time-table of minimum wage procedure under the fair labor standards act

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Page 1: Time-Table of Minimum Wage Procedure under the Fair Labor Standards Act

Time-Table of Minimum Wage Procedure under the Fair Labor Standards ActAuthor(s): John C. Shinn and John I. KolehmainenSource: Social Forces, Vol. 21, No. 2 (Dec., 1942), pp. 231-234Published by: Oxford University PressStable URL: http://www.jstor.org/stable/2570565 .

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Page 2: Time-Table of Minimum Wage Procedure under the Fair Labor Standards Act

SOCIAL-INDUSTRIAL RELATIONSHIPS

Contributions to this Department will include material of three kinds: (I) original discussion, suggestion, plans, programs, and _ theories; (X) reports of special projects, working programs, conferences and meetings, and progress in any distinctive aspect of the field; g,

g (3) special results-of study and research.

TIME-TABLE OF MINIMUM WAGE PROCEDURE UNDER THE FAIR LABOR STANDARDS ACT

JOHN C. SHiNN AND JOHN I. KOLEHMAINEN

Heidelberg College

S OF January 1, 1942, forty industry com- A mittees had been appointed and thirty-

five minimum wage orders issued in accordance with the terms of the Fair Labor Standards Act of 1938 (Wage and Hour Law).' Students of administration may well raise a number of pertinent questions about minimum wage pro- cedure under the statute. This procedure, it will be recalled, falls into two phases: the first or "industry committee phase" which includes the appointment by the Administrator of the industry committee, its meetings and hearings, wage recom- mendation and report; the second or "Adminis- trator phase" consisting of review of the industry committee records and recommendation, public hearing, oral argument, and issuance of the mini- mum wage order. How long has it taken to pro- ceed from the appointment of an industry com- mittee to the issuance of the wage rate? How much of this total time has been devoted to the industry committee phase of the procedure? To the Ad-

ministrator phase? What factors have delayed early deliberation and prompt action by the committees and the Administrator? Have any reforms been adopted which have accelerated the enactment of minimum wage orders?

Table 1 indicates the interval intervening be- tween (a) the appointment of the industry com- mittee and the issuance of the wage order; (b) the appointment of the committee and the filing of its report with the Administrator; and (c) the com- mittee report and the issuance of the wage order.

In some classifications the total period inter- vening between the appointment of the committee and the issuance of the wage order by the Ad- ministrator was relatively extended. 512 days were required to reach the apparel wage order, 487 days for the first woolen, 467 days for the railroad, and 432 days for the hat wage orders. On the other hand the second woolen minimum wage rate was issued only 68 days after the committee was appointed, the second textile 95 days, the shoe manufacturing and allied industries 102 days, and the enameled utensil 125 days. The average total time from committee appointment to issuance of wage order required by each of the first ten cate- gories was 360.4 days while the figure for the last ten was 135.3 days each. How much of the total time was spent in the industry committee phase? The average of the thirty-four categories was 98.4 days; the average time utilized by each of the first ten industry committees was 207.4 days while the last ten committees required only 40.8 days each. The average time needed for the Administrator phase was 126.5 days; the first ten classifications required an average of 153.0 days each for this stage of procedure while the last ten needed but

1 Data for this study are from the files of the Wage and Hour Division of the Labor Department. The literature on the administrative and procedural aspects of the Wage and Hour Act is growing rapidly. Among other studies see Calvert Magruder, "Administrative Procedures under the Fair Labor Standards Act," American Bar Association Journal, 25 (1939), 688-95; Harold November, "Industry Committees under the Fair Labor Standards Act," American Federationist, 47(1940) 144-50; Z. S. Dickinson, "The Organization and Functioning of the Industry Committees under the Fair Labor Standards Act," Law and Contemporary Problems, 6(1939), 353-67. See also the authors' "Labor and Public Representation on Industry Com- mittees," American Labor Legislation Review, 31(1941), 175-77.

231

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Page 3: Time-Table of Minimum Wage Procedure under the Fair Labor Standards Act

232 SOCIAL FORCES

TABLE 1

TIME-TABLE OF INDUSTRY COMMIrTEES*

INTERVAL INTERVENING BETWEEN

Ap- point-

Ap- ment point- of Com-

INDUSTRY COMMITTEE ment mittee report Com- and and

mittee filing issuance and of of

issuance report wage of wage with order

order admin- istra-

tor

days days days

Textile (No. 1) ................ 381 252 129 Apparel ...................... 282 230 Woolen (No. 1) ............... 487 351 136 Hosiery .......................198 112 86 Hat ...................... 432 263 169 Millinery ......................283 190 93 Shoe .......................372 254 118 Outerwear .................... 267 39 228 Underwear. 205 45 160 Railroad ...................... 286 181 Leather ...................... 83 90 Pulp and Paper ............... 152 54 98 Carpet and Rug ............... 291 86 205 Luggage and Leather Goods 218 71 147 Converted Paper Products. 325 180 145 Embroideries. 1 .........164 54 110 Portable Lamp and Shade 189 26 163 Enameled Utensil .125 20 105 Drug, Medicine, Toilet Prepara-

tions ......................179 45 134 Single Pants, Shirts, Allied Gar-

m ents ...................... 68 148 Seamless Hosiery .143 51 92 Rubber. 130 38 92 Gray Iron Jobbing and Foundry. 223 30 193 Clay Products............ 161.... 58 103 Textile (No. 2) ................ 95 37 58 Jewelry Manufacturing (No. 2). 174 27 147 Women's Apparel .129 37 92 Knitted and Men's Woven Un-

derwear and Commercial Knit- ting ...................... 180 41 139

Wood Furniture Manufacturing. 154 37 117 Lumber and Timber Products . 154 41 113 Miscellaneous Apparel .144 52 92 Passenger Motor Carrier . 154 58 96 Shoe Manufacturing and Allied

Industries .................. 102 49 53 Woolen (No. 2) ............... 68 29 39

Average .22..................... 98.4 126.5

* This table includes only those committees for which

94.6 days each. Two important observations are suggested by these figures: first, that a number of perplexing delays were encountered during the early history of the act; and secondly, that marked progress has been made in speeding the prepara- tion and issuance of minimum wage rates.

Considerable variation has appeared in the time necessary for the initial phase of minimum wage procedure. The first woolen committee used 351 days between its appointment and the filing of its report, the railroad committee 286 days, the ap- parel committee 282 days, and the hat committee 263 days. On the other hand the enameled utensil committee required only 20 days, the second jewelry manufacturing committee 27 days, and the second woolen committee 29 days'. As pointed out above, the average time of the first ten com- mittees was 207.4 days each while that of the last ten was only 40.8 days each.

This marked acceleration of the industry com- mittee phase stems from a number of important reforms. Committees were formerly appointed without proper regard to the availability of the basic economic data without which they could not function. Many committees were compelled to remain relatively inactive for varying periods-the railroad committee 102 days (from appointment to first meeting), the converted paper products com- mittee 92 days, the millinery committee 85 days- until the requisite investigations had been prepared by the research agencies of the Labor Department. At present the appointment of the committee occurs more or less simultaneously with the com- pletion of the economic studies. This data, of course, can be used to great advantage by re- convened committees or new committees within the same industry; for example, whereas it took the first textile Itommittee 252 days to proceed from appointment to the filing of its report, the second textile committee needed only 37 days; similarly the first woolen committee used 351 days, the second woolen committee only 29 days. It is only fair, however, to observe in this connection that a great deal of time was spent by the first woolen and textile committees in reaching a satis- factory definition of the industries. It probably

wage orders had been issued prior to January 1, 1942. It does not include the first jewelry manufacturing, knitted outerwear, property motor carrier, cigar, and tobacco industry committees; nor does it include the Special Puerto Rico industry committee appointed August 1, 1940. Data appearing in this paper refer only to those committees listed above.

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Page 4: Time-Table of Minimum Wage Procedure under the Fair Labor Standards Act

SOCIAL INDUSTRIAL RELATIONSHIPS 233

will not be possible to shorten appreciably the time necessary to prepare the economic data in new fields nor would it appear to be wise economy to skimp on this vitally important preparatory stage.

The time spent in actual committee sessions has been reduced considerably. The first textile committee, for example, needed 161 days from its first meeting to reach a wage recommendation, the apparel committee 136 days, and the shoe com- mittee 121 days; the last twenty-four committees, on the other hand, have together required only 53 days (an average of 2.2 days each) while the last ten committees have needed an average of 1.7 days each. This has been made possible by the follow- ing reforms: the basic data have been made avail- able to committee members several weeks prior to the initial session so that when the representatives convene they are prepared to take immediate ac- tion; there has been increasing use of experienced chairmen who have been able quickly to guide the deliberations of the committees; diminishing use has been made by the committees of the formal hearing device. Important, too, has been the increasing acceptance by the employer representa- tives of the forty cents hourly rate.

A serious bottleneck developed around the statutory provision requiring each committee to file with the Administrator a report containing its recommendations. The committees formerly spent much time in preparing these documents: the first woolen committee 220 days, the apparel committee 104 days, and the shoe committee 109 days; the reports were extended and detailed, fre- quently running to a hundred pages in length. Later the Office of the Solicitor of the Labor De- partment ruled that the reports need contain but the wage recommendation and a summary state- ment. The wholesome effect of this ruling is shown in the fact that the last seventeen industry committees together have required only 25 days (an average of 1.5 days each) for the writing and filing of their reports.

The second or Administrator phase has followed a similar pattern of variation and acceleration. The total time intervening between the receipt of the industry committee report and the issuance of the wage order has ranged from highs of 230 days for the apparel, 228 days for the outerwear, and 205 days for the carpet and rug classifications to lows of 39 days for the second woolen, 53 days for the shoe manufacturing, and 58 days for the second textile categories. The average time required by each of the first ten classifications was 153.0 days

while that of each of the last ten was 94.6 days; this suggests that some economies have been achieved. Perhaps the greatest saving has come from the diminishing use of the oral argument stage. The privilege of oral argument, granted at the discretion of the Administrator, has been used in fourteen of the thirty-four classifications; however it has appeared only twice in the last fourteen categories.

The public hearing required by law cannot per- haps be accelerated very much. Adequate notice and publicity must be given; interested parties need and demand sufficient time for the prepara- tion of their briefs; the Administrator and his staff wish carefully to examine and digest the economic data, industry committee records, and reports. Indeed, in the case of the property motor carrier and single pants-shirts-allied garments proceed- ings, the Administrator held up the public hearings until additional data had been secured. Many delays are, of course, unavoidable; inevitable changes in top administrative personnel, injury and illness of interested parties, often necessitate postponement of the hearings. And after the completion of the public hearing, the Administrator wants plenty of time for reviewing the entire record, calling for renewed investigations if neces- sary, or making a personal study of an industry (as did one Administrator of the New England jewelry industry) before rendering his decision. For example, 183 days intervened between the first session of the public hearing and the issuance of the wage order for the apparel industry, 156 days for the hat, 149 days for the carpet and rug in- dustries; on the other hand wage orders were issued 19 days after the opening public hearing in the case of the second woolen classification, 22 days for the knitted and men's underwear, and 29 days for the second textile.

A final delay, also largely inescapable, occurs between the issuance of a wage order and the date when it becomes effective. This interval has ranged from 60 days or more in the case of the seamless hosiery, portable lamp and shade, first woolen, and pulp and paper categories to only 16 days for the shoe manufacturing, lumber and timber products, and wood furniture manufactur- ing; 30 days appear to be the normal period. Suf- ficient time must be granted to the industries to prepare for a wage change; if possible the wage order will be made effective at the end of a normal period of activity to avoid compelling employers to fill out old contracts on the basis of increased labor

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Page 5: Time-Table of Minimum Wage Procedure under the Fair Labor Standards Act

234 SOCIAL FORCES

costs. Notification of the affected industries is in itself a formidable job; 30,000 notices were sent under the property motor carrier wage order while 17,000 were mailed under the lumber and timber products wage order.

The success of the Fair Labor Standards Act is dependent in large measure upon the effective

functioning of its minimum wage procedure. It is, therefore, reassuring to observe the impressive speeding of both industry committee and Ad- ministrator phases in the enactment of minimum wage rates. Yet the essential democratic char- acter of the process has not been sacrificed on the altar of speed and efficiency.

THE PROFIT MOTIVE TODAY ALFRED BORNEMANN

Rutgers University

()O CCASIONAL official remarks, as well as practically universal popular belief, would have it appear that economic activity is

almost solely dependent on the profit motive. Al- though the limitations of explanations of economic activity in terms of profit-seeking have sometimes been pointed out, the standard discussion of eco- nomic motives operates through the conventional classical concepts of wants, utilities, and cost.' Thorstein Veblen, on the other hand, has had considerable influence in effectively undermining the exclusively hedonistic psychology. In his Istinct of Workmanship,2 as elsewhere, he drew the distinction between business and industry, with implications that while the vast majority are driven by a desire for workmanlike accomplish- ment, a comparatively few are engaged almost exclusively in pecuniarv pursuits having no neces- sary relationship to production. Taussig's ex- planation of the difference between inventors and money makers is of some interest in this connec- tion.3 Less known, perhaps, is Paul H. Douglas's study of the incentives of scientists, business men, and wage earners.4

Jerome Davis maintains that the profit motive is important in capitalist society largely because it is superimposed upon many other motives and reinforces them. "One of the most potent means of adventure is the quest for money; and money means power as well as prestige. Consequently

there is a cumulative piling up of urges when the individual thinks of profits."5 Similarly, John Dewey pointed out that acquisition is an incident of love of power, of desire to impress others, to obtain prestige and influence, to manifest ability, or ". . . to 'succeed' in short under the conditions of the given regime."6 In opposition to instinct psychology, the influence of which was already waning when he wrote, Dewey asserted that "if we are to shove a mythological psychology of instincts behind modern economics, we should do better to invent instincts for security, a good time, power and success than to rely upon an acquisitive instinct. We should have also to give much weight to a peculiar sporting instinct. Not acquiring dollars, but chasing them, hunting them is the important thing."7

Among the first to turn to a realistic examination of economic behavior was Carleton H. Parker, who pointed out, for example, that the hedonistic psy- chology did not explain that "the worried father of a sick child seated at his office desk is not an economic man."8 Moreover, he directed atten- tion to the developing problem of individual loss of morale under the regime of big business.9 Parker's stress on instincts, however, led Wesley C. Mitchell to call attention to the importance of the "institutional factor" which includes the socially prevalent habits standardizing the behavior of individuals in a given group.10

1 Z. C. Dickinson, Economic Motives (Cambridge: Harvard University Press, 1922).

2 New York: The Macmillan Co., 1914. 3 F. W. Taussig, Inventors and Money Makers (New

York: The Macmillan Co., 1915). 4 "The Reality of Non-commercial Incentives in Eco-

nomic Life," The Trend of Economics, R. G. Tugwell, ed. (New York: Alfred A. Knopf, 1924), 153-188.

5 Jerome Davis, Capitalism and its Culture (New York: Farrar & Rinehart, 1935), 234.

6Human Nature and Conduct (New York: Henry Holt & Co., 1922), 145.

7 Ibid. 8 "Motives in Economic Life," American Economic

Review, 8 (1918), Supplement, p. 226. 9Ibid., p. 230. "Ibid., p. 236.

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