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COIIFIDEHTIAL October 29, Wafge Stabilisation wad the * Stark ®B& Kroat Manpower Problem Kenneth B. Williaiss »tab&3&sa,tion and policy stabilisation, by institutionalising preaeat w&g® differentials* diminishes the ability of free labor mrket force* to direct the migration of workers to those ooaitp&tloiis* industries* &»4 area® most essential to tha prosecution of the m r . Without tha utilisation of aoa-pecuniary measwes to control labor mobility, wage stabilisation is llkaly to result in large«*seale, purposeless aify«ti«ai of isrorfeers froer? job to job in seareh of higher pay* fe§f for tb.0 aana %f© of work vary greatly ascng plaast« la the aasse industry , and m&ng isfeatri©8 am4 ar®&&* ?or #3^Bpl#j the wage^r&t© in Sarah 1948 far $}r*8m A tool eoad die aialaara ia nirfrtyss® plants aloag the Seat 0©aat ranged fr<^3 |l«05 to #1«89 p©rh<R»*« Eatrt.a©e rates for a.<ltilt e«s?ffi.om building labor in July It41 varied fro»} $1 eenta an hour in Memphis to #«98 ©enta an hour in Cl@vel&M# Since nforTmrm eejanet r®e@ive higher imv i s their present ^oba but ean obtain subst&atial iaereaaes by ehanglag ©i^loyers, th® tenderiay Is' for worlmrn t o ehazige jobs* the oforation of atteh a tasdanay will labor ah.ort«L^ea« w>gnify trailing and plAe^jent problean» ereate houaiag ecwasanity fftelllty dlffietiltlea # and seriously interfere with the of th« required industrial and agricultural prod«etisnn» Wage stabili»ation caa only 8uc«e@d in preventing inflation and in mi&tfti&lng full production if mg© -safi n&apowar mobiliimtion pellaiea &r# in* tegrated* Both «a.g© and non^pee^yniary labor policies imtet fee directed tomrd the priEisry goal ©f directing workers to thoa« jobs moat essential to the prosecution of the war, and of retaining in m r produetion workers already eiaplayed In eueh ,job#» mx hmhor Boiurd is doing an assailant job in handling the fro© the wage stabilisation ®xv&* I t has pr©parly limited it« functions to the fundaB©ntal aa<l a^aloiatratiTely feasible probleas* I t la exeroisiag fisnotions I n t e l l i g e n t ^; on n oa»0 % ©aa® basis within a fr^raework of eaaantlal iciples* A eaae b;, ea«© approach is eaaentlal* the asa*k»t for labor is not national » r k e t but is himdreda of starleete* la aon« inttmiiues ajs. entire la the imrket (»te©l)« In other instantHM* the narfcet is a ca (Southern California}* In another instance th© on© large plant* ICaowledge of the forces operating in each market is required and application of the general -wage policies to each market nu«t b© m&do la the light of such knowledge* •» 2 • War ISazipover Oesmisaioa Is charged with the aajor responsibility for labor policies «feioh u t i l i s e ne&~peeuniary sseaaurcs of control* Unfortunately, i t s responsibility is aot oca&plete* Selective Service through i t s authority over the graft axid occupational defenssst BOW has the priaary non-|mcuni&ry inetruise&t ©f control. th$ ^&r U&n$vmr Connis-sion is urging the passage of a national service act urhieh will giv© the Gattsission oosspleto ooaspulsory control of a l l stes m& wamm including control of occupational deferment policy. Bhsther mob tompnlmty control is y«t lifmttfgg1 1or d*«lr&ble is d«bata¥l®» ffe#re Is but that i t will be Mflfliliifff b®for© the wtr is worn* Tlier® ie ao thet nuieh closer ijifeegratioia of ooou^atioHal defersent policy, ssanpower ©abilis&tioii policy, and -saar production question of I»ae4i&te desirability of a a&tioaal $@rrioe aot do* i a part up&& the naehinery available to admini&ter o<»spulsoi%T ooatrol and in pert upon public recognition that voluntary methods of control have The general gublio does mot yet appear to ho eo&vinft*d that voluntary and indirect oosapulflive iseaaxirea have been oxlmusted* Organised labor takes the position that voiimtary i5ea«ur#s hm® aot yet been given a full trial* the Baehlnery available for adssinistering ooapulsive control Is far £YG® adequate* the oaly orgaiiiaatian of suffisieat siao with eaough knowledge of labor supply and ©isploymeat proble&is to begin to h&adle the job is the Ualt#d States 'ife^loyatears Service* thim ageaoy, hown&r* requires s^bstsmti&l i»proveiaent b©f@r© it could a^ssiaistorr ocaapulsory controls eren yfith rotigh tor f*o important questioa* jserit serious oonsld#ration i® coaaectiort with mobilisation policies • The first is eoacerBed with the proper sis© ef the an&ed force &nd th@ tJtting of its ©xpaasion* Th® Wsir Gep&rtme&t has anncweaeed UMI offieial *oal i« sa ar&y of ?•§ ailliod by the cmi of 194S* Am additional 1«S * 8*0 sdllioa will b® in the lavy, Coast 'Ouard* tijurin®, mad Mcrdmut ^arisks by that tine* Thtaa> 9 to 9*6 million out of a total of Z9 saillioa stem l$-»4§ years of age will be in the arsed service by the end of 1^43* In fch© light ef MMfMWMP requirement* of industry aad asrioxjltur®, the shij^ing and tr&asportation situation^ &xwl necessity for supplying jsateriEls axid equipiwmt to our allies, it is highly questienable if our armed forces should be as large or should izisrease as rapidly as is now planned. Certainly, way further increase in rmt© of induotioa* or of the total anted fore* required by the sod of 1945 above pr@s#mt pleas should b© permitted only if conclusive proof of Its aeiiisity is Hours, of work seoond quest ioa ooaceras he<ars of work* In Septenber# average hours worked by a l l persons ss^loyed in aoa^agrieultaral industries was 43. Average scheduled hours m s about 45 • In manttfaeturing alone, the average in August was 42*8* Moat war industries producing durable £:oo<ls, ©asoept blast furnaces* steel works and roll lag mills, averaged close to 48* If sofeed^led hour* were iaasre&sed to 48, a straight arithmetical calculation «ug*e«t« that total sa&kours would increase 7 per cent, peraitti&g the relsas® of about § million workers* The distribution of h o w s worked around the arerage indicates that this figure is much too high* 4*4 nillion persons worked 00 hours or longer, 4*5 million from 60 to @§ hours, 2S*8 aslllios frees 40 to 49 hours, 5*5 million from 30 to 30 hours* and 3*1 million worked 29 hours or let** those B O W working a^onrs iO hours &Bi a l®rg® xm&btr of those in the upper ead of the 40 to 40 hour grorsp would not he affected if 48 hours nsre raado the point at whioh preniuB payaent begin* • Thoee working less than 30 hours and wtaey of those la the lower part of the SO to US group would sot work longer hours siiaoe they are not now prevented fross working longer hours by the requirement that overtijae be paid above 40 hours* Vteap of those working less than 30 hours a wsek are part^tisje workers #i-o wotald not rcsmia in the labor market if they h&d to work longer hours* the problem n&rrom d o m to those in the Tamper part ©f the SO to 39 group as4 the lowsr part of the 40 to 49 group. If all of those workers were placed on a standard 46-hour week* the number of workers iwho tvrit'hs®ticsall|r eould b@ rel@ased I W & i \m no m®r& than t million* Th« atoaber aoti*6lly released by placing the point of pressium payment 4S would be Htaeh ssiftller t)»a t aillion* Output pmr isanhour would decline m d abeenteoivm would iaorease. Masy "WOBMWJ ©specially married womea, would leave th# labor market rather than -ssmrk longer hours* In sojas© States, laws prohibit the e^ploy&ent of wmm. longer hours* the workers released would not all be in the right areas or have the proper skills to be r®~«mploye4» Labor's attitude is also isiportant* Labor would not willingly aoeept a cut in pay* In s^je industries* workers are required to work short hours or idle <m the job bettauoe of'bad jfe.he4uliRg or l*ok of rawimterials • In «<am® plants, more men are employed than ©an w©rk efficiently and ©a&y of the workers have to kill time* It would be #x©eedlagly difficult to eomdxiee such markers that longer h-QWtn &r© aeoessmry* If str&lght-tise wages are raised to permit the saise earnings at 43 otralght»tiBH» as are now ©btai&ed from 40 hours at straight-tijae and 8 hours of OTeriiw* Wifi^yitii wmald have to inoroaso S %/% per oeat* this would 'foe mildly Inflationary bee at-a© not all finas oould offset the added eost of basle rates by longer hours* la seas© industries, department*are not sufficiently balanced to work all jperMM on a 48^hour basis* For mmQ%&§ a finishing departeeut may in 40 hours finish all of the processed floods the dep&rtgieftt behind it ©an produee lit 48 hours* ltaohinoryt equipsent, and skilled workers are net available to b&l&j&o© all departe^uts and industries 021 a 48*»hour basis ^orooTor* nigMr ba®i© rates laooji higher oir^rtiad rates for those who work than 48 hours (150 mr sent of 108 iaste&d of ISO psr ©ent of 100)* • 4 - Mor$ important than &i§r of these eoasidera/tio&s is timing* lhrea.tu*lly » arerftge hours snast iaero&a®. to iaoroas® thssn now will r#snlt is diminishing the necessity of and incentive for attracting into the labor foroe, training, and upgrading parsons nh© will be si&e&ed in the labor aarket later to r#pl&o# ®ea drawn into the ara@4 forees* At this stage, it m&j b® mar© desirable to continue the general pressure for training additioml workers and to m k ® adjustments as required in a few tight are«.s vhere the need for loader hours is el«ar» At snoh a ti$te opposition to l^ngsr hours would b@ nioiKiised* Oa the oth#r h&2id4 in Sew York City SOEI# 400,000 persons are already tmespl^sd It would s®rr® ao good purpose to laftreft*e liourt there and create 'additicraal witmp 1 eyae&t • aetion i s beiiig tak@a in this Ti€ld# Ispr^sentativ© ItaiBSpeek iatroduoed Ml sss«a<fe©nt to tli© Fair Labor Stajwlards Act perKiitting work 40 hour* a week without psyaent of onr©rti©© premiums if &%$p®9& to bjr of markers certified lay the latioisal Labor Helatiosos Board* Last July, representetiTee of eifjkt GoT#nment agendas issued a joist statement reooBSMRidiag the adoption of th@ 4S*hour utmk as the hmnt workijig sehedule for sustained effioieaey l a most indtastrial op#ratica^B» Vhile l<mger hours s»y he aeeeesary in ®m® inetazMesji ev©.ry effort should h« sa&de to train additioaml workers so that hours e&n h® reduced to 4B« In peace t i » e , a 40*hour week le generally aesepted but in irar tiss© a 48»hour w»ek is ©ore efficient* the state* Beat m s sipmd by ?atters<m (War Sep&rtsse&fc) # Bard ?(Havy ^ ) Lasad (Haritiss© Cos^ission), MeKutt (1HI)« folson (M B), Taylor Draper (PubXle E«alth}» end fra©y (Labor ) Manpower faots The essential m&powar faets «ure thatt (1) She uneiopleyed res^rr© is about gone* only 1,7 (1.0 aillion jsales, .7 laillion f^Bales) vmre i n S@|st«isbej'» (2) The labor foroe has already hean stretched 1*5 (3) Tk* d#E*nds of the anaed foro«® *a& industry are oontizm* ing to inerease. Sojn© 4 million adiitio£yal &en nust be drawn into th© arsed faro«s by th© end of 1945* la addition, 4 Billion people nuet be brought into w*r Kesentially tlios© demands eaa be laet only if 4 million psrsoas, mostly ^arriad woss©n, ar^ brought into the labor foree &n& 4 million persons are shifted out of non-war in&astrl^s and agriculture* this xse&as that arotmd 14 million persons raust be plaoed in new jobs, § aillion of the® trained• lobal figures are too hugo to oosprehead ©asily» What the situation is and protsisee to be in a fe\r areas .may indieate the problem more «• g «. l a B s l t i e o r e , t o t a l ssiplo^Mmt increased frost* 417,000 In April 1040 t© 534,060 im Ju&@ 1942, ©r 117,000. Between July 1942 and J u l y 1943 58,000 a d d i t i o n a l u?orksrs w i l l b® needed i n m r -production p l a n t s * of replaoessiaxt of m i l i t a r y indwete©®* After replaeesMmt* of i»<hiote©s, w i l l be it nAt l o e a l s ^ p l y of a"bo\it 22,(XK3 workers, Msu&ing 10,000 d i s p l a c e fisents IToaa nen-nnr i n d u s t r i e s , ©atrane© i n t o the labor a%i*ket of IS,000 without c h i l d r e n and 10,000 ^ro^ea with c h i l d r e n . At l e a s t 34,000 workers isigrate i n t o Baltimore, i f ^s.r production ^oals are t o be aehicrred* I 20,000 i n Bov«febi»r 1940 t o 12S,000 i a July 194S* Th© loe&l s^ppl^ of sad 8©3si-skill@& wcrkars i s o^spl^tely exhausted• J!ren t h e supply of uns k i l l e d labor i s ir^d©qu«ite t o meet the &mm.n&* Frc^j J u l y 1942 t o J u l y about 9f,000 edditiortal worker* w i l l bo s*«it4* Bren with thorough u t i l i s a t i o n of a l l l o c a l l a b o r , including SS per e©nt eurtailssent of aoa*©sseatial i n d u s t r y , widespread h i r i n g of W0MA« es^loyiaent of haadieapped workers, ayad u t i l i s a t i o n of persons a v a i l a b l e for p a r t - t t e e work t not xaor© than 4S,000 persons eaa be made ftwilahlo t o scset the desmad* At l e a s t 48,000 mid p o s s i b l e 8S,000 t o 75,000 mjrtors must be obtained through KBW:agb
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