Minimum Wage Legislation
c.1912 — City Club of Philadelphia, Philadelphia PA
I must confess to being a somewhat tardy convert to minimum wage legislation. For a good while I could not see much in the proposition. But I have gradually come to believe that the law recently enacted in Massachusetts is a measure of great hope.
My original difficulty was that of expecting too much in the way of immediate results. I suppose I was looking for a panacea. Now wage boards furnish no panacea, not even for sweated wages; but they do involve a method and principle which ultimately, I believe, will have very far-reaching results.
MINIMUM WAGE WILL NOT DEPRIVE WORST PAID WORKERS OF WORK
Right here let me touch upon an objection which is urged by every critic and which perhaps may be now in the minds of some of my hearers, namely, that if the wages of the worst paid workers are raised they will be thrown out of work altogether. It amuses me a little to hear the solicitude expressed on that score by people who are quite untroubled by the constant displacement of labor through inventions in machinery, although the hardships thus suffered by workers too old to adjust themselves to new conditions have often been nothing less than heart-rending. In the present instance, however, I think the apprehension a sure bogey, for it assumes that wages will be raised beyond the margin of possible profit. And I think you will agree at the end of my talk that this is a most improbable result of the proposed method of fixing minimum wages.
MASSACHUSETTS MINIMUM WAGE BILL ENDORSED BY ECONOMISTS
Further, for the benefit of those who think the minimum wage proposition fantastic and contrary to what is conceived as “economic law,” let me say that our Massachusetts bill was endorsed by pretty much the whole economic department of Harvard college, and that prominent among the advocates of minimum wage legislation are Professor John R. Commons of the University of Wisconsin, and Professor Seager of Columbia University.
FAVORABLE DISPOSITION TOWARDS A MINIMUM WAGE
In every country where this minimum wage system has been adopted it was originally advocated by social reformers. But it had always been endorsed by organized labor, and it has never been very strenuously opposed by employers. Many of them, indeed, have favored the plan. That to me is a little alarming; for if there is nothing against the plan, can there be anything for it? Now the reason employers do not fear the findings of wage boards is that they sit themselves on these boards in equal number with their employees, and owing to the fact that they own the business, they can always threaten to shut down or to take their work out of the state if wages are demanded that threaten their profit. Thus they necessarily hold the whip handle, which ensures moderation from the employer’s end of wage board recommendations.
MINIMUM WAGE RELIEVES “OPPRESSED LABOR”
Nevertheless, minimum wage regulations do accomplish something. By setting a minimum, they correct certain flagrant abuses. They level up the wages of those who by accident, or by incompetence, or by the skinflint character of the employer are pushed down below the prevailing level. Therein lies their immediate and obvious benefit. It was for this rescue of oppressed labor that they were originally instituted,– for this and also to protect from undercutting a standard already attained. It was this latter quality in them which has led employers of the better class to welcome them. These employers said, “Protect me from the undercutting of sweated labor and I can continue to do as well, and perhaps can do better still, by my employees. Bring all labor in my line up to my level, otherwise there is danger that my own wage scale may be pulled down. Require all employers in a given industry to stand as to wages, as they already do as to hours, by a common standard. One may excel the other then by his greater skill in conducting his business, but not by his greater harshness in beating down wages.”
THE MORE SUBSTANTIAL BENEFITS OF A MINIMUM WAGE
If this was all that wage boards could accomplish, they no doubt would be justified. But they would not kindle in me any great enthusiasm. In the long run, however, I look for far more substantial benefits. For one thing, minimum wage negotiations will to some degree organize the worst paid workers who are now wholly unorganized. They will have to get together to appoint representatives upon wage boards. They will learn how to meet employers and discuss their common interests. They will get a new feeling of the solidarity of labor. They will learn that it is possible for labor to free itself from an abject dependence. The educational value of labor organization must be conceded even by those who chafe most impatiently at its occasional abuses. Wage boards tend to bring something of this education to the class of labor that needs it the most, and which is unable, for reasons that I have not the time to go into, to effect organization for themselves.
But equally important, and perhaps even more far-reaching, may be the reaction of wage boards upon employers. It is a new idea to most of them that private industry has any public aspect. If an employer, buying labor at the cheapest figure at which it can be secured, succeeds in paying less than it costs that labor to live, then insofar he is shifting the cost of production or of distribution to other people’s shoulders. His is to that degree a parasitic industry. And while he may be making money for himself, it is at a ruinous cost to the community, if at the same time he is manufacturing prostitutes or human beings so undernourished that they are worn out while still young, and become incapable of bringing forth healthy offspring. It is specifically upon this ground that much of the legislation protecting women is held constitutional in Massachusetts and in some other states: it is being argued as a matter of public wellbeing that the mothers of the next generation should be protected from a ruinous exploitation. It is not as an act of justice, or even an act of mercy; it is social self-preservation. The whole body, it is obvious, must perish when a too considerable part becomes diseased.
In England and in Australia, which countries are not bound by our constitutional limitation, the wellbeing of men as well as of women is held to be vital to the state, and wage boards accordingly are applicable to both men and women.
WAGE BOARDS POINT TO AND ACCENT THE PUBLIC ELEMENT IN PRIVATE INDUSTRY
Now, as I said, this conception of the public element in all private industry is almost a new idea in our generation, and wage boards are an admirable device for bringing this idea home. Already any bureau of statistics which calls for wage returns asserts the concern of society in the matter. If among these returns are industries which pay a living wage, a minimum wage commission would let those industries alone. Where no abuse exists the state has no call to interfere But the Massachusetts Act declares that where the wages of a considerable number of the women employees are manifestly below the requirements of life, there is a call for state intervention. Now the intervention warranted is the mildest possible. Our minimum wage law says that employers of this industry shall be called into a sort of conference and that each shall produce his pay roll. Buying labor (which is buying life) can no longer be relegated to subordinates who must keep the pay roll down to demonstrate their own value. Employers will be forced to match actual wages against a reasonable living standard, and to face the fact of their own deficiencies. Will not this be a revolutionary experience to the more thoughtful and conscientious among them?
If it should happen when the wage scales of each establishment are produced and compared that even in an industry where under-payment is prevalent, some employers are already paying a far better rate than their competitors and making a good profit at that, there is an object lesson that will not be lost on other employers nor on the public.
ERRATIC WAGES PAID BY THE CANDY INDUSTRY IN MASSACHUSETTS
The above is a condition that was found to actually prevail in the candy industry in Massachusetts. The labor in this industry is among the most ill paid in the state. In it the wages of over sixty-five per cent (65%) of the adult women employees range below six dollars ($6.00) a week. In one concern the wages of more than half of them fell below the miserable pittance of five dollars ($5.00) a week. Yet in another establishment in the near vicinity, buying labor in the same market, manufacturing the same grade of product, and selling it in the same market, not a single employee received less than seven dollars ($7.00), which the employer had of his own volition set as a minimum; and he said it was good business.
WAGE BOARDS IN ENGLAND HAVE INCREASED EFFICIENCY OF WORKERS
A great factor in causing low wages is the intermittent character of the employment, the way, because of shut-downs, compulsory “vacations,” and so on, the rate of a fairly good wage works out as a miserable weekly pittance. If employers can so organize their business that work is continuous through the year, the efficiency of the labor is thereby increased and the well-being of the worker is increased in due proportion. Minimum wage requirements may well work out in that way. For if workers must be paid more, it becomes necessary to develop their skill to make them worth their added cost, and workers whom an employer has taken the trouble to train it is worth his while to hold. Most striking and most lamentable in ill-paid labor is the way it shifts from establishment to establishment and often from trade to trade, with weeks or months of idleness between one and another job. Thus a low wage is both a cause and a result of low efficiency. In England already, I am told that wage boards have doubled the wage of some of the lowest paid workers, and employers find that they amply earn their increased price.
The evil of the present situation is far more extreme and more general than is realized. The Public Utilities Corporation of New Jersey has recently set a minimum wage of nine dollars, having decided after careful inquiry (as I am told by the gentleman on my right) that that sum was the minimum required for self-support. In Massachusetts, where the cost of living is certainly higher than in New Jersey, over ninety-three (93) per cent of the candy workers earn less than eight dollars ($8.00) a week and this industry is by no means the worst offender in the state.
THE BEST WAGES THE INDUSTRY WILL BEAR
Please notice that our Massachusetts law does not require employers to pay “living wages” On the contrary it requires wage boards in fixing minimum wages to take under reconsideration, besides the reasonable necessities of the employees, the ability of the industry to pay better wages and still pay its way. We don’t intend to drive industry out of the state. We simply put it up to employers to pay the best wages the industry will bear, and we put it up to them further to use their brains not simply to line their own pockets but to do so without injury to the state.
Thus you see the law does not demand a sudden and an impossible jump in wages That cannot be done by any fiat, not ever by a fiat from employers. A collective wage bargain negotiated through a wage board is simply one device above many others for ameliorating some of our present industrial abuses.
In justice the maintenance of labor should be a first charge upon industry. It is an essential element in the cost of production And those who own and control the industries of the country are under challenge to find a way to support decently the laboring people whom they employ. It is not necessary for us to point out to them just how this can be done. We put it up to them, the captains of industry, to find the way. Without the help of the ablest and most experienced business heads among us it is certain that the thing cannot be done with their help there is no setting a limit to the progress we may achieve toward an industrial well-being from which no man or woman who does an honest day’s work shall be left out.
Let me add that I am receiving letters from all over the country, from California to our eastern shores, asking for the report of our Investigating Commission. It can be obtained by writing for it to the Document Room, State House, Boston.
Source: City Club Bulletin [Philadelphia] 6, no. 7 (January 7, 1913), pp. 203-205.