United States. Congress. Senate. Special Committee.

Post-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic (unit 6) online

. (page 30 of 49)
Online LibraryUnited States. Congress. Senate. Special CommitteePost-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic (unit 6) → online text (page 30 of 49)
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Mr. Lynch. So actually, when the war ends, we have got to pick
up that slack insofar as labor is concerned ?

Mr. Hedges. You see, the building trades may have now in service
possibly 400,000 men, in armed services of all forms, soldiers, seabees,
and other types. Tliey are out of the current business ability. Many
of them are in war industries, airplane plants, shipping, a great many
of them are in shipping. They are here but they have gone into war
work.

Mr. Lynch. Going back to that $10,000 of construction for one
man in employment, you have in mind one man in the building
trades ?

Mr, Hedges. Electrical construction and I only used it as an ex-
ample. Now, we are seeking to get that from other estimators in
every field, what it costs for a bricklayer to work, a steamfitter, a



1938 POSTWAR ECONOMIC POLICY AND PLANNING

painter. We have not yet completed the gathering of those figures^
we are in the process of gathering them.

Mr. Lynch. Have you any knowledge whether or not the figures
for carpenters and bricklayers and the like would vary greatly?

Mr. Hedges. I think they would and I think they would be less
than $10,000. That is a guess.

Mr. Lynch. If that were so, if they were less than $10,000, that
may take up the difference between the 1,600,000 that might be em-
ployed and the 2,200,000 which is the peak of labor output.

Mr. Hedges. That is right.

Mr. Lynch. That is all, Mr. Chairman.

The Chairman. Mr. Gilford would like to ask the witness some
questions.

Mr. GiFFORD. I would like to ask this: How do you tliink we can
recover jobs when production costs are so high that it is rashness to
invest ? Will the time ever come when the carpenters and electricians
and masons will lower their wage in depression times, or will they hold
on or even have higher wages, no matter whether there is a depres-
sion or not ?

Mr, Hedges. Well, that goes back, does it not, to the question of
whether you think the hourly wage is the right index to produce the
right yearly wage for the craftsman. Is that your question ?

Mr. Gifford. Perhaps so.

I have seen no indication of the aristocrats, as you call them, aristo-
crats of labor — and I am not criticizing the A. F. of L. ; I think they
are a good organization — but when my neighbor cannot afford to do
a thing and pay the price per day, how can my neighbor who receives
$4 a day pay his neighbor who is no higher in the social scale $9 or
$10 a day ? How can he do it ?

I want to say I live in a rather small community, but I have done
rather a lot of work in building and repair work. I will use myself
as a guinea pig, as you might say. I bought a house last year. I had
it painted and papered inside, every room, by women of the commu-
nity, and they did a good job. It was painted by some of our older
men who did not know how to paint too well, but were fairly satis-
factory. I did not dodge paying the regular jDrice, but I could not hire
experts; they were not available. I employed anybody I could get to
do the work,

I want to bring out the point that people who cannot qualify among
the aristocratic workers, as you call them, may be fairly good work-
men. They are gradually increasing their ability and they may be in
pretty heavy competition now with the trades who demand such a
high rate of wage. I want a high wage rate. I Avant a high wage
rate for myself. But how can I get it if my neighbor cannot afford
to pay me? Are you willing to come down in the scale so that they
can afford to pay for work in times of depression?

Mr. Hedges. May I make a comment on that ?

Tlie Chairman. He asked for it ; yes, sir.

Mr. Hedges. I know it is a problem, and, of course, you would not
want me to underwrite the principle of engaging occasional labor for
these jobs. I do not think it would solve the problem if you reduced
the scale, the present average scale of $1.50 an hour, to 75 cents; I do
not think you would solve the problem. It might seem to do it, but I



POSTWAR ECONOMIC POLICY AND PLANNING 1939

do not think it would, because you would at once reduce tlie market
for houses by the return that the worker gets.

Now, I agree with you that is a maladjustment in the industry, and
I have told the labor-management committee of the electrical construc-
tion industry that that problem is an industry problem. It is not the
problem of labor or of management but labor and management
together.

I have suggested, and I have received some favorable reaction,
that an agency be set up by the employers and the union in any given
community to give better and cheaper service to the consumer through
this cooperative agency that the employer and union sets up, and that
would take some of the curse off repair bills that you chafe under in
the case of a plumber or an electrician. I chafe under them, too; I
have repair bills once in a while that make me sizzle,

Mr. GiFTORD. I have a neighbor and he has plenty of money. He
told a carpenter that he had a lot of work that he did not need, but
would have done if at a price of $5 a day, that he could work every
single day as long as he wanted to. He would not pay him $8, it was
not worth it to him. That fellow was glad enough to get $5 as social
security had not reached him at that time.

I am not interested in your average. You so easily get an average
but when the wages went down they worked only a few weeks out of
the year because there was nothing to do. You do not want to tell
me they loafed the rest of the time?

Mr. Hedges. I do not know, they may have driven taxicabs, I do not
know,

IMr. GiFFORD. A man could make money other ways, he could add to
bis annual income. Those figures you gave us are simply income for
that particular kind of work,

Mr, Hedges. That is right, it was measuring the return of the in-
dustry to that worker in the industry.

Mr, GiFFORD. When he came down to that $900 a year he might
have acted as a chauffeur a little while, couldn't he?

Mr. Hedges. Some of them may have gotten extra jobs but many
of them were on their uppers, too, that I know, when it was very wide-
spread, you see,

Mr. GiFFORD. I live in a community where we often like to say that
when hard times comes we live off each other.

Mr. Hedges. If that were possible within the industrial set-up we
have, that would certainly be one solution, but it does not work out for
many thousands of people that way.

Mr. GiFFORD. I would like to build some more, but I cannot pay
your prices, because those to whom I want to rent cannot pay the rent,
and I cannot get any return. It is foolish, silly, for me to do it. When
that condition exists, would you recommend the Government to come in
and for us to indorse the Wagner bill ?

Mr. Hedges. The Wagner bill for housing?

IMr. GiFFORD. We would repair everybody's house, clear up the slums
with Government money, long-term money ; would you like to see the
Government go into it?

Mr. Hedges. What I have suggested is an attempt to prevent a
condition where you need that kind of solution. If we once get into
this tailspin nothing will prevent it.



1940 POSTWAR ECONOMIC POLICY AND PLANNIXG

Mr. GiFTORD. You say we cannot be conservative any longer. I am
trying hard to be conservative. Perhaps you are right; we cannot
keep it up. I am trying to keep it up lest t be led astray by putting
the Government in bad financial shape. I am interested in the Wagner
bill where we would get social security so that when a man is out of
Avork, like some electrician, he would not have to work at something
else. He would not have to be a chauffeur. The Government will take
care of him and still he will keep his high wages. Those are happy
dreams. I recall a story about dreams. The man dreamed he was
dead. He woke up suddenly and someone asked him what woke him
up, and he said it Avas too damn hot. I could make it apply here..

I try to be conservative. I realize your position and your research
work, but when you cite to me tables of averages, you do not fool
me any.

Mr. Hedges. Well, you have heard of the old crack about the com-
parison of the w^ord lie, lies, damn lies, and research.

Mr. GiFFOED. I was on another committee where the OPA wanted
us to see statistics and I want to make it plain, 5^ou can make statistics
attractive if you start on the sickest day you have, then your average
is so much better. All New Dealers begin with 1933 to get their
average. Statistics are something you can talk about with exactness
on a §ubject you know nothing about.

Mr. MuKDOCK. Mr. Chairman, I do have some questions here but if
I may take just a minute I have been glancing at this chart at the
same time that I have been looking at the figures j^ou gave me. I
marked two of these years that you indicated out of about a decade. I
marked 1933 and 1937. This chart shows me that the lowest point
in recent years in both public and private construction Avas the year
1933 and I notice that you have indicated that the average salary of
these electrical workers was $541 that year. Whether we quibble al30ut
the matter of averages or not, I think it is a truism that this must
conform to the general economic conditions of the country, and our
national income in 1933 was at a very low ebb.

Mr. Hedges. That is right.

Mr. MuRDOCK. That probably explains the situation.

Mr. Hedges. Our figures dovetail with this chart. I have it. Is
that your point ?

Mv. MuRDOCK. Yes.

Of course, I am looking now at the year 1937 which you indicated
furnished an average wage of $1,846. That was before tlie war and
before the smaller depression, I notice a drop in the following yeav.
But that was the thing that had been running through my mind.

Now, if I may, Mr. Chairman, I would like to say this. We speak of
full employment. We all hope for full employment in the postwar
period. You have said as much and we have all said that. I believe
you indicated that you hoped the major part of that employment
would be in private hands, private employment, but you are also
willing that any necessary part may be in public employment.

Mr. Hedges. It will work out that way inevitabl}^, you cannot stop it.

]\Ir. MuRDOCK. I have the same feeling although I have the hope that
these 55,000,000 jobs or a large ])art of them might be with private
employment.

Mr. Hedges. That is rieht.



POSTWAR ECONOMIC POLICY AND PLANNING 1941

Mr. MuRDOCK. Private employment, I fear, cannot possibly furnish
all of those jobs. You would favor public employment coming to the
rescue and fitting into the picture to the point necessary to give us
full employment.

Mr. Hedges. I think everybody in the industry does think that. It
has been the history — there is nothing radical or revolutionary about
that. When private industry fails to move fast enough or in that direc-
tion, there will be a supplementary effort by public works. It is an
old theory, and happily many cities in the United States have gone far
now in making out such a program. Portland, Oreg., as you know^
hired Robert Moses, and they have their plan, and Louisville has its
plan. I have been told there are more than 1,000 cities that have pre-
pared a shelf of public works. I do not see anything radical or revo-
lutionary or antagonistic to the private-enterprise system in that
program.

Mr. MuRDOCK. I think all witnesses have indicated about the same
view, as I remember hearing them. This is what I am leading up to.
Is there not a danger that the governmental agencies, national and'
local, having made a shelf and made preparations for public employ-
ment, will tend to overdo it and compete with private employment in.
order to carry out their public construction?

Mr. Hedges. Well, that would have to be a prediction. My feeling:
would be if it is moved to the municipal level there would naturally
be checks on that from the people themselves that are going to bet
served by the unions and by the employers in that field. It seems to
me in this whole question of the relationship of central planning to the
locality, as you move the operation down to the lower level, I mean the
basic level or the municipality, you are going to wash out many of the
faults in such a system. I would like to see the thing move down to
the municipal level. There you get the kind of family economy that
this honorable gentleman described to act as a check upon bureaucrats
at the central level.

Mr. MiTRDOCK. We cannot legislate private employment. We may
enact legislation so as to give encouragement to private employment
but we cannot legislate it. The only legislating of employment we
can do, tlien, is for public employment, as I see it.' Now, if we should
pass any legislation looking toward postwar employment, do you think
it would be wise for us to write in some safeguards in order" to insure
that the public employment shall follow private employment and
supplement it?

Mr. Hedges. Well, conditions might arise when you would not want
it to proceed that way. You might want it to proceed anyway. I wouM
hesitate laying down too rigid a program because conditions have a.
habit of surprising j^eople, and you always want public works to sup-
plement private employment. Now, it might well be — suppose we don't
get materials for our private enterprise. There might be a period of ^
year when you could do some public works to get the thing started^
Public works should be thought of, it seems to me, as a ballast, as sa.
governor and not as a competitor to private enterprise.

Mr. MuRDOCK. That is well stated.

I notice in this very chart tfiat private employment goes down during:
the war period and public employment goes way up. That is a case
of war necessity.



1942 POSTWAR ECONOMIC POLICY AND PLANNING

Mr. Hedges. That is right.

Mr. MuRDocK. I am talkino- now of a time after the war when we
will not have that situation. We want private enterprise to give all
the employment that our economy can sustain or demand.

I have just been turning this o-ver in my mind. In case we pass some
bill that will provide for public employment, not made work, but use-
ful, wealth-producing necessary public employment, would it be well
for us to write into the law that this construction shall not be begun
until there is a certain degree of unemployment?
, Mr. Hedges. Well, I would hesitate, I would be a little afraid of that.
I would not be afraid of it in your principle. I see your principle but
I am afraid tliat you' might face a situation where you would not
want that to happen. I mean you might want to precede the great
private enterprise projects by some public works until they could get
ready to do it. They are all busy too and they are doing war work,
they have got to have a change-over. Materials have to be found.

Mr. MuRDOCK. I am thinking out loud, too, on the matter and I just
want to arrive at this idea, that }3ublic employment must supplement
private employment and I want that to be done in such a way that
governmental agencies will not say they have got a beautiful scheme
here — we have got our plans all cut and dried, and regardless of what
private employment needs w^e are going ahead with this whether it is
useful or needed or not.

Mr. Hedges. When they do that, they do harm. When they act as
competitors they do harm. When they act as supplementary to or a
governor of the situation they do good. Now, couldn't you write that
principle into your bill rather than to say just when the time should
be when they should proceed because you might want that hour
changed ?

Mr. MuRDOCK. That is exactly it.

I think that is all. Mr. Chairman.

Mr. LeFevre. Mr. Hedges, as I recall your figures just prior to the
war your average income was between $1,500 and $1,600 for workers
in the electrical construction field and you would like to see that in-
creased to remain at $3,000?

Mr. Hedges. Only if our national income reaches $150,000,000,000 or
$160,000,000,000.

Mr. LeFevre. I know your reason is perfectly good. I think every
American citizen should own his own home and things of that sort
and we are all striving for that. With this increased percentage,
what percentage of the cost of construction is for labor, let us say in a
$50.,000 project what would be the cost of labor ?

Mr. Hedges. It changes a great deal. It has been put at 50-50
for material and labor, tliat is 50 for labor and 50 for material. In our
particular segment, the electrical segment, it used to be written oif at 5
percent for electrical but now it has increased to 10 percent due to the
rapidly increased use of electricity and electrical equipment, such as
electrical kitchens and those things. About 10 percent goes into
electrical construction of any given job. That is for the total con-
struction, 10 percent of the total construction.

In our industry we used to write off 50 percent for labor and 50
percent for material. That has changed to about 63 and 37 for labor —
63 for other things, 37 for labor. That is due to the fact that the



POSTWAR ECONOMIC POLICY AND PLANNING 1943

building inc^ustry has seen mechanical changes taking place in that
field — the kind of thing Mr. Kaplan has mentioned. Mechanization
has gone forward. Labor takes about 37 cents over against 63 when
we used to take 50 over against 50. I could speak w4th more assur-
ance as to electrical construction than I could as to other things.

INIr, LeFevre. I was interested when you mentioned the falling
off of skilled mechanics. I know that is true. I agree with you as
to the fact that most of the men in the trade are old men. Wliat is
your union going to do to help this situation in the way of appren-
ticeships?

Mr. Hedges. We have a top committee in our industry, that is a
labor-management committee. We are now trying to set up a local
joint committee that is labor-management. Appenticeship is con-
trolled jointly between employers and the union and we are now
going to supply them with this analysis of the industry and even
try to prorate for that particular locality the number of apprentices
per year that should start into the industry. You see, w^e cannot
dictate to them, we hope to guide them.

Mr. LeFevre. What are the wage rates of these apprentices 2

Mr. Hedges. That is set down so they take about 25 percent the first
year, 50 percent the next year and 75 the next year and the full wage
the fourth year. That is about how it runs. That is often set up by
collective agreement between the employer and the union.

Mr. LeFevre. I think it is an awfully good move, something that
ought to be paid a lot of attention.

Mr. Hedges. We have to do it.

Mr. GiFFORD. I want to ask a question that is interesting to me.

A young man appealed to me. He went to school, he wanted to be a
master plumber and he passed the examination and they told him he
could not come in, that there were too many master plumbers now.
There are two boys who went 40 miles to school, worked for a plumber,
passed the examination but they were not allowed to become master
plumbers because there were so many plumbers a year only.

Mr. Hedges. Well, the doctors do that, you know, the certified public
accountants do it, the engineers do it, the architects do it. I admit it is
a rule-of-thumb method of doing something that has to be done. I
think we can improve upon the method and we are trying to improve
upon the method.

Mr. Giffgrd. Your question brought that out. You know perfectly
well they are limiting the number in these crafts and they are not
taking them in.

Mr. LeFevre. They are going to need them.

Mr. Fogarty. Mr. Hedges, this annual wage you have in 1942, I
would like to make it clear as to that $3,280. The only reason that it is
up that high is because of the tremendous amount of overtime that
was worked in the construction field.

Mr. Hedges. That is right.

Mr. Fogarty. Men were working 70, 80 hours a week on these con-
struction projects.

Mr. Hedges. That is right.

Mr. Fogarty. If it had not been for overtime they would not have
received anywhere near the annual wage shown because the wages, the
rate has not gone up verj^ much in the construction game.



1944 POSTWAR ECONOMIC POLICY AND PLANNING

Mr. Hedges. Practically nothing in the war years.

Mr. FoGARTT. I was very interested in listening to my good friend
from Cape Cod, my fellow New Englander, Mr. Gifford, and some of
his remarks as to coming from a small town.

Mr. Gifford. He wants to bring out that the town I live in is in a
very sparse section and I am not familiar, you see, with these problems.

Mr. Hedges. And a very delightful section it is.

Mr. FoGARTY. I happen to live in a smaller town, Mr. Gifford, than
you live m. I live in a small country town. I laid bricks 12 yeai's
before I came to Congress.

Mr. Gifford gave an example of one of his neighbors making $4
a day and he could not afford to pay $9 a day for mechanics. Well,
I do not believe anybody should be made to ^'ork for $4 a day in the'
first place. He has given you a few examples, and I will give you
an example now from experience.

I live in a small country town of about seven or eight hundred,
and about 8 years ago there was a new house being built about a half
a mile from where I lived. The contractor asked me if I would build
a chimney for him. He asked me how much I got, and I told him I
got $1.50 an hour, which was tlie union wage at the time. He thought
that was an awful lot, it was awfully high, he had already been to
someone else and they had given him a figure of $20 to build the
chimney. I said I would build it for him for $20. I went up that
morning to do it, and the chimney was done at 1 : 30, and so I made
$8 over tlie $1.50 hourly wage.

Mr. Gifford. They do not let you lay as many bricks these days.

Mr. FoGAKTY. Don't tell me that the bricklayers union has' any
such rules, because I happen to know what I am talking about in
that instance. You cannot show me any job anywhere in the country
where there is a limitation put on the work of any of these construction
building-trades industry.

Mr. Gifford. I liave been so informed.

Mr. FoGARTY. You have been misinformed.

Mr. Gifford. It is generally known to be true.

Mr. FoGARTY. You lay as many bricks as you can lay, and if you
do not keep up with the next guy, you are on the road.

JMr. Gifford. I am here to watch out for my Federal Government.
If all these dreams of public spending are put through, my Govern-
ment will soon be in a hot place. That is what I referred to when I
said the man was dreaming that he was dead and he was awakened.
That is what I tried to bring out.

Mr. FoGARTY. Mr. Hedges, I cannot see any way possible at all for
the reduction in the wages of the building-trades men even though
they get $1.50 an hour. I thought I was very fortunate in Rhode
Island. I was president of the bricklavers union for 4 years, and
1 worked as steadily as anybody did in Rhode Island, and I was get-
ting $1.50 an hour and my annual wage was never over $2,100, $2,200
a year— that was at $1.50 an hour. You have to take into considera-
tion the lack of materials, and when the job is finished you are looking
for another job. There is no possible way of gaining an average
wage from the construction industry because you have the weatlier
to contend with, lack of materials, you have the waiting time between
jobs, looking for another job, and it brings your annual Avage, if you are



POSTAVAR ECONOMIC POLICY AND PLANNING 1945

lucky, to about $40 a week, I cannot see how anybody in the world,
and especially the families of building-trades men because most trades
men, most building-trades men, are married and have families of four,
five cliildren, can get along on any less than that minimum. My
father happened to be a bricklayer, and most fathers who lay bricks
do not want their sons to become bricklayers because they cannot make
a livable Avage. That is the main reason why we do not have an
overabundance of mechanics in the building-trades industry today.

I think those facts are something I know quite a little about. I
just wanted to make that observation.

Mr. OiFFORD. I ask you if there is a month or two when there is no
no bricklaying to be don.e if you do anything else?

Mr. FoGARTV. I can chop wood and nuike $1.50 a day chopping wood.

jMr. GiFFORD. I want to say this off the record.

(Discussion off the record.)

Mr. Hedges. Mr. Chairman, I do not think anybody within the in-
dustry has seriously contemplated lowering either the hourly scale or
giving labor less income within the industry. To my knowledge I do
not know anybody that has made that proposal. It is wholly outside



Online LibraryUnited States. Congress. Senate. Special CommitteePost-war economic policy and planning. Joint hearings before the special committees on post-war economic policy and planning, Congress of the United States, Seventy-eighth Congress, second session, pursuant to S. Res. 102 and H. Res. 408, resolutions creating special committees on post-war economic (unit 6) → online text (page 30 of 49)