South. For example: Massachusetts paid drawing frame-tenders of cotton mills 13.3 cents an hour in 1914, whereas North Carolina, wage leader of the South, paid but 11.9 cents. B y 1920, this inter-regional difference of 1.4 cents had increased to 5.5 cents. This, of course, is a big increase but it is less than that which occurred between the Pittsburgh and southern steel mills (7.9 cents) and also less than that which took place between the woolen mills of N e w Jersey and Massachusetts (6.0 cents). Furthermore, it is less than the increased wage differentials of unskilled laborers which occurred within the cotton-textile states 0} both the North and the South. Between 1914 and 1920 Massachusetts increased its wage differential over Rhode Island and Maine by 7.7 cents an hour respectively. North Carolina in the same period increased its wage differential over the neighboring states of South Carolina, Georgia, and Alabama by 4.4 cents, 11.7 cents, and 16.4 cents respectively. 29 Apparently, then, evidence about the wage differentials of a given industry should not be restricted to inter-regional comparisons. Within a region, the wage differential of a given industry may be quite large and may greatly increase in a period of wage expansion. This is true of both high-wage regions (woolen mills in the Northeast) and low-wage regions (cotton mills in the South). Lumber Saw Mills: North Carolina pays the highest factory wages in the South, except in lumber saw mills. Louisiana, in 1913, was the wage leader of that industry. T o laborers in the 29 These wage differentials were measured f r o m wage data for d r a w i n g f r a m e t e n d e r s of t h e c o t t o n mills. Bulletin 604, p. 672, U . S. B u r e a u of L a b o r S t a t i s t i c s . T h e a v e r a g e h o u r l y e a r n i n g s of d r a w i n g - f r a m e t e n d e r s i n Alabama, Georgia, Maine, Massachusetts, N o r t h Carolina, Rhode Island a n d S o u t h C a r o l i n a w e r e i t . 4 cents per h o u r in 1914. T h e s t a n d a r d d e v i a t i o n of t h e a v e r a g e h o u r l y e a r n i n g s in 1914 w a s 1.3 cents, in 1920 it w a s 5.9 cents. T h e r e a d e r will recall o u r a r g u m e n t a b o u t u s i n g the h o u r l y w a g e s of d r a w i n g - f r a m e t e n d e r s a s a representative of the changes in t h e h o u r l y w a g e s of u n s k i l l e d labor in c o t t o n mills—see pp. 75-78.

124

W A G E S OF F A R M

AND

FACTORY

LABORERS

lumber saw mills it paid more per hour than did Alabama, Georgia, Mississippi, North Carolina, Florida or South Carolina. Between 1913 and 1919, Louisiana increased its wage lead of 1913 over Alabama, Georgia and Florida and maintained its lead over North Carolina. South Carolina, however, reduced the differential between itself and Louisiana by one cent an hour. Mississippi went further and cut an unfavorable wage differential from 2.7 cents ( 1 9 1 3 ) to zero in 1919. Lumber mills of the Far West had a most unusual wage change. Oregon in 1913 paid hourly earnings of 23.5 cents an hour to laborers, 2.8 cents more than did California saw mills. As of 1919, the differential of Oregon over California had increased to 13.1 cents an hour. Oregon's differential over Washington in 1913 was almost negligible—0.5 cents an hour. Six years later it was 1.2 cents. Thus, within the Far West and within the South, the wage differential of laborers in lumber mills did not narrow, but widened perceptibly between 1913 and 1919. And between the South and the West the regional wage differential of 6.8 cents an hour ( 1 9 1 3 ) grew to 24.9 cents ( 1 9 1 9 ) . The standard deviations of the average hourly earnings of laborers in the lumber mills of Alabama, Georgia, Louisiana, Florida, Mississippi, North Carolina, South Carolina, Oregon, California was 4.2 cents an hour in 1913, in 1919 it was 10.5 cents.30 Road Building: Continuously, since 1915» the nine geographic regions have reported the hourly wage rates paid to common laborers in road building. How much the regional wage differentials of these workers changed between that date and 1920 is shown in the next table. Since this is the only industry which has a continuous record of wage rates of common labor for all regions of the country, the data of Table 30 merit more than casual attention. Wage rates in the three southern regions dropped further and further away from the average 30 U. S. Bureau of Labor Statistics, Bulletin 225, p. 34 for 1913, and Bulletin 265, pp. 359-60 for 1919.

I N F L A T I O N AND DEFLATION

I25

national w a g e so that by 1920 their distance from the average was double what it had been in 1 9 1 5 . T h e opposite occurred in the W e s t N o r t h Central states and in the Pacific States. N o t e also the increases in the standard deviation of the average hourly rate. A f t e r five years of w a g e increases it was 100 per cent larger than it had been in 1 9 1 5 . TABLE 30. Regional Differences in the Houblt Wage Rates or Common Laborers in Road Buildino, 1915 to 1920. (Cents peb Hour)* 1915 1916. 1917 1918 1919 1920 20

Average Wage Rates (U. S.) Regional Difference + or—U. S. Average: New England Middle Atlantic East North Central West North Central Mountain Pacific West South Central South Atlantic East South Central Standard Deviation of Average Wage Rate

.. .. •• .. ,. . . . .

23

28

36

41

49

+0c. +2c. +3c. +3c. -fOc. 4-0c. +0 +1 +2 +2 +0 +1 +3 +2 +4 +1 +1 +1 +12 + 1 3 + 5 + 5 +« +6 +6 +8 +8 +a +6 + 8 + 5 +12 + 9 +11 + 1 1 —4 — « —7 —8 —5 —9 —6 —7 —7 —9 —9 —12 —8 —10 —11 —13 —13 —17 4.9c. 5.5c. 7.2c.

7.9c. 8.0c. 9.7c.

1

U . S. Bureau of Public Roads, Survey of Current Business, Supplement 1936, p. 42. F r o m three regions, which in 1915 paid more than the average rate, comes evidence which is perplexing. T h e Mountain region, by 1920, led the average rate by the same amount which it did in 1 9 1 5 — 6 cents. O n the other hand, the W e s t N o r t h Central states and the Pacific regions increased their favorable position over the average by sizable amounts. To summarize:

T h e hourly wage differentials of unskilled

laborers were, according to all available wage series, notably larger in 1920 than before the start of W o r l d W a r I. T o this statement there is no exception. A m o n g industries,

among

regions of the same industry, and, in the case of woolen goods,

126

WAGES

OF

FARM

AND

FACTORY

LABORERS

cotton goods, and lumber mills, within a given region of the same industry, the w a g e differential of common labor widened considerably between 1 9 1 4 and 1920. Table 31

summarizes

the g r o w t h in the standard deviations of average hourly earnings which occurred between 1 9 1 4 and 1920. T o be especially noted is the fact that intra-industry increases in the standard deviation were much larger than the inter-industry increase. TABLE

31.

T H E STANDARD DEVIATIONS OP AVERAGE HOUBLY WAGES OF U N S K I L L E D LABOREBS, 1 9 1 4 AND

1914

1920

3.1c.

5.0c.

1920

Increase 1914-1920 Cents per hour Per cent increase

Inter-Industry (NJ.C.B.) Intra-industry: Woolen Goods Iron and Steel Cotton Goods Lumber Saw Mills... Road Building » 1913.

B

1915.

13 1.7 13 4.2» 4.9"

3.6 5.9 5.9 10.5' 9.7

1.9 c. 23 4.2 4.6 63

61% 126 247 354 150 98

« 1919.

W A G E S OF S K I L L E D A N D U N S K I L L E D W O R K E R S ,

1914-1922

Manufacturing between 1 9 1 5 and 1920 actively competed for labor of every type with the result that the w a g e rates of factory workers, skilled and unskilled, rose higher and higher. Meanwhile, the supply of unskilled labor w a s decreasing. Immigration, always a prime source of unskilled labor, was so sharply curtailed by the w a r that between 1 9 1 5 and 1 9 1 9 the entire immigration was less than that of 1914. In addition the supply of common laborers w a s further reduced when it was needed most, because " T h e d r a f t removed from industry a larger percentage of the unskilled than of any other g r o u p . "

31

Thus,

as in the case of f a r m laborers, an increasing demand for labor had to be satisfied out of a dwindling supply. U n d e r 31 P. H. Douglas, Real Wages in the United States 1890-1926, p. 178, 1930.

INFLATION

AND

\2J

DEFLATION

the circumstances, hourly wages of unskilled laborers were bound to have large increases. In sixteen of twenty-one industries, the relative increase in the hourly earnings of unskilled labor exceeded those of skilled workers. T h e average increase in the latter's hourly earnings between 1914 and 1920 amounted to 136 per cent. This was 25 percentage points less than the average increase in the hourly wages of unskilled laborers (Table 3 2 ) . T h e post-war deflation, however, completely reversed the war-trend. A t the end of the depression ( 1 9 2 2 ) it was found that in twenty out of twenty-one industries, unskilled laborers had sustained the larger relative wage slash between 1920 and 1922. TABLE

32.

HOURLY EARNINGS OF SKILLED AND U N S K I L L E D WORKERS IN MANUFACTURING 1 9 1 4 , 1 9 2 0 , AND 1 9 2 2 *

— Index Numbers • Skilled Unskilled Skilled Unskilled Skilled Unskilled 1914 1920 1922

29.1c. 68.7 56.6

203c. 52.9 405

100 236 195

100 261 198

100 82

100 76

» Wages, Hours, and Employment in the United Slates, 1914-1986, p. 52, National Industrial Conference Board, 1936. Data of 1914 are for July alone, of 1920 and 1922 for the last half of the year alone. FACTORY

WAGES

AND

FACTORY

PRICES

S o large were the wage increases of all factory workers (1914-1920) that at first sight one might believe that manufacturers must have paid them at the expense of profits. But it is axiomatic that a rise in wage rates does not necessarily mean a decrease in profits. W h e n a wage increase is given (or contemplated) a manufacturer can prevent a rise in labor costs by running his machines more hours a week or by introducing better machines. Theoretically, an increase in the productivity of machinery can readily absorb out of total costs an increase in wage rates. S o productive might be the new machines or the

128

WAGES

OF

FARM

AND

FACTORY

LABORERS

new techniques that total costs per unit of product may remain unchanged or actually decrease despite a sizable rise in wage rates. Even without the advantage of new machines an increase in the efficiency of labor consequent upon a wage increase can prevent labor costs from rising. Furthermore, depending upon the state of the market an increase in wage rates may be passed on to the consumer in the form of higher prices, in which event profits would not decrease and might even increase. In 1915, when the market called for more goods, the selling prices of manufactured goods rose. T o fulfill demand, factories worked more hours per week and more weeks per year. Labor costs per unit of product declined. When the United States entered the W a r in April 1917 prices again rose. Factory production increased and so did factory wages. Everyone, it was said, was making money. W a g e s were rising and so were profits. T h e business failures of 1918 and 1919 combined were less in number and in dollar volume than those of 1914. When machines run at full capacity, additional wage increases must come out of profits or capital or go into selling prices. It seems that many wage increases at the time took the latter path. According to the Census of Manufactures, selling prices of manufacured goods rose 186 per cent between 1914 and 1919, factory wages advanced 156 per cent. Measured " in dollars of constant purchasing power " labor costs per unit of product rose 3.6 per cent, selling price per unit of product increased 4.1 per cent. 32 Consumers were willing and able to pay higher prices for the products of manufacturing. Thus, manufacturers were able to pay extraordinary wage increases to all their workers among them the unskilled. Profits did not suffer and neither did capital investment. The structure of manufacturing costs was severely upset by the post-war deflation. W a g e declines between 1919 and 1921 were considerably less than those in selling prices. 33 This is not 32 F . C. Mills, Economic Tendencies in the United States, p. 231, and p. 225, and see pp. 220-237, National Bureau of Economic Research, 1932. 33 Ibid., p. 225 and p. 231. Measured in " c u r r e n t d o l l a r s " labor costs per unit of product fell 6.3 per cent, selling prices declined 21.7 per cent from 1919 to 1921.

INFLATION

AND

DEFLATION

I2g

to say that the deflation in factory w a g e s was negligible. Q u i t e the contrary. In the fifteen month interval September

1920-

December 1921 the average hourly earnings of unskilled f a c t o r y laborers fell 28 per cent. Measured by their o w n specific peaks and t r o u g h s the w a g e decreases had a wide r a n g e of declines. F i v e industries—agricultural implements, electrical g o o d s , hosiery and knit, iron and steel, and r u b b e r — c u t the h o u r l y earnings of unskilled labor by more than 35 per cent. C o n s i d e r ing the total collapse of manufacturing in the post-war deflation it is surprising to find that the hourly w a g e s did not decline even m o r e than they did. Perhaps, the timing of the w a g e movements softened their fall. F a c t o r y w a g e s started to decline, not in the opening months of

1920 when business did, but in

September. O n e year later the trough of deflation w a s reached by m a n u f a c t u r i n g whereupon prices started to rise. S o o n production and employment 6wung upward and the post-war revival w a s on its way. H a d the business revival been delayed another year or so, the hourly w a g e s of all factory w o r k e r s , especially those of unskilled laborers, would have g o n e m u c h lower than they did. A t the time business began its post-war revival

(October

1921)

the hourly wages of m a n u f a c t u r i n g

were leveling off from their deflation declines. Earlier in the chapter we saw that f a r m w a g e s followed f a r m prices t h r o u g h the inflation and subsequent deflation of W o r l d W a r I. T h e same harmony of movement is not to be found in the course of factory selling prices and factory w a g e s either f o r the w a r period or for the entire span of years between 1 9 1 4 and 1939. T h e selling price of manufactured goods,

1914-1920,

increased more than factory w a g e s did but year-to-year m o v e ments of prices and wages were not closely related. T h e data available for a comparison of factory selling prices and f a c t o r y wages Ln the y e a r s 1 9 1 4 to 1920 are none too complete but taking them as they stand they show no consistent relationship of price and w a g e movements. W e made a series of detailed comparisons of selling prices and wages in the f o l l o w i n g indus-

I3O

W A G E S OF F A S M A N D F A C T O R Y

LABORERS

tries: iron and steel, cotton goods, woolen goods, lumber, and meat packing. The aim was to ascertain, as exactly as possible, the quantitative relationship between the movement of factory wages and factory prices. A t the end we found that no valid generalization could be drawn. Generally speaking, selling prices of specified manufactured goods had Larger increases between 1 9 1 4 and 1920 than did the wages of the workers making the goods, but beyond that broad (and none-too-informative) conclusion it would be impossible to go. Over the quarter of a century which lay between 1 9 1 4 and 1939 factory wages moved along without regard to current changes in selling prices of manufactured goods. This happened for a number of reasons, chief among them being the fact that in the 1920's and 1930's wages in manufacturing tended to become relatively unflexible. " That they [wages] have long since been to some extent less flexible than prices is, of course, well known. They rise and fall less than prices and are less quick to move either up or down." 34 Furthermore, the general cost structure of manufacturing rests heavily upon costs of materials. The Census of Manufactures 1 9 1 4 to 1939 shows that the ratio of costs of materials to wages was approximately 3.5 to i. 8 5 During those years the total wage bill of manufacturing averaged about 1 5 per cent of factory selling price whereas costs of materials at no time were less than 55 per cent. Even in 1929, when total manufacturing wages were at a peak they formed but 1 6 per cent of factory selling price. They were exactly that in 19x9 at which time material costs were 60 per cent of selling price. 34 Thus, we would expect changes in factory prices to be rather closely allied with 34 J. A. Estey, Business Cycles, p. 482, 1941. Estey is here talking of wages and prices in general. His observation would apply particularly to manufacturing. 35 Costs of materials, in the Census, includes costs of materials and costs of containers, fuels, and purchased electrical energy. 36 Selling price is the " value of product" as reported by the Census of Manufactures.

INFLATION

changes

in costs

of

AND DEFLATION

materials.

And,

in fact

I3I

they

were.* 7

F a c t o r y wages, on the other hand, while they underwent severe changes in times of price

fluctuations

did not closely reflect

current variations in factory prices. R E A L W A G E S OF F A R M AND F A C T O R Y LABORERS, 1 9 1 4 TO 1 9 2 2

T h e first W o r l d W a r revolutionized the w a g e structure of this courftry and at the same time produced a tremendous upheaval in the cost of living. Retail prices w e r e slow t o rise but once started they never stopped advancing until June 1920 at which time they began a moderate decline. F o r many employees the illusion created by money w a g e increases was shattered by the rise in the cost o f living, and some workers, for example government employees and public school teachers, suffered a deep cut in their real wages. 3 8 F a r m laborers enjoyed no advance in real wages. A s is indicated in Table 34, their real monthly w a g e rates went down. D u r i n g 1918, 1919, and 1920, their real daily w a g e rates w e r e approximately 10 per cent higher than in 1914. But these gains were offset in large part by losses in four other years. A t the end of the fantastic price-wage spiral in 1922 their money wages could buy less goods than before the war. N o r w a s that all. A substantial increase in the cost of living which remained with them long after their money wages had declined was the unwelcome legacy of W o r l d W a r I to farm laborers. F a c t o r y laborers fared much b e t t e r — i n their real hourly w a g e rates. E v e n in 1922, they were 28 per cent higher than in 1914. H o w e v e r , the increases in their real weekly wages tell a different story. T h e i r relative standings in 1 9 1 5 , 1 9 1 6 , 1 9 1 7 , 1 9 1 9 and 1921 were such as t o raise a doubt about the extent of the gain in their real annual wages. If in any of those y e a r s they failed to find a full year's employment, then in that y e a r — 37 See F . C. Mills, Economic

Tendencies in the United States, p. 225,

and p. 384, National Bureau of Economic Research, 1932. 38 P . H . Douglas, Real Wages in the United States, 1890-19x6, p. 194-5,

p. 201, 1930.

132

WAGES OF FARM AND FACTORY LABORERS

o r y e a r s — t h e i r real annual wages were less than they had been in 1 9 1 4 . V e r y likely it is that when unemployment began to spread in the summer of 1 9 2 0 , unskilled factory laborers were soon faced w i t h acute distress. TABLE

33.

I N D E X N U M B E R S OF R E A L WAGES OP FABM LABOBERS AND FACTOBT LABORERS,

1914

TO

1922. (1914 = 100)

Farm Laborers • Daily Monthly 1914 1915 1916 1917 1918 1919 1920 1921 1922

100 98 98 100 108 Ill 110 93 98

100 99 99 100 102 99 100 94 98

Factory Laborers b Hourly Weekly 100 106 110 111 126 125 140 117 128

100 101 104 103 112 106 121 108 125

• Money Wages are from Farm Wage Rates, Farm Employment and Related Data, p. 4 U. S. Bureau of Agricultural Economics, 1943. Price data are from Index Numbers 0/ Prices Paid by Farmers for Commodities 1910-1988, U. S. Bureau of Agricultural Economics. b Money wages 1914 to 1920 are from the New York Federal Reserve Bank (October 1914-January 1915 = 100). Money wage data December 1921 and December 1922 are from the National Industrial Conference Board, N. Y. (July 1914= 100). Retail prices are from Changes in the Cost of Living in Large Cities in the United States 1913-19+1, Bulletin 699, p. 43, U. S. Bureau of Labor Statistics. 1941. A l l indexes shown above in T a b l e 3 3 w e r e derived by dividing indexes of money w a g e s by indexes of retail prices. I n Chapter I I I there is a brief discussion about the sources of the retail price data here used. T h e compilation of the indexes f o r f a r m laborers w a s simple because their money wages and the prices they pay are reported annually. H o w e v e r , in deriving the indexes for factory laborers it w a s first necessary to solve the problems which arose f r o m the f o l l o w i n g f a c t s : 1 ) there are n o conftinuous data on their money w a g e s f r o m 1 9 1 4 to 1 9 2 0 ; 2 ) the indexes of the retail prices they pay are reported

INFLATION

AND

DEFLATION

133

between 1 9 1 4 and 1 9 1 8 for December alone not for the entire year. F o l l o w i n g is our solution of these t w o problems. T h e w a g e data for unskilled factory laborers f o r the y e a r s 1 9 1 4 to 1920 were taken f r o m the quarterly w a g e reports of the N e w Y o r k Federal R e s e r v e B a n k . Since the retail price data are for December alone, the O c t o b e r w a g e rate of a g i v e n year w a s averaged w i t h that of J a n u a r y of the f o l l o w i n g year. M o n e y w a g e data for 1921 and 1922 w e r e taken f r o m the records of the N a t i o n a l

Industrial C o n f e r e n c e B o a r d .

To

preserve

comparability the December w a g e data of 1921 and 1922, not the annual figures, w e r e used. W h y w e feel justified in fusing the money w a g e data of these t w o series has already been explained in a footnote to Chart I (p. 1 9 ) . It is possible to compare our indexes of real w a g e s w i t h those of the Conference Board. F r o m December 1 9 1 4 to December 1920, w e found that real hourly w a g e s and the real weekly w a g e s of unskilled factory laborers increased 40 percent and 21 per cent respectively. T h e Conference B o a r d reports that f r o m July 1 9 1 4 to December 1920 the respective increases were 42 percent and 25 percent. Some part of these modest differences is traceable to the differences in the dates of measurement and also to the differences in the indexes of retail prices used to compute the real w a g e s of these laborers. T h e Conference B o a r d uses its o w n index of retail prices; w e used those published by the B u r e a u of L a b o r Statistics.

CHAPTER V RECOVERY AND STABILITY, 1922-1929 MANUFACTURING

began a post-war revival in the Fall of

1921. Encouraged by the demands of an extraordinary boom in building construction, and paced by automobile production, all the industries of manufacturing increased output, employment, and payrolls. F r o m December 1921

1

to April 1924 the

average hourly earnings of unskilled factory laborers increased 20 per cent which gain w a s almost double the revival-increase of f a r m wages, 11 per cent, from 1922 to 1924. Both farm wages and factory wages as is indicated in Table 34 varied very little between 1924 and 1929. T r u e , there were some w a g e ripples in those years but they were minor undulations, and, compared to those of W o r l d W a r I and those that were to come in the Great Depression, they were

almost

negligible. F r o m the viewpoint of wages the years 1924-1929 were a lull between t w o storms. TABLE

34.

HOURLY E A R N I N G S OF FACTORY LABORERS AND DAILY WAGE RATES OF F A S M LABORERS, 1 9 2 4 TO 1 9 2 9 .

Factory Laborers Hourly Earnings •

Farm Laborers Daily Wage Rates, no board

1924

455c.

1925

45.5

229

1926 1927 1928 1929

46.1 47.1 47.4 48.6

231 228 227 225

b

229c.

» Wages, Hours, and Employment in the United States, 19H-19S6, p. 52, National Industrial Conference Board, 1936. *>Farm Wage Rates, Farm Employment, and Related Data, pp. 3-4, U. S. Bureau of Agricultural Economics, 1943. 1 It is impossible to date exactly the revival turning point in the hourly earnings of unskilled factory labor because there is a gap in the wage data from January 1922 to June 1922. December 1921 was selected as the date because average hourly earnings were then at their recorded post-war deflation low—38.8 cents an hour. In July 1922, they were 39.0 cents per hour.

134

RECOVERY

AND

STABILITY

135

In the cyclical contraction of June 1923-July 1924, the hourly earnings of factory laborers did not decline; instead they increased .9 cents an hour. They remained unchanged in the recession of November 1926-1927. The greatest change they had came between January 1928 and September 1929, when they rose 2 cents an hour. N o one would expect, of course, that every single industry, once it had experienced its post-war revival, would share this unusual wage stability. Lumber and millwork plants, from July 1923 to September 1929 advanced the hourly earnings of unskilled laborers from 38.4 cents to 48.2. Contrariwise, woolen mills in the same period dropped hourly earnings from 49.6 cents to 45.2. Unskilled laborers in cotton mills ( N o r t h ) lost ground steadily and in September 1929 received 6.3 cents an hour less than in May 1923. These three industries were outstanding exceptions. Most other unskilled factory laborers picked up an extra two or three cents an hour in these years, the major part of which gain came in the twenty-months expansion which preceded September 1929. Those hourly wage rates of which there is an annual record show a stability even greater than that manifested in hourly earnings. The hourly wage rates paid to common laborers by the United States Steel Corporation from 1924 to 1929 remained unchanged at 44.0 cents an hour. 2 O n road building projects, common laborers in 1923 received 38 cents an hour and 39 cents in I929. s In New Y o r k City the hiring rate for unskilled male laborers in July 1923 was 48.4 cents an hour, in January 1929 was 49.6 cents. 4 According to the Bureau of Labor Statistics, the entrance rate per hour for adult male unskilled laborers in 1926 was 40.1 cents and in succeeding years 2 Survey of Current Business, 1932 Supplement, of Foreign and D o m e s t i c Commerce.

pp. 70-71, U . S. Bureau

3 U . S . Bureau of Public Roads, Survey of Current Business, 1936 ment, p. 45, U . S . Bureau of F o r e i g n and D o m e s t i c Commerce. 4 The

Federal

Department.

Reserve

Bank,

Second

District,

New

York,

Supple-

Research

136

WAGES

OF

FARM

AND

FACTORY

LABORERS

w a s 39.9 cents, 40.2 cents and 40.7 cents. 5 In general, the hourly earnings of skilled factory w o r k e r s had practically the same stability. F o r the moment, m a n u f a c t u r i n g seemed committed to an unannounced policy of maintaining hourly wages, pref e r r i n g to m a k e necessary labor changes by laying off workers or by decreasing the w o r k i n g hours per week. F r o m time to time, the factories in the face o f falling price levels and diminishing markets had to r e a d j u s t employment schedules but these a d j u s t m e n t s had little or 110 effect on the hourly w a g e rates or h o u r l y earnings o f f a c t o r y laborers. M u c h less steady w a s the course of the laborers'

weekly

w a g e s , but practically all their variations are clearly traceable to changes in the number of hours w o r k e d per week, not to any change in h o u r l y w a g e s . F o r example, in the depression w h i c h began in M a y 1923, hours w o r k e d per week declined f r o m 50.9 to 4 7 . 1 in July 1 9 2 4 — a decrease of 7.5 per cent. 6 H o u r l y earnings in the same period did not decrease. Instead they increased 2 per cent. T h e depression phase of the next business cycle saw hourly earnings remain the same whereas hours w o r k e d per week declined 2.2 per cent. 7 Production, employment, and selling prices had some w i d e s w i n g s f r o m 1923 to 1 9 2 9 but on the w h o l e they produced little variation in the h o u r l y w a g e s o f factory w o r k e r s . F a r m e r s in the post-war period had to contend w i t h an uncertain domestic market and w i t h a failing market abroad. T h a t wheat, cotton, and other m a j o r crops w o u l d fal) from their war-peaks w a s an eventuality to be expected. T h e crash, w h e n it came, w a s far more severe than even the pessimists anticipated. H o w e v e r , the f a r m price recovery w a s strong, but unfortunately it w a s temporary. In 1 9 2 1 , " a l l " 5 Monthly

Labor

Review,

January

1942, p . 173, U .

farm prices

S . B u r e a u of

Labor

Statistics. 6 Wages,

Hours,

and Employment

in the United

53, N a t i o n a l I n d u s t r i a l C o n f e r e n c e B o a r d , 1936. 7 Ibid.,

p. 53.

States,

1914-1936,

p p . 52-

RECOVERY

AND STABILITY

I37

cent. 8

began to rise, and in one year they advanced 8 per Cotton rose from 13.5 cents a pound ( 1 9 2 1 ) to 20.8 cents and then to 28.0 cents in 1923.® For many farmers, the future in spite of higher production costs, was bright. They saw corn prices under the surge of a steady pull, increase 86 per cent between June 1921 and 1925. 1 0 Wheat was late to r e v i v e — 1 9 2 3 — b u t with its upturn it went from 94.2 cents per bushel to 145.8 cents in the next two years. 1 1 However, these and other farm prices soon weakened and faltered. Wheat prices started to slump off in 1925 and despite some temporary revivals began a long descent to the abyss of 1932. 12 Cotton really never recovered its price position of 1923, although it did steady itself from 1927 to 1929 at approximately 18 cents a pound. 13 Indications were abundant that the export market would no longer absorb its former amount of American produce, and the effect of dietary changes of our people, together with the decline of the birth rate, added to the difficulties of the farm market. Apparently the " P r o s p e r i t y " of the 1920's was not for the farmers or their hired hands. In the preceding chapter we saw that farm wage rates lagged behind farm prices when the latter began to revive in 1922. Farm wage rates ended their deflation decline in 1922, and in the next two years rose 11 per cent (daily, without board) and 14 per cent (monthly without board). Both these gains, it will be noted, were less than those in the hourly wages of factory workers in the same period. 8 Agricultural 1941.

Statistics,

1941, p. 556, U. S. Department of Agriculture,

9 F. Strauss and L. H . Bean, Cross Farm Income and Indices of Farm Production and Prices in the United States 1869-1937, p. 143, U . S. D e p a r t ment of Agriculture, Technical Bulletin, No. 703, 1940. 10 Ibid. 11 Ibid. 12 Ibid. 13 Ibid.

138

W A G E S OF F A R M

AND FACTORY

LABORERS

Between 1924 and 1929 the daily wage rates of farm laborers were extremely stable, the 1929 wage rate being 4 cents a day less than that of 1924 (Table 34). Midway between these years — i n 1926—there came the highpoint of post-war farm wages, at which time the daily wage rate, without board, was $2.31. This was only 2 cents a day more than the rate of 1924. The stability of farm wages in this period is quite remarkable because at the time farm prices underwent some unusual variations. N o movement in farm wage rates occurred from 1925 to 1926 even though farm prices fell 12 per cent. Next year when farm prices rose 8 per cent wage rates again remained unchanged. Probably, these price movements were too short-lived to produce any change in wages. Specific farm crops — w h e a t , cotton, corn—had their own independent price-swings between 1923 and 1929, but for the most part the farm wage rates of the various crop regions exhibited no tendency to follow either the advances or the declines in farm prices. Slightly more fluid were the monthly wage rates of farm laborers but in no sense did they respond to changes in farm prices. A s already stated they increased 14 per cent between 1922 and 1924. They rose again in the next two years but only by minute amounts, leveled off during the following two years and then rose slightly in 1929. Between 1924 and 1929, the monthly wage rate without board, increased from $49.32 to $51.22. Figured on a basis of 20 working days to the month this gain of $1.90 amounted to 9.5 cents a day. A s small as it was, this gain was greater than that achieved by day laborers. Perhaps, it was caused by a weak bid for the more capable farm laborers who were being attracted to the cities by the higher wages, shorter hours, and better working conditions of the factories. T h e stability of farm wage rates, 1924-1929, is a partial contradiction of the rather positive statements made in Chapter I V about the close relationship between farm wages and farm prices. However, it must be remembered that between 1924

RECOVERY AND S T A B I L I T Y

I39

and 1929 farm prices did not change their direction for any appreciable length of time but rather suffered temporary declines which were followed by shaky recoveries. When farm prices collapsed in the Great Depression ( 1 9 2 9 - 1 9 3 3 ) the price-wage relationship of agriculture was once again clearly exhibited. One of the unmistakable landmarks in the economic history of the United States is the year 1929. That fateful year marked the beginning of the Great Depression which produced, among other things, falling wages and mass unemployment of unprecedented size. That year completed a unique chapter and began another in the history of American wages. Thus, it is a good vantage point at which to pause for a moment in order to survey the more important wage changes which occurred between 1 9 1 4 and 1929. Farm wages from 1 9 1 4 to 1929 had increases much smaller than those of the factories (Table 3 5 ) . Although monthly TABLE 35. PEB

CENT

I N C H EASES I N

MONET

WAGES

AND R E A L

FACTORY LABORERS, 1 9 1 4 TO

Money Wages Farm Laborers" Daily, without board Monthly, without b o a r d . . Factory Laborers b Hourly earnings .. Weekly earnings

WAGES

or

FARM

AND

1929

Real Wages

+57% +72

+ 5% +15

+139% +128

+41% +36

»Money wages are from Farm Wage Rates, Farm Employment, and Related Data, pp. 3-4, U. S. Bureau of Agricultural Economics, 1943. T h e indexes of prices used to compute the changes in real wages of farm laborers refer to the prices paid for commodities used " for living ". They are taken from Index Numbers of Prices Paid and Prices Received, Table 2, Column 3, U. S. Bureau of Agricultural Economics, July 1941. b

Money wages are from Wages, Hours, and Employment in the United States, 1914-1936, pp. 52-54, National Industrial Conference Board, 1936. The indexes of prices used to compute the changes in real wages of factory laborers are from Changes in the Cost 0/ Living in Large Cities in the United States 1913-41, p. 43, Bulletin 669, U. S. Bureau of Labor Statistics, 1941.

I40

wage

WAGES

rates

of

OF

FARM

farm

AND

laborers

FACTORY

LABORERS

advanced

more

than

daily

wage rates, their increase was considerably less than those in either the weekly or hourly earnings of factory laborers. Unfortunately, there ting

the

1914-29

is no way

changes

in

of

the

measuring real

or

earnings

estimaof

farm

laborers hired by the day or month with board. W e do know that the increase in their money wages was not exceptionally large, 1 4 and it is extremely doubtful whether the increase in real value of their board, lodging, and perquisites was so great as to lead to the belief that the 1 9 1 4 - 2 9 rise in their real earnings approximated that of factory laborers'. Table 3 6 compares the hourly wages of factory laborers, road-building laborers and f a r m laborers in 1 9 1 4 and 1929. If carelessly made, comparisons between f a r m wages and factory wages can be extremely misleading because, unlike factory workers, f a r m laborers receive in addition to a money wage certain perquisites which are of no little value to them. In Chapter V I I the reader will find data about the monthly and annual earnings (cash and perquisites) of f a r m laborers. F a r m wage data shown below in Table 3 6 deal solely with the hourly wage rates of f a r m laborers hired without board. T h e y do not include perquisites. B y a conversion factor of 20—the estimated number of f a r m working days in a month—the monthly wage rates were reduced to daily wage rates. Daily wage rates were then changed to hourly wage rates by dividing them by 10, on the assumption that in 1 9 1 4 and 1 9 2 9 f a r m laborers worked ten hours a day. W h y were the hourly wage rates of factory laborers in 1 9 2 9 so much lower than the hourly earnings? In the first place because the industry coverage of the wage reports, whence the figures are taken, is not the same. T h e wage sample of the Bureau of Labor Statistics covers nine industries, the Confer14 Between 1914 and 1929 the money wages of farm laborers hired beard rose 80 per cent (monthly) and 68 per cent (daily).

with

RECOVERY

AND

STABILITY

I4I

ence B o a r d covers twenty-one, m a n y of w h i c h pay relatively h i g h wages. Secondly, the hourly w a g e rates ( B . L . S . ) entrance

rates,

are

not the a v e r a g e h o u r l y rates of all laborers

employed. A f t e r some time on the j o b , laborers receive an increase in w a g e rates. A s s u m i n g that the increase amounted to 15 per cent, the a v e r a g e h o u r l y rate o f f a c t o r y laborers in 1 9 2 9 w o u l d be approximately

4 7 cents in those

industries

covered by the B u r e a u of L a b o r Statistics. T o those readers w h o might believe that the hourly earnings o f factory laborers in 1 9 2 9 contained some overtime payments, w e must g i v e some i n f o r m a t i o n about hours o f w o r k in that year. A c c o r d i n g to the Conference B o a r d unskilled

laborers

worked 50.2 hours per week in 1929. T h e full-time ( s t a n d a r d ) w o r k week of manufacturing in that year w a s 50.6 hours according to the Census o f M a n u f a c t u r e s , and 49.6 according to the Conference B o a r d . 1 5 T h e latter

figure

does not include data

f r o m the iron and steel industry wherein the full-time (standa r d ) w o r k week in 1929 w a s 54.6 hours per week. 1 8 Considering the large number of laborers employed in the iron and steel industry, it w o u l d be reasonable to assume that, if the hours-data of that industry were included in the over-all average of the Conference B o a r d , then the B o a r d ' s figure of the fulltime w o r k week for all m a n u f a c t u r i n g ( 1 9 2 9 ) would be at least as high as that shown by the Census o f M a n u f a c t u r e s , i. e., 50.6 hours per week. In that event, it could not be said that f a c t o r y laborers exceeded the standard w o r k week in 1929. In 1930, a year in w h i c h there w a s surely no overtime in manufacturing, the a v e r a g e hourly earnings o f unskilled factory laborers were 47.8 cents. T h a t w a s 27.5 cents more than their hourly earnings of 15 L . Wotman, Hours

1914. of

Work

in American

Bureau of Economic Research, Bulletin 71, 1938. 16 Ibid., p. 9, Table 5.

Industry,

p. 2,

National

142

WAGES

OF F A R M

AND

TABLE

FACTORY

LABORERS

36.

H O U R L Y W A G E R A T E S OF F A R M L A B O B B I S , H O U R L Y W A G E R A T E S AND HOURLY E A R N I N G S OF FACTORY LABORERS, 1 9 1 4 AND

1929

Increase 1914

Farm Daily, without board' Monthly, without board* Factory Hourly Wage Rates (BXS.)» Hourly Earnings ( N I . C 3 . ) c . Road Building 4

1929

1914-1929

143c. 14.8

22.5c. 25.6

8.2c, 10.8

n.a. 203c. 20.0c.

40.7c. 48.6 39.0c.

283 19.0

n. a. not available • Farm Wage Rales, Farm Employment, and Related Data, pp. 3-4, U. S. Bureau of Agricultural Economics, 1943. b Monthly Labor Review, January 1941, p. 23, U. S. Bureau of Labor Statistics. c Wages, Hours, and Employment in the United States, 1914-1936, pp. 52-54, National Industrial Conference Board, 1936. Data of 1914 are for July. d U . S. Bureau of Public Roads, Survey of Current Business, 1936 Supplement, p. 45, U. S. Bureau of Foreign and Domestic Commerce. Data of 1914 are for 1915. No data are available for 1914.

CHAPTER VI DEPRESSION A N D REVIVAL, 1929-1944 IN the Great Depression, farm wage rates declined so much, that despite their recovery in the thirties, they were 30 per cent lower in 1939 than they were in 1929; on the other hand the wage rates of unskilled factory laborers were 20 per cent higher. During the first half of 1939 wages in manufacturing and agriculture remained fairly stable but shortly after the start of World War II they began to rise and, according to the latest available data, they were still rising in October 1944. Since the wage movements of 1940-44 are completely different from those of the decade 1929-39, it is not feasible to treat them as one. They must be studied separately. Most of this chapter deals with the depression and revival of agricultural and manufacturing wages in the years 1929 to 1939. The wage increases which occurred between October 1939 and October 1944 are discussed in the last part. I

Between 1929 and 1933 agriculture and manufacturing experienced a severe depression from which neither had a full recovery by the close of the fourth decade. Both industries were hit hard but judging from the 1929-39 data on prices, employment, and wages agriculture suffered even more than manufacturing did. (Table 37). The Federal Farm Board,1 which was set up in 1929 to stabilize farm prices, was unable in the face of the complete collapse in farm prices to fulfill its purpose. And although the New Deal Administration form1 Agricultural Marketing A c t of 1929, 46 Stat. L. 11. The purpose of this Act was " to help farmers by extensive development of agricultural cooperation under government auspices. The co-operatives, it was hoped, would make possible a more efficient and orderly marketing of farm commodities so as to stabilize and perhaps even raise prices. T o this end, a Federal Farm Board was established and given charge of a revolving fund of $500,000,000." C. T . Schmidt, American Farmers in the World Crisis, p. 116, N. Y . , 1941.

143

144

W A G E S OF F A R M

AND

FACTORY

LABORERS

ulated a number of farm-price plans, some of which were successfully executed, the agricultural situation even during the revival period left much to be desired. When, in 1937, success seemed about to crown the effort, farm prices again declined and two years later they were 36 per cent lower than they had been in 1929 (Table 3 7 — C o l u m n 2 ) . Farm employment in 1939 was 13 per cent lower than it was in 1929, and, of particular interest to us, farm wage rates were 30 per cent lower, whereas the wage rates of unskilled factory laborers were 20 per cent higher. According to Column 1 of the next table, farm wage rates between 1929 and 1939 declined 50 per cent. T h i s was double the decline in factory wage rates. The revival period brought large wage increases to the farm laborers but, as is shown in Column 4, they were less than those secured by factory laborers. It will be noted that the weekly earnings of factory laborers were 6 per cent lower in 1939 than at the start of the depression. This occurred because 11.6 hours work per week were dropped from their actual work week between 1929 and 1939. In the latter year they worked only 38.6 hours a week. If they had worked a full-time (standard) work week of 40 hours then their weekly earnings would have been only 2.7 per cent lower than in 1929. Compared to the gain in leisure time and freedom from toil this would have been a small loss. Data for the year 1937 are included in Table 37 in order to satisfy those readers w h o maintain that the revival phase of the Great Depression ended in 1937 and that subsequent changes to 1939 were a separate part of a new movement. Much evidence, some of which appears in Table 37, exists to support that opinion. Factory employment decreased between the Fall of 1937 and the Summer of 1938, the weekly earnings of factory laborers fell sharply, and the decline of farm prices was not without its effect on farm wage rates. It is an open question whether the economic fluctuations of 1937-8 were merely a recession (as it was then styled) or a full-sized de-

DEPRESSION

AND REVIVAL

I45

pression. That the 'slump' affected many phases of manufacturing and agriculture, particularly the latter, is apparent from the data set forth in Column 3 and Column 4 of the following table. T A B L E 37. INDEX NUMBERS o r PRODUCTION, PRICES, EMPLOYMENT, AND WAOES,

1933, 1937, AND 1939

(1) 1933

1929 = 100 (2) 1939

(3) 1937

1933 = 100 (4) 1939

PRODUCTION

Manufacturing* Agriculture 6

62 96

98 106

166 112

159 110

69 48

81 64

131 173

117 133

69 82

94 87

148 108

136 106

75 77 61

120 122 94

160 158 150

160 159 154

49 60

69 70

145 142

141 140

PRICES

Wholesale' Farm*» EMPLOYMENT

Manufacturing": Agriculture 6

, ...

WAGES

Manufacturing Unskilled Labor Hourly Rates 0 * Hourly Earnings«1* Weekly Earnings*1 Agriculture Daily, no board 6 Monthly, no board"1

...

* Hourly wage rates and hourly earnings are measured from July to July •Board of Governors of the Federal Reserve System. b U. S. Bureau of Agricultural Economics. c U. S. Bureau of Labor Statistics. d National Industrial Conference Board.

In 1933, the farm wage rates erf day laborers were half what they had been four years before. Indeed, they were in that year 22 per cent lower than their level of 1914. For ten-or-eleven hours a day, a farm laborer in 1933, working without board, received $1.11 and those w h o worked by the month without board were paid $25.67. Every region between 1929 and 1933 slashed the daily wage rates of farm laborers. T h e least de-

I46

W A G E S OF F A R M A N D F A C T O R Y

LABORERS

crease (42.5 per cent) occurred in New England; the West North Central states had the greatest decrease (58.7 per cent). Drastic as were the depression declines in farm wage rates, those in farm prices were even worse. A t first sight, the prices received by farmers in 1932 for their crops, livestock, fruits, and dairy products are almost unbelievable. Wheat sold for 37 cents a bushel, a price not to be found anywhere else in the post-Civil War record of the Bureau of Agricultural Economics.2 Cotton sold for 6.1 cents a pound, a price which equaled the price-low recorded in I897.* Some farm products — tobacco, cottonseed, and potatoes—did not sink to record lows but only in the farm depression of the 1890's are there quotations for them which were lower than those of 1932. By 1932, the price of every farm product had collapsed; dairy products were 53, fruits were 45, and meat animals 40 (base: 1 9 2 9 = 100). 4 From the Atlantic to the Pacific the farm economy was strewn with bankruptcies, foreclosures, and tax-sales. Writing in 1933 the Secretary of Agriculture summed up the situation as follows: The current depression has caused greater shrinkage in demand for farm commodities, in farm-commodity prices, and in farm incomes than has any similar decline recorded in the last 70 years.5 It is not easy to date the beginning of the farm depression. Certainly it came not as a sudden change in 1929. All through the i92o's the prices of specific farm crops wavered, and yearto-year changes of 15 per cent proved how soft and uncertain 2 F. Strauss and L. H . Bean, Gross Farm Income and Indices of Farm Production and Prices in the United States 1869-1937, p. 143, Technical Bulletin No. 703, U. S. Department of Agriculture, 1940. 3 Ibid. 4 Agricultural 19415 Yearbook >933-

Statistics, of Agriculture,

1941, p. 556, U . S. Department of Agriculture, 1933, p. 2, U. S. Department of Agriculture,

DEPRESSION

AND

REVIVAL

I47

was the farm market. In 1925, the price of wheat, corn, rye, and sweet potatoes, stood at post-war peaks. T w o years earlier, cotton, cottonseed, and tobacco were at theirs. N o farm c r o p — except rye and flaxseed—was at its post-war high in 1929, and all of them, except wheat, experienced minor price cycles between 1923 and 1926. Independently of each other, the meat animals—hogs, cattle, calves, sheep, and lambs—also had a variety of price movements in the same years. " A l l " farm prices began to recede in 1928, imperceptibly at first, and then more rapidly to the trough of 1932. T h e following year they swung upward and soon it seemed that many farm prices would return to their pre-depression levels. In 1937, however, they again declined and the end of the ' disastrous decade' found them weak and floundering. H o w closely farm wage rates followed farm prices through depression, revival, and ' recession' is indicated in the index numbers of Table 38. Note that in 1940 both farm prices and farm wage rates were 30 per cent lower than in 1927. A s happened in the inflation and deflation of 1914-22, changes in farm wage rates from 1928 to 1939 lagged behind the changes in farm prices. In 1928 and 1929 farm w a g e rates had little change despite the decline in farm prices. F a r m prices in 1933 rose, but farm wage rates continued to fall and did not rise until the following year. In 1937 farm wage rates again lagged behind changes in farm prices. T h a t year they continued to rise even though farm prices declined. Statistical representations such as those set forth in Table 38 and in Chart I V , and the arguments which draw upon them for support, are bound to evoke some criticism. The data of farm prices and of farm w a g e rates are compiled from a vast number of transactions which, as among themselves, had the most diverse changes. It would be difficult, if not impossible, to find a farm wage rate which had changes exactly the same as those set forth in Table 38. A n d it is unlikely that any single farm price had the same variations as " all " farm prices. T h e

148

W A G E S OF F A R M

AND

FACTORY

LABORERS

T A B L E 38. INDEX NUMBERS o r FABM

P K I C E S AND F A B M W A G E R A T E S , 1 9 2 7 TO 1 9 4 0 . (1927 =

" All " Farm Prices» 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940

100 99 97 71 60 42 55 70 73 85 71 63 65 70

100)

Farm Wage Rates b " All " Daily, no bd. 100 100 101 93 73 54 47 54 58 62 70 70 69 70

100 100 99 91 71 53 49 55 58 62 71 69 68 70

» Agricultural Statistics, 1941, p. 556, U. S. Bureau of Agricultural Economics 1941. Data refer to crop year. *>Farm Wage Rates, Farm Employment, and Related Data, p. 4, U. S. Bureau of Agricultural Economics, 1943. " A l l " wage rates refer to the weighted average wage rate per month, a figure which is made up of the monthly and daily wage rates, with and without board.

price declines and revivals of crops were different from those of livestock/ H o w different were the price movements of three leading crops is apparent from the diagrams of Chart I V . S o too with the decline and revival of f a r m wage rates. T h e y varied widely among themselves. Y e t the main point we are making, and the only one, would seem to be undeniable; the movement of farm wage rates between 1 9 2 7 and 1 9 3 9 was dominated by movements in f a r m prices. Much of the explanation of the unusual course of f a r m wages in those years can be readilyfound in the equally unusual course of f a r m prices. There is, of course, nothing profound about this statement, but, to the reader, as to the writer, it may come as a surprise that the relationship between the two variables actually was so close.

DEPRESSION

AND

REVIVAL

I49

Not only was there an identity of movement between the national averages of farm prices and farm w a g e rates but in specific areas, also, the cyclical variations of farm prices influenced the wage rates of farm laborers. In the West North Central States the price of wheat 9 from 1925 to 1939 decreased 26 per cent, farm wage rates in that region declined 32 per cent (Chart I V ) . Between 1925 and 1933, the price of wheat fell 57 per cent, so did the farm w a g e rates. Wheat prices started to drop in 1926 but as will be noted in Chart I V the farm wage rates of that region remained unchanged between 1925 and 1929. In chapter V it was pointed out that farm wage rates between 1924 and 1929 were extraordinarily stable and were uninfluenced by year-to-year changes in the prices of farm products. Thus, the extended wage lag which occurred in the West North Central states from 1925 to 1929 is to be regarded as a part of that general wage stability. It is not a separate and distinct w a g e movement arising for the first time in 1926 in the West North Central states alone. Wheat prices rose in 1933 but farm wage rates continued to decline and did not rise until the following year. F o r the third time farm w a g e rates again lagged in 1938 when they remained stationary despite a sharp drop in wheat prices. The second figure in Chart I V compares the cyclical changes in cotton prices and in w a g e rates of cotton pickers. A f t e r traversing a complete price cycle between 1923 and 1928, cotton in the latter year sold for 18.1 cents a pound. Cotton pickers in that year were paid a wage rate of 1.1 cents a pound. W h e n the farm price of cotton declined in 1928 the wage rates of cotton pickers also declined. In 1933 the price of cotton began to revive and so did the w a g e rates of cotton pickers. Hence, it appears that the lag in the wage rates of cotton pickers was not as pronounced as the wage lag in the W h e a t Belt or in 6 The index of wheat prices plotted in Chart I V is for the West North Central states alone. It is a weighted index number of the same composition as the one which was used in Chapter I V to show the 1914-23 wheat price changes in that particular area.

150

W A G E S OF F A R M

AND FACTORY

LABORERS

Iowa (Chart I V ) . However, in 1936 when the price of cotton fell 31 per cent the -wage rates of cotton pickers remained unchanged and had no decline until the following year. All in all the cyclical relationship between cotton prices and cotton picking w a g e rates w a s very close. A s of 1936, the cotton price was 61 and the w a g e rates af cotton pickers were 62 ( 1 9 2 7 = 1 0 0 ) . In Alabama and in Georgia the cyclical variations of cotton prices and cotton picking wage rates were practically identical with those in the entire Cotton Belt. T In Iowa the price qf corn dropped from 79 cents a bushel in 1928 to 23 cenits in 1932, whereupon it began a recovery which fasted until 1936 when it again declined. F a r m wage rates in that state as will be noted in Chart I V began their cyclical decline one year after the drop in corn prices and did not end their decline until 1933. Thus, they lagged behind changes in the price of corn at both the downturn and the upturn of the price cycle. T h e y also lagged in 1936 when they continued to rise even though the price of corn was falling. Their reaction to this price decline did not come until 1938 when they turned down slightly by which time the price of corn was again on the upturn. Since Iowa produces not only corn but also raises h o g s — a n d indeed secures most of its cash income from the sale of h o g s — i t must not be thought that farm wage rates in Iowa between 1928 and 1939 were influenced by changes in the price of corn alone. It may well be that varia7 T h e indexes (1927 = 100) of cotton prices and the wage rates of cotton pickers in Alabama and Georgia a r e as follows: ALABAMA

Cotton P r i c e » W a g e Rate, Cotton Picking »

1933 33 38

1936 67 63

GEORGIA

1932 34 38

1936 69 63

Price data for 1938 and 1939 a r e not available for individual states-. • Income P a r i t y for Agriculture, Income from Cotton and Cottonseed, P a r t I, Section 1, p. 9 for Alabama and p. 8 for Georgia, U . S. Department of Agriculture, 1938. *> Farm Wage Rates, Farm Employment, and Related Data, p. 143, U . S. Bureau of Agricultural Economics, 1943.

DEPRESSION AND REVIVAL

I 51

tions in hog prices more than those in corn prices were responsible for the current changes in farm wage rates, but because the price of hogs is not recorded for individual slates there is no way of proving or disproving a statement to that effect. W e do know that with the collapse of hog prices on the national markets the cash income of hog farmers in Iowa declined from 267 millions (1929) to 92 millions in 1932, subsequently recovered but totaled only 207 millions in 1936.® That the farm wage rates of Iowa were influenced by these changes goes without saying. Generally speaking, the amplitudes of the cyclical changes in the cash income derived from the sale of hogs in Iowa were similar to those in corn prices, so similar that the 1928-39 variations in corn prices set forth in Chart I V (Figure 3 ) can be regarded as an accurate representation of the depression and revival in the cash income derived from the sale of hogs in Iowa.' About the relationship between wage rates and the farm prices of livestock, truck vegetables, and fruits, we have said nothing. Considering the fact that in the cultivation of these products there is employed a large number of farm laborers, this omission appears to be a serious one for our general argument. No doubt, the farm wage rates of the regions wherein these products are raised were influenced by cyclical price changes in the respective products, but unfortunately there is no way of showing how much they were influenced. W e cannot logically associate the average wage rates of the entire country with the national farm price of any one given vegetable or fnrit any more than with the national farm price of either hogs, cattle, or sheep. And a comparison of farm wage rates and the farm prices of meat animals within 8 Income Parity for Agriculture, P a r t I, Section 3, Income from Hogs, 1907-37, Table 3, U. S. Department of Agriculture, 1938. Data refer to " Cash income from sales of hogs, pork, and lard." 9 Ibid.; the indexes (1929 = 100) of the cash income from the sales of hogs, pork, and lard in Iowa are 33 in 1932, 74 in 1936, and 60 in 1939. Data for 1939 are from Agricultural Statistics, 1941, p. 366, U. S. Department of Agriculture, 1941.

152

W A G E S OF F A R M A N D F A C T O R Y CHART I V .

LABORERS

MOVEMENT OF F A R M PRICES AND F A R M W A G E

RATES

I N SELECTED A R E A S , 1 9 3 5 TO 1 9 3 9

FARM PRICES

FARM WAGE. RATES

\ \

\

1 9 2 5 - 100 V

\ \

\

FIG. 1. West North Central Staito Wheat Price Farm Wage Rale, Daily, No Board — 1 1

1 9 2 8 - 100

\ \

\

S.

\

•v\ F IG. 3. Iowa Corn Price Farm Wage Rate, Daily. No Board 1 1 1925 1927 1929 1931

**

\

V

1933

1935

1937

The index numbers underlying the figures in this chart will be found in the Appendix, Table D.

1939

DEPRESSION

AND

REVIVAL

I 53

any specific region or state cannot be made because the price data for hogs, cattle, or sheep are not available for individual states. The state prices of truck vegetables are reported but they cannot be readily used for our purpose. F o r example, California leads all other states in the sale of truck vegetables, 10 but California also grows oranges, grapes, and cotton. W i t h the farm prices of which crop shall we compare the farm wage rates of California? Obviously, the cyclical price changes in all the major crops of that state influenced the 1929-1939 course of farm wage rates but to represent that fact in a graph or in a series of index numbers would produce nothing more than a confusion of statistical patterns, from which could be drawn no trustworthy judgment. These difficulties do not apply to Iowa because corn is far and away the most important crop of that state, and, as we have just pointed out, the cyclical variations of corn prices in that state were similar to those in the gross income derived from the sale of hogs. Nor do these difficulties apply to Maine or Kentucky. T h e Blue Grass state derives most of its farm income from the sale of tobacco and Maine's dependency upon the potato is legendary. Kentucky's tobacco and Maine's potatoes underwent a price cycle of exceptional severity, their decline from 1929-1933 approximating those of wheat, and like "all " farm crops neither had an enduring recovery after 1933. In Maine and in Kentucky the wage rates of farm laborers followed the course of farm prices of potatoes and tobacco respectively through depression and revival. E M P L O Y M E N T AND U N E M P L O Y M E N T OF F A R M LABORERS

The decline in money wages was not the only loss sustained by farm laborers in the Great Depression. They also lost their jobs, and, what was more important, they lost the opportunity 10 See Income Parity for Agriculture, P a r t I, Section 14, Income from Truck Crops and Farm Gardens, U. S. Department of Agriculture, 1941. California's cash income from the sale of truck crops is more than double that of Florida's—ibid., p. 65 (California) and p. 46 ( F l o r i d a ) .

154

W A G E S OF F A R M A N D F A C T O R Y

LABORERS

for employment. A s of 1939, it seemed that much of this latter loss w a s destined to be permanent. W h e n unemployment first struck manufacturing and trade, some workers returned home t o the farms. Subsequently more workers left the cities, and were forced to seek a livelihood on the family farm. Consequently the w a g e rates of f a r m laborers were depressed not only by the decline in farm prices but also by the pressure of a tremendous oversupply in the farm w o r k force. A c c o r d i n g t o the C r o p Reporters, the supply of f a r m laborers between 1929 and 1932 increased one-third. 1 1 M o s t of this oversupply can be traced t o the ranks of hired workers. T h e number of family workers employed on farms increased by 285 thousand persons between 1929 and 1933, during which time the number of hired workers declined by 551 thousand ( T a b l e 3 9 ) . W h e n farm prices recovered, some hired workers were reemployed but never again did all of them return to their jobs. Data in Table 39 indicate that their employment in 1939 w a s 13 per cent lower than in 1929. E v e n in 1937, when f a r m prices were relatively high, the employment of hired farm w o r k ers w a s over 3 5 0 thousand less than it had been eight years before. F r o m the data set forth in the next table it is evident that total farm employment sustained a net decrease between 1929 and 1939 and that about 70 percent of this loss w a s borne by hired hands. O f particular significance is the decline in total f a r m employment which occurred between

1933 and

1937.

A g r i c u l t u r e w a s rapidly a d j u s t i n g itself to new and lower levels of employment in those years. T o all appearances it w a s no longer able during the decade of the thirties to provide the same amount of employment w h i c h it had in the 1920's. Little imagination is required t o realize how bitter must have been the unemployment sustained by f a r m laborers during the 1930's. T h e Census of Unemployment, which w a s taken in 11 R. F. Hale and R. L. Gastineau, Reliability and Adequacy of Farm Wage Rate Data, Exhibit D, p. 8, U. S. Department of Agriculture, 1940

DEPRESSION

AND REVIVAL

155

T A B L E 39 FAHM EMPLOYMENT o r

FAMILY W O B K E U

AND H B U D V O U R N ,

1929, 1933,

1937

AND 1939.* FAHM

EMPLOYMENT

Total 1929 1933 .. 1937 1939 ,,

(000 omitted)

Family Workere

Hired Total Workers

11,289 11,023 10,892 . , 10,740

8,305 8,590 8,261 8,145

2.984 2,433 2,631 2,595

1929-1939 . ... —549 1929-1933 .. —266 1933-1939 .. —283

—160 +285 —445

—389 —551 +162

.

INDEX NUMBERS

100 98 96 95

1929=100

Family Workers

Hired Workers

100 103 99 98

100 82 88 87

CHANGE :

« Farm Wage Rate», Farm Employment,

and Related

Data, p. 155, U . S. Bu-

reau of Agricultural Economics, 1943. April 1930, revealed that 103,518 farm laborers were without work although they were able and willing to work. 1 2 Between 1930 and 1933 another 4 1 7 thousand lost employment. N o w , let us assume that in the five year period 1929 to 1933, each year brought into the labor market an additional 10,000 farm laborers. Surely, that estimate is a minimum. Accepting it, we could say that an extra 50,000 workers were added to the farm labor force between 1929 and 1933. N e x t , consider the decline in employment shown in Table 39 for the same y e a r s — 5 5 1 thousand. A d d the decline in employment to the net increment in the working force and it could be estimated, in round numbers of course, that in 1933 about 600,00 farm laborers were out of work. A n d in 1934 the employment of hired hands dropped another 97 thousand. A s the years slipped on, although farm employment increased but slightly, more new workers sought employment. Thus, it is not difficult to accept the figure of 543 thousand " Totally U n employed " farm laborers which appeared in the 1937 Census 12 Fifteenth

Census of the United States, 1930, Unemployment,

Vol. II,

p. 13. This figure refers to the category " Class A " unemployment used in that survey.

156

W A G E S OF F A R M

AND FACTORY

LABORERS

13

of Unemployment. And, in 1940 when agricultural production was expanding to meet the new demand for farm products, there were 4 1 1 , 6 2 0 farm laborers who were either seeking employment or who were then employed on public emergency works. 1 4 H O U R L Y AND W E E K L Y

W A G E S OF F A C T O R Y

LABORERS

The hourly wage rates of unskilled factory laborers declined 25 per cent between July 1929 and July 1 9 3 3 (Tabic 40). The fact that this decline was almost identical with the July 1929July 1 9 3 3 decrease in hourly earnings should be of interest to those who maintain that relative changes in hourly earnings cannot be used to show relative changes in hourly wage rates. Not only did hourly earnings and hourly wage rates vary by almost the same amount between July 1929 and July 1933 but the year-to-year changes in them were closely related (Table 4 0 ) . F o r the sake of direct comparison, the wage data in Table 40 are shown for July of each year, that being the month in which the annual survey of hourly wage rates paid to common laborers is made by the Bureau of Labor Statistics. The peakto-trough decline (September 1929-May 1 9 3 3 ) in the hourly earnings of unskilled factory laborers amounted to 26 per cent, a decrease which is slightly larger than the July 1929-July 1933 decrease shown in the next table. 16 13 Census of Partial Employment, Unemployment and Occupations: 1937, Vol. I, Table 4, p. 5, 1938. This report states that 542,725 farm laborers registered themselves as " Totally Unemployed " and 183,288 classified themselves as " Emergency Workers." 14 U . S. Bureau of the Census, Series P-14, No. 13, Table 1, p. 7, October 29» 1943- According to the press release, 288,460 farm laborers were " seeking w o r k " in March 1940, 123,160 were employed "on public emergency work." These statistics and the others found in Table 1 of this press release " are based on a 5 per cent sample." 15 In specific manufacturing industries, the peak-to-trough declines in the average hourly earnings of unskilled labor were widely divergent. Five of twenty-one industries cut hourly earnings by 30 per cent or more, six industries dropped them by 20 per cent or less. See, Wages, Hours, and Employment in the United States, 1914-1936, Tables 4-30, pp. 52-159, National Industrial Conference Board, 1936.

DEPRESSION AND

REVIVAL

IS?

T A B L E 40. HOURLY

W A C E R A T E S AND H O U B L Y

EARNINGS o r

LABOBEBS, J U L Y 1 9 2 9 TO J U L Y

UNSKILLED

4)

.. -S

£ H >> S3 ~ H ® 2 » > o

°

^

§

40.7c. 40.5 383 31.8 30.5

1929 1930 1931 1932 1933

48.7c. 47.9 46 2 393 37.4

8 2 >. > M

»11

fli S5

« A

July July July July July

FACTOBT

1933

I

a

100 100 95 78 75

100 98 95 81 77

CHANGE

July 1929-JuIy 1933 July 1929-JuIy 1931 July 1931-July 1933

—10.2c. —113c. — 2.4 — 25 — 7& — 83

.... ... ....

• Monthly Labor Review, January 1942, p. 173, U. S. Bureau of Labor Statistics. b Wages, Hours, and Employment in the United States, 19H-19S6, pp. 54-5, National Industrial Conference Board, 1936. It w i l l be noted that m o s t of the cyclical fall in h o u r l y w a g e s came between

1 9 3 1 a n d 1 9 3 2 , the decrease in t h e

first

two

y e a r s of the depression b e i n g a l m o s t n e g l i g i b l e . I n C h a p t e r it w a s s h o w n that b e t w e e n

V

1 9 2 4 a n d 1 9 2 9 h o u r l y w a g e s of

f a c t o r y l a b o r e r s w e r e , o n t h e w h o l e , v e r y stable. T h a t stability c o n t i n u e d to hold in 1 9 3 0 a n d e v e n f o r the first half of 1 9 3 1 . P r o b a b l y some industrialists s h a r e d the v i e w s of H e n r y F o r d w h o u r g e d fellow e m p l o y e r s t o m a i n t a i n w a g e rates. P r e s i d e n t H o o v e r , d u r i n g 1 9 3 0 a n d 1 9 3 1 , o f t e n declared that it w o u l d be e c o n o m i c a l l y u n w i s e t o cut w a g e s . W h a t e f f e c t his statements h a d upon the policies of m a n a g e m e n t it is impossible t o estimate

but, as pointed

out

w a g e s u p to the m i d d l e of

above, 1931

the declines

were

relatively

in

hourly

negligible.

H o w e v e r , w h e n the d e p r e s s i o n g r e w steadily w o r s e there c a m e

I58

W A G E S OF FARM A N D F A C T O R Y

LABORERS

a number of wage reductions. The United States Steel Corporation together with Bethlehem Steel and General Motors announced on September 23, 1931 a general reduction in w a g e rates. Other large corporations shortly thereafter followed suit. N o effort, of course, was made to keep laborers at full employment. Reacting to dwindling sales, the factories decreased production, laid of? workers, and reduced the hours of work per week. Factory production decreased 55.7 per cent before completing its recession and those industries making durable goods reduced Output 77.4 per cent. Unemployment of staggering proportions was inevitable and naturally the unskilled factory laborers were among the first to be laid off. A s early as April 1930, about 10 per cent of all factory laborers were out of work. 1 4 Generally speaking, their rate of unemployment was materially greater than that of the other factory, workers. Unemployment increased in 1931 and even more in 1932, but beyond general estimates there are no adequate data about it. Employment in manufacturing dropped until in March 1933 it was 45 per cent less than it had been in September 1929, and in the durable goods industries it was 58 per cent less. 17 Much less drastic was the employment decline of the non-durable goods industries—31 per cent. 18 T a k e n by themselves, declines in factory employment cannot be regarded as satisfactory measures of factory unemployment. However, these figures when used with data measuring the decline in hours worked per week partially fill the gaps of information about unemployment. Unskilled factory laborers in September 1929 worked 51 hours per week. 1 8 In direct con16 U. S. Census of Unemployment, April 1930, Vol. II, Table 3, pp. 15-16, U . S. Bureau of the Census. 17 Revised Indexes of Factory Employment and Payrolls, 1919-1933, Bulletin 610, pp. 22-3, U . S. Bureau of Labor Statistics, and Revised Indexes of Factory Employment and Payrolls, pp. 1 -2, U . S. Bureau of Labor Statistics, September 1936. 18 Ibid. 19 Wages, Hours, and Employment in the United States, 1914-1936, p. 54, National Industrial Conference Board, 1936.

DEPRESSION

AND

REVIVAL

159

trast to the leisurely decline in hourly earnings, about 60 per cent of the total cyclical decline in their hours worked per week had occurred by September 1931. 2 0 Before the bottom w a s reached in March 1933, they worked but 32.9 hours per week. 2 1 Considering the 1929-1933 drop in factory employment (44.6 per cent) and the decline of 35.1 per cent in actual working hours per week, it is not difficult to realize that the unemployment suffered by the average factory laborer in 1932 and in 1933 must have been most severe. Without exception, the weekly earnings of factory laborers had cyclical declines which were at least 25 percentage points greater than those in hourly earnings. 22 F r o m October 1929 to March 1933 the average weekly earnings of factory laborers fell 51.3 per cent 24 and in only one industry (printing—book and j o b ) did weekly earnings drop less than 30 per cent. 24 E v e r y industry, whether it produced consumption goods or production goods, slashed the weekly earnings of factory laborers, and the declines were executed regardless of the type of product manufactured or the wage levels of 1929. A t their respective troughs in 1933, the weekly earnings of unskilled laborers in furniture were 32.3, in iron and steel were 33.0, and in rubber were 34.2 (peak 1 9 2 9 = 100). 2 8 Iron and steel in 1929 paid the highest weekly earnings to unskilled laborers, rubber ranked third, and furniture was among the lowest. O n the other hand cotton goods ( N o r t h ) , the lowest paying industry in 1929, decreased its weekly earnings by an amount less than eighteen of twenty-one industries. Furthermore, there was no consistent association between the cyclical declines in the weekly earnings and those in hourly earnings. For example, 20 Ibid., pp. 54-55. 21 Ibid. 22 Ibid., T a b l e s 5-30, pp. 56-150. 23 Ibid.,

T a b l e 4, pp. 54-5.

24 Ibid., T a b l e 26, pp. 142-3. 25 Ibid., T a b l e 17 f o r f u r n i t u r e , T a b l e 19 f o r i r o n a n d steel, a n d T a b l e 28 for rubber.

l6o

W A G E S OF F A R M

AND

FACTORY

LABORERS

the five industries showing the least decline in hourly earnings did not have the five lowest declines in weekly earnings. H o w ever, at the other end of the scale there was some slight degree of associaton. Furniture, and iron and steel had the most severe declines in both weekly earnings and hourly earnings. Otherwise, there was no significant correlation between the cyclical declines in weekly earnings and hourly earnings of factory laborers in specific manufacturing industries. W e expected to find some consistency in the two w a g e changes. But it seems that the Great Depression was not a homogeneous phenomenon consisting of equal parts producing equal effects on every phase of manufacturing. Nowhere were the wholesale price changes, the production slumps, and the employment declines exactly the same, and the recessions of weekly earnings as compared with those in hourly earnings even in a given industry were, on the whole, most varied. In March 1 9 3 3 , the average weekly earnings paid to unskilled factory laborers were $ 1 2 . 2 8 for 3 2 . 9 hours of work. 2 6 Only one industry then paid more than $ 1 6 . 0 0 a week—printing, book and job, $ 1 7 . 2 0 . F i v e industries at that time paid lower weekly wages than they did in J u l y 1 9 1 4 — f o u n d r y and machine shops, luiriber and mill work, paint and varnish, rubber, and furniture ( 1 5 . 5 per cent lower). 2 7 However, the weekly earnings of the average unskilled factory laborers, even at that time, were 1 5 per cent higher than in J u l y 1 9 1 4 and the average hourly earnings were 8 1 per cent higher. Nothing of the sort happened to the farm wage rates. In 1 9 3 3 every type of f a r m wage rate, daily or monthly, with or without board, was at least 1 4 per cent lower than it was in 1 9 1 4 . In the Spring of 1 9 3 3 , factory wages rebounded from the grip of depression and advanced under the propulsion of two powerful forces. In addition to those forces of wage recovery, which usually arise after a prolonged industrial depression, 26 Ibid., T a b l e 4, p. 55. 27 Ibid., T a b l e s 11, 21, 28 and 17 respectively.

DEPRESSION

AND REVIVAL

l6l

there came into operation a new philosophy of government, one which was determined to raise w a g e rates, to lower hours of the standard w o r k week, and to foster trade unionism. A l l these policies aided factory laborers', none of them except the S u g a r A c t of 1937

28

w a s designed to help farm laborers.

T h e C o d e of F a i r Competition, signed by the

President

under the National Industrial Recovery A c t (June 1933),** and the President's Reemployment Agreement (July 1933)

80

established definite hourly or weekly minimum w a g e rates. T h e numerous w a g e regulations of the Codes were aptly

sum-

marized by the Brookings Institution in the following w o r d s : In a general way, one can say of the male unskilled production wage rates that in almost one-half of the codes the highest minimum wage is set at 40 cents while in most of the other half it falls between 30 and 40 cents. Only a few codes (less than a tenth of them) set rates higher than 40 cents and but a handful ( 1 0 codes) have top minima less than 30. S1 A s we shall presently see, more than one-half the total revival increase in the hourly w a g e rates of unskilled factory laborers came between July 1933 and July 1934, the hey-day of the Blue Eagle. O n relief projects, the wage policy adopted by the government had a tendency to increase, or at least to maintain, the prevailing rates of unskilled factory labor. In A u g u s t 1933 the Federal E m e r g e n c y Relief Administration ruled that all relief projects should pay a minimum wage rate of 30 cents an hour but if the prevailing rate of the locality was higher then that 28 Public No. 414, 75th Congress, ch. 898. 29 Public No. 67, 73rd Congress, H. R. 5755. 30 See Sections 5 and 6 of the President's Reemployment Agreement The President's Reemployment Agreement (The Blanket Code) was authorized by the National Industrial Recovery Act, op. cit., Section 4(a). 31 L. S. Lyon, and others, The National Recovery Administration, pp. 318-9, Brookings Institution, 1935. " The Minimum ' wage floor' so frequently referred to is really a complex of staircases," p. 318.

l62

WAGES OF FARM

AND FACTORY

LABORERS

was to be paid. 32 The Federal Administrator of Public W o r k s in the Winter of 1933 prescribed the following minimum hourly wage rates for unskilled workers on construction projects undertaken by the Civil W o r k s Administration: 40 cents an hour in the southern zone, 45 cents in the central zone, and 50 cents in the northern zone. 33 By Executive Order of the President 3 4 workers on the W . P . A . ( 1 9 3 5 ) were to receive a " security p a y m e n t " which wage varied according to specific regions. T o earn his security wage, a worker had to be employed 140 hours a month. Organized labor complained and the government allowed skilled workers to work out their security wage at the prevailing wage rates of the locality. " The same holds for other occupations, although, in low wage states, the rate for unskilled labor—especially for w o m e n — i s usually in excess of prevailing hourly wages." 86 T h e following Federal laws provided for the payment of minimum wage rates or " prevailing " wage rates: The Public Contracts Act of 1936, 39 and the Fair Labor Standards Act of 1938. 37 Of these enactments the more important is the latter. This law, known popularly as the W a g e and Hour Law, provided that all plants producing goods which were to be sold in inter-state commerce must pay a minimum hourly wage of 25 cents from October 1938 to October 1939, and, thereafter to 1945, a minimum of 30 cents an hour. 38 F a r m laborers were 32 Security, Work and Relief Policies, Report 0} the Committee on LongRange Work and Relief Policies to the National Resources Planning Board, Appendix 2, p. 556, U. S. Government Printing Office, 1942. 33 ibid., Appendix 5. 34 Executive Order No. 7046, May 20, 1935. 35 N. Anderson, The Right to Work, p. 143, and see also pp. 142-144, Modern Age Books Inc., N. Y., 1939. Italics ours. 36 Public No. 846, 74th Congress, S. 3055. 37 Public No. 718, 75th Congress, S. 2475. 38 Ibid., Section 6.

DEPRESSION

AND REVIVAL

163

specifically excluded from this a c t 1 9 as well as from the Public Contracts Act. 4 0 In general, one can say that in the revival period, 1 9 3 3 - 1 9 3 9 , the Federal Government established by law and by example a wage floor of approximately 3 5 cents an hour for unskilled labor. N o doubt, some factory laborers did not always receive in private industry the legal wage or even the one then paid on relief projects. Y e t , those rates furnished a guide-post which was followed by most factories. E v e n without the exertions of the government it is entirely probable that sizable wage increases would have occurred. Between March 1 9 3 3 and August 1 9 3 9 , factory employment increased 55 per cent. 41 Actively sharing in the general advance of manufacturing w e r e both the hourly wage rates and the hourly earnings of unskilled labor. Between J u l y 1 9 3 3 and J u l y 1 9 3 9 the hourly wage rates of unskilled factory laborers increased 1 8 . 2 cents an hour or 60 per cent (Table 4 1 ) . According to the National Industrial Conference Board, the average hourly earnings of unskilled factory laborers in the same months increased 59 per cent. Once again, a close agreement between the relative movement in the hourly wage rate ( 6 0 per cent) and the hourly earnings ( 5 9 per cent) is to be noted (Table 4 1 ) . The variation in the revival increases of hourly earnings was extremely broad, ranging from 26.7 per cent in boots and shoes to 1 0 5 . 7 P e r c e n t >n furniture. Seventeen of twenty industries had wage increases of more than 5 0 per cent. A s will be noted below more than half the total revival increase in hourly wage rates and in hourly earnings came in the twelve month period, J u l y 1 9 3 3 - J u l y 1934, a period which 39 Ibid., Section 13(6). 40 Op. cit., Section^ 41 Revised Indexes of Factory Employment and Payrolls, September 1938, p. 2, and Indexes of Factory Employment and Payrolls, May 1940, pp. I, i A , U. S. Bureau of Labor Statistics.

164

W A G E S OF F A R M

AND FACTORY

LABORERS

saw the start of business revival as well as the first days of the National Industrial Recovery Act. While it is impossible to determine which of these two factors was primarily responsible for the unusual rise in hourly wages, it seems, that Government policy must be accorded much of the credit because it does not seem likely that business revival by itself would have gathered enough strength in that single year (July 1933-July 1934) to increase the hourly wages of factory laborers by an amount equal to the entire depression decline. As is indicated in the next table, the hourly wage rates and hourly earnings of factory laborers advanced 10 to 11 cents an hour between T A B L E 41. H o u r l y Wage R a t e s a n d H o u r l y E a r n i n g s of U n s k i l l e d F a c t o r y Laborers, J u l y 1933 t o J u l y 1939 0)

>.s

« v «5