CHAPTER III.

THE TEST OF EXPERIENCE

There are objections urged against minimum wage legislation that cannot be disposed of as easily as can the constitutional difficulties considered in the preceding chapter. If the legal regulation of the rate of wages is otherwise highly desirable, the fact that it might contravene the Constitution would simply be conclusive proof that the best interests of the State demand that we should entertain no sentimental scruples about changing the Constitution; the important consideration is whether or not such regulation is desirable. To show that it is not desirable several practical objections are urged. For instance, it is contended, and not without effect, that a minimum wage will discourage industrial prosperity by driving certain industries out of the state; that it will enhance the vexing problem of unemployment; and that it will reduce the general level of wages by making the minimum wage the maximum. To disprove these allegations, the friends of the legislation point to the experience of Australasia and England. As the laws have been in operation but a few years, however, any positive conclusion as to how they really have worked, and how they will operate in the future, must needs be tentative; but, the statistical data at hand is valuable in pointing out a tendency, and this tendency, it must be admitted, is favorable to the laws.

Practicability. First of all, the laws work. They are enforceable and are enforced apparently with little friction. The official reports from Victoria are to the effect that "the working of the determinations is harmonious and satisfactory," that "the determinations are well observed, and prosecutions for breaches are few, misunderstandings being usually responsible." The rapid growth of the number of boards and awards is an indication of the workability of the acts. In June 1912, there were, in Victoria,

1 Report of Chief Inspector of Factories of Victoria, 1909, p. 72. 2 Official Year Book of the Commonwealth of Australia, 1901-1912, p.

1041.

PUBLIC REGULATION OF RATE OF WAGES 47

III Wage Boards affecting 130,000 employees, and 65 determinations in force; in New South Wales, in December, 1912, there were 157 Industrial Boards and 339 awards in force; in South Australia, in December 1912, 56 trades, including 25,000 employees, were under Boards, and 49 determinations were in force; in Tasmania, where the law was put into operation in 1911, the Parliament had, by the 30th of June 1912, authorized the appointment of 19 Boards, and II of them had made determinations.1

Apparently serious administrative difficulties cannot be urged as a good objection to minimum wage legislation.

Effects on Industry. Is minimum wage legislation destructive to commercial prosperity? Not in Australasia, if available testimony and statistics are reliable. The following figures, taken from the census report of New Zealand,2 should satisfy the most sanguine proponents of minimum wage legislation.

The value of the output of manufactures increased from £9,549,000 in 1895 to £17,141,000 in 1900; the external trade grew from £16,000,000 to more than £23,000,000 in 1901.

"In June 1900," says Mr. Reeves," "after this 'most prejudicial' law had been at work nearly five years, the Canterbury Chamber of Commerce, one of the chief mercantile chambers in the Colony, published these sentences in the forty-first annual report:

“Probably at no period in the history of New Zealand can we

1 Official Year Book of the Commonwealth of Australia, 1901-1912, p. 1041. According to the Report of the Chief Inspector of Factories for Victoria, for 1912, there were 131 special boards, affecting 150,000 employees in 1912.

2 Reeves, William P., "State Experiments in Australia and New Zealand," II, p. 137-8.

office.

Omitting Government railway workshops and Government printing Excluding dressmaking, tailoring, shirtmaking, millinery, etc., for which there were no returns in 1896.

Reeves, William P., "State Experiments in Australia and New Zealand," II, p. 105-6.

find such unmistakeable signs of general prosperity as we have experienced during the past year. Our industries, almost without exception, have had their capacities taxed to the very utmost, skilled labor has been practically unobtainable, anu, except in the case of one or more exceptional trades, there is every prospect for a continued demand for the productions of New Zealand labor. The number of workers employed in our factories in the year 1895 was 29,879. The number has steadily increased until, at 31st March 1900, the number employed reached 48,938, being an increase of 19,059, or nearly 64 per cent in five years. No stronger proof can be required of the forward march of our industrial army, and it is satisfactory to note that the industries that have been benefited most by the wave of prosperity which we are now enjoying have been able to give to the workers higher wages and improved conditions of employment.' ”

A similar condition of affairs is reported from Victoria. For instance, the number of factories increased steadily from 3,370 in 1896 to 7,750 in 1912; and the number of persons employed increased from 40,814 in 1896 to 104,746 in 1912.1 Victor S. Clark says: "The impression the country makes upon a visitor is not that of a land where industry is paralyzed and business stagnated, but rather the reverse. Permanent and costly buildings are being erected in the larger cities, public improvements are going forward, the wharves are crowded with shipping, the railway service is fully occupied. . . . There are few evidences of excessive unemployment. To a person studying in Australia, the economic argument that a country will be industrially ruined by state regulation is not convincingly demonstrated." Sidney Webb said, in 1912, that in the sixteen years since the minimum wage law went into effect in Victoria, the number of factories had increased by no less than 60 per cent, and the number of workers in them had more than doubled. And Philip Snowden adds to this: "The prosperity of the colony has been marked in the years which have passed since this legislation was first enacted. Since 1896 (the year when the first Act was passed) the revenue of Victoria has risen from £6,400,000 to

1 Report of the Chief Inspector of Factories and Shops of Victoria, 1913, P. 5. 2 Victor S. Clark, "The Labor Movement in Australia," p. 219.

3 Sidney Webb, "The Economic Theory of a Legal Minimum Wage," P. 5-6. Philip Snowden, "The Living Wage," p. 113, 114. For representative opinions see Appendix to Briefs in the case of Stettler v. O'Hara, Oregon Supreme Court, 1913, p. 162-169.

£10,700,000. The savings bank investments have risen from £4,300,000 to £15,400,000. The receipts from the state railways have increased from £1,400,000 to £4,443,000. The number of marriages have risen from 4,700 to 10,200.”

Without speculating on the probable or possible part that the minimum wage laws have played in this extraordinary expansion in Australasia, and even without insisting that they have played any part at all, is it not fair to assume that the presumption is in favor of the laws and that the burden of proof has been shifted to the opponents thereof? This data may not prove the case for minimum wage legislation, but it is hard to see how it can be used to establish a case against such legislation.

Effects on Wages. State regulation has practically eliminated sweating in Australasia, according to the reports. According to Professor M. B. Hammond of Ohio University, the secretary of the Anti-Sweating League of Victoria, Samuel Mauger, told him that sweating no longer exists in Victoria, and adds that "his statements are confirmed by factory inspectors and various trade union secretaries."" Corroborating testimony is not wanting. "The question whether the operation of the acts has bettered the monetary position of the operative," say the official Year Book of Australia," "may be answered in the affirmative. Starting from the lowest point, the provision of an absolute minimum wage per week has stopped one form of gross sweating. . . . The average wage of females in the clothing trade in 1897 was ten shillings and ten pence a week; there were, however, in that year 4,164 females receiving less than one pound per week, and their average was eight shillings and eight pence. It was almost a revolution when a minimum wage of sixteen shilling per week of forty-eight hours was fixed by the Boards, when pieceworkers' rates were fixed to ensure a similar minimum, and when outworkers were placed on the level of pieceworkers." The Chief Inspector of Factories of Victoria reported in 1900: "I venture to affirm that there is now no sweating in the clothing trade in the State of Victoria." The following statistics on the clothing trade are taken from the Official Year Book:*

1 M. B. Hammond, "Where Life is More Than Meat," Survey, Febru ary 6, 1916.

2 Official Year Book of the Commonwealth of Australia, 1901-1912,

P. 1041.

8 Report of Chief Inspector of Factories of Victoria, 1900, p. 17. Official Year Book of the Commonwealth of Australia, 1901-1912,

p. 1042.

In Tasmania, continues the report, where there was no such law in operation in 1911, the female workers in clothing factories, 20 to 26 year old, who had been in the service from three to five years, received 12s per week.

But it is not the sweated workers alone that have been benefited by a minimum wage; wages have increased all along the line. "Except in three occupations," said Victor S. Clark in 1905,' "where there has been a recent increase in the proportion of female and juvenile workers, the rate of wages has uniformly risen since the boards went into operation." This statement is followed by the table on page 51 taken from the Report of the State Inspector of Factories for the year ending December 31, 1902.

According to the official Year Book," "the relative increase from 1891 to 1911 was greatest in Victoria and South Australia, and least in Tasmania, but in the last named State there was a remarkable increase, amounting to nearly 17 per cent in 1912. This is, no doubt, accounted for to a large extent by the fact that the wages board system was first adopted in Tasmania in that year."

When interpreting these figures, however, it should be remembered that they represent the nominal rather than the effective wage increase. The increase in wages has been accompanied, in most cases, by an increase in the cost of living; so that the increase in real wages can be safely assumed to be considerably less than the foregoing figures would seem to indicate. One official reports from Australia is to the effect that

1 Bulletin of the U. S. Bureau of Labor, No. 56, p. 70.

2 Official Year Book of the Commonwealth of Australia, 1901-1912,