Economics Volume II: Modern Economic Problems

by Frank A. Fetter

These exceptions have come in various ways. There is first, the eight-hour limitation in public employment, required in federal employment in 1868, really effective since 1892, and now in force likewise in about two thirds of the states. In almost the same jurisdictions—national, state and municipal—eight hours is the legal day on work done in private business for the governments. Work on railroads and street railways, particularly in the direct operation of trains, such as the work of dispatchers, signal men, and trainmen, is subjected to a large variety of regulative measures, hours being limited in some cases to 8, in others to 9, 10, 12, or 16, and in a number of cases a specified minimum number of hours of rest is required after the maximum hours of labor. These laws are primarily for the protection of the public, but they afford a protection to the employee much needed, as many well-authenticated cases of excessive and exhausting hours demonstrate.

The limitation of hours has very recently been extended to many private businesses in which exceptional conditions exist affecting the health of the workers or the safety of the public. This development has occurred almost entirely since the United States Supreme Court in 1898 (Holden vs. Hardy) sustained a Utah statute limiting to eight the hours of labor in underground mines. Now 8 hour laws in certain specified cases are found applying to mines, smelters, tunnels, and a variety of other kinds of work, and in a few cases the limit is 9, 10, or 11 hours.

§ 8. #Broader aspects of this legislation#. The subject took on a new aspect when the legislature of Oregon, in 1913, declared broadly that "no person shall be hired, nor permitted to work for wages, under any conditions or terms, for longer hours or days of service than is consistent with his health and physical well-being and ability to promote the general welfare by his increasing usefulness as a healthy and intelligent citizen," and fixed ten hours as the limit of work consistent with such a measure of health and welfare, in work in any mill, factory, or manufacturing establishment. This law was sustained by the Supreme Court of that state and was carried on appeal to the United States Supreme Court.[6] In support of the law there was presented a voluminous brief giving a most impressive body of evidence from scientific and from practical business sources, to show the many evils, popularly unsuspected or underestimated, that result from long hours even in industries of no exceptional hazards.[7] Physiological and psychological tests demonstrate that the fatigue following more than a moderate working period not only reduces immediate efficiency, but so poisons the system that greater liability to accident, disease, intemperance, immorality, and premature decay, results.

Two main purposes appear somewhat intermingled in this legislation in limitation of hours. The first purpose is to protect the public directly where the safety of others is dependent on the health and efficiency of the worker. The second purpose is to protect directly the worker's health and welfare, that policy being recognized to be in the long run the best likewise for the public welfare. In legal reasoning it is being recognized that the individual wage-worker, even the adult male, is not in a position to judge the number of hours he ought, for his own good, to work, and is unable to fix the length of his own working day. As a matter of economic theory, the usance of a child, a woman, or a man, is merely that kind and amount of service that can be given out by each without repressing the normal possibilities of growth, reducing the normal health and vigor, or shortening the normal period of healthy productive human existence.[8] It is becoming a general social policy to prevent the abnormal strains of industry that cause the unnatural deterioration of the human factor in industry. A wage-worker may be permitted to sell his daily net fund of working power—his usance—but not his life.

§ 9. #Plan of the minimum wage.# Even more recent than the legislative regulation of hours downward is the attempt to regulate wages upward in the case of certain low-paid wage-workers. The modern[9] movement for the minimum wage began in Victoria in 1896, and it soon extended to nearly all the other Australasian states. Great Britain applied the plan in 1910 to industries in which wages were exceptionally low. The plan was first adopted in the United States by Massachusetts in the year 1912, tho in an emasculated form, and spread so rapidly that at the end of 1915 it was found in at least 11 states. Minimum wage laws usually lay down "a living wage" as the standard to be used, and either prescribe a flat rate of wages, or, more often, leave the decision in each case to the wage commission established to administer the law.

Generous sympathies have guided this movement of which much has been hoped and which, on the other hand, has always had its adverse critics. The most that can be claimed for it by its friends after more than twenty years of experience, is that the "dire predictions" have not been verified. In truth it would seem that the plan as yet has not been tried on a scale that could yield very large fruits either for good or for evil. The persons whom it is sought to aid are only selected groups of the lowest paid workers, generally limited to minors and young women, who in many cases are those of immigrant families in urban districts. A large volume of discussion on this subject has developed, mostly of an a priori nature, of which we may here touch only a few of the salient points.

At first glance the principles involved in the legislation limiting hours and those in minimum wage legislation may seem to be the same. But an important difference soon appears. In the former case the evil is that of a too long working period, injurious to health, and this can be reached directly and stopped by an efficiently administered law. But in the latter case the real evil is industrial weakness and incapacity such that the workers are unable to command "a living wage" in a competitive market. A minimum wage law, by itself, neither cures the industrial incapacity nor ensures employment to the industrially weak at any wage. The law does not attempt to compel employers to employ at the legal minimum wage every one who wishes to work; it merely declares that the employer shall not employ any one whom, in his employ, he finds to be not worth that high a wage.

§ 10. #Some problems of the minimum wage#. Unless the demand for a particular kind of service is absolutely inelastic (a rare if not impossible situation in a large market), there must be fewer jobs for the less capable workers at high than at low wages, other prices remaining the same. Further, some of the less capable workers must be crowded out of such jobs as remain; for an artificially higher wage attracts into an occupation some from other occupations before paid more highly. It seems to be admitted by the friends of minimum wage legislation that this result is logically to be expected and that to some degree it appears. Of course it is never possible to tell to just what extent workers have been and are being excluded in this way from any particular establishment or occupation. Forbidden to earn what they can, the poorer workers must become dependent on charity. It may be said, and perhaps truly: better this than underpaid labor destructive to the health of the workers and evil in its competitive effects upon other wage workers.

In most discussions of the wages of women there is a ready confusion of sympathetic ideals of what one would like to see with the cold facts as they are. Women's services (especially those of young women) have increasingly of late been coming upon the labor market in such a way as to cause abnormal congestion in a few occupations. Employers have not caused low wages in these cases. Partly these occupations are the clean, light, and agreeable ones, partly they have a relative social glamour, largely they can be followed for a few years near the home of the worker, nearly always they may be undertaken with brief training and little skill. Investigation has shown that at least eighty per cent of this group of girl workers live at home. A wage that is amply a "living wage" when used as a pro-rata contribution to an American family income is frequently insufficient for the girl living "independently." Such a girl is, under the conditions, unable to earn a living in her chosen occupation, and it may be better to recognize that fact and to deal with such individual cases as appear among the one fifth of all girls employed.

The one unquestioned service of the minimum wage law is that of diagnosing the evil of low wages rather than in remedying it. The minimum wage law brings to light the industrial incapacity of particular individuals to earn a living wage. The direct remedy is to abolish the incapable workers or their incapacity by such methods as regulating foreign or cityward immigration, custodial care of the physically, mentally, and morally weak, vocational guidance, and more effective measures of industrial education. Alongside of the abnormally low paid occupations or elsewhere in the industrial organization are other occupations in which with, or often even without, special training, the sweated workers could get, competitively, more than the minimum wage, if they could, or would, qualify for the work.