You have found an item located in the Kentuckiana Digital Library.
No. 18 "The Thirty-Hour Week: Dangers Inherent in Proposed Legislation," March, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_18 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 18 "The Thirty-Hour Week: Dangers Inherent in Proposed Legislation," March, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. Pamphlets Available Copies of the following pamphlets may be obtained upon application to the League's national headquarters: American Liberty League Speech by Jouett Shouse The Tenth Commandment Why, The American Liberty League? Statement of Principles and Purposes Progress vs. Change Speech by Jouett Shouse Recovery, Relief and the Constitution Speech by Jouett Shouse American Liberty League Its Platform An Analysis of the President's Budget Message N. R. A. Its Past, and Recommendations for the Future Analysis of the $4,880,000,000 Emergency Relief Appropriation Act Economic Security A Study of Proposed Legislation Democracy or Bureaucracy? Speech by Jouett Shouse The Bonus -An Analysis of Legislative Proposals The Constitution Still Stands Speech by Jouett Shouse Inflation Possibilities Involved in Existing and Proposed Legislation Write to american liberty league NATIONAL PRESS BUILDING WASHINGTON, D. C. THE THIRTY-HOUR WEEK Dangers Inherent in Proposed Legislation american liberty league T^ational Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. Document No. 18 March, 1935 The Thirty-Hour Week â˜… Legislation to impose a thirty-hour week upon industry again is before the Congress. Two years ago Miss Frances Perkins, Secretary of Labor, with the approval of the President, objected to a similar bill on the ground that its provisions were too severe and too inflexible. The Administration's attitude, which presumably has not changed, deserves commendation. The Brookings Institution in a recent study concluded that the legislation "would not promote national welfare." "It would prove detrimental to the interests of labor as well as other classes," said this research organization. "It would not promote recovery and bids well to intensify the depression. At best its immediate effects would be a spread of employment at the expense of efficiency and productive output. In its long-run implications the measure offers to the workers of the country merely a choice between more leisure and a more abundant consumption of goods and services." Studies by other disinterested authorities support the conclusion that the legislation is dangerous and unsound. Its objectionable features include the following: 1. It is an unwarranted attempt to control production in violation of constitutional principles. 2. Instead of increasing purchasing power and stimulating industry it would retard recovery through higher prices and reduced consumption. 3. While purporting to aid one class of citizens, it would in reality injure all classes. 4. It would be impossible to enforce even with a vast new bureaucracy. Terms of Bills The legislation is before the Congress in two forms. The Black bill is under consideration by the Senate Committee on Judiciary, while the Connery bill is in the House Committee on Labor. Although different in detail each limits industry to a thirty-hour week of five days of six hours and each by a different method seeks to prevent any reduction in daily or weekly wages. The Black bill, which would be in effect for a two-year period, provides that "no article or commodity shall be shipped, transported, or delivered in interstate or foreign commerce, which was produced or manufactured in any mine, 2 quarry, mill, cannery, workshop, factory, or manufacturing establishment situated in the United States, in which any person, except officers, executives and superintendents, and their personal and immediate clerical assistants, was employed more than five days in any week or more than six hours in any day." Agriculture and domestic service are exempt from the bill. Exemption permits may be issued for specified classes or individuals by the Secretary of Labor. The government departments and contractors on public works are prohibited from making purchases from business enterprises which fail to conform to the thirty-hour requirement. No governmental agency may make or renew a loan to any employer of labor in factories and mines who fails to observe the thirty-hour week rule. I All codes under the National Industrial Re- covery Act are to be amended to include the thirty-hour limitation. It is made unlawful for any employer subject to the act to reduce, directly or indirectly, daily, weekly or monthly wage rates until a reasonable opportunity has been given for collective bargaining with employees. The penalty for violations of the act is a fine of not less than $200 or imprisonment for not more than three months, or both. The Connery bill proclaims the existence of a national emergency during which the thirty-hour requirement shall be in effect. The President may declare a termination of the emergency. The bill applies to all forms of employment and to all employers in trades engaged in producing, transporting or distributing goods or services in or affecting interstate commerce. Agricultural workers and persons employed in domestic service and those subject to the Railway Labor Act are exempt. Special exemptions for not to exceed 90 days and for maximum weekly working periods of not to exceed 40 hours may be granted to employers operating under codes. It is provided that if any modification from the strict thirty-hour rule is permitted, it shall be subject to an adjustment of compensation so that workers will not receive smaller weekly earnings than before the law became effective. Employers not conforming to the requirements as to hours of work or compensation shall not be entitled to exemptions from anti-trust laws authorized under the National Industrial Recovery Act. One of the provisions of the Connery bill which is not in the Black bill gives authority to the 3 President to establish quotas or forbid importation of any commodity which is being imported in such quantities as to endanger the operation of the thirty-hour week. Under the Connery bill the penalty for violation is a fine of not more than $500 for each offense, each day such violation continues being deemed a separate offense. Constitutional Principles Both bills seek to control conditions of production. Such a step is a flagrant departure from constitutional principles. While the Constitution permits regulation of interstate commerce, the courts have never construed commerce as synonymous with production. The commerce clause of the Constitution forms the basis for the prohibition in the Black bill against shipment of goods in interstate or foreign commerce which have been produced or manufactured by labor employed more than 30 hours per week. By adroit methods a dragnet is thrown out to catch all industries which may not ship products in interstate commerce. Few could escape from the clauses which apply to industries under codes and to those selling to government departments and contractors, or borrowing from government agencies. The Connery bill bases the control over hours of labor on an emergency which has interfered with the free flow of interstate commerce. Under this highly doubtful power it limits hours of employment. The bills represent a repudiation of the right of freedom of contract as guaranteed by the due process clause of the Fifth Amendment to the Constitution. The employee may not sell more than a fixed amount of his labor nor may the employer buy more than that amount. Such arbitrary restrictions of conditions of production in industry in the two measures are without precedent. They go far beyond the National Industrial Recovery Act which authorizes industrial groups to join in codes under government supervision. That act provides that the codes, which in theory if not in practice are voluntary agreements, shall contain conditions of employment. No maximum hours are specified. It would have been contrary to principles laid down by the Supreme Court of the United States in the child labor cases to write into the law requirements as to hours of labor, wages or child labor. Whether or not the thirty-hour bills are so phrased as to escape invalidation in the courts, there can be no question but that both do violence to constitutional principles. Economic Theories The theory of the thirty-hour week is that it will force the employment of more workers and that by maintaining daily or weekly earnings of those already employed, the aggregate purchasing power will be increased. It is assumed that the greater purchasing power will make possible a larger output of industry and that additional workers will be needed. The spiral thus set in motion is supposed to boom industry and restore prosperity. The experience under the National Industrial Recovery Act has demonstrated that such a theory is fallacious. What actually happens is that an undue limitation of hours, with a consequent increase in unit costs, necessitates such an advance in prices of the products as to cause buyers to restrict their purchases. Exports fall off as prices become less attractive. The lessened consumption forces industry to curtail production. Workers are laid off instead of hired. More than 11,000,000 employees under codes now are operating theoretically on a forty-hour week basis. There are about 2,200,000 employees under codes calling for less than 40 hours and about 8,500,000 employees under codes allowing more than 40 hours. Despite the maximum hours allowed under codes factory employment in the United States actually averaged in recent months only about 33 hours weekly. The effect of a flat thirty-hour requirement would be to increase greatly the unit costs of industries now operating on a basis of 40 hours or more. If a worker now employed for 40 hours were to receive the same wages for 30 hours his hourly rate would be increased by one-third. Such an increase necessarily would be passed on to the consumer in higher prices. In recent hearings before the National Industrial Recovery Board it was testified by Charles R. Hook, president of the American Rolling Mill Company, that a thirty-hour week would mean a 16 per cent increase in the selling prices of its products. The added wage cost under a thirty-hour week to the entire steel industry would have been $185,000,000 on the basis of 1934 production. What has happened under reductions in hours may be illustrated by the operation of the Cotton Textile code. As against increases in pay rolls, hourly wage rates and the number of persons employed, there was a decrease of domestic consumption in 1934 of 13 per cent and a decrease in exports of cotton goods of almost 50 per cent. In numerous industries already suffering from increased labor costs a thirty-hour week could not be endured. There would be wholesale bankruptcies and liquidations. By reason of the present low average hours of employment a thirty-hour week would by no means absorb all of the idle workers. While in certain industries it would mean an increase in the number of employees proportionate to the shifting from a forty to a thirty-hour week, the average increase would be only that involved in changing from a thirty-three to a thirty-hour week. One of the false assumptions on the part of the sponsors of thirty-hour week legislation is that by reason of technological advances the millions of unemployed cannot be entirely absorbed in industry without an over-production of goods. The Brookings Institution in studies on "America's Capacity to Produce" and ^America's Capacity to Consume" found that the United States has not reached a stage of economic development in which it is possible to have genuine over-production. Its conclusion was that we cannot materially shorten the working day and still produce the quantity of goods and services which the people aspire to consume. Effects on Workers It is doubtful if any class of workers would benefit from a thirty-hour week law. At first a worker receiving the same pay for 30 hours of labor as for 40 hours would be better off. His earnings would remain the same while he would have considerably more leisure in which to enjoy life. The increase in industrial costs due to the thirty-hour week would mean higher prices of the articles which the worker must buy. His purchasing power or real wages would quickly show a decrease. He would be forced to adopt a lower standard of living. The reduced consumption of goods by the public generally would be reflected in a curtailment of production. The worker might find his earnings decreased through a reduction in actual hours below 30 or he might lose his job altogether. 6 Workers with fixed incomes not directly affected by a thirty-hour week law would also be injured. The higher costs of industry and consequent higher prices would reduce the purchasing power of the incomes of this group. This would contribute to the general reduction in consumption which would affect industry adversely. Agriculture is exempt from both the Black and Connery bills. The spokesmen for organized labor argue that the farmer would benefit from the increased purchasing power of industrial workers. This might be true if the legislation actually should increase the purchasing power of any group for a very long period of time. In real fact, however, not only would such increased purchasing power be lacking but the farmer and the farm laborer like everyone else would feel the effect of higher prices of industrial commodities. Persons in domestic service, although exempt under the bills, would be affected by the increased cost of living. A New Bureaucracy A thirty-hour week law would mean a further addition to the vast and ever-growing bureaucracy. The National Recovery Administration has about 4,000 employees exclusive of persons connected with the operation of codes who are not on the government payroll. Despite their best efforts enforcement has broken down. Under the proposed legislation it would be necessary to police 200,000 manufacturing plants besides mines and quarries and countless retail stores and other lines of business. The retail business alone would offer insuperable difficulties. Before long a bureaucracy would be built up which would seek to perpetuate itself at the expense of the taxpayers. The best interests of industrial workers or of the public generally would not be furthered by this legislation. Over the years there has been a very material decrease in working hours simultaneously with an increase in average earnings. The reduction in the working week from 1900 to 1929 was 13 per cent, the increase in the per capita income during the same period being 40 per cent. Since 1929 working hours have been reduced still more. Economic laws rather than high-handed attempts to shackle industry must achieve any further benefits accomplished in this connection. 7