Should the Wage-Hour Law Be Suspended?
LAW DOES NOT RESTRICT USE OF MACHINERY
By L. METCALFE WALLING, Administrator, Wage and Hour Division and Division of Public Contracts, U. S. Department of Labor
Over the Blue Network, March 18, 1942
Vital Speeches of the Day, Vol. VII, pp. 444-446.
LET me say at the outset that if the enforcement of the Fair Labor Standards Act of 1938 and the Walsh-Healy Act interfere with the production of one tank —or ship—or plane—or gun, it should cease tonight. If one minute is to be lost in the race to equip the United Nations to smash the Axis because of the overtime provision of the law, we ought to strike it from the statute books—not a week or a month from now, but at once. Nothing should and nothing will deter us from the task ahead, the accomplishment of a program of arms production that will see the machines of this nation in operation every hour of every day.
When the clouds of war were gathering over Europe, a time when not many Americans felt that this nation might be threatened, I was one of that comparatively small group that felt—and said—that we in the United States ought to be preparing to take our part in the struggle. Those were the days when to suggest American participation was not the popular thing to do. I say this not to claim credit for farsightedness but to let you know that I felt then as I do now that we have but one major task before us—to win this war. I want to emphasize that again tonight. Winning the war is paramount to every other issue . . . the 40-hour week, social gains or anything else. Our every consideration should be devoted to that end.
This is my first opportunity to address you as Administrator of the Wage and Hour Division. It comes at a time when the Wage and Hour Law is under concerted attack. I should like to speak to you as an impartial public servant; to review the whole problem of overtime in national defenseindustries from the viewpoint of the arguments that have been brought forward and the questions that have been and are being raised every day. I should like to discuss this from the knowledge of the facts we have in the Department of Labor bearing on our federal labor legislation, remote or direct, on the job of winning this war. It is not my purpose here to defend this legislation, but rather to make an appraisal of it from the standpoint of all of us as citizens concerned with winning the war.
The question in everyone's mind today is this: "Can we keep our defense plants running 24 hours a day with the present restriction on labor's hours? Should the 40-hour week be suspended or modified for the duration, so that our Army and our Navy will get the war materials they must have to stop and eventually defeat the Axis?" Much has been written within the past few weeks concerning the "40-hour week" and its effect upon all-out arms production. Much of what has been written has been inaccurate; much has been misleading. There are some fantastic misconceptions on the subject abroad today, and I therefore welcome this opportunity to discuss the matter with you.
You may have read or heard it said that there is no flexibility in the overtime provisions of our law; that it was created to spread employment in time of peace, when millions were without jobs; that it now enforces a workweek that is not only unnecessary but actually detrimental to the war program. The New York Times, in an editorial on February 16th under the title "Fighting the War on a Forty-Hour Week," explores the background of the law,infers that it was predicated on breaking the back of unemployment, and suggests that the maximum output week lies somewhere between 48 and 60 hours for most occupations in the United States.
To this I want only to say that in the war industries of America today there is no 40-hour week. I mean that literally, for these are the facts: Ninety per cent of the plants in important defense industries today are operating more than 70 hours a week. Three-fourths of these plants are operating some departments at least 120 hours a week. Two-fifths of them are carrying on an important amount of production for more than 160 hours a week.
The mills and factories of America engaged in vital war production are now working 80 hours a week and more. Included in those plants are smelting and refining, brass, copper, bronze, chemical factories and engine manufacturing other than airplane engines. Aircraft plants, blast furnaces, defense shipyards and plants producing machine tool accessories are all in operation for 80 hours and more every week.
In the light of these figures, do you believe that the standard workweek for maximum output ought to be somewhere between 48 and 60 hours?
Let's look at this question of hours per week from another viewpoint. Consider the hours of work in war industries surveyed by the Bureau of Labor Statistics for the first half of December. Bear in mind that these figures include some of the time worked prior to Pearl Harbor and that the period of the survey was too early to include the full acceleration resulting from our entrance into the war. Despite this, the average number of hours per shift worked in leading war industries ranged from 54 hours in machine tool accessories, 52 hours in fire arms manufacture, 47 hours in iron and steel forgings and explosives manufacture to 46 hours in ship building. Comparable weekly work hours were in use in all other important war industries.
No, we are not fighting this war on a 40-hour week— nor over a 40-hour week, much as some of our editorial writers would have you believe. Not when over 90 per cent of our shipbuilders are working an average of more than 12 hours overtime per man per week, when 96 per cent of the workers in the machine tool industry are employed 56 hours a week, or when over 66 per cent of our engine builders are working an average of better than 14 hours overtime a week.
It has been written—and frequently of late—that the "40-hour week" was a factor in the ruin of France. By inference it is suggested that the same thing can happen here. I want, therefore, to draw your attention to a very important distinction. It was the 40-hour week for machines that contributed to the downfall of that nation, for France employed her machinery for only 40 hours instead of hiring additional workers. We Americans, I can assure you, are not making that mistake. We are striving toward the utilization of every piece of plant equipment and every ounce of industrial capacity for producing urgently needed war materials. We are accomplishing that purpose by installing second, third and even fourth shifts of workers. Although the use of extra shifts necessarily varies according to the needs of different industries, a vast majority of plants are producing an important volume of war materials on a 120-hour basis.
Utilization of machinery in war plants in January of 1942 was far greater than that of September, 1941, and the September record was better than that of December, 1940. Between September and January we increased the effective utilization of our war production facilities by 10 to 15 per cent. There is ample evidence to show that the payment of overtime did not deter even greater plant utilization. Only 2 out of 650 employers whose plant operations are represented inthe Bureau of Labor Statistics survey declared that overtime paid after 40 hours prevented more complete plant operation. Only 2 out of 650.
"End the 40-Hour Week" was the cry of the Detroit "Times" in an editorial which that paper published on March 7. In part, the "Times" declared: "That man should be paid good wages and collect overtime is, of course, conceded. But every worker, every industrialist, every poor man, every rich man has an equal stake in this war." Let us see who would gain should this editorial advice be followed. Not the worker, it is obvious. Not the production program, because we are constantly stepping up plant utilization right now. Would the Federal Government save on defense contracts through reduced labor costs?
Let's examine this matter of government contracts. There are some $56-billion worth of these contracts outstanding today, the majority of which provide for lump payment to the contractor regardless of changes in cost and from which the government could not benefit from reduced cost of overtime.
Then who would benefit? Repeal or suspension of the law would have one certain result. Whatever saving might accrue would flow to the producer of the goods, not to the government.
Here is a fact you may have overlooked. Take away overtime and you cut wages, as Senator Taft said recently in pointing out that the law does not prohibit work in excess of 40 hours. Is it good policy or plain good business to cut wages in the face of rising prices?
There is a common misconception which many writers have failed to point out. A rise in labor cost of, for example 10 per cent, does not necessarily mean an increase of 10 per cent in cost of production, for there are other factors which must be taken into consideration. A recent study indicates that it is actually more profitable for an employer to work his men 48 hours and pay overtime than 40 hours because of the more efficient use of his productive capacity.
Shortage of labor has frequently been cited as justifying repeal of the overtime requirements. The San Antonio, Texas, "Express" echoes a common view in an editorial titled "Conditions that impede the victory program," which it printed in the closing days of 1941. "The Wage-Hour Act," it said, "based on peace time and even on depression conditions, is proving to be a bottleneck in the victory program proposed by President Roosevelt and OPM Director-General Knudsen." May I point out that the Bureau of Employment Security indicates that shortages of raw materials will result in serious unemployment during 1942. The Bureau of Labor Statistics estimates that employment in civilian production will be curtailed by almost 8-million workers between the fourth quarter of 1941 and the fourth quarter of 1942.
The aircraft industry has been able to double its employment by adding second and third shifts which the 40-hour week standard encourages.
Lieutenant General Knudsen, now Army Director of Production, declared a few days ago in an address at Des Moines that—and I am quoting; "Shelving of the 40-hour week is unnecessary so long as we have sufficient man power to operate swing shifts." General Knudsen speaks not only from personal experience but from an intimate and long time knowledge of production factors.
Again, it has been said that the problem is one of lack of skilled workers. The training program which was accelerated by the overtime penalty of the law, together with the dilution of the production process is the obvious solution to that problem. Using this technique, we are breaking downinto simpler operations the production of units, a process that has been made possible through the cooperation of labor. Applying this production line principle, it is possible to use men and women of lesser skills in these sub-operations and thus keep materials flowing without interruption.
The experience we gained in the last world war has been invaluable to us in the present. We learned the importance of stabilized conditions throughout the country. We learned that the maintenance of universal standards of labor the country over eliminated some of the tendency for labor to migrate from job to job or state to state. We know something of this production business in America and for once the aggressors will find that production is not too little or too late. We are ready for the task that faces us now. Because we appreciate the magnitude of the job we have to do and because we have the industrial machinery and the labor to man it, we are prepared.
The Fair Labor Standards Act and the Walsh-Healy Act assisted American industry to meet today's need for total war production. They stimulated the operation of multiple-shift systems which, week after week, month after month, have stepped up the productive capacity of the nation. Look at the record with an open mind and you will see that there is in reality no 40-hour or 60-hour or 80-hour week in the war plants of America. They can produce and will produce the tools of war 160—yes, even 168 hours a week. We can and will produce the materials that will win this war and we shall have preserved our way of life in doing so.