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Full text of "Investigation of concentration of economic power; monograph no. 1[-43]"

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76 S nil^f^ 88 } SENATE COMMITTEE PRINT 
od Session I 



INVESTIGATION OF CONCENTRATION 
OF ECONOMIC POWER 



TEMPORABY NATIONAL ECONOMIC 
COMMITTEE 



A STUDY MADE UNDER THE AUSPICES OF THE BUREAU 
OF LABOR STATISTICS FOR THE TEMPORARY NATIONAL 
ECONOMIC COMMITTEE, SEVENTY-SIXTH CONGRESS, 
THIRD SESSION, PURSUANT TO PUBLIC RESOLUTION NO. 
113 (SEVENTY-FIFTH CONGRESS), AUTHORIZING AND 
DIRECTING A SELECT COMMITTEE TO MAKE A FULL AND 
COMPLETE STUDY AND INVESTIGATION WITH RESPECT 
TO THE CONCENTRATION OF ECONOMIC POWER IN, AND 
FINANCIAL CONTROL OVER, PRODUCTION AND 
DISTRIBUTION OF GOODS AND SERVICES 



MONOGRAPH No. 14 
HOURLY EARNINGS OF EMPLOYEES 
IN LARGE AND SMALL ENTERPRISES 



Printed for the use of the 
Temporary National Economic Committee 




UNITED STATES 

GOVERNMENT PRINTING Jl 'ICE 

WASHINGTON : 194 



TEMPORARY NATIONAL ECONOMIC COMMITTEE 

(Created pursuant to Public Res. 113, 75th Cong.) 

JOSEPH C. O'M \HONEY, Senator from Wyoming, Chairman 

HATTON W. SI Ml ^RS, Representative from Texas, Vice Chairman 

WI yLLxM H. KINO, Senator from Utah 

WALLACE H. WHITE, Jr., Senator from Maine 

CLYDE WILLIAMS, Representative from Missouri 

B. CARROLL REECE, Representative from Tennessee 

THUsRMAN W. ARNOLD, Assistant Attorney General 

•WENDELL BEROE, Special Assistant to the Attorney General 

Representing the Department of Justice 

JEROME N. FRANK, Chairman 

•SUMNER T. PIKE, Commissioner 

Representing the Securities and Exchange Commission 

GARLAND S FERGUSON, Commissioner 

•EWB. L. DAVIS, Chairman 

Representing the Federal Trade Commission 

1SADOR LUBIN, Commissioner of Labor Statistics 

•A. FORD HINRlCHS Ghief Economist, Bureau of Labor Statistics 

Representing the Department of Labor 

JOSEPH J. O'CONNELL, Jn., Special Assistant to the General Counsel 

•CHARLES L. KADES, Special Assistant to the General Counsel 

Representing the Department of the Treasury 



Representing the Department of Commerce 
• * • 

LEON HENDERSON, Economic Coordinator 
DEWEY ANDERSON, Executive Secretary 
THEODORE J. KREPS, Economic Adviser 



•Alternates 



Monograph No. 14 

HOURLY EARNINGS OF EMPLOYEES IN LARGE AND SMALL 
ENTERPRISES 

JACOB PERLMAN 



ACKNOWLEDGMENT 

This monograph was written by 
JACOB PERLMAN 

Chief, Division of Wage and Hour Statistics, Bureau oj Labor Statistics 

The Temporary National Economic Committee is greatly indebted 
to the author for .this contribution to the literature of the subject 
under review. 

The status of the materials in this volume is precisely the same as that of 
other carefully prepared testimony when given by individual witnesses; it is 
information submitted for Committee deliberation. No matter what the 
official capacity of the witness or author may be, the publication of his 
testimony, report, or monograph by the Committee in no way signifies nor 
implies assent to, or approval of, any of the facts, opinions or recommenda- 
tions, nor acceptance thereof in whole or in part by the members of the 
Temporary National Economic Committee, individually or collectively. 
Sole and undivided responsibility for every statement in such testimony y 
reports, or monographs rests entirely upon the respective authors. 

(Signed) * Joseph C. O'Mahoney, 
Chairman, Temporary National Economic Committee. 

m 



TABLE OF CONTENTS 



Par* 

Letter of transmittal - ix 

Summary xi 

CHAPTER I 

Variations in the Wage Structure in General 1 

Introduction 1 

What is the wage structure. .". 2 

Measurement of earnings 3 

Industry approach to the wage structure 4 

Earnings and methods of wage payment 5 

Geographical differences 6 

Variations by size of community , 7 

Differences between union and nonunion plants 8 

The occupational wage structure. _- 9 

CHAPTER II 

Variations in Earnings by Size of Company • 11 

Extent of differences in hourly earnings by slvs-of company 12 

Relation of geographical location to variations in hourly earnings by 

size of company . _ 12 

Relation of size of community to differences in hourly earnings by 

size of company ' 15 

Relation of composition of labor force to variations in hourly earnings 

by size of company 16 

Relation of product to differences in hourly earnings by size of com- 
pany . 19 

Unionization in relation to variations in hourly earnings by size of 

company T . 20 

Other differences by size of company 21 

Differences in hourly earnings by size of company in the iron and 

steel industry 22 

General characteristics of industries in which hourly earnings vary 

by size of company 23 

Industries in which hourly earnings did not vary by size of company. . 25 

CHAPTER III 

Variations in Wages by Size of Establishment 27 

Special field studies of industries, showing relationship of average 

hourly earnings and size of establishment..-. 28 

Industry-wide statistics on average hourly earnings by size of estab- 
lishment , 35 

Average hourly earnings in factories reporting to the Bureau of 

Labor Statistics, by size, August 1937 35 

Establishment reports to the census of manufactures 42 

National Industrial Conference Board study 46 

APPENDIX A 

The Radio Manufacturing Industry 47 

Description of the industry 47 

Radio sets branch . ._ 47 

Radio parts and radio tubes ' 54 

v 



VI TABLE OF CONTENTS 

appendix B Page 

The Explosives Industry.. ._ 57 

Description of the industry . 57 

Differences in average hourly earnings by size of company 58 

Other differences by size of company 60 

appendix c 

The Soap Industry , — 61 

Description of the industry. . 61 

Differences in average hourly earnings by size of company 62 

Differences in weekly earnings and overtime rates between large and 

other companies 67 

APPENDIX D 

The Meat-Packing Industry . ,. 69 

Description of the industry ±- 69 

Differences in average hourly earnings by size of company " 69 

Other differences by size of company 72 

APPENDIX E 

The Fertilizer Industry 75 

Description of the inMstry _ 75 

Differences in average hourly earnings by size of company _ 76 

APPENDIX F 

Cyclical Stability of Employment in Large and Small Companies in 10 

Industries 81 

Index - 87 



LIST OF TABLES 



CHAPTER II 



Pag« 

1. Average hourly earnings of workers in meat-packing industry, by 

wage district, type of company, sex, and skill, December 1937 13 

2. Average hourly earnings of workers in fertilizer industry, by region, 

size of community, and size of company, during spring months of 

1938 14 

3. Average hourly earnings of workers in meat-packing industry, in 

northern wage district, by size of community and type of company, 
December 1937 _-_• ;___*. 15 

4. Average hourly earnings in selected industries, by size of company, 

sex, and skill ". 17 

5. Average hourly earnings of selected occupations in radio sets and soap 

industries, by size of company 18 

6. Average hourly earnings of workers in fertilizer industry by region, 

type of plant, and size of company, during spring months of 1938.-. 20 

7. Number of plants paying extra rates for overtime work in selected 

industries, by size of company 21 

8. Degree of concentration in selected industries in 1935 24 

CHAPTER III 

9. Distribution of individual plants in wood household branch of furniture 

industry, by average hourly earnings and size of plant, October 1937- 29 

10. Distribution of individual plants in metal office furniture branch of 

furniture industry, by average hourly earnings and size of plant, 
October 1937 30 

11. Distribution of individual plants according to average hourly earnings 

in full-fashioned hosiery branch of hosiery industry, by region, size 

of plant, and unionization, 1938 : 31 

12. Distribution of individual plants according to average hourly earnings 

in boot and shoe industry, by size of company, 1939*. 32 

13. Average hourly earnings in bituminous coal industry, by size of 

establishment, 1936 .. 33 

14. Average hourly earnings in manufacturing industries reporting to the 

Bureau of Labor Statistics, by size of establishment, August 1937.. 36 

15. Average hourly earnings in durable and nondurable goods industries, 

by size of establishment, August 1937 . 39 

16. Average hourly earnings in 13 selected industries, -by size of establish- 

ment, August 1937 .' 41 

17. Average hourly earnings in manufacturing industries, by size of estab- 

lishment, 1937^. 1 ... 43 

Section A. Industries in which average hourly earnings did not 

increase with size of establishment .. 43 

Section B. Industries in which average hourly earnings increased 

with size of establishment -44 

APPENDIX A 

18. Average hourly earnings of workers in sets branch of radio manufac- 

turing industry, by sex, skill, and size of company, August 1937.. 48 

19. Percentage distribution of all workers in sets branch of radio manu- 

facturing industry according to average hourly earnings, by type 

of company and skill, August 1937 . '__ 49 

20. Percentage distribution of all workers in sets branch of radio manu- 

facturing industry by size of company, sex, and skill, August 1937.. 50 

VII 



VIII LIST OF TABLES 



Pag* 



21. Average hourly earnings of all workers in sets branch of radio manu- 

facturing industry, by skill, occupation, sex, and size of company, 
August 1937 50 

22. Percentage distribution of male workers in sets branch of radio manu- 

facturing industry according to average hourly earnings, by size of 
company and skill, August 1937 ' 53 

23. Percentage distribution of female workers in sets branch of radio 

manufacturing industry according to average hourly earnings, by 

size of company and skill, August 1937 54 

APPENDIX B 

24. Distribution of plants in explosives industry according to average 

hourly earnings, by type of plant, October 1937 58 

25. Percentage distribution Of workers in explosives industry according to 

average hourly earnings, by type of plant and skill, October 1937. 59 
26.- Average hourly earnings in explosives industry by skill and size of 

company, October 1937 60 

27. Percentage distribution of workers in explosives Industry by skill and 

size of company, October 1937 _'_ 60 

appendix c 

28. Average hourly earnings of workers in soap industry, by size of com- 

pany, sex, and skill, January 1938 62 

29. Distribution of plants in soap industry according to average hourly 

earnings of all workers, by size of company, January 1938 63 

30. Percentage distribution of workers in soap industry according to aver- 

age hourly earnings, by size of company, January 1938,. -. 63 

31. Percentage distribution of workers in soap industry, by se.x and skill 

of workers and size of company, January 1 938 64 

32. Average hourly earnings, weekly hours, and weekly earnings of workers 

in soap industry, "by size of company, sex, skill, and occupation, Jan- 
uary 1938 65 

33. Percentage distribution of male workers in soap industry according to 

average hourly earnings, by skill and size of company, January 1938. 66 

34. Percentage distribution of female workers in soap industry according 

to average hourly earnings, by skill and size of company, January 

1938 . . 67 

35. Percentage distribution of workers in soap industry according to weekly 

earnings, by size of company, January 1 938 68 

APPENDIX D 

36. Average hourly earnings of workers in meat-packing industry, by wage 

district, type of company, sex, and skill, December 1937 70 

37. Percentage distribution of workers according to average hourly earn- 

ings in meat-packing industry, by region and type of company, 
December 1937 .. 70 

38. Average hourly earnings of workers in meat-packing industry in 

northern wage district, by size of community and type of company, 
December 1937__ - '.. 71 

39. Average weekly earnings of workers in meat-packing industry, by wage 

district, size of company, sex, and skill, December 1937 73 

APPENDIX E 

40. Average hourly earnings of workers in fertilizer industry, by region, 

type of plant, and size of company, during spring months of 1938- - 76 

41. Average hourly earnings of workers in fertilizer industry, by region, 

size of community, and size of company, during spring months of 
1938. 77 

42. Average hourly earnings in dry-mixing plants of fertilizer industry in 

lower southern wage district, by size of company and size of com- 
munity, during spring months of 1938 79 



LIST OP TABLES IX 

APPENDIX P 

Page 

43. Stability of employment in large and small concerns in 10 industries. 82 

44. Relative stability of employment provided by large and small con- 

cerns in 10 industries - 83 

45. Stability of wage pavments in large and small concerns in 10 industries, 

1929^37 , ...... .. 84 

46. Relative stability of wage payments provided by large and small 

concerns in 1 industries ..^ , 84 

47. Average annual number of employees, 1929. ^ 86 



LETTER OF TRANSMITTAL 

August 15, 1940. 
Hon. Joseph C. O'Mahoney, 

Chairman, Temporary National Economic Committee; 
United States Senate, Washington, D. C. .- 

Sir: I have the honor to transmit this report on Hourly Earnings of 
Employees in Large and Small Enterprises, prepared by the Bureau of 
Labor Statistics for the Temporary National Economic Committee. 
This study is illustrative, not comprehensive, but it indicates that in 
many industries concentration of ownership in a few companies is 
accompanied by higher hourly earnings for workers and suggests the 
value of continuing studies along this general line. 

The consequences of "bigness" in American industry to our economic 
well-being have been approached from various angles by the Tem- 
porary National Economic Committee. This volume analyzes the 
importance of size to the earnings of workers. The basic comparisons 
are between the average hourly earnings of employees of the largest 
companies and those of the smaller companies in each of 16 industries 
whose wage structures have been surveyed in detail by the Bureau of 
Labor Statistics. It is clear, from this limited analysis, that workers 
in the plants of big companies have higher earnings than those in 
small companies, in industries in which concentration of ownership 
centers control of a large share of the industry in a few companies. 
Differentials in earnings do not appear clearly in industries in which 
ownership is more diffused.' 

Earnings differences between employees in establishments (or 
plants) of different sizes are also discussed. A brief appendix sum- 
marizes a limited inquiry into the comparative stability of employ- 
ment provided by large and small companies, indicating no Clear 
difference between the two groups in the same industry. 

The wage structure of American industry is complex. Each indus- 
try has its own pattern, in most cases an intricate one. Average 
hourly earnings may differ in accordance with the region and the size 
of the community in which they are located, the size of the company 
which owns them, and the size of the plant itself. In some instances, 
differences apparently attributable to one of these factors merely 
reject the influence of the others. Thus, in many industries size of 
establishment appears to be the basis for differences in average hourly 
earnings, only to disappear when allowance is .made for levels of earn- 
ings in the region and size of community in which the plants are 
located. In other cases these differences are explained by the com- 
position of the working force in each plant as between workers of 
different skills, or sexes, or races; but generally the differences hold 
good for workers of the same sex and race doing the same job. 

Workers at the same job in the meat-packing, iron and steel, and 
electrical-goods industries and in the manufacture of radio sets, explo- 

XI 



XII LETTER OF TRANSMITTAL 

sives, soap, fertilizers, and chewing and smoking tobacco and snuff had 
higher hourly earnings when employed by one of the biggest concerns 
in their industry than when working for a smaller company. This 
difference was not a function of region, size of community, or size of 
establishment, and could not be explained by unionization. 

On the other hand, there was no relation between the size of average 
hourly earnings and the size of company in the shoe, leather, cotton 
goods, woolen and worsted goods, hosiery, knitted underwear and 
outerwear, radio parts and tubes, and furniture industries. Thus, 
size of company appears to be a significant factor only in those indus- 
tries in which a substantial share of the total business is done by a few 
companies, not in the industries in which ownership is more widely 
diffused. 

' . In very few of these industries were there clear differences between 
the average hourly earnings of employe in plants of different sizes. 
An exception appears to be provided by bituminous coal mines. 

This report has been written by Jacob Perlman, Chief of the 
Division of Wage and Hour Statistics of the Bureau of Labor Sta- 
tistics, with the assistance of Edwin M. Martin, of the Temporary 
National Economic Committee Studies Section of the Bureau of 
Labor Statistics, under the general direction of Aryness Joy. Mr. 
Perlman has drawn largely upon materials assembled in his Division 
over a period of years and has been assisted in this study by E. B. 
Morris and other members of his staff. The data on average hourly 
earnings by size of establishment in chapter III were compiled for this 
report by Edwin M. Martin, Marshall Spaulding, Manuel Cambouri, 
and Harry Brenner, of the Temporary National Economic Committee 
Studies Section. 

There follows for the convenience of the committee, a brief sum- 
mary of the contents of this report. 

Respectfully submitted. 

Isador Lubin, 
Commissioner of Labor Statistics. 



SUMMARY 

Considerable discussion lias been devoted in recent years to the role 
played by large corporations in the economic life of the Nation. The 
rapid progress of integration in industry, which has resulted in the 
gradual elimination of small business in many industries, has received 
wide attention. For the most part, however, this attention has been 
directed toward the effect of concentration upon financial control and 
upon price and market controls in relation to the functioning of the 
economy. One important question has rarely been raised: Is the 
growth of "big business" beneficial to workers, as measured by 
earnings? 

In order to answer this question, the Bureau of Labor Statistics has 
undertaken this inquiry for the Temporary National Economic Com- 
mittee, with particular regard to the earnings of workers in relation 
to the size of the company and of the plant in which they are employed. 
In the course of this inquiry, information available from previously 
conducted studies of wages and hours has been assembled and ana- 
lyzed. One important conclusion reached as a result of this analysis 
is that hi some industries in which ownership is concentrated to a high 
degree in a small group of large companies, higher earnings are gen- 
erally found in the plants of the larger companies than in those of their 
smaller competitors. In other industries in which ownership is more 
diffused and no large companies dominate the field, there appears to 
be no clear relationship between earnings and size of company or size 
of establishment. 

In 8 of the 16 different industries whose wage structures the Bureau 
of Labor Statistics has analyzed hy size, earnings varied by size of 
company, with differences m favor of the larger firms. These 8 
industries include 3 of the largest employers of labor — meat 
packing, iron and steel, and electrical goods, as well as those engaged 
in the manufacture of radio sets, explosives,' soap, fertilizers, and 
cigarettes and chewing and smoking tobacco. In each of these indus- 
tries, there is a high degree of concentration in a few large companies. 
A group of 8 other industries, in which there was no clear relation 
between hourly earnings and size of enterprise, included shoes, leather, 
radio parts and tubes, furniture, hosiery (full-fashioned and seam- 
less), knitted underwear and outerwear, cotton eoods, and woolens 
and worsteds. 1 

In the eight industries in which the large companies hi general 
showed higher earnings than smaller enterprises, it was rarely true 
that the same level prevailed in all of the establishments of a corpora- 
tion. Quite frequent y, a large company adapted its wage level to 
local conditions, with higher hourly earnings in its northern than in its 
southern plants and in large communities than in small towns. In 
each industry, however, employees of the large concerns received con- 

' A number of other industries have also been surveyed, but in most of them the number of establishments 
or the number of workers covered was not large enough to permit a sufficient ly detailed classification of the 
data to determine whether sizo of enterprise was an independent factor influencing the wage struoture, or 
whether other factors were more important. 

XIII 



XIV SUMMARY 

siderably higher hourly pay than those of the other group of small or 
middle-sized companies in the same locality. >> 

The reasons for these differences in favor of large companies are 
beyond the scope of this report; to determine them would require a 
much more detailed inquiry, with considerable emphasis upon finance, 
location, technology, research, and engineering, which the Bureau 
has not been equipped to undertake. However, it is quite often true 
that higher rates of pay are justified by the executives of large com- 
panies on the ground that they make it possible to obtain the best 
employees in the labor market. This is more readily possible, of 
course, in an industry where labor costs are a fairly low percentage of 
total costs of production and have little effect on the margin of profit. 
Said an executive of a large soap company: "The labor cost involved 
in a cake q£ soap is- so small that we can afford to pay high wages and 
command'fene best there is in the labor market." It is also sometimes 
stated that higher rates are paid because of the desire on the part of 
officials to maintain a good morale in the labor force. The relatively 
high hourly earnings of employees of the large companies are often" 
the result of piece work and production, bonus or incentive plans 
which are designed to encourage efficiency among the workers and 
thereby to reduce labor costs by sharing with them the savings result- 
ing from greater output. 

In addition to any conscious desire to pay higher wages, the ability 
of the large companies to follow this policy must also be considered. 
Good and efficient management was given by the president of a large 
international union as the reason why workers in a certain corporation 
were able to earn considerably more per hour than those in other 
companies in the industry. Good management, however, is the 
result of many factors. There are certain economies that can only 
be achieved by placing numerous establishments under a single owner- 
ship. These economies may emanate from the control or advanta- 
geous purchase of raw materials, from the ability to maintain large 
research organizations to improve technical processes and machines 
and to replace old machines and production processes with new ones, 
from the possibility of salvaging and manufacturing certain byproducts 
(which in raw or semifinished form could be sold only at scrap prices) , 
from the reduction of the cost of distribution by large-scale advertising 
and better utilization of sales organizations. Finally, there is also the 
element of market control, which results from the advantages of con- 
trolling patents on machines and processes, as well as the ability to 
exercise a degree of control over prices which might otherwise force a 
lower wage level. 

In the course of this inquiry, the influence of size of establishment 
as distinguished from size of company on the level of hourly earnings 
was also analyzed to determine whether any possible economies of 
operation and management associated with the size of the individual 
operation, regardless of the size of the ownership unit, contribute to 
higher earnings in large plants than in small ones. There is no clear 
evidence that this is the case, with a few exceptions such as bitumi- 
nous-coal mines. Available Nation-wide statistics on average hourly 
earnings for groups of single plants of various size (regardless of owner- 
ship) appeared at first to indicate.that there is a definite relationship. 
•On more detailed analysis — by'' location, size of company, type of 
product, and composition of labor force — for a few industries for 



SUMMARY 



XV 



which such analysis is possible, it appeared that these other factors are 
more important than size of plant. 

In any study of workers' earnings, it is important to be fully aware 
of the many variations which exist. These variations are associated 
not only with size of company, but with differences in the location of 
industrial plants in different parts of the country and in communities 
of different size, in the nature of the product and the composition of 
the labor force with reference to skill, race, sex, in the occupations in 
the industry, and, by no means least, in the ability of management. 

The numerous differences in the wage structure and the patterns 
which it presents are the subject of chapter I of tins report. Chapter 
II presents a summary of differences in workers' earnings which are 
associated with size of company. Chapter III analyzes existing 
information on wage differences associated with size of plant. Ap- 
pendixes A to E present in detail the information collected by the 
Bureau of Labor Statistics on variations in wages and hours by size 
of company or of establishment in a number of selected industries. 



THAPTER I 
VARIATIONS IN THE WAGE STRUCTURE IN ^GENERAL 

INTRODUCTION 

One of the outstanding characteristics of the American wage struc- 
ture is the multiplicity of rates .of pay and of hourly earnings. Wide 
variations exist not only throughout industry in general but also 
within a single industry, a single plant, and even a single occupation 
in the same plant. 

. During the past 2 years, the Bureau of Labor Statistics has found 
average hourly earnings as low as 4 cents, paid to a group of young 
colored laborers filling small containers with various materials in a 
feztilizer plant in South Carolina, and as high as $4.45, paid to a 
"hot roller" in the iron and steel industry working in a strip mill in 
Indiana. 1 Even among common laborers in 20 different industries 
the hourly rates paid to men beginning on the job ranged from 10 
cents to $1.14 in July 1939. The lowest. rate was reported for a 
Negro working in a fertilizer plant in Georgia and for a Mexican in a 
brickyard in Texas. The highest rate was paid to an employee in 
the building industry in New York City. Among these 20 industries, 
common-labor rates per hour averaged from 36 cents in the fertilizer 
industry to 64 cents in petroleum refining. Taking the workers in 
manufacturing industries for the country as a whole in October 1939. 
there was a spread in average hourly earnings from 29 cents for all 
workers in cottonseed processing (the making of oil, cake, and. meal) 
to $1.01 in the printing and publishing of newspapers and -periodicals. 

In a single industry— the full-fashioned hosiery industry — hourly 
earning^ in September 1938 ranged from 5 cents for a learner in Missis- 
sippi to $2.50 for a working foreman in Tennessee, with average 
hourly pay of 66 cents for all wage earners in the industry. Taking 
the individual factories separately, the lowest average was 24 cents 
for a Georgia establishment, in contrast with 97 cents for one in New 
Jersey. In a Pennsylvania plant, where hourly earnings averaged 63 
cents, the range was from 25 cents for a learner to $1.43 for a foofser 
knitter. The hourly earnings in the most important single occupa- 
tion in this plant — legger-.knitters — varied from 67 cents to $1.18, 
with an average of 91 cents for all legger knitters. 

Quite often, similarly situated plants will show considerable -varia- 
tion in. hourly earnings. For example, two establishments, making 
the same products in a given industry, located side by side in the 
same city, and resembling each other in many other respects, have 
been found to "have radically different levels of earnings. 

1 The latter worked on a tonnage basis, in addition to whkn ie received a substantial'monthly bonus. 
His annual earnings for 1937 amounted to $9,053. 

1 
258849 — 40— No. 14 2 



2 CONCENTRATION OF ECONOMIC POWER 

WHAT IS THE WAGE STRUCTURE? 

These examples are, of course, extremes. Nevertheless, the records 
of many industries reveal wide variety in the hourly earnings of 
American workers, both between occupations and between workers 
doing the same job in the same or different plants. Are these varia- 
tions random or do they follow definite patterns based on character- 
istics 'which can be identified? Undoubtedly there is a pattern in 
most instances, and the ladies mado by the Bureau of Labor Statis- 
tics have made it poss bL to describe in some detail the structure of 
workers' earnings in many industries. 

Although the figures given above have all represented average 
hourly earnings, it is more usual to speak of the pattern of earnings 
as the "wage" structure. It should be obvious that it would be 
impossible in most industries to use differences in wage rates as a 
basis for describing a "wage" structure, since comparisons between 
the level of hourly wage rates and piece rates are not possible. More- 
over, wage rates as such have little economic significance. They are 
the terms of the contract of employment, but they do not necessarily 
represent either the amount received by workers for a given quantity 
of work or the labor cost to employers of a given quantity of product. 
Consequently, it has been the general practice to discuss differences 
in the compensation of workers in terms of their earnings, hourly, 
weekly, or annual. In the present report, as in others prepared by 
the Bureau of Labor Statistics, the phrase "wage structure" is fre- 
quently used as synonymous with the hourly earnings structure of 
worker incomes. 

It is cus.tomary to analyze the wage structure from two points of 
view — differences between occupations and differences between plants. 
In every plant earnings vary with differences in skill. This charac- 
teristic of the wage structure is familiar to everyone,' although the 
principle followed in establishing occupational differentials, and the 
variations in the differentials which prevail in different plants are 
still little understood. However, the present report is not primarily 
concerned with this aspect of the wage structure. 

The present inquiry is concerned with the second aspect of the wage 
structure;* the differences in the average hourly earnings of workers in 
the same occupation but employed in different plants, particularly 
as these differences may be related to variations in the size of the 
company owning the plants. Essentially the question to be. answered 
is this: Do large companies pay higher or lower wages on the average 
than small companies for the same work? 

Enough is known about this "interplant" wage structure to make 
it clear 'that a valid answer to this question must take account of 
several factors. Tn the first place, it is known that each major indus- 
try tends to have its own wage structure. The causes for these differ- 
ences are obscure but may be related to differences in type of opera- 
tions, in traditional practices, etc. . For this reason ii is necessary to 
analyze the wage structure of each major industry separately. In 
many cases the boundary lines between industries may not be clear, 
nor is it always possible to know how detailed a classification of indus- 
try, on the basis of differences in its products, is desirable. 

In the second place, it is known that in many industries pay for the 
same job varies from plant to plant in accordance with such factors 



CONCENTRATION OF ECONOMIC POWER 3 

as the region and size of community in which the plant is located, and, 
in some rare cases, by the size of the plant. Differences in earnings 
by size of company which are merely reflections of these other known 
relationships would have little significance. Hence it is necessary to 
find out whether large companies pay higher or lower wages than 
small companies in the same industry for the same job in the same 
region and size of community. In some industries it is necessary to 
extend this analysis to cover the comparison of wages also in the same 
sized plant. 

In the third place, it is difficult if not impossible to insure that "the 
same job" is in fact an identical operation. Similar occupational 
designations do not necessarily represent an identical input of skill 
and energy by the worker. It is impossible to avoid this difficulty 
entirely. A break-down of the major industries into industrial 
subgroups in accordance with the product produced is of some assist- 
ance since the responsibilities of workers with similar job titles will 
often vary when they are making different products. To an indeter- 
minate extent the higher earnings on the average of workers in plants 
with production bonus systems is a reflection of greater worker input 
rather than a difference in the rate of earnings for the same job. ' 

Unfortunately, existing information on earnings in such detail is 
not available, and a precise analysis of the kind suggested here cannot 
be made for many industries. In the present study, which places 
principal reliance on field studies of the Bureau of Labor Statistics for 
the industries in which quite detailed data were obtained, it has not 
been possible to make interplant comparisons for identical occupa- 
tions, and reliance has been placed on comparisons of the average 
hourly earnings of all employees in each plant. Wherever possible, 
in order to present the most careful comparisons, the percentage 
distribution of employees by skilled, semiskilled, and unskilled and 
by sex is given in addition to the other information. 

Finally, it cannot be too strongly emphasized that the pattern of the 
interplant wage structure is primarily a description of a set of relation- 
ships and tells nothing about the causes or reasons of the differences 
which are described, though it may provide some leads. In the present 
report only one factor — unionization— which can correctly be described 
as a cause of interplant differences in the rate of pay for the same job 
has been discussed. If the employees of large companies '.h a ve higher 
earnings than those of smaller companies for the same job, and its 
employees are more generally unionized, that would appear as a cause 
for the difference, though not necessarily the only one. Unions are a 
force making for higher earnings. This factor is to be distinguished 
from size of community which is not in itself a reason for wage differen- 
tials, although it is a fact that workers in large cities in general have 
larger earnings for the same job than those in small cities. More 
information is needed about differences in cost of living and in the 
labor supply before conclusions can be drawn about the reason for 
the wage differentials between communities of different sizes. 

MEASUREMENT OF EARNINGS 

In order to make effective comparisons of the wage structure in dif- 
ferent industries, in different parts of the country, and in different 
occupations, some common measure is necessary. The only practical 



4 CONCENTRATION OF ECONOMIC POWER 

way to measure differences in the wage structure on a broad scale is in 
terms of average hourly earnings. Wage rates must be reduced to the 
common denominator of average hourly earnings in order to compare 
the pay of piece workers, time workers, and production bonus workers. 
Rates may be easily obtained for workers paid on a straight-time 
basis, but there is a large proportion of the employees in industry who 
are engaged on straight piece work or are paid under various produc- 
tion bonus plans, for whom the basic or guaranteed rates are no indi- 
cation of earnings. Hourly earnings may be obtained for each of these 
individuals by dividing the total hours actually worked into total 
earnings for a given pay-roll period. Hourly earnings are also to 
be preferred to weekly and annual earnings in measuring the existing 
variations in the wage structure. Weekly earnings reflect not only 
hourly earnings but also the number of hours worked during the week, 
while annual earnings are affected by both the number of hours worked 
during the week and the number of weeks of employment in the year. 
Hence, average hourly earnings have been used throughout this 
study 

INDUSTRY APPROACH TO THE. WAGE STRUCTURE 

In studying the Nation's wage structure, the most common approach 
has been from the standpoint of a single industry, so-called. This 
was done under the codes of the N. R. A.,> and the same procedure is 
now being followed in connection with the Tublic Contracts and Fair 
Labor Standards Acts. Thus, it is assumed that each industry has 
its own wage structure, which may be distinguished from those of 
other industries. 

There is.no doubt that in numerous instances it is possible to talk 
of an industry wage structure as indicated by the similarity of the 
occupational wage structures of the various plants in the industry. 
This may bS indicative of a degree of competition both for labor and 
for sales, plus a close similarity in production methods, which has 

f>roduced similarities among the w'age structures of the various estab- 
ishments in the industry. Such an industry — and they are rare, — 
usually is fairly well concentrated geographically or is affected by 'wide- 
spread union contracts. Moreover, it is usually one in which the 
labor cost per unit of output is an important element in the total cost 
of the product. 

It is more often true that the border lines of an industry are hard to 
define, and the distribution of plant averages in such an industry 
covers a wide range, with no well-defined concentration, but i§ widely 
scattered on a regional basis. It may be said to have a locality- 
determined wage structure, in which wages in a given plant are 
largely the result of competition from establishments of other indus- 
tries in the same locality! Competition fr6m other plants in the same 
industry located elsewhere plays a fairly minor role. 

This is true partly because occupations cut across industry lines. 
Common labor is used in many industries; certain types of skilled 
workers, as for example^machinists, are in demand in many factories; 
and certain more or less routine semiskilled jobs require the same 
type of ability regardless' of the industry. Thus, there is a certain 
degree of interchangeability of workers among industries at all ievels 
of skill. Thus it appears," that for purposes of wage regulation, our 
concept of what an industry is needs reexamination. It is clear, also, 



CONCENTRATION OF ECONOMIC POWER 5 

that broad interindustry comparisons have little meaning, and-that for 
comparisons of the wage structure the field needs to be narrowed, not 
broadened. This is especially important because many industries 
make a number of products, each of which constitutes practically a 
separate industry, and is represented by its own wage structure. 
A good illustration is found in the hosiery industry, which is often 
treated by various Government agencies as a single entity. a As a 
matter of fact, it consists Of two distinct branches, one covering full- 
fashioned and the other seamless hosiery. They differ from each other 
in many Ways — in their manufacturing processes, in the composition 
of their labor force, in their locations, in the size of their establish- 
ments, and in the degree- of unionization. A recent survey of the 
industry by the Bureau of Labor Statistics showed that each branch 
had a widely different level of average hourly earnings, amounting to 
65.8 cents an hour for full-fashioned and 85.1 cents for seamless hosiery 
workers. 

Another illustration is the electrical manufacturing industry, which, 
as defined by the Census- of Manufactures, covers an enormous variety 
of products. In a recent survey of this industry, it was necessary to 
divide it into 14 separate divisions, each of which had a more or less 
distinctive wage structure. The average hourly earnings of all em- 
ployees among the various branches ranged from 49.5 cents for fuses, 
wiring devices, and specialty transformers to 86.2 cents for trans- 
formers and switchgear. These differences were due partly to varia- 
tions in the composition of the labor force, as to sex and skill of the. 
workers. Thus, the lowest-paid divisions were those that operated 
on a mass-production basis and had a relatively large proportion of 
semiskilled and women workers, while the highest-paid branches had 
a relatively large proportion of skilled rnen. 

EARNINGS AND METHODS OF WAGE PAYMENT 

Another factor associated with differences inhourly earnings among 
workers in the same plant, as well as among various establishments 
in a given industry, is the method of wage payment used; such as 
straight time rates, straight piece rates, and various production 
bonus plans. 

The range of hourly earnings is especially wide in industries in 
which a large proportion of the labor force is paid on* a straight piece- 
rate basis. This is true of employees of the same sex and in the same 
occupation. In a certain shoe factory, for example, it was found 
that tha. earnings of 26 men machine shoe -cutters varied from 42.3 
to 81.1 cents an hour, with the average amounting to 64.3 cents. 
In the same plant, the hourly earnings of 43 women fancy stitchers 
ranged from 30 to 53.4 cents, the average being 35.9 cents. This 
wide dispersion reflects to a large extent differences in the productive 
capacity of individual workers. 

Similarly, there is considerable variation in hourly earnings among 
workers paid under production bonus plans. For the most part, 
such methods of wage payment are found in plants belonging teethe 
large industrial corporations, and to a certain degree this accounts for 
.thi> difference in hourly earnings in favor of the farge as against the 
sma 1 !- companies, discussed later in this report. In other words, the 
workers in the large companies are stimulated by these plans- to do 



Q CONCENTRATION OF ECONOMIC POWER 

more work in an hour than workers in smalJer companies paid on a 
straight hourly basis, and the higher earnings of large company 
employees are not for the same work but for more work. Moreover, 
production bonuses are often responsible for the relatively high hourly 
earnings of individual semiskilled and unskilled workers in certain 
industries. 

Methods of wage payment based on measured production generally 
result in higher hourly earnings than straight time rates. With few 
exceptions, this was true of workers in the set-up and folding paper-box 
industries in 1935. In the set-up paper-box industry, for example, 
the average hourly earnings of women operating automatic wrapping 
machines in the northern region amounted to 39.6 cents under straight 
time rates, 41.9 cents under straight piece rates, and 44 cents under 
production bonus systems. In the folding paper-box industry, the 
average hourly earnings of men press feeders in the northern area 
amounted respectively to 49.3, 55.3, and 53.5 cents. 

GEOGRAPHICAL DIFFERENCES 

Of the various factors that play an important part in the wage 
structure, the geographical location of industry has received great 
attention during recent years. In Government regulation, regional 
variations in wages were recognized in the codes of the N. R. A., 
which generally set separate minima for the Northern and Southern 
States. Likewise, geographical differences are now taken into con- 
sideration in part in setting minimum rates under the provisions^ the 
Public Contracts Act. 

In discussing geographical differences in hourly earnings, it is 
important to remember that relatively few States constitute homo- 
geneous wage" areas, although comparisons are most frequently made 
by States. Often they have two or more contrasting wage levels. 
For example, in the State of Indiana, hourly earnings in the northern 
part are on the whole considerably higher than those in the southern 
'section. The same is true of Pennsylvania, with highest hourly 
earnings in the Pittsburgh territory, a fairly high level in the metro- 
politan area of Philadelphia, and a much lower level in the small 
towns of the southeastern part of the State. Hence, any true regional 
classification of hourly earnings must be made across State lines. 

In industries that are widely distributed geographically, hourly 
earnings are generally lower in the southern than" in the northern 
States. 2 There is a wide range of hourly earnings in both areas. 
While the average earnings of workers in most of the plants in the 
South is lower than the average in most plants in the North, the 
average earnings of the higher-wage southern plants exceeds that of 
many of the lower-paid plants in the North. There is a whole range 
of hourly earnings at the lower level of the wage scale in the South, 
which is not widely duplicated anywhere in the North. The most 
important reason for Jiese lower hourly earnings is the fact that the 
South has been comparatively undeveloped industrially,' and there is 
a larger supply of labor available there, with comparatively little 
training. The low-money income which agriculture in that area can 

2 References are mpdc throughout this report to the North and the South, and to "the Northern region' 
and "the Southern region." These regions are defined differently for different industries, as indicated In 
the appendices, in which details Jor each of several industries are discussed. 



CONCENTRATION OF ECONOMIC POWER 7 

offer to many of these employees, and the consequent abundance of 
labor means that many southern plants have been able to get a labor 
force with much lower wages than typical northern plants. There 
are, of course, exceptions in both the northern and southern areas. 
Other factors, which are associated with the large supply of labor, 
contribute to the lower average earnings in the South, such as lack 
of widespread union organization, a somewhat lower cost for certain 
items in the standard of living, in part associated with the warmer- 
climate, cheaper housing, etc. 

Taking the Northern States as a group, northern New England, in 
general, has lower hourly earnings than southern New England. 
Hourly earnings in southern Pennsylvania, Maryland, and Delaware 
are considerably below those in New York, New Jersey, and northern 
Pennsylvania. They are high, on the whole, in the Middle Western 
States of Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, and 
the urban areas of Missouri, and considerably lower throughout the 
agricultural belt comprising the Dakotas, Nebraska, Kansas, and 
Iowa. On the other hand, hourly earnings are almost as high in most 
of the Mountain States as in the Eastern States, and one of the highest 
levels of all is found on the Pacific coast. 

In the Southern States, hourly earnings are on the whole relatively 
higher among those States on the periphery of the South, including 
Virginia, North Carolina, Kentucky, Tennessee, Oklahoma, and Texas; 
and are lowest in the States of the deep South, which include South 
Carolina, Georgia, Florida, Alabama, Mississippi, Arkansas, and 
Louisiana. 

VARIATIONS BY SIZE OF COMMUNITY 

Some attention has also been given in recent years to differences 
in hourly -earnings by size of community. 3 Recent wage studies 
indicate that these differences are more important than they have 
hitherto been considered. 

The extent to which hourly earnings vary by size of community 
may be illustrated by the meat-packing industry in 1937. In the 
northern wage district, 4 the average pay of all workers increased 
gradually with the size of community in towns above 25,000 popula- 
tion, from 61.8 cents an hour for places between 25,000 and 50,000 
to 69.9 cents for metropolitan areas of 1,000,000 and over. A rela- 
tively high average in smaller communities, below 25,000, was due 
for the most part to the high level of hourly earnings in one large 
and exceptional establishment. In the southern wage district, the 
same general variation was evident. Average hourly earnings were 
considerably higher in metropolitan areas between 100,000 and 
500,000 population than in places under 100.000. The differences 
by size of community hold when still other factors in the wage structure, 
such as size of company, are taken into account. 

Another illustration is found in the boot and shoe industry, for 
which records are available for 1939. In this industry, the average 
hourly earnings of all workers in the country as a whole varied direct ly 

' By size of community is meant here the population of the metropolitan aren. which includes a central 
city and the suburban districts, as defined by the Bureau of the Census. It should be. pointed out that 
considerable confusion will result in the analysis if it is based on size of city, including merely the population 
within the political boundaries, rather than size of community. 

4 See appendix D for a description of this district. 



3 CONCENTRATION OF ECONOMIC POWER 

with size of community, without exception. In rural territory ^corri- i 
munities of less than 2,500), the average pay amounted to 37.3 cents | 
an hour, as compared with 56.5 cents in metropolitan areas with a \ 
population of 1,000,000 — a difference of over 19 cents. There was j 
very little difference in hourly earnings between places of 2,500 and ; 
under 5,000 and those of 5,000 and less than 10,000, in both of which ! 
hourly earnings averaged about 41 cents. Each succeeding class of j 
community showed an increase in the average over the preceding one. ' 
Here again t the differences in hourly earnings by size of community 
seem to persist when allowance is m&de for the degree of unionization, ; 
differences in the price of shoes, and other importan t factors influencing I 
the wage structure. 

- DIFFERENCES BETWEEN UNION AND NONUNION PLANTS 8 

• 

The single factor discussed in this report which may be termed a ! 
''reason" for differences in hourly earnings in cortain industries is : 
unionization. This is especially true in industries in which both | 
union and nonunion plants are numerous, since it is obvious that in j 
either a highly organized or an almost wholly unorganized industry i 
there would be no substantial differences in wage levels due to this ; 
factor. In most cases, hourly earnings in union. plants exceed those 
in nonunion- plants, although there are exceptions. For example, j 
considerable variation in hourly earnings between union and lonunion il 
establishments was found in several branches of the furniture industry \ 
in 1937. In the manufacture of wood household furniture of various 
types, the* differences in favor of union plants were 13.1 cents for the 
country as a whole, 9.6 cents for the northern district, and 4.5 cents 
for the southern area. . Similar differences appeared in the northern 
district in communities of different size. In the manufacture of 
upholstered furniture in the North, th,e difference in favor of union 
plants amounted to 15.3 cents; in novelty furniture, 6.7 cents; and 
in kitchen furniture., 13.8 cents. In the manufacture of wood office 
furniture, the union plants in the North paid 8.6 cents more per hour, 
on the ayerage, than other plants. On the other hand; in the manu- 
facture of metal office furniture in the North, the average hourly 
earnings" were Higher in nonunion (67.7 cents) than in union plants 
(65.3 cents). . 

The small companies in -the meat-packing industry located in the 
North offer another example. Pay ^in unionized plants in 1937 aver- 
aged 6.1 cents per hour higher for all workers than in nonunion estab- 
lishments, a difference of more than 10 percent. A similar difference 
was found in communities of similar sizes, although it was consider- 
ably less pronounced in the metropolitan areas of 1,000,000 and over 
than in other places. 

Another illustration is found in the shoe industry.- In 1939, the 
average hourly earnings of all workers whose earning records were 
studied by the Bureau of Labor Statistics amounted to 54 cents in 
union plants, as compared with 46.4 cents in nonunion establishments, 
a difference of 7.6 cents. Similar variations were found' in the aver- 
ages when the wage earners were classified by sex and skill, and, 
generally speaking, when they were classified by the. size of com- 

« Tn the illustrations used herp, a union plant has been defined as one where a majority of the workers 
belong to occupations that are. covered by either oral or written agreements with a union. 



CONCENTRATION OF ECONOMIC I'uv. 

munity in which the plants wore located, and by the price of shoe 

manufactured. 

These examples could be multiplied many times. As already indi- 
cated, examples of the opposite situation can also be cited, although 
they were not so numerous in the industries in winch the Bureau of 
Labor Statistics has made studies of the wage struct hit in recent 

THE OCCUPATIONAL WAGE STRUCTURE 

Occupational differentials constitute the coir of the wage structure 
in any single establishment. These differentials reflecl variations in 
occupational skill. They constitute an intraplant wage stm, tine of 
an entirely different sort from the interplant structure w hich lias been 
under discussion in the preceding pages. In the ease of straight-time 
workers, the wage ladder usually starts with the common-labor en- 
trance rate as the lowest rung, leading up to the highest wage paid 
for the most skilled jobs in the plant. The same is true for employees 
on piece" work or under some production bonus plan, for which the 
rates are set in a manner to reward differences in skill among the 
several occupations. 

Generally speaking, the occupational differences found in the indi- 
vidual establishments are reflected in the average hourly earnings by 
occupation for the industry as a whole. In some cases, however, the 
picture of the industry's occupational wage ladder is somewhat con- 
fused by the fact that the occupations in the various plants are not 
always strictly comparable. 

In general, the relationships among the average hourly earnings of 
groups of skilled, semiskilled, and unskilled employees are fairly well 
defined, although within each group there are always exceptions. 
Among men workers, the difference between the average hourly earn- 
ings of skilled and semiskilled workers is often approximately twice 
as large as that between semiskilled and unskilled employees. Taken 
as a whole, the proportion of skilled women employees is very small, 
but the average' pay of semiskilled women employees is quite often 
not much higher than that of unskilled men workers. 

The question has often been raised as to whether women doing the 
same work as men in a plant receive the same rate of pay v Uniformity 
of pay was required by many of the codes under the N. R. A., and 
it is also insisted upon by trade unions. Moreover, it is probably in 
accordance with the principles of good personnel policy, unless tho 
higher rate for men may be justified on the ground that they ai 
quired to perform certain tasks in addition to the regular duti. 
the job, such as lifting heavy loads. However, a difference is fre- 
quently found, where average hourly earnings of women are lower 
than those of men for the same occupation. 6 These figures tor entire 
industries may reflect in part the fact that women are employed in 
the lower-wage establishments. 

There are also differences in hourly earnings between white and 
Negro employees. On the whole Negroes earn less, because they are 
more generally engaged in semiskilled and unskilled occupations. In 
the Northern States, white and" colored employees. doing idei 
jobs in a given plant are often paid the same nit.es. and m some • 

• In the case of piece or production bonus workers, this may be due to lower productivity . 
than men. 



10 CONCENTRATION OF ECONOMIC POWER 

they are assigned to fairly skilled jobs. In the Southern States, the 
tendency is for white and Nagro workers to be assigned to quite 
different occupations in the same establishments, with the less skilled 
work going to the Negroes. 

These illustrations indicate the many factors which play a part in 
the wage structure. Each of those factors must be considered in 
connection with the interplant variations in earnings levels which are 
associated with size of company, and which form the subject of the 
next chapter. 



CHAPTER II 
VARIATIONS IN EARNINGS BY SIZE OF COMPANY 

This chapter considers the question: Is the presence of a dominant 
company, or a group of dominant companies, in an industry in any 
way reflected in differences of earnings? Do large organizations, 
operating more than one factory, for example, generally offer their 
employees an opportunity to earn more money per hour than their 
smaller competitors in the same industry? The answer, as already 
indicated, appears to be that they do in a number of industries, 
wheiher their plants are found in the North or the South, in small or 
large towns; and whether their employees are skilled or unskilled, 
men or women, whites or Negroes. This is by no means universally 
true for all industries. Within industries in which there are certain 
large, dominant companies, there may also be some small independent 
companies and plants which pay higherVages and offer better earning 
opportunities than their larger competitors. In many of the indus- 
tries in which there are no dominant companies, there appears to be 
little differentiation in earnings associated with the size of enterprise. 
These are the industries in which, typically, there are many concerns 
of intermediate or small size, such as the furniture industry, bituniinous- 
coal mining, etc. 

Although the existence of higher wages in large companies in a 
number of industries seems fairly clear, a positive generalization 
cannot be made for all industries, since information on earnings- is 
available on a company basis for only a limited number of industries. 
The Census of Manufactures and the Bureau of Labor Statistics, 
the principal comprehensive sources of. data on employment, pay 
rolls, and man-hours worked in factories present . their reports by 
size of individual plant (or "establishment") and not by company. 1 
The only reports which are sufficiently detailed to permit analysis of 
company size as well as other factors influencing hourly earnings are 
those derived from the special field surveys of the Division of Wage 
and Hour Statistics of the Bureau of Labor Statistics, referred to in'the 
preceding chapter. Since 1934 this Division has made a succession 
of studies of wages and hours in a number of industries, which 
throw considerable light on the relation between hourly earnings and 
size of company. 

This chapter presents a summary of the wage structure in a group 
of light industries included in this series of studies in which higher 
earnings characteristically appear in large companies. Five of the 
industries — radio sets, explosives, soap, meat packing, and fertilizers- 
are discussed in detail in appendices A to E. The iron and steel and 
electrical-goods industries have not been analyzed further, because 
of the difficulty in treating size of company in connection with other 
factors without revealing company identity. The original report on 
the cigarette and chewing and smoking tobacco industry did not dea 1 
extensively with size of company. 

1 For a discussion of these data on wage differences by size of establishment, see ch. III. 

11 



12 CONCENTRATION OF ECONOMIC POWER 

.EXTENT OF DIFFERENCES *IN HOURLY EARNINGS BY SIZE OF 

COMPANY 

In three of the industries considered here, the difference in hourly 
earnings was essentially between two types of companies, a few 
relatively large ones and numerous intermediate and small concerns. 
For example, among the firms making radio sets, the difference in wage 
levels was striking — average hourly earnings amounting to 73 cents, 
for the two largest producers, as compared with 53 cents for the 
remainder of the industry. In the explosives industry, the averages 
were 82 cents for the Big Three and 65 cents for the other com- 
panies-. The hourly earnings in the manufacture of. soap averaged 76 
cents for the four largest concerns, as against 58 cents for the other 
•companies. 

In four other industries there were three general levels of hourly 
earnings, one covering a few relatively large firms, another a group of 
intermediate size, and the third a number of small companies. The 
differences in earnings were substantial, particularly between the 
largest and smallest companies. Among the firms engaged in the 
manufacture of electrical goods the average hourly earnings were 82 
cents for the Big Three, as against 67 cents for the intermediate 
size and 59 cents for the small concerns. In the meatpacking 
industry the averages were 70 cents for the Big Four, 64 cents for the 
intermediate, and 56 cents for the small packers. In the fertilizer 
industry the hourly earnings averaged 37 cents for the Big Seven, 
compared with 34 cents for the intermediate and 27 cents for the small 
companies. In the making of cigarettes and chewing and smoking 
tobacco there were substantial variations in hourly pay in 1935, par- 
ticularly, in the southern wage district, where the Big Three averaged 
43 cents,, the Second Six 41 cents, and the relatively unimportant 
small concerns 33 cents. 

In the iron and steel industry, differences in hourly earnings are 
substantial between large and small companies, with certain excep- 
tions. 

Differences in hourly earnings, as indicated in the previous chapter, 
may be associated not only with size of company but also with other 
factors, such as geographical distribution, size of community, union- 
ization, composition of labor force, nature of product, etc. Hence, 
before any conclusions may be reached as to whether size of company 
is in itself impor'tanf, it is necessary to determine "the part played by 
the other factors in the wage structure. 

RELATION OF GEOGRAPHICAL LOCATION TO VARIATIONS IN HOURLY 
EARNINGS BY SIZE OF COMPANY 

Hourly earnings are substantial!} higher in the northern than in " 
the southern region, and, generally speaking, the plants of the larger 
companies are more frequently found in the North than in the South. 
It is thus appropriate to question whether the higher hourly earnings 
in the larger concerns are due primarily to geographical location rather 
than to size of enterprise. 

In the" manufacture of radio sets, electrical goods, and soap, most 
establishments are located in the northern region, and it is clear that 
the existing differences in hourly earnings by size of company in these 



CONCENTRATION OF ECONOMIC POWER 



13 



industries cannot be affected by location to any appreciable degree. 
Furthermore, a detailed examination of the data indicates that even 
within the northern area geographical distribution did not play any 
significant role in the wage structure of each of these industries. 

In the explosives industry there are some plants in the Southern 
States, but those of the "Big Three" and other companies are both 
widely distributed on a regional basis. Here the differences in hourly 
earnings between the two groups of concerns persisted in all parts of 
the country. 

In contrast, a number of plants in the meat-packing industiy and 
most of the plants in the fertilizer and tobacco industries are located 
in the Southern States. An analysis of the figures for each of these 
industries, however, shows that hourly earnings varied by size of 
company, with higher pay in the larger companies in both the northern 
and southern regions, with the exception of some small tobacco 
factories. 

In the meat-packing industry the average hourly earnings of all 
wage earners in the northern wage district amounted to 72 cents for 
the "Big Four", 64 cents for the' intermediate, and-60 cents for the 
small concerns. In the southern wage district hourly earnings in the 
"Big Four" averaged 5S cents, as against 42 cents for the other com- 
panies. 2 Within each region, moreover, the dominant position occu- 
pied by the "Big Four" in the industry's wage structure is emphasized 
by the fact that the highest hourly earnings in the industry were usually 
found in the States where the large packers are heavily represented. 

Table 1. — Average hourly earn-';igs of workers in meal-packing industry, by wage 
district, type of company, sex, and skill, December 1937 



Wage district and type of company 



| Total 
i workers 



Northern wage district I $0,667 

Big Four | .715 

Intermediate I .636 

Small I .597 

Southern wage district i .497 

Big Four h .580 

Other' '.I I .418 

I 



Males 



All 



Skilled 



$0. 689 
.739 
.659 
.615 
.512 
. 598 
.430 



$0. 820 
.887 
.781 
.733 
.638 
. 761 
.541 



Semi- 
skilled 



.670 
.717 
.650 
.590 
.493 
.578 
.405 



Un- 
skilled 



$0. 007 
.649 
.599 
.525 
.430 
.501 
.360 



Females 



0.511 
.550 
.492 
.439 
.368 
.422 
.317 



1 Includes 1 plant belonging to an intermediate company in the southern wage district. 
Source: V. 8. Bureau of Labor Statistics. 



Likewise, in the fertilizer industry, notable differences in hourly 
earnings by size of company appear within each of the three wage 
districts. In the northern region, the averages of all workers amounted 
to 57 cents for the "Big Seven," 50 cents for the intermediate size 
companies, and 44 cents for the one-establishment concerns. Hourly 
earnings were generally lower as one goes South, and in the upper 
southern wage district average hourly earnings of 39, 36, and 32 cents, 
respectively, were reported. In the lower southern region, the aver- 
ages amounted to 28 cents for the "Big Seven," 24 cents for t lit 1 
intermediate, and 21 cents for the one-establishment companies. 3 

See table 1. Due to the fact thai only l establishment of an Intermediate-size concern was included in 
I f)c southern area, no distinction was made here between I he intermediate and small companies. 
' See table 2. 



14 



CONCENTRATION OF ECONOMIC POWER 



As mentioned before, in the manufacture of cigarettes and other 
tobacco products (except cigars) in the southern wage district, where 
by far the largest part of the industry is located, the average hourly 
earnings of all workers in 1935 amounted to 43 cents for the "Big 
Three.," 41 cents for the "Second Six," and 33 cents for the small 
companies. The chief factors responsible for the minor variation 
between the "Big Three" and the "Second Six" concerns are differ- 
ences in the composition of the labor force and the degree of union- 
ization discussed below. In contrast, in the relatively small part of 
the industry found in the northern wage district, average hourly 
earnings were slightly higher in the small companies than in the 
large and intermediate size concerns — 46 cents as comparedvwith 45 
cents an hour. 

Table 2. — Average hourly earnings of workers in fertilizer industry, by region, size 
of community, and size of company, during spring months of 19S8 



Region and size of community 



"Big 

§even" 
companies 



Intermedi- 
ate com- 
panies 



One-estab- 
lishment 
companies 



Northern wage district 

Under 10,000 population ..'. 

10,000 and under 100,000 population,. 

100,000 and under 500,000 population. 

500,000 population and over 

Upper southern wage district 

Under 10,000 population 

10,000 and under 100,000 population.. 

100,000 and under 500,000 population. 

500,000 population and over 

Lower southern wase dist' ict 

Under 10,000 population _ 

10,000 and under 100,000 population.. 

100,000 and under 500,000 population. 

500,000 population and over 



.438 
.600 
.392 



.409 
) 

.276 
.209 
.273 
.298 



$0. 503 
.407 
.431 
.465 
.557 
.355 

<}) 

(') 
.399 



$0^438 
.366 
.390 
.472 
.507 
.316 
.255 



.241 
.170 
.237 
.300 



.369 

.208 

.178 
.226 
.268 



1 Less than 3 plants; no ayerage computed. 
Source: U. S. Bureau of Labor Statistics. 

In both the meat-packing and fertilizer industries, employees in 
companies- of the same size had higher average hourly earnings in 
the North than in the South. In the meat-packing industry, the 
difference in favor of the Northern as against the Southern States 
amounted to 14 cents for the "Big Four" and 20 cents for the other 
companies. In the fertilizer industry, the "Big Seven" averaged 18 
cents higher in the northern than in the upper southern wage district, 
where the average, in turn, exceeded that in the lower southern region 
"by 12 cents,. For firms of intermediate size, the variations were 15 
cents between the northern and upper southern wage districts, and 
11 cents between the upper and lower southern regions, with slightly 
smaller differences of 12 cents and 11 cents between the two areas for 
the one-establishment companies. 

In the iron and steel industry, hourly earnings in the South were 
generally lower than in the North, and a difference existed in hourly 
earnings between plants of most of the large integrated companies 
and the smaller nonintegrated plants (having under 1,000 employees), 
whose hourly . earnings were the lowest in each region. Separate 
figures cannot be presented for this industry by regions, because there 
are omy one or two large concerns in certain areas, outside the prin- 
cipal area of concentration (the Pittsburgh and Great X^akes area). 

Thus, for these industries, it appears that geography alone cannot 
account for differences in wage levels associated with size of company. 



CONCENTRATION OF ECONOMIC POWER 



15 



RELATION OF SIZE OF COMMUNITY TO DIFFERENCES IN HOURLY EARN- 
INGS BY SIZE OF COMPANY * 

Hourly earnings usually increase with size of communitj". Due to 
this fact, there has been in recent years an important tendency for 
plants to shift toward the less populous centers, in order to take 
advantage of lower wage levels. There is no indication that this 
tendency has been greater among the larger than among the smaller 
concerns. Nevertheless, it is important to discover whether size of 
community is, in fact, a hidden factor, which affects the apparent 
relation between hourly earnings and size of company. 

In the manufacture of both radio sets and electrical goods, a sub- 
stantial part of the industry is located in the larger metropolitan 
areas, with relatively few establishments found in the smaller towns. 
Thus, size of community could not affect the wage structure in these 
industries to any important degree. Curiously enough, in the case of 
radio sets, the only metropolitan district with uniformly low wages 
was that of New York City. On analysis, this appears to be due to 
the fact that practically all of the plants located there belonged to 
small companies. 

In both the meat-packing and fertilizer industries, hourly earnings 
varied directly with size of community. However, for each group of 
communities, hourly earnings were higher in the larger companies 
than in the smaller companies. 

In the meat-packing industry, there is a strong tendency toward 
concentration in the larger metropolitan areas. The coverage of the 
study, however, was sufficiently large to permit a simultaneous break- 
down of the figures by size of community and size of concern only in 
the northern wage district. In this area, according to table 3, the 
average hourly earnings of all workers for each size of community were 
highest in the plants of the "Big Four" packers, next highest in the 
intermediate-size concerns, and lowest in the small companies, with 
two minor exceptions. For the "Big Four" and small packers, the 
averages varied directly with size of community. This tendency was 
not evident in the intermediate companies, for which a comparatively 
small number of plants was studied. In general, it appears that the 
differences in average hourly earnings were more pronounced by size 
of concern than by size of community. 

Table 3. — Average hourly earnings of workers in meat-packing industry in northern 
wage district, by size of community and type of company, December 1937 



Size of community 



All communities 

Under 50,000 

50,000 and under 100,000... 
100,000 and under 500,000.. 
500.000 and under 1,000,000 
1,000,000 and over 




Intermedi- c 
ate com- 
panies 



: Small com- 
panies 



$0,636 



.682 
.614 
.642 
.597 
.628 



SO 597 



.540 
. 54u 

. 557 
. 653 



Source: U. S. Bureau of Labor Statistics. 



• This analysis covers 4 industries only. In the explosives and soap industries, too few plants wore 
Studied to permit an analysis of the hourly earnings by size of community, and in tobacco factories no 
significant differences appeared in the South, where most plants are in small or middle-sized communities. 



IQ CONCENTRATION OF ECONOMIC POWER 

In the fertilizer industry, there is a strong tendency for the "Big 
Seven" and the intermediate companies to concentrate their plants 
in the larger metropolitan areas, while the one-establishment concerns 
are found mostly in the smaller communities. There were, on the 
whole, differences in average hourly earnings in favor of the "Big 
Seven" over the intermediate companies, as well as in favor of the 
latter over the one-establishment concerns, for each size of community, 
as indicated by table 2, which presents a simultaneous break-down of 
the data for all wage earners, by region, size of community, and size of 
company. Unlike those in the meat-packing industry, however, the 
variations in average hourly earnings in the fertilizer industry were 
more important by size of community than by size of concern . 

RELATION OF COMPOSITION OF LABOR FORCE TO VARIATIONS IN HOURLY 
EARNINGS BY SIZE QXJPOMPANY 

Thus far, the analysis has been confined to all workers in an industry, 
indicating that for plants in the same general location hourly earnings 
are considerably higher for employees of the larger companies. There 
is, however, the further question whether the nature of the occupations 
and the composition of the labor force with respect to skill, sex, race, 
etc., accounts to any extent 'for these differences in wage levels in 
companies of different size. It appears that in these industries 
similar variations in hourly earnings by size of company hold for each 
of these groups of workers, and that the differences in hourly earnings 
by size of concern cannot be attributed to variations in the composition 
of the labor force with respect to sex and skill. 5 

» See table 4. 



CONCENTRATION OF ECONOMIC POWER 



17 



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18 



CONCENTRATION OF ECONOMIC POWER 



A comparison was made of hourly earnings on an occupational basis 
between the large companies and other companies in the manufacture 
of radio sets and soap, and in practically every instance the average 
in the large companies exceeded that of the small companies, for the 
same types of j work. The occupational variations in both industries 
ranged from 4 to over 30 cents, depending on the type of work. 
Table 5 shows the differences in average hourly earnings for selected 
occupations in these industries. 

There is some difference in the composition of the labor force by 
sex and skill between the large and small firms. Such differences are 
often attributed to the degree of mechanization, which means con- 
siderable specialization and mass production in the, larger corhpanies 
and which makes possible the employment of a large proportion of 
semiskilled workers and of women. A close examination of the 
records, however, indicates that there is no general uniformity with 
respect to the composition of the labor force either with regard to 
skill or sexpf employees in the industries under consideration. 

Table 5. — Average hourly earnings of selected occupations in radio sets and soap 
industries, by size wf company 



Industry and occupation 



Large com- 
panies 



Othercom- 
panies 



Differ- 
ence. 



Radio sets: ' 

Assemblers, chassis, female 

Assemblers, coils, female - 

Assemblers, final, sets, male 

Inspectors, chassis assembly, male 

Material handlers, male. 

Repairers, sets, male.-. 

Solderers, female — 

Testers, set circuits, male 

Soap: a 

Drier operators, male 

Framers and strippers, male 

Mill rmd plodder operators, male. 

Packers, shipping, female..- 

Slabbers and cutters, male 

Soap'makers, male 



$0. 5(a, 
.646 
.760 
.818 
.687 
.814 
.597 
.862 

.768 
.805 
.796 
.543 
.819 
1.052 



$0. 460 
.488 
.532 
.599 
.528 
.636 
.461 
.568. 

.555 
.591 
.512 
.424 
.572 
.947 



.130 
.158 
.228 
.219 
.159 
.178 
.136 
.294 

.213 
.214 
.284 
.119 
.247 
.105 



1 Based on survey made in 1937. 
5 Based on survey made in 1938. 

Source: U. S Bureau of Labor Statistics. 



Another factor to be considered in connection with the composi- 
tion of the labor force is the color or race of employees. In the meat- 
packing industry, for example, there is considerable difference in the 
make-up of the labor force in this respect between the "Big Four" 
and other packers. The average hourly earnings of Negroes exceeded 
those of : whites in the northern wage district. On examination, this 
proved to be due to the fact that , the former, constituted a larger 
proportion of the labor force in the "Big Four," which had a higher 
wage level. On the other hand, when the comparison was made 
separately for each type of company, hourly earnings of Negroes and 
whites were about the same. 6 In the southern wage district, the 
average hourly earnings of whites exceeded those of Negroes. Here, 

'it The same situation was found in connection with the Mexicar or other workers. In the northern wage 
district, the average hourly earnings were generally higher for Mexicans and others than for whites, which 
was due to the fact that most of the former were employed by the "Big Four" companies. On the other 
hand, the average hourly earnings in the southern wage district were higher for whites than for Mexicans 
or others in nearly all cases, owing largely to the fact that the majority of the latter wtre employed by other 
than "Big Four" concerns. ' 



CONCENTRATION OF ECONOMIC POWER 19 

the fact that the big companies hire a larger proportion of white 
workers tends to accentuate the difference in the average hourly 
earnings in favor of white workers. 

In the manufacture of cigarettes and chewing and smoking tobacco, 
differences in the composition of the working force are very important. 
In the South, the "Big Three" employed 54 percent colored workers 
as compared with 21 percent for the "Second Six," thus reducing the 
average hourly earnings of employees i the "Big Three" taken as a 
whole and increasing the figures for Jie "Second Six." The small 
variation in wage level between the "Big Three" and the "Second 
Six" was confined largely to colored employees. White workers in 
the larger companies, on the other hand, earned substantially more 
than in the middle-size firms. In addition, there was considerable 
difference in hourly earnings for each group of wa^c earners in the 
"Second Six" over the small companies. 

RELATION OF PRODUCT TO DIFFERENCES IN HOURLY EARNINGS BY 

SIZE OF COMPANY 

Related also to differences of occupation and skill are the variations 
in the products manufactured in companies of different size in the 
same industry. Where the same product is considered,- hourly earn- 
ings were generally higher for larger concerns. 

In the manufacture of electrical goods, for example, separate figures 
on hourly earnings were compiled for as many as 14 product groups. 
The averages for all workers ranged from 49.5 cents in the manufacture 
of fuses, wiring devices and specialty transformers to 86.2 cents in 
transformers and switch gear. To a considerable extent, these varia- 
tions were due to differences in the composition of the labor force by 
sex and skill. No information by size of company can be published 
for each of these product groups, as it would disclose information re- 
lating to individual concerns, but it may he stated that hourly earn- 
ings were higher for the larger companies for each type of product. 
This is substantiated bv the fact that the average hourly earnings 
differed considerably by size of concern for each skill-sex group. 

In the explosives industry, hourly earnings were different for the 
two branches — black powder and dynamite — but in each case pay in 
the plants of the "Big Three" was considerably more than. .in the other 
companies. In plants making black powder, the respective average 
hourly earnings were 77 and 67 cents. The average earnings in the 
manufacture of dynamite amounted to S3 cents for the "Big Three" 
and 64 cents for the other concerns. 

In the fertilizer industry, hourly earnings differed according to the 
degree of integration in plants, being highest in acid-making, next 
"highest in superphosphate, and lowest in dry-mixing establishments. 7 
The degree of integration here tends to vary directly with the size of 
company. However, for each type of plant .-tceording to the degree 
of integration, the "Big Seven" generally had higher average hourly 
earnings than the intermediate-size : impanies, while the latter with- 
out any exception paid more thai he one-establisTiment concerns. 
Moreover, the differences were gr< ; er by size of company than by 

: This may be explained l>> of t ne labor font-, the proportion of skilled and 

semiskilled v <\%e earners beinj: hi^hesi in r.cif'-niak i[ and lowest in dry-mixing establishments. 



20 



CONCENTRATION OF ECONOMIC POWER 



the degree of integration. This is shown by table 6, which presents 
a simultaneous break-down of the data by type of plant according to 
the degree of integration and the type of concern. 



Table 6.- 



- Average hourly earnings of workers in fertilizer industry, by region, type 
of plant, and size of company, during spring months of 1988 



.Region and type of plant 



"Big Inter- 

Seven'" | mediate 
I companies i companies 



Northern wage district 

A,cid-making plants 

Superphosphate plants... 
Dry-mixing plants 

Upper southern wage district 
Acid-making plants — .. 
Superphosphate plants. .. 
Dry-mixing plants 

Lower southern wage district 

Acid-making plants 

Superphosphate plants. ._ 
Dry-mixing plants 



1-estab- 
lishrnent 
companies 




1 Less than 3 plants; no average computed. 
Source: U. S. Bureau of Labor Statistics. 



UNIONIZATION IN RELATION TO VARIATIONS IN HOURLY EARNINGS BY 

SIZE OF COMPANY 

Concerns having union agreements usually show higher hourly earn- 
ings than nonunion firmS in the same industry. If, as it is sometimes 
alleged, the larger companies maintain high wage levels to keep out 
unions, the differences in wage levels associated with unionization may 
obscure the importance of size of company differences. Some ex- 
amples in particular industries are given below. 

In the manufacture of both radio sets and electrical goods, union- 
ization was quite prevalent. At the time of the Bureau's recent sur- 
veys, however, establishments having agreements with unions were 
found in both large and small companies, so that the extent of union- 
ism was not sufficiently different in the two groups of companies to 
explain differences in hourly earnings by size of concern. In fact, the 
firms nraking radio sets in New York City, which were generally small 
and had a fairly low wage level, for the most part had union agree- 
ments. 

In the manufacture of cigarettes and other tobacco products (except 
cigars), unionization affects the wage levels in companies of different 
size. For example, in 1935, in the South, where most of the plants 
are located, some of the establishments of the "Second Six" companies 
were unionized, while practically none of the other concerns were 
organized. In the North, as already indicated, the small plants in 
New York City were unionized to a considerable degree, and this had 
a tendency to raise the average hourly earnings for that area. 

In the explosives, soap, and fertilizer industries, on the- other hand, 
there was relatively little unionization at the time of the Bureau's 
surveys, and this factor did not play any significant role in the wage 
structure. In the meat-packing industry a lack of complete informa- 
tion made it impossible to classify plants of the "Big Four" and the 
intermediate companies on the basis of unionization 



CONCENTRATION OF ECONOMIC POWER 



21 



OTHER DIFFERENCES BY SIZE OF COMPANY 

Another reason why larger concerns have higher hourly earnings 
than the smaller companies k the fact that the former to a greater 
extent than the latter use straight piece-work or production-bonus 
methods of wage payment. This is true of 3 of the 6 industries 
considered here. In the meat-packing industry, 24 percent of the 
total labor force worked under production-bonus systems, but these 
were confined to 40 plants, nearly all of which belonged to ,the larger 
concerns. In the manufacture of soap, however, the proportion of 
workers paid under production-bonus plans did not differ materially 
between the large and small companies. A similar situation existed 
in the radio-sets and electrical-goods industries. In explosives and 
fertilizers the nature of the work was such that practically all of the 
wage earners were paid straight-time rates. 

At the time of the survey in each of these industries the proportion 
of establishments that paid extra rates for overtime work was consider- 
ably higher in the larger than in the smaller companies. This may be 
seen from the data in table 7. It should be pointed out, however, 
that under the Fair Labor Standards Act at the present time, all plants 
manufacturing goods for interstate commerce are required to pay time 
and one-half for all overtime in excess of 42 hours, so that any differ- 
ences previously existing on this score are less likely to be important 
currently. 

Table 7. — Number of plants paying extra rates for overtime work in selected 
industries, by size of company 





Year of 
survey 


Number of plants 


Industry and size of company 


Total 

covered in 

survey 


Number 
paying ex- 
tra rates 
for over- 
time work 


Radio sets ■ " 


1937 


24 


16 










2 
22 


2 






14 










1937 


233 


144' 










22 
32 
179 


21 






27 






• 96 










1937 


51 


30 






"Big Three" companies.. 




28 
23 


25 


Other companies _. 




5 










1938 


72 


28 






13 
59 


13 






15 










1937 


258 


120 






59 

17 
182 


55 






11 






54 










1938 


283 


(51 










" • 60 
72 
151 


20 






13 






18 



Source: U. S. Bureau of Labor Statistics. 



22 CONCENTRATION OF ECONOMIC POWER 

Not only do larger concerns have higher hourly earnings than the 
smaller ones, but in the past they have also reported shorter working 
hours. In the explosives industry in 1937, for example, the average 
weekly hours actually worked by all wage earners amounted to 40 
for the "Big Three," as against 44 for the other companies. The 
averages in 1938 in establishments making soap were 39 hours for 
the large and 40 hours for the other concerns. In the meat-packing 
industry, the weekly schedule averaged 41 hours for the "Big Four," 
44 for the intermediate, and 45 for the small companies: Hence, 
the difference was considerably larger between the "Big Four" and 
intermediate than between the latter and the small concerns. The 
Fair Labor Standards Act, of course, will have a tendency to narrow 
these differences. 

As a result, the differences in weekly earnings by size of company 
were not as pronounced as were hourly earnings. Nevertheless, these 
variations were fairly substantial. For example, in the explosives 
industry, the average weekly, earnings of all workers amounted to 
$32.97 tor the "Big Three," as against $28.79 for the other concerns. 
The averages in plants producing soap were $29.56 for the large and 
$23.16 for the other companies. In the meat-packing industry, the 
average weekly earnings amounted to "$28.56 for the "Big Four," 
$28.13 for the intermediate, and $25.25 for the small concerns. 

DIFFERENCES IN HOURLY EARNINGS BY SIZE OF COMPANY IN THE IRON 

AND STEEL INDUSTRY 

The iron and steel industry presents a rather peculiar situation that 
warrants special consideration. It is clear, as already indicated, that 
there is a difference here in hourly earnings in favor of employees of 
the large companies, with few exceptions. However, no adequate 
analysis can be made without disclosing the identity of individual 
companies, and for that reason statistics cannot be presented. 

In this industry there are a number of large integrated companies 
engaged in all processes that cover the converting of iron ore into 
rolling-mill products, each of which employs over 10,000 workers, 
with plants scattered, rather widely. Among the large companies, 
one concern plays a dominant role, and its practices are followed to a 
considerable degree ^by other companies in the industry. There are 
also numerous smaller concerns, which range in size from a few hundred 
to several thousand employees. Those employing over 2,500 workers 
are partially or fully integrated, that is, operating steel works and 
rolling mills, as are some of the companies employing 1,000 to 2,500 
employees. The smaller companies with less than 1,000 workers are 
for the most part engaged in the manufacture of rolling-mill products 
only. Thus, it is difficult to compare earnings in the different groups, 
because of differences in processes and products. 

According to the Bureau's survey of the iron and steel industry in 
1938, there was very little difference in average hourly earnings for 
the country as a whole among the groups of companies with 1,000 
workers and over, while the concerns employing less than 1,000 
workers had a considerably lower wage level. For all employees, 
hourly earnings in the companies with 1,000 and n 're averaged at 
least 84 cents, but the average of those with less tin 1,000 workers 



CONCENTRATION OF ECONOMIC POWER 23 

amounted to 73 cents. The same differences appeared for employees 
of each grade of skill. Thus, the concerns with less than 1 ,000 workers 
averaged 86 cents for skilled workers, 67 cents for semiskilled, and 
60 cents for unskilled employees, compared with at least $1, 80 cents, 
and 70 cents, respectively, for the companies with 1,000 or more 
workers. With regard to common laborers, the average hourly pay 
amounted to 52 cents for concerns with under 1,000 employees, as 
against at least 60 cents for those with 1,000 workers and over. 

In addition to size of company, geographical distribution is an 
important factor in the industry's wage structure. Unfortunately, 
in all except the main territory in which the industry is located, there 
are only one or two large concerns, thus making it impossible to present 
separate figures. A detailed analysis of the data, however, indicates 
that the smallest companies had the lowest wage level in each region. 
Moreover, in the Pittsburgh and Great Lakes area, which contains 
most of the industry, the average hourly earnings were similar to 
those presented for the country as a whole. 

Other factors that play a part in the industry's wage structure are 
the nature of the product and the extent of unionization. The 
differences in hourly earnings by product are not very pronounced, 
but even for the same product -the smallest' companies showed the 
lowest wage level. In this industry, unionization is found primarily 
among the largest concerns. While it may explain differences in 
hourly earnings among the latter, it does not accoimt for the liigfrer 
wage level of the group as a whole as compared with that of the 
smallest companies. 

GENERAL CHARACTERISTICS OF INDUSTRIES IN WHICH HOURLY EARNINGS 
VARY BY SIZE OF COMPANY 

From the preceding analysis, it is fairly clear that hourly earnings 
differ by size of concern in each of the eight industries presented in 
detail, irrespective, to a large degree, of the other factors in the wage 
structure. What are the general characteristics of these industries? 
Under what conditions of industrial organization is it likely that 
hourly earnings will be found to vary by size of company? 

First, the industries considered here differ considerably in size. In 
terms of the number of wage earners, they range from less than 10,000 
in explosives to over 500,000 in the iron and steel industry, according 
to table 8, which is based on the Census of Manufactures of 1937. 
They cover an enormous range of products, manufactured from widely 
different raw materials, with various technological processes and dis- 
tributed in a variety of markets. Moreover, as pointed out previously, 
the industries vary with respect to location by region and size of 
community, with respect to composition of labor force as to sex, skill, 
and color, and with respect to the degree of unionization. 

On the other hand, these industries have one characteristic in 
common, namely the important position occupied by a few large well- 
known companies. Tables made for the National Resources Com- 
mittee and presented in the Structure of the American Economy 
indicate that in 1935 the four largest companies had over 90 percent 
of the persons engaged in the manufacture of cigarettes, 81percent 
in explosives, 63 percent in soap, 46 percent in 'iron and steel, nearly 



24 



CONCENTRATION OF ECONOMIC POWER 



40 percent in meat-packing, electrical machinery, and the radio 
industry, and 31 percent in fertilizers. The eight largest concerns 
show further concentration of working forces— 99 percent for cigarettes, 
91 percent for the explosives industry, 72 percent for soap, 59 percent 
for steel, and about 45 percent for the other four industries. 8 

Table 8. — Degree of concentration .in selected industries in 1935 



Industry 



Radios, radio tubes, and phonographs s__ 
Electrical machinery, apparatus, and 

supplies , ,;_. . 

Explosives -. .'. 

Soap 1 

Meat packing, wholesale. 

Fertilizers 

Blast-furnace products and steel-works 

^nd rolling-mills products 

Cigarettes and chewing and sn- 'cing 

tobacco and snuff 



Number 
of estab- 
lish- 
ments ' 



162 

1,435 
77 

232 
1,160 

743 

497 
159 



Number 
of wage 
earners ' 



48, 343 

257, 660 

6,406 

14, 008 

127, 477 

* 20, 893 

502, 417 

36, 279 



Percent of persons 
employed in 1935 2 



In 4 
largest 
concerns 



37.6 

39.7 

80.6 
63.3 
38.7 
31.3 

M6.0 

6 90.3 



In 8 
largest 
concerns 



45.3 

46.5 
90.7 
72.5 
47.3 
45.1 

'58.7 

«99.2 



Percent of value of 
product in 1935 » 



In 4 

largest 
concerns 



27.0 

44.4 
82.0 
73.5 
55.6 
25.9 

5 49.3 

8 89.7 



In 8 
largest 
concerns 



38.6 

52.3 
93.1 
83.1 
• 63.5 
41.6 

«63.8 

6 99.4 



1 Based on Census of Manufactures, 1937 

2 See National Resources Committee, Structure of the American Economy. Appendix 7, table I, pp. 
239-247. 

3 No separate figures are available for radio sets, but- it is estimated that plants making such products 
represent about one-half of the total industry in terms of wage earners. 

' Due to Extreme seasonajity, this figure is not indicative of the size of the industry, which reported as 
many as 36,782 wage earners at the height of the season in April 1937. 

5 The figures cover cigarettes only. 

6 These figures cover steel-works and rolling-mills products only. 

Owing to a higher degree of mechanization, however,' the largest 
concerns represented a considerably larger share of total output than 
is indicated by the number of persons employed. This is illustrated 
by the fact that the proportion which the value of their products 
represented in 1937 is almost uniformly higher for both the four and 
the eight largest concerns tha,n the proportion of the number of their 
employees. For example, in the meat-packing industry, the four 
largest packing companies had nearly 40 percent of the total number 
of employees and over 55 percent of the total value of product. 9 

Practically all of these large companies are multiple-establishment 
concerns, with plants scattered throughout various parts of the 
country. In addition, many of them own establishments or are 
affiliated with firms in other industries, and they enjoy advantages in 
the production and distribution of their' products, due largely to the 
economies of large-scale, integrated organizations. The intermediate 
size companies in meat packing and in the manufacture of electrical 
goods and fertilizers share some of these characteristics of the larger 
companies. For example, many of the intermediate concerns have 
two or more establishments in various localities, some have affiliations 
in other industries, and they distribute their products fairly widely. 
Most of the small concerns in these three industries, on the other hand, 

« See table 8. 

• In assembling the materials upon which this analysis is based, the Bureau of Labor Statistics has taken 
particular care to include a proper proportion of the plants of each company in its surveys. In the explosives 
industry the survey covered all plants, but in the other industries the sample varied from about 25 percent 
in the manufacture of electrical goods to 50 percent in the manufacture of radio sets and of soap. 



CONCENTRATION OF ECONOMIC POWER 25 

have only one establishment. Many of them also cater largely to a 
local market, although some distribute their products widely and 
compete freely with the larger companies. Furthermore, they are 
often relatively little mechanized, and sometimes they may be highly 
specialized in the making of certain products. The small companies 
are quite numerous, and as a result they occupy an important position 
in each industry. 

INDUSTRIES IN WHICH HOURLY EARNINGS DID NOT VARY BY SIZE OF 

COMPANY 

The Bureau of Labor Statistics in recent years has also studied the 
wage structure in a number of other industries in which no differences 
in wage levels are apparent by size of company. For the most part, 
these industries do not have any small group of dominant companies, 
such as the eight industries discussed above. Among the industries 
recently studied in which no variation by size of company (or size of 
establishment) appeared are furniture, the radio parts and radio tubes 
branches of the radio industry, the hosiery industry, the knitted-goods 
industry (both outerwear and underwear), the boot and shoe industry, 
and the leather industry. 

In the shoe industry, only 25 percent of the value of product was 
manufactured in 1935 in the four largest concerns and 31 percent in 
the eight largest. 10 ' A detailed study of the industry showed a very 
wide range in average hourly earnings, associated primarily with other 
factors in the industry than the size of company, such as geographical 
location, size of community, price lines, and type of shoes manufac- 
tured. Thus, although there are numerous companies with more than 
one plant in this industry, some of them fairly large, no single group 
predominates and no wage pattern in terms of size of company is 
apparent. , 

10 National Resources -Committee, Structure of the American Economy, Appendix 7. table I, pp. 240-241. 



CHAPTER III 

VARIATIONS IN WAGES BY SIZE OF ESTABLISHMENT ' 

The preceding chapter has summarized the information available 
on the role of size of company in the wage structure of a number of 
manufacturing industries, in some of which a few companies dominate 
the industry and pay, in general, higher wages than their smaller 
competitors. In the other industries, in which no such dominant role 
is played by a few firms, differences in average hourly earnings are not 
apparently associated to the same degree with sizb of company. The 
economies of operation possible for a large company, and particularly 
an integrated company with widespread facilities for obtaining raw 
materials, for shipping, and for selling, as well as for manufacturing 
in any one of a number of plants, are of a different order from those 
associated solely with the size of the operations in a single plant. Is 
there any advantage to employees in having manufacturing operations 
concentrated under one roof rather than in a number of associated 
smaller plants? Is there, in other words, any difference in wages 
associated with the size of the establishment as distinct from the size 
of the company? - In particular, are the average hourly earnings of 
employees in the large establishments of an industry higher than those 
of employees in smaller establishments? To answer this question, 
average hourly earnings for many manufacturing industries were as- 
sembled by size of establishment from three sources — a special com- 
pilation of the monthly reports of- manufacturers to the Bureau of 
Labor Statistics for 89 industries in August 1937; reports to the 1937 
and 1935 Census of Manufactures for a different group of 105 and 59 
industries, respectively; and a study of 6 industries by the National 
Industrial Conference Board. In addition, the group of detailed field 
studies conducted by the Bureau of Labor Statistics in six industries, 
are discussed in the present chapter. It appeared, on first examination 
of the comprehensive industry-wide data covering' many industries}, 
that differences did exist in average hourly earnings of employees in 
favor of factories of large size. Larger average hourly earnings w ere 
associated with larger operating units in a majority of industries for 
which considerable information was available. On closer examination 
of detailed information for particular industries, for which it was possi- 
ble to segregate other factors influencing' wages, such as location, 
unionization, etc., however, it became clear that these industry-wide 

1 The contents of this chapter, and in particular the special study of -variations in average hourly earnings 
by size of establishment, based on data collected by the Bureau of Labor Statistics, were prepared by Edwin 
M. Martin, Marshall Spaulding, Manuel Cambouri, and Harry Brenner, of the Temporary National 
Economic Committee Studies Section of the Bureau of Labor Statistics.' 

2 For the purposes of this chapter the terms "plant," "operation," and "establishment" are used inter- 
changeably. The term "establishment" is used in the sense ordinarily employed by the Bureau of Labor 
Statistics and the Bureau of the Census, that is, to mean a single plant or factory. However, as indicated by 
the Bureau of the Census ; n the Biennial Census of Manufactures, 1935, this definition is Qualified by the 
statement that, "In some cases, however, it refers to 2 or more plants operated under a common ownership 
and located in the same city, or in the same county, but in different municipalities or unincorporated places 
having fewer than 10,000 Inhabitants. On the other hand, separate reports are occasionally obtained for 
different lines of manufacturing carried on in the same plant, in which event a single plant is counted as 2 or 
more establishments" (V. S. Bureau of the Census, Biennial Census of Manufactures, 1935, p. 5). 

27 



28 CONCENTRATION OF ECONOMIC POWER 

data could not be accepted without further analysis. After analyzing 
in detail the information for 6 industries discussed below, it was con- 
cluded that there was no clear relationship between size of plant and 
the level of average hourly earnings, except in bituminous coal mining, 
For example, larger establishments, it often appeared, paid higher 
average hourly earnings because they were located more frequently 
than the smaller establishments in the North and in the larger cities, 
or because they were more often owned by large companies which 
enjoyed certain advantages beyond those associated with size of 
plant — all circumstances which usually make for higher average 
earnings. Moreover, a large plant, if it belongs to a large company, 
may have advantages arising out of corporate connections which 
permit the payment of higher-wages than those paid in small or middle- 
' sized plants. Thus, in any tabulation of data merely by plant size, 
plants of large companies with high wage levels would be classified 
with similarly sized single establishments, and would considerably 
confuse the picture. 

There are still other factors associated with any industrywide study 
of earnings by size of plant which confuse the picture. Some quite 
small plants, for instance, have higher average hourty earnings than 
large plants classified in the same broad industry because they are 
shops making essentially a different product of a higher grade fit a 
higher price, requiring a considerable degree of skill and enabling the 
payment of higher wages. Examples are women's dress shops, 
fine jewelry manufacturers, and furniture upholstery firms. In 
establishments with less than 100 employees, field studies indicate that 
quite frequently the inclusion or exclusion of one or more highly 
skilled workers may considerably affect the wage structure. If this 
highly skilled work is performed by the proprietor himself, and no 
skilled workers are hired, average hourly earnings are apt to be fairly 
low. On the other hand, if the proprietor hires a few highly skilled 
workers, the average will be much higher. 

It has been possible to assemble information on earnings by size of 
plant in combination with other important factors influencing the 
level of wages for only six industries, which is presented in detail 
below. As already seated, in these industries there is no evidence of 
clear-cut differences in wages by size of plant, except in bituminous 
coal. However, the data from these special industry studies are pre- 
sented, as they were first analyzed, in order that other students of the 
problem of the influence of size of operations on the wage level may 
have them at hand as a basis for future studies. 

SPECIAL FIELD STUDIES OF INDUSTRIES, SHOWING RELATIONSHIP OF 
AVERAGE HOURLY EARNINGS AND SIZE OF ESTABLISHMENT 

The following sections summarize the detailed analysis of the influ- 
ence of size of plant upon the level of wages in the furniture industry, 
the manufacture of radio parts and tubes, the manufacture of hosiery, 
knit goods, shoes, and bituminous coal as indicated by field studies 
by the Bureau of Labor Statistics. Most of the companies in each 
of these industries are single-unit concerns. 

In neither radio parts nor radio tubes, each of which is more or less 
distinct from the radio-sets industry, did hourly earnings vary by size 



CONCENTRATION OF ECONOMIC POWER 



29 



of establishment to any degree, as shown by an analysis of plant 
averages. As in the case of radiio sets, neither geographical location 
nor unionization appeared to play any part in the wage structure of 
these brariches of the industry, though the number of plants covered 
was too small to make definite conclusions possible. Likewise, al- 
though the plant averages depended considerably upon the composi- 
tion of the labor force as to sex and skill, the separate figures for each 
sex-skill group failed to show any relation between hourly earnings and 
size of establishment. 

In most branches of the furniture industry there were no indications 
■that average hourly earnings varied' directly with size of plant. This 
was true of the wood household-furniture branch as a whole, for which 
data are presented in table 9. Moreover, differences in hourly earn- 
ings among establishments of the same size group existed when allow- 
ance was made for the variations between the northern and southern 
regions. Wage levels in this industry differed by product, such as 
'case goods, upholstered furniture, novelty furniture, and kitchen 
furniture, but the averages did not vary by size of plant when the 
figures for each region were analyzed on a product basis. One reason 
why there was no increase in hourly earnings by size of establishment 
was the fact that the majority of the unionized plants employed less 
than 250 workers, and the union establishments generally also had the 
highest averages. However, even when the union and nonunion 
plants were treated separately, neither showed any relation between 
hourl} r earnings and size of establishment. Lastly, there was no 
increase in average hourly earnings by size of plant when the data 
were analyzed on the basis of individual communities. A similar 
analysis indicates that hourly earnings did not vary by size of estab- 
lishment in the wood office-furniture and public-seating branches of 
the industry. 



Table 9.- — Distribution of individual plants in wood household branch of furniture 
industry, by average hourly earnings and size of plant, October 1937 





Total 


Size of plant in terms of number of employees 


Average hourly earnings 


6 
to 
20 


21 
to 
50 


51 
to 
100 


101 - 
to 
250, 


251 
to 
500 


501 

to 
1,000 


1,001 

to 
2,500 




1 

1 

7 
32 
46 
39 
46 
37 
25 
22 
11 
10 

7 

4 

3 

3 

2 

1 

1 


1 

1 
2 
4 

2 

1 

1 


1 
1 
1 
4 
5 
8 
9 
8 
8 
6 
1 
4 
2 
1 
3 

2 












20.0 and under 25.0 cents 












25.0 and under 30.0 cents. 


. 2 

7 

13 

7 

13 

13 

5 

7 

1 

3 

2 

1 


1 

11 
18 
17 
12 
10 

9 

6 

4 

1 

1 

J 


2 
7 
8 
3 
5 
2 
2 
2 
2 

1 


1 

2 

2 
2 
1 




30.0 and under 35.0 cents. ,. 


1 


40.0 and under 45.0 cents. 




1 




1 






60.0 and under 65.0 cents 


2 
2 

1 


1 




1 


70.0 and under 75.0 cents 




75.0 and under 80.0 cents ; 


1 


80.0 and under 85.0 cents 




85.0 and under 90.0 cents 






2 


















. 


100.0 and under 105.0 cents 




1 












1 










U.Ul^UK. | 












Total 


298 1 


12 


65 


76 


92 


34 


13 


6 







Source: V. P. Bureau of Labor Statistics. 



30 



CONCENTRATION OF ECONOMIC POWER 



The only branch of the furniture industry that showed some 
tendency for average hourly earnings to differ by size of plant was 
metal office furniture, as one may see from table 10. It should be 
pointed out, however, that the coverage here is too thin to justify 
any definite conclusions^ although none of the other factors, such as 
geographical distribution, unionization, and size of community, appear 
to have played any significant role in the wage structure. 

Table 10. — Distribution of individual plants in metal office furniture branch of 
furniture industry, by average hourly earnings and size of plant, October 19S7 * 





Total 




Average hourly earnings 




Size of plant in terms of number of 
employees 


45 
and 
under 

50 
cents 


50 

and 

under 

55 
cents 


55 

and 

under 

60 
cents 


60 

and 

under 

65 
cents 


65 

and 

under 

70 
cents 


70 

and 

under 

75 
cents 


. 75 

and 

under 

80 
cents 


80 

and 

under 

85 
cents 




4 
3 
5 

7 


2 


1 
2 






1 
1 
1 
3 






















. 2 


2 

• 1 














2 




1 












Total 


19 i 2 


3 


2 


3 


6 


2 




1 











Source: U. S. Bureau of Labor Statistics. 

According to table 1 1 , the average- hourly earnings in full-fashioned 
hosiery did not. indicate any tendency to increase with size of estab- 
lishment in the northern States, whether for union or nonunion plants. 
This was also true when the independent finishing establishments, 
which had a lower wage level as compared with the integrated plants, 
were excluded from each group of establishments. Size of com- 
munity appears not to have played any part in the wage structure 
of this branch, due to the 'fact that most of the plants are located in 
the largest metropolitan areas. On the other hand, there was some 
tendency for the averages in the southern wage district to increase 
by size of establishment. The coverage in this region, however, is 
not sufficiently large to draw definite conclusions, especially since 
size of community appears to have played some role in the wage 
structure. A similar analysis failed to disclose any relation between 
hourly earnings and size of plant in the seamless branch of the in- 
dustry, which was surveyed by the Bureau at the same time. 

An analysis of hourly earnings in the knitted outer ear industry, 
by size of establishment, based on a survey by the Bureau in 1938, 
failed to reveal any significant relationship between the two factors. 8 

3 Along with knitted outerwear, the Bureau also surveyed knitted underwear, cloth, and gloves aud 
mittens, but in none of these branches was the coverage sufficiently large to analyze the hourly earnings 
by size of rHant. 



CONCENTRATION OF ECONOMIC POWER 



31 



Table 11. — Distribution of individual plants according to average hourly earnings 
in full-fashioned hosiery branch of hosiery industry, by region, size of plant, and 
unionization, 19S8 





Northern wage district 




Southern 
tvaee dis- 




Union plants 


Nonunion plarfts 


trict, all 
plants ' 


Average hourly earnings 


I 

c 

a 

E 
s 

?, 
s 


1 
>. 
& 
— 
g 

s 

2 

5 


| 
o 

| 

o 

£ 
O 

■a 


>. 
a 

o 
$ 

s 

a 


■n 
9 
>. 

s 

a. 
| 

s 


t 
f 


1 

n 

E 

o 

§ 


s 
> 

c 
— 
c 
id 

>. 

£ 

s 


5 

5. 

c 
a 
E 

- 

2 


! 
>. 



■a 
E 

c 

o 

a 


o 

>. 
3 

a 

E 

o 
o 

c 

IO 


I 
>. 

c 

a 

E 

s 

<N 

O 

e 


3 

_ 

3 

E 

3 


s 

E 

1 

p 


1 

9 

'•s 

.-. 

E 

a> 

Q 

8 

£ 

s. 


3 

> 

e 
■a 

§ 

a. 
>, 

"5. 
g 

S 

of 


1 

>■ 
a 

a 

% 
- 

3 

1 

4 


>■ 

z 

a 

E 

S 

O 
1 

2 
1 
2 
1 
1 

s 


\ 
^. 
o 

3. 
E 

V 

a 

i 
i 

2 

2 
1 
1 

s 


3 

a 
E 

ai 

o 
O 

"i 

4 

1 

6 


>> 

o 
Q. 

a 

of 

8 


Under 35.0 cents .. 


























1 


1 
1 

1 
2 
1 
2 
1 

9 


2 

1 
3 


1 
2 

3 


i 
i 

2 


1 
1 


















































3 

1 
1 

1 
7 






i 
l 


i 
•l 

i 
l 


2 

"i 

3 


3 

1 

2 
3 

3 
3 

1 
1 

17 


1 
1 

1 
3 


9 


i 

l 
l 

l 
4 


■1 

2 


I 
1 


1 
1 




55.0 and under 60.0 cents - 

60.0 and under C5.0 cents 


-- 


65.0 and under 70.0 cents _.. 


1 






75.0 and under 80.0 cents . 




i 




80.0 and under 85.0 cents. . . . 






85. P and under 90.0 cents. . 


















Total 


2 


5 


9 


1 













' Includes 1 trade-union integrated and 2 independent finishing plants. 
Source: U. S. Bureau of Labor Statistics. 

Neither did hourly earnings vary by size of company in the boot 
and shoe industry. This may be seen irom an examination of table 
12, .which indicates that establishments belonging to each size group 
covered a fairly wide range of average hourly earnings. This con- 
clusion holds true even when account is taken of the other factors in 
the industry's wage structure, such as geographical distribution, size 
of community, unionization, retail price of shoes, type of shoe con- 
struction, kind of shoes, etc. Likewise, hourly earnings did not differ 
by size of company in the boot and shoe cut stock and findings in- 
dustry, which was surveyed by the Bureau at the same time. 

Although these industries differ from each other as to size, product, 
and other respects, they have several characteristics in common. 
As mentioned previously, very few companies in the furniture, hosiery, 
and knit-goods industries have more than one establishment, and in 
none of these industries is there a small group of companies that occupy 
a dominant position, in terms of either number of employees or vol- 
ume of product manufactured. In the boot and shoe industry, there 
are numerous companies with more than one plant, and some of these 
are fairly large, but no single group predominates in the industry. 
Lastly, each of these industries is characterized by keen competition 
in the distribution of its products. 



32 CONCENTRATION OF ECONOMIC POWER 

Table 12. — Distribution of individual plants according to average hourly earnings 
in boot and shoe industry, by size of company, 1939 



Average hourly earnings 



Total 



Plants belonging to companies with— 



Under 

200 
workers 



200 

and 
under 

500 
workers 



500 

and 

under 

1,000 

workers 



1,000 2,000 

and I and 

under i under 

2,000. I 5,000 

workers workers 



5,000 

workers 
and 
over 



Under 30.0 cents 

30.0 and under 35.0 cents 
35.0 and under 40.0 cents 
40.0 and under 45.0 cents 
45.0 and under 50.0 cents 
50.0 and under 55.0 cents 
55.0 and under 60.0 cents 
60.0 and under 65.0 cents 
65.0 and under 70.0 cents 
70.0 and under 75.0 cents 
75.0 cents and over 

Total 



284 



28 



Source: U. S. Bureau of Labor Statistics. 

For the bituminous-coal industry the Bureau's analysis based on a 
field survey in 1936 took particular account of average hourly earnings 
in union and nonunion mines, of the region in which the mines were 
located (since there is a recognized geographical difference in wage 
levels), and also of whether the mines were "captive" mines,' that is, 
were owned by a railroad, steel, automobile or other company so that 
their wage policy of rate of operations might be affected by policies 
outside the coal industry. 

Significant differences must be analyzed in terms of size of mine in 
relation to these other factors. In the 23 captive union underground 
mines 4 in the northern Appalachian region earnings were progressively 
higher as the "size of the mine increased, and in the southern Appala- 
chian region for mines employing 250-500 miners, as compared with 
smaller mines, but not for larger mines with more thhai 500 workers. 
In the larger group of noncaptive union underground mines, there 
was ah almost uniform and marked increase in earnings as the size 
of the mines increased. (See table 13.) 

* Strip mines w6re eliminated because of the great difference in method of operations and possible' earn- 
ngs. 



CONCENTRATION OF ECONOMIC POWER 



33 



Table 13. — Average hourly earnings in bituminous coal industry, by size of estab- 
lishment, 1936 

A. CAPTIVE UNION UNDERGROUND MINES ' 





Northern Appalachian 
region 


Southern A ppalachian 
region 


Middle West region 


Size of establishment 


Num- 
ber of 
estab- 
lish- 
ments 


Num- 
ber 
of em- 
ployees 


Aver- 
age 
hourly 
earn- 
ings 


Num " Vum- 

berof N b ^, n 

<8£- "fo- 
ments |l> lo > ees 


Aver- 
age 
hourly 
earn- 
ings 


Num- 
ber of 
estab- 
lish- 
ments 


Num- 
ber 
of em- 
ployees 


Aver- 
age 
hourly- 
earn- 
ings 




( 2 ) 
6 
4 
9 


( ? ) 

( 2 ) 

1, 134 
1,064 
4,823 


( 2 ) 
( 2 ) 
$0,725 
:803 
.900 

.854 












51 to 100 employees 
















3 


513 


$0. 736 

751 

.673 

.696 








251 to 500 employees 

Over 500 employees. ..1 


3 1, 269 
7 1 3.812 

13 5,594 


8 


( 2 ) 

( 3 ) 


f») 
( 3 > 






Total... 


23 


7,177 


4 


1,806 


$0,912 








Southern Interstate 
region 


Rocky Mountain 
region 


All regions 
















( 2 ) 

( 2 ) 
13 
13 
19 


( 2 ) 

( 2 ) 

2,205 
3,638 
10, 109 


( 2 ) 
















( 2 ) 


101 to 250 employees 

251 to 500 employees 


( 2 ) 


( 2 ) 
( 2 ) 


( 2 ) 
( 2 ) 


3 
4 


403 

674 


$0. 892 
.885 


$0. 753 
.819 
.808 




( 2 ) 














Total 


( 2 ) 


( 2 ) ' 


7 


1,077 


.888 


49 


16,108 


.803 







B. NONCAPTIVE UNION UNDERGROUND MINES 





Northern Appalachian 
region 


Southern Appalachian 
region 


Middle West region 




18 
38 
50 
32 
22 


419 
3, 766 
7,321 
10,228 
10, 122 


$0,710 
.778 
.761 
.789 
.797 


6 

22 
47 
27 

9 


140 
1,702 
7, .588 
7,878 
4,444 


$0,530 
.698 
.722 
.741 
.809 


13 
17 
22 
16 
4 


339 

1,224 

3,095 

4,493 

949 


$0,661 


51 to 100 emplovees 

101 to 250 employees 

251 to 500 employees 


.788 
.767 
.791 
.82Q 






Total... 


160 


"31, 856 


.777 


111 


21,752 


.744 


72 


10,100 


.786 








Southern Interstate 
region . 


Rocky Mountain 
region 


All regions 




9 
11 
6 


242 
788 
710 


$0. 003 
.639 
.689 


3 
9 
10 
4 


111 

672 

1,179 

680 


$0,858 
.787 
.885 
.910 


49 
97. 
135 
79 
35 


1,251 
8,152 
19,893 
23,279 
15,515 


$0,671 




.721 


101 to 250 employees 


.752 
.778 










.803 


















Total 


26 


1,740 


.656 


26 


2,642 


.864 


395 


68,090 


.769 











' Captive mines are defined as those owned and operated by large consumers of coal who use the ma- 
jority of their output, selling in the open market only incidentally. 

2 Less than 3 establishments. Not shown in order to prevent disclosure of data for individual estab- 
lishments. 

3 Not shown in order to prevent disclosure of data for indi\ idual establishments. 



258840— 40 — No. 14- 



34 



CONCENTRATION OF ECONOMIC POWER 



Table 13. — Average hourly earnings in bituminous coal industry, by size of estab- 
lishment, 19S6 — Continued 

C. NONCAPTIVE NONUNION UNDERGROUND MINES 





Northern Appalachian 
region 


Southern Appalachian 
region 


Middle West region 


Size of establishment 


Num- 
ber of 
estab- 
lish- 
ments 


Num- 
ber 
of em- 
ployees 


Aver- 
age 
hourly 
earn- 
ings 


Num- 
ber of 
estab- 
lish- 
ments 


Num- 
ber 
of em- 
ployees 


Aver- 
age 
hourly 
earn- 
ings 


Num- 
ber of 
estab- 
lish- 
ments 


Num- 
ber 
0(" em- 
ployees 


Aver- 
age 
hourly 
earn- 
ings 




6 .11 


$0. 513 


C)° 
8 
(') 
• (l) 


54 

(') 

•1, 139 

(') 

(') 


$0,420 
(') 
.644 
(') 
('). 


3 
5 


(') 
198 
864 

(') 


(') 








$0,722 










.655 










0) 


























Total 


6 


111 


.513. 


17 v 


2,654 


.675 


11 


1,469 

i 


.655 








Southern Interstate 
region 


Rocky Mountain ' 
region 


All regions 




5 
3 


113 
171 


$0. 493 
.401 






(') ■ 


17 
10 
13 
3 
(') 


312 

684 

2,003 

845 

(') 


$0,512 


51 to 100 employees 


.590 




.649 
















.625 
















(') 


















Total i ...I. 


8 


284 


.432 


3 


•197 


$0. 655 


. 45 


4,7*15 


.650 



1 Less than 3 establishments. Not shown in order to Drevent disclosure of data for individual establish 
ments. • . 

Source: U. S. Bureau of Labor Statistics. 

It has been suggested that this relationship between size of mine 
and average hourly earnings in the bituminous-coal industry may be 
explained in part by the fact that in the larger mines it is both physi- 
cally and financially possible to mechanize operations more completely 
than in the smaller mines. The result is an increase in the hourly 
earnings of the machihe operators who are paid on a tonnage basis at 
rates fixed, within certain limits, by union contracts. It was impos- 
sible to take into consideration two other factors which bear on wage 
differentials — the size of the company owning the mine and the size 
of the community in or near which the mine was located. Although 
one may hazard the guess that both of these factors may be of less 
importance in coal mining than in many other industries, it is possible 
that they might alter the picture presented here if they could be taken 
into account. 

In addition to coal mining, there are a few other branches of industry 
in which enough is known about these possible sources of difference to 
conclude that the mere size of the individual operation (the "plant" 
or ''establishment") offers some- advantages in organization for pro- 
duction,- selling; or financing which makes possible higher hourly 
earnings. An example is the wood household branch of the furniture 
industry. The furniture industry as a whole seems to show a close 
relationship between size of plant and average hourly earnings, but 
the man} r other factors include differences in product and cannot be 
analyzed from existing data except for limited sectors of the industry. 



CONCENTRATION OF ECONOMIC POWER 35 

INDUSTRY-WIDE STATISTICS ON AVERAGE HOURLY EARNINGS BY SIZE OF 

ESTABLISHMENT 

In the following sections three sets of statistics on average hourly 
earnings by size of establishment are ppesented in order — the special 
compilation of average hourly earnings for selected factories reporting 
to the Bureau of Labor Statistics in August 1937, the man-hour data 
reported by the Census of Manufactures and tabulated by the Bureau 
of Labor Statistics, and the study of six industries by the National 
Industrial Conference Board. 

Average hourly earnings in factories reporting to the Bureau of Labor 
'Statistics, by size, August 1937 

Special tabulations have been made of the reports received from 
manufacturers by the Bureau of Labor Statistics on employment, 
pay roll, and man-hours which show average hourly earnings by size 
of establishment, in August 1937, for 89 industries. 5 

Average hourly earnings increased as size of establishment increased 
in about two-thirds of these 89 industries. 8 The record for each of 
these industries, showing average hourly earnings, in cents per hour, 
for each size group, is given in table 14, in which the industries are 
grouped in 7 sections according to the consistency with which earnings 
increase with size. 

» These data are collected and tabulated by the Division of Employment Statistics of the Bureau of 
Labor Statistics, under the direction of Lewis E. Talbert, in cooperation with State agencies in 14 States 
which act jointly with the Bureau in collecting monthly reports. 

« The establishments were at first classified into 9 groups: 1 to 20 employees, 21 to 50 employees, 51 to 
100 employees, 101 to 200 employees, 201 to 300 employees, 301 to 400 employees, 401 to 500 employees, 501 
to 1,000 employees, 1,001 employees and over. Although this classification showed a decided tendency 
for average hourly earnings to increase as size of establishment increased, the size intervals were so small for 
establishments w'ith less than 500 employees that the relationship was quite irregular. Moreover, in many 
' instances there were either no establishments or such a small number in many of these size groups that 
comparison of the relationship between size and average hourly earning' was hazardous. For this reason, 
the establishments were reclassified into 4 size groups— those emplovin.fi to 100 wage earners, 101 to 500, 
501" {o 1,000, and over 1,000. The averages for the. establishments In each «ize group were computed by 
' dividing the total pay roll for all the establishments in the size groiljS by the total number of man-hours 
worked by the employees of all establishments in the size ?roup. 

The measure of size, which had to be used is not entirely satisfactory. Establishments were classified 
on the basis of the number of waee earners employed during the pan^lar pay-roll period, usually 1 or 2 
week', for which the data were reported to the Bureau of Labor Statfs'ties. In relation to more desirable 
measures, such as practical capacity in terms of physical volume or maximum number of employees re- 
quired at anv one tim£ to operate the establishment at full capacity /'the basis used may have put certain 
large establishments operating with 2 or 3 shifts in unduly large size sroups. This procedure may introduce 
a fairlv important error since there is considerable evidence that evtm in periods of peak activity there are 
at anyone time wide short-run variations in the level of operations in different establishments of the same 
industry. 



36 



CONCENTRATION OF ECONOMIC POWER 



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CONCENTRATION OF ECONOMIC POWER 



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CONCENTRATION OP ECONOMIC POWER 



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CONCENTRATION OP ECONOMIC POWER 



39 



In 36 industries average hourly earnings increased with each in- 
crease in establishment size. 7 In 1 1 industries, employees of .estab- 
lishments in the smallest size group earned more than those of estab- 
lishments in the next largest size group, but with this exception earn- 
ings increased with each increase in size of establishment. 8 For 
another 10 industries it was the earnings in the largest establishments 
which were out of line, being below those paid by the next to the 
largest group of establishments. 9 In hardware and soap industries 
the single exception was the next to the largest size group. 10 

The industries in which earnings increased consistently as size of 
establishment increased, or those in which only one group constituted 
an exception to this rule, include a number of the important durable- 
goods industries — steel, automobiles, aluminum, electrical machinery, 
textile machinery, and agricultural implements — as well as chemicals, 
soap, cigars and cigarettes, petroleum refining, radios, rubber tires, 
and meat packing, in which, in general, plants are larger and earnings 
higher than in the non-durable-goods industries. 11 All of 4 these indus- 
tries are characterized by large-scale operations and by presence of a 
few large companies which have a dominant position. The analysis 
in the preceding chapter indicates that for steel; meat packing, and 
the manufacture of cigarettes and soap, at least , size of company rather 
than size of plant is the size factor associated with. wage differences. 
For automobiles, the differentials are affected by the high-wage 
manufacturing and assembly plants of the large companies and the 
lower wages paid in the smaller plants manufacturing parts, essentially 
a different industry. 



Table 15. 



-Average hourly earnings in durable- and non-durable-goods industries 
by size of establishment, August 1937 





All estab- 
lishments 


Establishments with— 


Industry group 


1 to 100 
employ- 
ees 


101 to 500 
employ- 
ees . 


Ml to 
1,000 em- 
ployees 


Over 1,000 
employ- 
ees 




,$0,674 


$0,593 


$0,590 


$0,624 


$0,763 






Durable goods. +. 


' .736 
.590 


.595 
.592 


.622 
.560 


.683 
.572 


.820 
.634 







Source: U. 8. Bureau of Labor Statistics. 

In this group of industries in which- earnings increase with size, on 
the other hand, there are^also some industries in which there are many 
small companies and small plants and in which the large companies 
in the industry do not. occupy such a dominant position. Among 
these are beverages, confectionery, canning and preserving, paper 
boxes, knit goods, cotton and woolen and silk and rayon goods, leather, 
sawmills, millwork, furniture, and foundries. Other information, 
however, casts doubt on inferences which might be drawn from reports 
for these industries. In the paper-box industry, for example, some 
of the set-up paper-box plants are affiliated with large companies 
operating in other industries, which take their products and give 

' See table 14 (A). 
•See table 14 (B). 
• See table 14 (C). 
'• See table 14 (D), 
11 See table 16. 



40 CONCENTRATION OF ECONOMIC POWER 

them a marketing advantage. In cotton- textiles and in the lumber 
industries it is known that there are wide geographical differentials 
in^wages between the North and the South. In the lumber industry, 
the largest operations are in the North, so that apparent differences 
are not necessarily conclusive. In furniture, as already indicated, a 
careful analysis requires classification by product— which runs the 
entire scale from simple wooden furniture to -upholstered furniture — 
and by region. When these allowances are made the apparent differ- 
ences in earnings by size of establishment largely disappear. 

The analysis of Bureau of Labor Statistics data showed only one 
industry, women's clothing, in which there was an inverse relationship, 
average hourly earnings declining as size of establishment increased. 12 
In this industry, as in men's clothing and in certain industries in 
group B of table 14 in which the smallest establishments paid more 
wages than the next largest size establishments, the smaller estab- 
lishments are unionized and pay higher wages. Some are engaged in 
producing quality merchandise of a more or less custom-made charac- 
ter, which requires -more highly skilled workmen than would be used 
in a large establishment operating on a mass production basis. Thus, 
the inverse relationship is- perhaps to be explained by the skill compo- 
sition of the working force. 

In 7 industries there appeared to be no relationship between average 
hourly earnings and establishment size, 13 and, in addition, there were 
22 industries for which no conclusions could be drawn because of the 
small number of reporting firms. Of these, 7 industries had estab- 
lishments in only 1 or 2 of the size groups, and 15 had 3 or more 
establishments in only 2 size groups. 14 These industries are presented 
in section G of table 14. It may be observed that for this group in 
which numbers reporting were too small to make conclusions possible, 
there were only a few industries in which average hourly earnings 
increased as, size of establishment increased. In most of these 
industries there was no apparent relationship between the 2; in fact, 
in 3 industries — beet sugar, clocks and watches, and jewelry — average 
hourly earnings declined as size of establishment increased. The 
situation in the clock and watch and jewelry industries is perhaps 
similar to that suggested as characterizing the women's clothing 
industry. In the explosives industry and the fertilizer industry it has 
already been indicated in the preceding chapter that higher hourly 
earnings are associated with size of company, not sjze of establishment. 

As a further test of conclusions, before some of the reasons for 
diversity in earnings listed above were apparent and to avoid com- 
plications caused by small number of reports, a representative group 
of 13 of the industries reporting" to the Bureau of Labor Statistics 
was selected for further analysis. In each of these industries, the 
reports included a large number of establishments in each of the 
four size groups an<i represented a large proportion of the industry. 
They included both durable and nondurable goods industries. In 
each of these industries, there was a close relationship for the country 
as a whole between the level of average hourly earnings and the size 
of establishment. In 9 of them — automobiles, steel works, electrical 

'2 See table 14 (E). 
" See tabic 14 (F). 

11 Average hourly earnings could not be shown in those cases in which there were fewer than 3 estab- 
lishments. 



CONCENTRATION OF ECONOMIC POWER 



41 



machinery, foundries, machine tools, cement, glass, knit goods, and 
woolen goods — earnings increased with eaeli increase in size. In 
others, such as cotton goods, dyeing and finishing of textiles, paper 
and pulp and paper boxes, there was at least 1 exception to the general 
rule. The textile industries, . in general, showed smaller differentials 
between small and large plants than the other industries. 15 

Table 16. — Average hourly earnings in IS selected industries, ' hy size of estab- 
lishment, August 19 >V 



Industry 



A. Consistently increasing earnings with 

increasing plant size: 
Automobiles . . 

Steel works and rolling mills 

Cement 

Electrical machinery, apparatus 

ami supplies . ... 
Foundry and machine shop prod- 
ucts _ _ 

O lass : -.. _ _ 

Machine tools.. 

Woolen and worsted goods 

Knit goods _ 

B. Increasing earnings wij,h increasing 

plant size, except one size group: 

Cotton goods 

Dyeing and finishing 

Paper and pulp : 

Taper boxes 



Number 
of estab- 
lish- 
ments re- 
porting 



310 
253 
140 

429 

i,744 

140 
1ST 
414 
481 



54(1 
15C 
357 
642 



Number 
of em- 
ployees 

reported 



Establishments with— 



384, 876 

•133. 521 

23, 833 

194,933 

230, 4-43 
57, 068 
39, 520 
125, 803 
126, 052 



294,722 
38, 738 

114,858 
36,411 



1 to 100 
employ- 
ees 



$0. 603 
.617 
.644 

. 573 

.617 
.577 
.643 
.561 
.451 



.420 
. 546 

. 557 
.488 



nil to .'HO 501 to Over 

employ- 1 ,000 em- 1 ,000 em- 
ees ployees ployees 



X 729 
.722 
. 664 

.602 

. 673 
.629 
.695 
.580 

.461 



.384 
. 560 
.611 
. 558 



$0. SI0 
.783 
.713 

.679 

. 725 
.672 
.700 
. 586 
.524 



.424 
.574 

. 656 
.543 



$0. 932 
.870 

m 

.773 

.745 
. 737 
. 758 
.608 
.580 



.446 
. 570 
.613 
.021 



1 Selected as industries with the largest number of establishments in the various size groups ami with the 
largest samples reporting to the Bureau of Labor Statistics. 
' Insufficient number of reports. 

Source: U. S. Bureau of Labor Statistics. 

In addition to computing the average hourly earnings of all em- 
ployees of the plants in each size group, the average hourly earnings 
of each plant in each industry were arrayed by size groups. On this 
basis it appeared that in most industries in which there was a pro- 
nounced tendency for average hourly earnings to increase as size of 
establishment increased, this was due, not so much to the fact that the 
larger establishments paid higher wages on the average than any of 
the small establishments, but to the fact that few of the large estab- 
lishments paid as low wages as most of the smaller establishments. 
In other words, there were, in nearly every case, small establishments 
which paid as high wages on the average to their employees as any 
of the large establishments, but there were also many small establish- 
ments which had much lower average hourly earnings than even the 
lowest of the large establishments. 

Thus, taking the analysis as a whole, the diversity of these indus- 
tries with respect to' location in high or low wage areas, the degree of 
skill required, the dominance of certain compairies, or other aspects of 
organization are so great that no generalizations can safely be drawn, 
in view of the fact that these factors are known to be so important in 
influencing wage levels in addition to any importance size might 
assume. There is the further complication, already suggested, of 

'» See table 16. 



42 CONCENTRATION OF ECONOMIC POWER 

diversity of products included under so-called "industries." In only a 
few of these 89 "industries" do all plants manufacture the same lines of 
products. Thus, as indicated in the preceding chapter, the explosives 
industry makes two quite different products — black powder and 
dynamite — -and might more truly be defined as two industries; the 
radio industry has three distinct branches — sets, parts, and tubes. 
The difference in the products of the specialized machinery industries, 
of furniture, etc., is too well known to require elaboration. 

Thus, taking into account all of these well-grounded doubts and the 
further fact that reports to the Bureau of Labor Statistics are not 
niynerous enough to permit generalizations about size in many 
industries as a factor in wage levels, it is clear that no sweeping, con- 
clusions can be drawn from these or other similar data. 

ESTABLISHMENT REPORTS TO THE CENSUS OF MANUFACTURES 

In cooperation with the Bureau of the Census, the Bureau of Labor 
Statistics has compiled the average hourly earnings by size of establish- 
ment, in 1933, 1935, and 1937, of employees in a large number of the 
manufacturing industries for which the Census of Manufactures has 
collected information on man-hours worked. 16 These reports cover a 
limited section of the industrial field, with 49 percent of the manu- 
facturing wage earners represented in the reports in 1937. The 109 
"industries", so-called, represent in many cases subdivisions of the 
broader groups classified as "industries" by the Bureau of Labor 
Statistics, and are not, therefore, directly comparable. 17 Thiis, for 
example, this tabulation shows separately the following "industries" 
which the Bureau groups under cotton textiles — cotton yarn and 
thread, cotton woven goods, cotton narrow fabrics; and the following 
which the Bureau groups under silk and rayon manufactures — 
rayon throwing and spinning (commission only), rayon yarn and 
•thread (processed for sale) , "commission" branch of rayon broad 
woven goods, rayon narrow fabrics, silk narrow fabrics, silk throwing 
and spinning (commission only), silk yarn and thread (made for sale), 
silk broad woven goods (18 inches wide and over) separately for the 
commission branch and the regular branch. This finer classification 
removes, to some extent, one of the factors of doubt in analysis of 
broader classifications— namely, differences in. product. Thus, the 
smaller and more homogeneous the classification, the more reliable 
the conclusions — if other factors can be satisfactorily analyzed. 

In these reports, as in those made direct to the Bureau of Labor 
Statistics, there is the same general tendency for average hourly 
earnings to increase as size of establishment increases in the majority 
of cases. In about 65 of the 101 census "industries" for which average 
hourly earnings, by size of plant were compiled for 1937, average, 
hourly earnings increased as size of establishment increased. 18 Of the 
38 industries for which no such relationship existed, 28 were textile u*A 
apparel industries, although only about 50 percent of the industries 
included in the reports were in the textile and apparel fields. 19 On the 

« See Man-Hour Statistics for 10S Selected Industries. Census of Manufactures, 1937: Published j° iDt 'y 
by the Bureau of the Census and the Bureau of Labor Statistics. These statistics are compiled under tne 
direction of Dr. Arthur F. Beal. ... . . ,,..,,_ 

' 7 These tabulations include as "industries" separate figures in several industries for establishments doing 
refrular work and those doing contract work. 

18 See table 17, reetion A. 

" See table 17, section B. 



CONCENTRATION OF ECONOMIC POWER 43 

other hand, there was a direct relationship between size and earnings 
in all but 2 of the 21 industries included in the group "Iron and 
steel and their prcducfs, including machinery." The exceptions were 
"cast-iron pipe and fittings" and "radios, radio tubes, and phono- 
graphs." In the latter mdustry, a special study of the Bureau of 
Labor Statistics shows that in the radio-sets branch of the industry 
earnings Vary with size of. company, so that the conclusion ifrom 
industry-wide data is not valid. 

Table 17. — Average hourly earnings in manufacturing industries, by size of 

establishment, 1937 

SECTION A. INDUSTRIES IN WHICH AVERAGE HOURLY EARNINGS DID NOT INCREASE 
WITH SIZE OF ESTABLISHMENT 

(All establishments in these industries in the United States reporting fully to 1937 
Census of Manufactures) 

Food and tobacco industries: 

1. Cereal preparations. 

2. Distilled liquors. 

3. Tobacco (chewing and smoking) and.snUff. 
Textile mills: 

4.. Cotton yarn and thread. 

5. Cotton woven goods (over 12 inches in width). 

6. Cotton narrqw fabrics. 

7. Dyeing and finishing of cotton yarn. 

8. Cotton fabric dyeing and finishing. 

9. Batting, padding, and wadding; upholstery filling. 

10. Processed cotton waste. ■ - 

11. Worsted woven goods. 

12. Recovered wool fiber. 

13. Felt goods, except woven felts. 

14. Rayon throwing and spinning — commission only. 
15". Rayon yarn and thread — processed for sale. 

16. "Commission" branch. of rayon broad woven goods (18 inches wide and 

over), 

17. "Regular" brancu 01 rayon broad woven goods (18 inches wide and over). 

18. Rayon narrow. fabrics. 

19. Dyeing and finishing of rayon (and silk) yarn. 

20. Silk narrow fabrics. 

21. Knitted cloth. 
Clothing industries: 

22. Knitted outerwear — contract factories. 

23. Knitted outerwear — regular factories. 

24. Knitted underwear. 

25. Work clothing (including work shirts) and sport garments, except leather. 

26. Trousers (semidress), wash suits, and washable service apparel. 

27. Leather and sheep-lined clothing. 

28. Shirts (except work shirts), collars, and nightwear— r-contract factories. 

29. Shirts (except work shirts), collars, and nightwear — regular factories. 

30. Men's underwear — regular factories. 

31. Furnishing goods, men's, not elsewhere classified — regular factories. 
Miscellaneous industries: 

32. Insecticides arid fungicides, and industrial and household chemical 

compounds, not elsewhere classified. 

33. Blackings, stains, and dressings. 

34. Lime. 
Metal industries: 

35. Zinc smelting and refining. 

36. Sheet-metal work, not specifically classified. 

37. Cast-iron pipe and fittings. 

38. Radios, radio tubes, and phonographs. 



44 CONCENTRATION OF ECONOMIC POWER 

Table 17. — Average hourly earnings in manufacturing industries, by size of 
establishment, 1937 — Continued 

SECTION B. INDUSTRIES IN WHICH AVERAGE HOURLY EARNINGS INCREASED WITH 

SIZE OF ESTABLISHMENT 

(All establishments in these industries in the United States reporting fully to 1937 
Census of Manufactures) 

Food and tobacco industries: 

1 . Flour and other grain-mill products. 

2. Feeds, prepared, fqr animals and fowls. 

3. Meat packing, wholesale. 

4. Malt liquors. 
5-. Cigars. 

6. Cigarettes. 
Textile mills and apparel: 

7. Woolen yarn. 

8. Worsted yarn. 

9. Woolen woven goods, including woven felts. 

10. Woolen and worsted dyeing and finishing. 

11. Woolen and worsted carpet yarn, jointly with wool carpets and rugs 

(other than rag). 

12. Paper-fiber and grass carpets and rugs. 

13. Dyeing and finishing of rayon and silk fabric. 

14. Silk throwing and spinning — commission only. 

15. Silk yarn and thread — made for sale. 

16. "Commission" branch of silk broad-woven goods (18 inches wide and 

over). 
'17. "Regular" branch of silk broad-woven goods (18 inches wide and over). 

18. Hosiery. 

19. Men's, youths', and boys' clothing, not elsewhere classified — contract 

factories. 

20. Men's, youths', and boys' clothing, not elsewhere classified — regular 

factories. 
Chemical industries: 

21. Paper. 

-22. Pulp (wood and other fiber). 

23. Rayon and allied products. 

24. Drugs and medicines. 

25. Perfumes, cosmetics, and other toilet preparations. 

26. Soap. 

27. Cleaning and polishing preparations. 

28. Petroleum refining. 

29. Leather (tanned, curried, and finished) — contract factories. 

30. Leather (tanned, curried, and finished) — regular factories. 

31. Rubber boots and shoes. 

32. Rubber tires and inner tubes. 

33. Rubber goods other than tires, inner tubes, and boots and shoes. 
Stone, clay, and glass industries: 

34. Cement. 

35. Clay products, other than pottery. 

36. Pottery, including porcelain ware. 

37. Nonclay refractories. 

38. Glass. 
Nonferrous metal industries: 

39. Aluminum products. 

40. Copper smelting and refining, jointly with lead smelting and refining. 

41. Smelting and refining of nonferrous metals other than gold, silver, plati- 

num, not from the ore. 

42. Nonferrous-metal alloys, nonferrous-metal products, except aluminum, 

not elsewhere classified. 
Iron and steel and their products, including machinery: 

43. Blast-furnace products. 

44. Steel-works and rolling-mill products. 

45. Wrought pipe, welded and heavy riveted, made in plants not operated in 

connection with rolling mills. 

46. Plumbers' supplies, not including pipe or vitreous-china sanitary ware. 

47. Steel barrels, kegs, and drums. 



CONCENTRATION OF ECONOMIC POWER 45 

Tablk-,,17. — Average hourly earnings in manufacturing industries, by size of 
establishment, 1037 — Continued 

SECTION B. INDUSTRIES IN WHICH AVERAGE HOURLY EARNINGS INCREASED WITH 

SIZE OF ESTABLISHMENT — continued 

Iron and steel and their products, including machinery — Continued. 

48. Tin cans and other tinware not elsewhere classified. 

49. Stamped and pressed metal products; enameling, japanning, and lac- 

quering. 

50. Wire drawn from purchased rods. 

51. Wircwork, not elsewhere Classified. 

52. Electrical machinery, apparatus, and supplies. 

53. Machine tools. 

54. Machine-tool accessories and machinists' precision tools. 

55. Machinery not elsewhere classified. 

56. Machine-shop products. 

57. Machine repair shops. 

58. Engines, turbines, water wheels, and windmills. 

59. Refrigerators and refrigerating and ice-making apparatus. 
00. Motor-vehicle bodies. 

61. Motor-vehicle parts and accessories. 

62. Motor-vehicle trailers. 

63. Motor vehicles, not including motorcycles. 

Source: Man-Hour Statistics for 105 Selected Industries. 

Although it is difficult to compare these more comprehensive figures 
with those compiled from reports to the Bureau of Labor Statistics 
due not only to differences in the detail of the industrial classification 
and to the size groups used, there arc some limited comparisons which 
can be made. Both sets of reports show" a relationship between size 
of establishment and average hourly earnings for 8 of /the 13 industries 
selected from the Bureau of Labor Statistics list for special study be- 
cause of the relatively large sample covered. 20 The Bureau of Labor 
Statistics data indicated that, with one, exception, earnings increased 
with size of establishment in the "cotton goods," "dyeing and" finish- 
ing," and "knit goods" industries. The census figures show. each 
of these industries in several subgroups, but the subgroups taken 
together do not cover all of the imp< taut branches. of the industries 
which the Bureau of Labor Statistics overs, because of lack of reports 
to the Census of Manufactures. L. the subgroups shown by the 
census, however, there is no tendency for earnings to increase with 
size of establishment in any of these industries, and doubt is cast upon 
the significance oT the Bureau's reports. 

The "woolen and worsted goods" industry, in which there is also a 
relation between earnings and size of plant shown in the Bureau of 
Labor Statistics figures, is broken down in the census compilation 
into the "woolen woven goods (including felts)" and the "worsted 
woven goods" industries. In the woolen industry earnings increase 
with size of establishment, but in the worsted industry they do not 

Figures on average hourly earnings by size of establishment were 
also compiled from the Census of Manufactures reports for the year 
1935 for ~>9 industries nnd show similar information to that for 1937. 
In more than hull' of the "industries" reported for 1935 average hourly 
earnings showed a tendency to increase as size of establishment 
increased. Again, most of the industries in which there was no such 
relationship were in the textile and apparel groups. This lack of 
relationship between size of establishment, and earnings in many 
industries is not conclusive, on the other hand, as it may well result 

» See tabic 16. 



46 CONCENTRATION OF ECONOMIC POWER 

from the geographical distribution of the plants, particularly since 
textile and apparel plants are known to be distributed widely in the 
South as well as in the North and in small as well as in large com- 
munities. 

These cases illustrate again the complexity of analysis of this subject 
and the necessity for much more detailed information. And so, as 
in the case of data from the Bureau of Labor Statistics, it must again 
be noted that these census figures, since they represent all establish- 
ments in the country in each industry, do not provide any evidence" 
on the independent character of the relation between size of establish- 
ment and average hourly earnings. In fact, the same report of the 
Census of Manufactures and the Bureau of Labor Statistics provides 
regional and size of community figures which strongly suggest that 
the higher earnings in the larger establishments may well be due, in 
whole or part .to the tendency for such plants to be concentrated in 
the northern region and the larger communities. 

NATIONAL INDUSTRIAL CONFERENCE BOARD STUDY 

A more limited study of the relationship between size of establish- 
ment and average hourly earnings in manufacturing industries was 
made on the basis of September 1937 data by the National Industrial 
Conference Board. 21 Reports were received on a voluntary basis 
from six industries: Cotton textiles, printing, foundries and machine 
shops, lumber, and paper and pulp. The average hourly earnings 
data were compiled by size of establishment, region, and sex of the 
employees. In" general these figures also showed a tendency for 
average hourly earnings to increase as size of establishment increases. 
This information is subject to some of the same limitations as appear 
in the reports on size of establishment from the "Bureau of Labor 
Statistics and the Census 01 Manufactures, with the further limitation 
that the number of reports is smaller in each industry and the results 
somewhat less conclusive. 

21 M. Ada Benav,. "Differentials in Industrial Wages and Hours in the United States," National Indus- 
trial Conference Board studies, No. 238, New York City, 1938. . Although the conclusion of this study is 
stated as "on the whple, large companies pay higher wages than smaller business concerns'' (ibid, p. 23), 
no data are presented on earnings by size of company. For the most part the terms "company," "establish- 
ment," and "plant" are used interchangeably throughout .the discussion, but it is clear from examination 
that the data presented relate solely to single operating units corresponding roughly to those termed in this 
analysis "establishments." 



APPENDIX A 
THE RADIO MANUFACTURING INDUSTRY 

DESCRIPTION OF THE INDUSTRY 

In the manufacture of radio sets— which, for the most part, is 
done in medium-sized plants — employees of the two largest producers 
receive markedly higher average hourly earnings than workers in the, 
other firms. This differential amounted to 20 cents an hour on the 
average in 1937 (73 cents an hour compared with 53 cents), and held, 
in general, for both skilled and unskilled workers, and for men and 
women. 

The manufacture of radios may be termed a medium-sized industry. 
According to the Census of Manufacturers, it had 56,095 wage 
earners in August 1937/ which is the month covered by the Bureau's 
wage survey. 2 The latter included plants engaged in making receiv- 
ing sets, receiving-set parts (except cabinets), and radio-receiving 
tubes. This coverage corresponds very closely to that used by the 
Census of Manufactures, which designated the industry as "radios,, 
radio tubes, and phonographs." 

The Bureau's survey was made on a sample basis, and included 59 
plants and approximately 50 percent of the total number of wage 
earners. In analyzing the data, however, it was observed that 
different wage levels existed in the several branches of the industry. 
This necessitated the presentation of separate figures for establish- 
ments making radio sets and those manufacturing radio parts only. 

RADIO SETS BRANCH 

In 1937 practically all of the companies engaged in the manufacture 
of radio sets had only one establishment in this industry. In fact, the 
survey did not include more than one plant for any firm in each of 
the three branches of the industry, so that in effect each establish- 
ment represents a different company. On the other hand, a number 
of plants 3 are affiliated with large companies in. other industries. 

In spite of the fact' that there are some large firms in this industry, 
one of its outstanding characteristics is the presence of numerous 
small and medium-sized companies. Since the single-unit firm pre- 
vails in this industry, the distribution of companies by size is virtu- 
ally identical with the classification of plants according to number of 
wage earners, and any relationship between size of company and aver- 
age hourly earnings holds equally well for size of establishment. 

1 U. S. Department of Commerce, Bureau of Census, Biennial Census of Manufacturers, 1937, pt. I, 
p. 1157. 

• For a detailed description of the wage structure in this industry, as determined by the survey, see the 
following: Mimeographed report on "Average Hourly Earnings in the Radio Manufacturing Industry, 
August 1937," which was issued on May 15. 193S; and the article on "Hourly Earnings in Radio Manu- 
facturing, August 1937," which appeared in the Monthly Labor Review, Aueust 1938, pp. 353-377. 

! Some of these establishments aho manufacture products classified bv the census under other indus- 
tries, but the survey included only their departments primarily engaged in the making of radio sets, parts, 
and tubes. 

47- 



48 



CONCENTRATION OP ECONOMIC POWER 



Thus although it is not possible, to determine definitely whether aver- 
age hourly earnings may be related to size of plant or size of company, 
the evidence generally indicates the greater importance of size of 
company. However, the fact that several of the companies with but 
a single plant in the radio-sets industry are in fact giant concerns with 
huge investments in related industries may tend to invalidate the 
conclusions drawn. Regardless of the size of the plants which they 
own in this industry, their plants possess many of the characteristics 
of large companies, such as large financial resources, leadership in 
markets, advantages in national advertising) etc. 

Although the two largest producers are important in the industry, 
their combined position is by no means a predominant one. In 1937 
they accounted for approximately 40 percent of the total number of 
wage earners engaged in the manufacture of radio sets. One of these 
producers also had an establishment making radio tubes, but neither 
of them was represented in the parts branch of the industry. 

In the manufacture of radio sets, the average hourly earnings of all 
wage earners in August .1937 were 00.9 cents. In analyzing the wide" 
range of averages in different plants it was- found that the hourly 
earnings in the establishments of the two largest producers occupied 
by far the highest rung in the industry's wage ladder. Thus, the 
average of the two largest producers combined was 73.1 cents, while 
no other establishment in the industry averaged more than 61.0 
cents, and as a group the average hourly earnings of their employees 
was 53.1. Outside of the two largest producers, however, there was 
very little evidence that hourly earnings varied directly with size of 
company. 4 

Table 1 8. — Average hourly earnings of workers in sets branch of radio manufacturing 
industry, by sex, skill, and size of company, August 1937 



Sex aud skill 


All 


Plants of 

2 largest 

companies 


Hants of 
( other 
eompanles 


All workers: 

Skilled ■ 


$0. 752 
.581 
.531 


$0,890 
.696 
.656 


$0,666 


Semiskilled../ 


.502 




.469 






Total » :. 


.609 


.731 


.531 


Males: 

Skilled.. '. 


.784 
.677 
.577 


.902 
.782 
.666 


.700 




.577 


Unskilled 


.506 






Total T 


.696 


.800 


.610 


Females: 

Skilled I „ 


.523 
.510 
.473 


.659 
.607 
.628 


.499 




. .458 




.437 






Total.. J 


.504 


.610 


.457 







Source: TJ. 8. Bureau of Labor Statistics. 



The extent to which plants of the two big companies paid higher 
hourly earnings than the smaller companies is also shown by the dis- 
tribution of the average hourly earnings of individual employees. 
While for all practical purposes 47.5 cents -an hour was the effective 



* Seo tabic 18. 



CONCENTRATION OF ECONOMIC POVVEU 



49 



minimum in large company plants, 43 percent of the employees of 
the smaller companies received less than that. On the other hand, 
over 45 percent earned 72.5 cents or more an hour in establishments of 
the two largest producers, as compared with 9 percent in plants of the 
smaller companies. 5 , 

Table 19. — Percentage distribution of all worker* in sets branch of radio manufac- 
turing industry according to average hourly can ng , by type of company and skill, 
Avgust 19S7 





Plants of 2 largest companies - 


Plants of other companies 


Average hourly earnings 


All 


Skilled 


Semi- 
skilled 


I'm- 
skilled 


All 


Skilled 


Scmi- 
skille'd 


Un- 
skilled 












.0.7 

.9 

11.6 

11. 1 

18.7 

21.0 

10.8 

6.4 

5.0 

4.6 

2.7 

1.9 

1.5 

1.0 

.9 

.8 

.3 

.1 


r 

0.1 
3.3 
4.1 
5.3 
9.8 

14.4 
0.6 
9.5 

11.5 
7.6 
6.6 
5.5 
4.3 
3.7 
3.6 
.9 
.3 


1.2 

.8 

11.5 

12.6 

20.6 

26.5 

9.4 

5. 1 

4.2 

3.3 

2.0 

1.1 

.7 

.3 

.3 

.2 

.2 


2 












2 


32.5 and under 37.5 cents 










20.2 


37.5 and under 42.5 cents-. . .... 










13.6 




0.1 

4.7 
9.7 
15.0 
' 17.1 
8.0 
11.0 
9.4 
7.0 
6.0 
5.1 
4.1 
1. 3 
.3 


0.1 

1.0 

.9 

2. 5 

3.0 

7.5 

12.7 

21.7 

20.2 

14. ft 

9.0 

5.2 

1.4 


0.1 

5.6 
12.5 
18.3 
17.1 
S. 7 
13.7 
9.1 
4.8 
2.9 
3.2 
3.5 
.4 
.1 


7.0 

8.G 

18.4 

38.2 

11.5 

7.2 

6.3 

9.9 

.8 

.8 

.3 


25 8 




14 1 


52.5 and under 57.5 cents 

57.5 and undy 62.5 cents .. 


11.4 
7.2 
3 


07.5 and under 72.5 cents 


1.9 
4 




1 


82.5 and under 87.5 cents 


1 






92.5 and under 100.0 cents .. 

110.0 and under 120.0 cents 


.1 


120.0 cents and over. ... . 




Total 


100. 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 



' Less than one-tenth of 1 i>ereent. 
Source: O. S. Bureau of Labor Statistics. 

Tin? number of firms covered by the survey was too small to de- 
termine whether or not the relationship between hourly earnings 
and size of company was influenced by the region or size of community 
in which the plants of the' two largest producers and those of other 
companies were located. 

Only a small part of the difference in earnings between the two 
groups of companies appears to be attributable to differences in the 
composition of the labor force. Both the large and small produers 
had the same proportion of skilled workers — : about 1!) percent; and 
the larger producers had only slightly more semiskilled employees 
than the balance of the industry. 6 Thus, the wage advantage, of 
skilled labor eoulct not have been an important influence on the 
differential. This conclusion is further demonstrated by the large 
differentials shown -in table 18 between earnings of workers with the 
same degree of skill in the two groups of companies. Moreover, 
data on average hourly earnings in specific occupations show a sub- 
stantial differential betw.een employees* of the large companies and 
those of the smaller companies. 7 For example, the differences for 
unskilled male workers amounted to • .2 cents for watchmen, .11.3 
cents fop common laborers, 11 (> cents f >r cleaners and sweeps, and 
15.9 cents for material handlers. Th ifferenccs for unskilled women 

» Bee table 19. 

See table 20 
: See table 21. 



258849- 40— No. 14 5 



50 



CONCENTRATION OF ECONOMIC POWER 



were 13.3 cents for leads preparers and 15.8 cents for coil assemblers. 
This is conclusive evidence that the two largest producers pay more 
for similar types of work. 

Table 20. — Percentage distribution of all workers in sets branch of radio manu- 
facturing industry, by size of company, sex, and skill, August 1937 



Sex and size of company 



Total 



Skilled 



Semiskilled 



Unskilled 



All workers 

Two largest companies 
Other companies 

Males i 

Two largest companies 

Other companies .. 

Females,, '.. 

Two largest companies 
O ther companies 



100.0 
100.0 
100.0 



19.4 
19.4 
19.4 



63.4 
"66:7 
61.2 



17.2 
13.9 
19.4 



ol 
60.9 
44.5 
49.0 
39.1 
55.5 



16.9 
18.4 
15.9 
2.5 
1.0 
3.5 



25.5 
32.6 
20.8 
37.9 
34.1 
40.4 



8.6 
9.9 
7.8 
8.6 
4.0 
11.6 



Source: U. S. Bureau of Labor Statistics. 

Table 21. — Average hourly' earnings of all workers in sets branch of radio manu- 
facturing industry, by skill, occupation, sex, and size of company, August 1937 





Plants of 2 largest- 
companies 


Plants of other 
companies 


Skill, occupation, and sex 


I 

Number of i™Z° 
emDlovees h oui\y 
euipioytes earmjl g S 


Number of 
'employees 


Average 
fiourly 
earnings 


All occupations: 


3,461- 
2,224 


$0,800 
.610 


3,864 
4,811 


$0,610 


Females • '. i ?.. 


.457 






Total 

SKILLED 

Adjusters, parts: 

Males. _ 


5,685 

37 
12 

33 

7 
83 

68 


.731 

.877 
.651 

1.049 

.866 

.817 


8,675 

11 

9 

104 

8 
40 

55 
3 

248 

83 

69 


.531 

(') 
(') 


Females 


Aliners, sets: 

Males . 


.708 


Females _ • 


(0 


Cabinet reflnishers: Males ■.. 


.654 


Inspectors, final and cabinet finish: 

Males 


.676 


Females __---' 


(') 


Inspectors, chassis assembly: 

■Males 


62 


.818 


.599 




1 nt 


.510" 


Machine set-up and maintenance employees: 

Males . 


64 

1 

100 

116 

68 


w 
.898 

0) 
.942 
.910 

882 


.823 


Females ;.. 




Machinists: Males. _• .. 


' 32 
82 

174 
94 

16 

169 
23 

172 
62 
99 
83 

24 
19 

7 


.891 


Plant maintenance employees: Males 


.765 


Supervisors, working: 

Males. 


.761 


Females 


25 .676 
36 -.844 
130 I .884 


.543 


Test equipment set-up and maintenance employees: 
Males. 


(') 


Testers, final: 

Males. 

Females.^' _ 


.662 


Testers, set circuits: 

Males 


56 . 862 ' 
2 -CO-' 
85 | 1.070 
36 ! .942 

34 ! . 758 
10 ' .036 
39 1 .940 


.568 


Females _• .. 


.457 


Tool and die makers: Males ... 


.931 


Trouble shooters: Males... . . 


.749 


Winders, transformer coils: 

Males '. 


( l ) 


Females . ,. 


(') 


Miscellaneous skilled employees: Males 


(') 



i Not a sufficient numbor of workers to justify the presentation of dal a. 



CONCENTRATION OF ECONOMIC POWER 



51 



Table 21. — Average hourly earnings of all workers in sets branch of radio manu- 
facturing industry, by skill, occupation, sex, and size of company, August 1937 — 
Continued. 





Plants of 2 largest 
companies 


Plants of other 
companies 


Skill, occupation, and sex 


Number of 
employees 


Average 
hourly 
earnings 


Number of 
employees 


Average 
hourly 
earnings 


SEMISKILLED 

Apprentices and learners: Males 


14 

127 
113 

8 
63 

82 
15 

26 
73 

19 
13 

14 
37 

. 31 
50 

96 
130 

25 
11 

66 
9 

67 
28 
47 

29 
19 

199 
71 

1 
28 

40 

10 

94 
60 

35 
1 

43 


$0. 694 

.767 
.590 

(') 
.593 

.760 

.577 

.613 
,611 

.752 
.69? 

.806 
.633 

1 651 
.566 

.794 

.627 

.781 
.619 

.903 

.657 
.528 
.712 

.759 
.581 

.813 
.623 

.565 

.859 
.651 

.684 
.679 

.829 
.934 


66 

183 
1,406 


$0,537 
478 


Assemblers, chassis: 

Males 


Females " 


. 460 


Assemblers, electrolytic and paper capacitors: 

Males 




Females 


1 

200 
38 


532 


Assemblers, final, sets: 

Males , 


Females.. : 


444 


Assemblers, mica capacitors: 

Males... _ '. 




Females.. 


39 

45 
201 

26 
31 

11 
73 

51 
162 

35 
40 

32 
13 

21 
18 
37 

51 

76 

85 
69 

2 
17 

86 
12 

160 

17 

18 


.388 


Assemblers, other parts: 


.522 




' 468 


Assemblers, speakers: 

Males. 


8 


Females 


Assemblers, transformers: 


Females •_ 


.436 


Assemblers, unassignable: 

Males.. 


.617 


Females 


.451 


Assemblers, variable condensers: 

Males... 


.498 


Females 


.383 


Drill press operators: 


.618 


Females _ 


(') 


Factery clerks: 


(') 


Females _ 


(') 


Helpers, plant maintenance: Males 


.651 


Inspectors, incoming materials: 


.703 


Females . 


.475 


Inspectors, parts: 

Males 


.599 
.489 


Laminators, transformer: 

Males 


(') 


Miscellaneous machine operators: 


.860 




(') 


Packers and wrappers: 


.532 


Females 


0) 


Paint sprayers: 


(') 






Plating employees: 


35 
8 

83 
27 

13 
12 

99 

43 

89 

89 


.707 




(') 


Punch press operators: 
Repairers, parts: 


183 
33 

38 
25 

119 


.907 
.668 

.765 
.559 

.814 


.603 
(') 

0) 




(') 


Repairers, sets: 


.636 




.516 


Rivoters, eyeletters, etc.: 


6 
114 


.621 


.484 




.484 



' Not a sufficient number of workers to Justify the presentation of data. 



52 



CONCENTRATION OF ECONOMIC POWER 



Table 21. — Average hourly earnings of all workers in sets branch of radio manu- 
facturing industry, by skill, occupation, sex, and size of company, August 1937 — 
Continued 





Plants of 2 largest 
companies 


Plants of other 
companies 


Skill, occupation, and sex 


Numbor of 
employees 


Average 
hourly 
earnings 


Number of 
employees 


Average 
hourly 
parnings 


semiskilled— continued 
Shipping employees: 


73 
12 

4 
404 

96 
1 

146 
46 

2 
39 

1 
53 

114 

2 
20 

11 
313 

109 
44 


$0. 738 
.608 

(') 
.587 

.760 

.797 
.582 

.682 

(') 
.652 

.623 

.62^ 

.751 
.603 

.731 
.631 


77 
3 

23 

396 

46 


$0,601 


■Soldercrs: 


(') 




.461 


Storekeepers: 


.672 






Testers, parts: 


48 
113 


.565 




.467 


Winders, capacitors: 






13 

4 

265 

33 


(') 


Winders, flat coils: 


(') 




.439 


Winders, other coils: 


.484 


Wirors, parts: 






73 

U8 
212 ! 

64 

5 

15 
283 ' 

45 
9 


.366 


Wirers, sets: 


.484 




.421 


Miscellaneous semiskilled employees: 


.619 


Unskilled 

Assemblers, coils: 






69 

, 83 
19 

12 
22 

39 


.646 

.605 
.522 

.766 
.658 

.644 


.488 


Cleaners and sweepers: 


.489 




(') 


Cluing and taping employees: 






25 

167 
1 

fi 
64 

226 
7 

165 

609 

46 

11 

• ? 


' (') 


Laborers: 


.531 




(') 


Leads preparers: 
, Males • 


8 
73 

327- 
16 


.637 

.687 
. 597 


.504 


Material handlers: 


.528 




(') 


Starters: 


.424 








.399 


Miscellaenous unskilled employees: 


74 

18 
2S 


.624 

.704 
.627 


.582 




(') 







1 Not a sufficient number or workers to justify the presentation of data. 
Source: IT. S. Bureau of Labor Statistics. 



CONCENTRATION OF ECONOMIC TOWER 



53 



The largo producers employed a larger percentage of men than the 
smaller companies -61 percent, as compared with 45 percent. In 
general, women earn smaller wages in the same occupation than men, 
and this factor might account in whole or part for the size of company 
differential. Wage differentials for men and women workers vary in 
this industry from 10 cents an hour for unskilled workers up to as 
much as 20 cents an hour for skilled workers. Although the larger 
percentage of men employed by the two largest producers was un- 
doubtedly responsible for part of the differential between large and 
small companies, there is still a substantial difference between com- 
panies with respect to earnings of men arid women considered sepa- 
rately. Men employed by the large companies averaged 19 cents per 
hour more than those of the smaller companies; women averaged 15 
cents per hour more. 8 

The distributions of individual average hourly earnings, by sex and 
skill groups, in tables 22^ and 2.'i, confirm the general conclusions 
reached that the two largest producers in the radio-sets branch of the 
radio industry pay more on the average to men and women workers 
in the same skill group than the smaller companies in tin; industry. 
Although the range of earnings appears to be similar in both organ- 
ized and unorganized plants, information is not available to indicate; 
the degree of influence which unionization may have had on the 
general level of rates in the industry. 

Table 22. — Percentage distribution of male workers in sets branch of radio manufac- 
turing industry according to average hourly earnings, by size of company and skill, 
August 19S7 





Plants of 2 largest companies 


Plants of other companies 


Average hourly earnings 


All 


Skilled 


Semi- 
skilled 


Tin- 
skilled 


All 

0.7 

.5 

4.3 

4.5 

11.7 

14.1 

13. 7 

10.6 

9.7 

9.0 

6.0 

4.3 

3.4 

2.2 

2.0 

1.8 

.7 

.2 

100. 


Skilled 


Semi- 
skilled 


Hu- 
sk illed 












1.2 

.9 

2.7 

3.3 

16.2 

21.0 

12.5 

9.8 

10.0 

8.6 

5.8 

3. 1 

2. 1 

.8 

.8 

.5 

.6 

.1 

100.0 


0. 8 














.4 












1.7 

3.2 

2.4 

6.2 

13.1 

9.9 

10.9 

13.6 

8.8 

7.9 

6.7 

5.2 

4.5 

4.3 

1.2 

.4 

100.0 


13.7 












10.6 




0.1 

1.9 
2.7 
5.3 
9.8 
9.5 
16. 1 
14.8 
12.2 
9.8 
8.4 
6.8 
2.1 
.5 




0.1 

2.0 

2.4 

4.1 

7.9 

12. 6 

23. 1 

17.6 

9.4 

5.9 

0. 6 

7.2 

.9 

.2 




18.5 


47.5 and under 52.5 cents 




5.3 

8.2 

18.7 

32.9 

12.7 

9.8 

8.6 

1.2 

1. 1 

1. 1 

.4 


12.3 


52.5 and under 57.5 cents 

57.5 and under 62 "Scents 

62. 5 and under 67.5 cents 

67.5 and under 72.5 rents 

72.5 and under 77.5 cents 

87.5 and under 92.5 cents 

92.5 and under 100.0 cents.... 


0.2 
.4 

.8 
2.4 
6.9 

13.2 

22.9 

21.3 

15. 5 

'.). 5 

5.4 

1.5 


17.9 

14.0 

6.8 

*.© 

.7 

. 1 

.3 

. i 














Total 


100.0 


100.0 


100. 


100.0 


100.0 



Source: II. S. Tlureau of I-almr- Statistics. 



1 See lahle 18. 



54 



CONCENTRATION OF ECONOMIC POWER 



Table 23. — Percentage distribution of female .workers in sets branch of radio manufac- 
turing industry according to average hourly earnings, by size of company and skill, 
August 1.937 





Plants of 2 largest companies 


Plants of other companies 


Average hourly earnings 


All 


Skilled 


Semi- 
skilled . 


Un- 
skilled 


All 


Skilled 


Semi- 
skilled 


' Un- 
skilled 












0.8 

1.2 

17.5 

16.4 

24.3 

26.4 

8.5 

3.0 

1.2 

.6 

.1 

(') 




1.1 

.7 

16.0 

17.4 

22.8 

29.6 

7.9 

2.7 

1.2 

.6 














0.3 

10.6 
8.3 
18.9 
26.6 
19.6 
8.3 
3.3 
1.7 
1.7 
.7 


3.1 












24.6 












15.5 




0.1 
9.1 

20.6 

30.0 

28.6 

5.6 

4.7 

.9 

.4 




0.1 
9.1 

22.1 
31.9 
25.8. 
5.0 
4.7 
.9 
.4 


i 


30.8 


47.5 and under 52.5 cents... 

52.6 and under 57.5 cents 

57.5 and under 62.5 cents. 

62.5 and under 67.5 cents ;.. 

67.5 and under 72.5 cents 

72.5 and under 77.5 cents 


i.7 
15.5 
10.3 
34.6 
13.8 
19.0 
3.4 
1.7 


11.0 

9.7 

17.6 

51.1 

8.8 

.9 

.9 


15.2 

7.1 

2.6 

.5 

.5 

.1 


77.5 and under 82.5 cents 
























Total 


' 100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 







1 Less than Ho of 1 percent. 

Source: u . 8. Bureau oi juabui Stoiioucs. 



RADIO PARTS AND RADIO TUBES 

In these two branches of the radio manufacturing industry, there 
is no clear-cut distinction between earnings of employees in large as 
compared with small companies or in large as compared with small 
plants. There are only a small number of companies which manu- 
facture radio tubes, and in the manufacture of radio parts the wage 
situation is confused by differences in manufacturing processes. For 
those who may be interested, however, the data collected by the 
Bureau are briefly described below. 

The manufacture of radio parts is to a considerable degree a sep- 
arate and distinct branch of the industry, with numerousplants mak- 
ing only either original parts for the producers of sets or replacement 
parts for general distribution. Even the largest companies manufac- 
turing radio sets buy some parts from other firms. In fact, it is 
generally known that in certain cases such parts manufacturers con- 
tract to sell either an important share or all of their output at a given 
price to the large plants producing sets. In general, the smaller the 
establishment making sets, the greater is the number of parts bought, 
from outside firms, and some of the very Small establishments in this 
branch of the industry act largely as assembly plants. Moreover, 
while most of the large producers of sets make their own replacement 
parts, the latter are also supplied to the market by separate parts 
manufacturers. 

An examination of the company averages for hourly earnings indi- 
cates that size of company is rqlated only in a moderate degree to 
variation in hourly earnings. Average hourly earnings in each of the 
3 companies with more than 1,000 employees exceeded 45 cents an 
hour, while average hourly earnings in eacli^pf the 4 companies with 
less than 100 employees were lower than 45 cents. On the other 
hand, there was considerable variation in the company averages of 
each of the remaining size groups. Of the 13 establishments having 



CONCENTRATION OF ECONOMIC POWER 55 

between 100 and 500 employees, 4 averaged 35 and less than 40 cents; 
4, 40 and less than 45; 2, 45 and less than 50; 2, 50 and less than 55; 
and 1, over 60 cents. Likewise, of the 7 plants reporting from 500 
to 1,000 employees, 1 averaged between 35 and 40 cents, 4 between 
45 and 50, and 2 between 50 and 55 cents. 

The manufacture of radio-receiving tubes is concentrated largely 
in comparatively few large establishments. The sample of eight 
plants covered in the survey is too small to permit any conclusions 
as to variations attributable to size of company. 



APPENDIX B 
THE EXPLOSIVES INDUSTRY 

DESCRIPTION OF THE INDUSTRY 

A survey of the explosives industry by the Bureau of Labor Sta- 
tistics in October 1937 indicated that there was a substantial differ- 
ence between the wages paid by the larger and smaller companies. 
Although a relatively small industry, the manufacture of ( xplosives 
is dominated by three large firms, whose wages were considerably 
higher on the average than those paid by the smaller companies. 

The Bureau's survey was restricted to establishments reporting 5 
or more workers and included 51 plants. 1 These plants employed 
3,814 wage earners engaged on work falling within the" scope of the 
survey. 2 The wage data were obtained for a pay-roll period during 
October 1937. 

The explosives industry is composed of two branches — dynamite 
and black powder. These branches differ considerably with respect 
to raw materials used, manufacturing processes, and final products 
and their uses. Usually, a plant specializes in the making of cither 
one or the other of these products. However, 3 of the establishments 
manufacture both products, each plant being classified iu accordance 
with the predominant product made. Of the 51 plants surveyed, .32 
plants, with 3,058 wage earners, manufactured dynamite and 19, 
w r ith 756 wage earners, made black powder. The differences in the 
wage structure of the 2 branches of the industry were not sufficient 
to require a separate presentation of the reported earnings, and they 
are given in combination in the tables which follow. 

In view of the hazardous nature of the work, factories making ex- 
plosives are generally not very large. Of the 51 plants, only 13 had 
over 100 workers and none over 500. 

On the other hand, there is considerable concentration of ownership 
in the industry. The 51 plants were owned by 19 companies. One 
concern owned 12 establishments, another 9, and a third, 7. The 3 
leading firms, hereafter referred to as the "Big Three," controlled 28 
establishments, with 2,781 wage earners. The other companies 
owned 23 plants, with 1,033 workers. The "Big Three" had a more 
dominant position in the dynamite than in the black pow r der branch 
of the industry. 

' For a detailed description of the wage structure in this industry, as determined by the survey, see the 
followinp: Mimcofrraphed report on "Earnings and Hours In the Explosives Industry, October 1937," 
•which was issued on March 10, 1938; and the article on "Earnings and IJours in the Explosives Industry, 
October 1037," which appeared in the Monthly Labor Review, August 1938, pp. 378-392. 

> The total employment in these plants, irtcluding workers engaged in the production of products outsido 
of the definition of the industry, was 4,524 wage earners. 

57 



58 



CONCENTRATION OF ECONOMIC POWER 



DIFFERENCES IN AVERAGE HOURLY EARNINGS BY SIZE OF COMPANY 

The average hourly earnings of employees of the "Big Three" com- 
panies were 81.9 cents, over 25 percent higher than the 65.3 cents 
received on the average by the workers of the smaller companies. 
The average for the industry as a whole was 77.1 cents. 

The distribution of average hourly earnings by plants, given in 
table 24, confirms this substantial differential between the large and 
small companies, although the range of average hourly earnings is 
large for both groups of plants, and there is a substantial amount of 
overlapping. Thirteen of the 28 "Big Three" plants reported an aver- 
age of at least 80 cents an hour, while all of the plants of the other 
companies fell below 80 cents. 

Table 24. — Distribution of plants in explosives industry according to average hourly 
earnings, by type of plant, October 1987 



Average hourly earnings 


All plants 


Number of plants 
belonging to — 


"Big 
Three" 


Other 
companies 


.... 


4 
8 
6 
13 
7 
5 
2 
6 


, 


4 




1 
1 
8 
5 
5 
2 
6 


7 




5 




5 
2 










Total.. - 




51 


28 


23 







Source: U. S. Bureau of Labor Statistics. 

The distribution of individual average hourly earnings by size of 
company again supports the general conclusion: namely, the "Big 
Three" not only pay higher wages to their employees on the average, 
but a smaller percentage of their employees are in the low-wage brack- 
ets, a higher percentage are in the top brackets, and their modal 
earning range is above that of the smaller companies. 3 Thus, only 
2.4 percent of all employees of the "Big Three" companies earned less 
than 52.5 cents an hour, as compared with 14 percent of the employees 
of the other companies. At the other end of -the scale, the "Big 
Three" paid 24.3 percent of their employees 92.5 cents or over an 
hour, but only 4.6 percent of the employees of the smaller companies 
received that much. 

» See table 25. 



CONCENTRATION OF ECONOMIC POWER 



59 



Table 25. — Percentage distribution of workers in explosives industry according to 
average hourly earnings, by type of plant and sk'll, October 1937 





Total 


Big Three 


Other companies 


Average hourly earnings 


All 


Skilled 


Semi- 
skilled 


Un- 
skilled 


All 


Skilled 


Semi- 
skilled 


Un- 
skilled 


Under 37.5 cents 


0.8 

.9 

1.2 

2.7 

5.8 

8.8 

11.2 

10.8 

9.9 

9.8 

12.1 

7.0 

6.2 

4.4 

2.9 

3.0 

l.S 

.7 


(') ' 

0.4 

.5 

1.5 

3.8 

6.6 

8.7 

9.2 

10.3 

11.4 

14.8 

8.5 

7.9 

5.5 

3.5 

4.1 

2.5 

.8 






0.2 

.9 

.6 

6.6 

17.5 

21.9 

15.1 

17.6 

9.0 

5.5- 

2.6 

1.4 

.5 

.4 

.2 


2.8 

2.2 

3.4 

5.6 

11.5 

i4.9 

17.6 

15.' 3 

8.9 

5.2 

5:0 

3.0 

1.6 

1.5 

1.0 

.2 

. 1 

.2 


1.4 

.2 

1.2 

1.4 

7.8 

11.2 

17.7 

17.2 

12.7 

8.5 

6.9 

5.3 

3.0 

2.7 

1.9 

.4 

.1 

.4 


2.3 
4.-5 
1.3 
6.7 
16.2 
20.9 
21.0 
15.2 
6.1 
1.6 
3.9 
- .3 


8.9 


37.5 and under 42.5 cents 

42.5 and under 47.5 cents 

47.5 and under 52.5 cents 

52.5 and under 57.5 cents 

57.5 and under 62.5 cents 

62.5 and under 67.5 cents 

67.5 and under 72.5 cents 

72.5 and under 77.5 cents. ..^ 

77.5 and under 82.5 cents 

82.5 and under 87.5 cents 

87.5 and under 92.5 cents 

92.5 and under 97.5 cents,... 


0.3 

.2 

.2 

.2 

1.4 

3.7 

3.8 

.6.0 

11.4 

17.8 

12.9 

12.8 

9.4 

6.5 

7.2 

4.7 

1.5 


0. 1 
1.0 

.7 

1. 1 
5.9 

14. 5 

13.8 

19.4 

15.6 

17.5 

4.8 

3.3 

1.6 

.3 

.5 


6.0 
15.2 
18.4 
15.2 
16.4 
10.8 
8.8 
.7 
.6 


97.5 and under 102.5 cents... 






102.5 and under 107.5 cents. 






107.5 and under 112.5 cents.. 






112.5 and under 125.0 cents. 






125.0 cents and over 




















Total :. 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 







1 Less than one-tenth of 1 percent. 
Source: U. S. Bureau of Labor Statistics. 

This differential in favor of the large companies overshadows the 
differential associated with type of product, as is indicated by the 
fact that for the "Big Three" plants, average hourly earnings amounted 
to 72.1 cents in the black-powder branch of the industry and 78.4 
cents in the dynamite branch, while for the other companies the cor- 
responding averages were 67.0 and 64.3 cents. 

Detailed examination of the average hourly earnings for individual 
plants does not reveal any pattern in earnings explainable "in terms 
of the region or size, of community in which the plants were located, 
and for that reason no figures are shown for the "Big Three" and the 
other companies which take account of these factors. 

Similarly, size of establishment does not appear to be of great 
importance in relation to average hourly earnings, although there is a 
definite tendency for the employees of the "Big Three" companies in 
large establishments to have higher average hourly earnings than those 
in the small establishments. However, in plants of the sizes owned 
by both large and small companies, those with 26 to 50 and 51 to 150 
employees, the "Big Three" employees receive much higher earnings 
on the average than employees of the smaller companies. 

The differences between the average hourly earnings of "Big Three" 
employees and employees of the other companies are not to be 
explained in terms of differences in the composition of the working 
force. Although the "Big Three" had a slightly smaller proportion 
of skilled and semiskilled employees than the smaller companies, the 
average hourly earning differentials were about the same hi per- 
centage terms for each skill class as they were for all employees. 4 
The same holds true for the distribution of individual average hourly 
earnings in the various classes of skill. 6 Although no data were 
available for individual occupations, it is clear that the differentials 
for the broad classes of skill are so great that thev must reflect sub- 
stantial differentials between earnings in individual occupations. 

• 9ee tables 26 and 27. 

* See table 26. 



GO 



CONCENTRATION OF ECONOMIC POWER 



Those occupational differentials in earnings between large and 
small companies are apparently not the consequence of differences in 
the race or sex of employees or the degree of unionization. Nearly 
all workers in the industry were white men. Union contracts were in 
effect in an almost negligible number of plants. 



Table . 26. 



-Average hourly earnings -in explosives industry by skill and size of 
company, October 1937 



Size of company 



"Rip Throe" companies 

Other companies 

Percent difference 



Skilled 


Semi- 
skilled 


$0. 010 
.712 

27.8 


W). 750 

. nos 

25. 5 



Unskilled 



$0. 649 
.527 
23.1 



Source: U. S. Bureau of Labor Statistics. 



Table 27. — Percentage distribution of workers in explosives industry, by skill and 
size of company, October 1987 



Size of company 



"Bin Three" companies _ 
Other companion 



Skilled 


Semi- 
skilled 


53.6 

51.7 


27. \ 
30.0 



Unskilled 



19.0 
15.3 



Source: TJ. S. Bureau of Labor Statistics. 

Thus, it is clear that the three large companies which dominate the 
explosives industry pay their employees substantially more for similar 
types of work than the smaller companies with which they compete. 
None of the available statistical data throw any light on the factors 
responsible for this situation. 

OTHER DIFFERENCES BY SIZE OF COMPANY 

Not only did employees of the "Big Three" companies have higher 
earnings than those of the smaller companies, but they also worked 
shorter hours in October 1 937. In terms of full-time hours, two of the 
"Big Three" plants operated less than 40 per week, while the others 
had a 40-hour schedule. The 40-hour week also predominated among 
the establishments belonging to the other companies, but a substantial 
number of them (7 out of 23) operated on a schedule in excess of 40 
hours. The average weekly hours actually worked by all employees 
amounted to 40.2 for the "Big Throe" plants and 44.1 for the estab- 
lishments of the remaining (inns. 

As a result, the differences in weekly earnings between the "Big 
Three" and other companies were not so pronounced as in the case of 
hourly earnings. Nevertheless, these differences were fairly substan- 
tial. This is indicated by the fact that the average weekly earnings" 
of all workers amounted to $32.97 for employees of the "Big Three" 
companies, as against $28.79 for workers in the other companies, a 
difference of $4.18. 

On the whole, the "Big Three" companies were more liberal with 
respect to overtime rates in the autumn of 1937. Thus, of the 30 
establishments that paid overtime rates of time and one-half, 25 
belonged to the "Big Three" and 5 to the other companies. In 
contrast, of the 21 plants that compensated overtime on a prorata 
basis, only 3 belonged to the "Big Three" and 18 to the other group. 



APPENDIX C 
THE SOAP INDUSTRY 

DESCRIPTION OF THK INTUTSTUY 

In the manufacture of soap, employees of four large companies, 
which produce at least three-fourths of all the soap manufactured in 
the United States, had distinctly higher hourly earnings than em- 
ployees of the smaller-size firms. Average earnings in the large 
companies were 70 cents an hour as compared with 58 cents for the 
medium-size and 55.5 cents for small companies in the industry. 

The manufacture of soap is a relatively small industry, with an 
average of 14,008 wage earners during the year 1937. 1 The Bureau of 
Labor Statistics, in its survey, excluded all plants with 5 or less workers 
and selected 72 representative establishments with approximately 
half of the wage earners in the industry. The wage data obtained 
covered a, pay-roll period during January 1938. 2 On the basis of 
corporate affiliation, these 72 plants may be divided into 3 distinct 
groups. The most important group includes 13 plants belonging to 
companies that employed 1,000 or more workers. Each of these 
companies had 2 or more plants represented in the sample, the majority 
of which were relatively large in size. 3 The other two groups repre- 
sented companies which had only one plant in the sample. The 
second group consisted of 16 middle-sized companies which employed 
from approximately 100 to 700 workers. The third included 43 
small companies, with 6 to 60 employees. Of the total number of 
workers covered in the sample, 4,375 (61.2 percent) were employed 
by the large companies: 2,228 (31.2 percent) by the medium-sized 
companies; and 540 (7.6 percent) by the small companies. 

Both the large and medium-sized companies make various types of 
soap, specializing for the most part in widely advertised brands. 
The small companies, on the other hand, tend toward specialization 
in certain types of product which are usually manufactured for a local 
market. They also engage to a considerable extent in making up 
special lots of sOap in accordance with the specifications of customers; 
such as jobbers, drug store chains, 5-and-10-cent stores, and large 
department stores. Both the large and medium-sized companies are 
highly mechanized, while the small companies usually have limited 
amounts of equipment, mostly of an older type. 

• U. S. Department of Commerce, Bureau of the Census, Biennial Census of Manufactures, 1937, pt. r r 
p. 748. 

' For a detniled description of tho wago structure in this industry, as determined by the survey, see the 
following: Mimeoi-'raphed report on "I'arninss ami Hour- in fhe Soap Industry, January 1938," which was 
issuce. on Jun.' 16, 1938' and the article on "Earnings and Hours in the Soap Industry, January 1938," tho 
Monthly Labor Review, June 1038, pp. 1423-1432. 

1 The survey included practically nil establishments belonging to the larger companies. In order to 
prevent the latter from overweighting tho sample, however, only SO percent of the workers were covered in 
each of ttie plants with 400 employees and over. These workers were selected to yield a carefully balanced 
cross-section of the labor force in each establishment from the standpoint of department, occupation, sex, 
etc. The remaining companies weic selected on the basis of the representativeness of their plants with 
respect to the various size-classes found in the industry. 

61 



62 



CONCENTRATION OF ECONOMIC POWER 



DIFFERENCES IN AVERAGE HOURLY EARNINGS BY SIZE OF COMPANY 

The average hourly earnings of all employees in plants belonging 
to the large companies were 76.2. cents, compared with 58.0 cents in the 
medium-sized and 55.6 cents in the small companies. 4 Since all of 
the plants included in this survey were located in the northern 
region, it is evident that regional differentials are not a factor, in 
average hourly earnings in this industry. The significance of size of 
community in the wage structure of the soap industry could not -be 
determined from existing reports. From all available evidence, 
however,, it would appear that there is a substantial differential in 
average hourly earnings between the employees of the large companies 
'which dominate the industry, and those of all other companies, even 
after .allowance for these other factors. 

Table 28. — Average hourly earnings of workers in soap industry, by size of company, 
sex, and skill, January 1938 



Size of company and sex of workers 


. Total 


Skilled 


Semi- 
skilled i 


Unskilled 


All companies: 


W.722 
.478 


$0,903 


$0,718. 
.504 


$0,638 




.467 








Total.. - '—-—._ 


,688 


.903 


.696 


.598 


Large companies: 


.784 
.557 


.932 


.786 
.577 


.693 




.548 








Total.. . .: 


.762 


.932 


.771 


.669 






Other companies: 


.616 
.422 


.825 


.609 
.450 


.561 




.411 








Total . 


.575 


.825 


.586 


.507 






Medium companies: 


.626 
.427 


.831 


.618 
.453 


.670 




1 .417 










.580 


.831 


.692 


.516 






Small companies: 


.580 
.385 


.812 


.577 
(») 


.495 




.361 










.556 


.812 


.559 


.474 







' Includes 24 foreladies who were classed as skilled workers. 
» Not enough employees to justify an average. 

Source: U. S. Bureau of Labor Statistics. 

The difference in the, wage level between the large and the smaller 
companies is shown further by the distribution of average hourly 
earnings of individual plants. Hourly earnings in only 1 of the 13 
plants operated by the large companies averaged less than 60 cents an 
hour, while those in the other 12 averaged 65 cents or over. In 
contrast, in 43 of the 59 plants owned by the smaller companies, 
average hourly earnings were less than 65 cents. Earnings in only 3 
of the establishments belonging to the smaller companies averaged 

« See table 28. 



CONCENTRATION OF ECONOMIC POWER 



63 



75 cents and over, as compared with 7 of the 13 plants owned by the 
large companies. ' On the basis of these plant averages there was 
little difference between the medium-sized and the small companies. 8 

Table 29. — Distribution of plants in soap industry according to average hourly 
earnings of all workers, by size of company, January 1988 





All plants 


Plants of 

large 
companies 


Plants of other companies 


Average hourly earnings 


Total 


Medium- 
sized 
companies 


Small com- 
panies 


Under 35.0 cents 


1 
3 
6 
7 
8 
12 
7 
9 
9 
3 
, 4 
3 




1 
3 
6 

7 
8 
11 
7 
6 
7 
1 
2 




1 


35.0 and under 40.0 cents.. i 




1 
1 

1 
2 
4 
2 
3 
2 


• 2 






5 


45.0 ana under 50.0 cents '. 




6 






6 




1 


7 


■60.0 and under 65.0 cents 


5 




3 
2 
2 
2 
3 


3 




5 


75.0 and under 80.0 cents 


1 


"80.0 and under 85.0 cents. _ 




2 


■85.0 cents and over 














Total 


72 


13 


59 


16 


43 







Source: U. S. Bureau of Labor Staiistics. 

The distribution of individual average hourly earnings presents a 
similar picture. 8 Although only 17.3 percent of all workers employed 
by the large companies received less than 62.5 cents an hour, 63.4 
percent of the employees in the other companies received less than this 
amount. On the other hand, 16.1 percent of the large company 
workers were paid 92.5 cents or over, but only 4.1 percent of the 
employees of the smaller companies received as much. 



Table 30. 



-Percentage distribution of workers in soap industry according to average 
hdurly earnings, by size of company, January 1938 



Average hourly earnings 


Large 
com- 
panies 


Other 
com- 
panies 


Average hourly earnings 


Large 
com- 
panies 


Other 
com- 
panies 






0.5 
2.3 
6.3 
14.1 
10.9 
12.2 
11.3 
5.8 
7.7 
8.6 
. 8.1 
4.6 


82.5 and under 87.5 cents 

87.5 and under 92.5 cents. ..'... 

92.5 and under 97.5 cents. 

97.5 and under 102.5 cents. 

102.5 and under J07.5 cents 

107.5 and under 1.12.5 cents 

112.5 and under 117.5 cents 

117.6 and under 125.0 cents-^.- 


8.0 
7.7 
4.6 
4.5 
2.6 
2.1 
1.1 
.7 
.5 


1.7 


27.5 and under 32.5 cents.- 




1.8 


32.5 and under 37.5 cents , 

37.5 and under 42.5 cents 

42.5 and under 47.5 ce -\s 

47.5 and under 52.5 ceuts. 

52 5 and under 57.5 cants 

57.5 and under 62.5 cents 


6.5' 

1,8 

5.8 

4.7 

4.5 

12.0 

12.6 

14.8 

11.5 


1.5 
.7 
..4 
.4 
.4 
.1 
.6 


67.5 and under 72.5 cents 

72.5 and under 77.5 cents 

77.5 and under 82.5 cents 


Total. — 




100.0 


100.0 



Source: V. S. Bureau of Labor Statistics. 



To some extent, the differences in the average earnings among the 
three types of companies are due to variations in the composition of 
the labor force. 7 Skilled employees constituted 19.6 percent of the 



» Spe fahlp 2ft. 
" See tahlo 30.! 
» See taMe 31. 



64 



CONCENTRATION OF ECONOMIC POWER 



working force in the plants of. large companies, as against 15 per 
cent in the small companies and only 9.6 percent in the medium- 
sized companies. For semiskilled employees, the proportions were 
41.5 percent in the medium-sized, 39.2 percent in the large, and 33.9 
percent in the small companies. Undoubtedly, the higher average 
earnings of employees of the large companies may be attributed in 
part to the fact that these companies employ more skilled workers 
than the small companies. Nevertheless, a differential remains for 
each group of workers, as may be seen in table 28, in which the average 
hourly earnings of employees of each size company in each skill group 
are compared. Skilled employees of the larger companies, for ex- 
ample, receive nearly 1 1 cents an hour more on the average than those 
of the smaller companies. The difference is even greater for semi- 
skilled and unskilled employees. The medium-sized companies paid 
only slightly more to their skilled and semiskilled employees than did 
the small companies; but the differential amounted to 7.5 cents for 
the unskilled. The distributions of individual averages by skill 
groups suggest a similar conclusion. 



Table 31. 



-Percentage distribution of workers in soap industry, by sex and skill of 
viorkers and size of company, January 1938 





Total 


Males 


Females 


Size of company 


Total 


Skilled 


Semi- 
skilled 


Un- 
skilled 


Total 


Semi- 
skilled 


Un- 
ski'led 




100.0 
100.0 
100.0 


89. 8 
76.0 
85.8 


19.6 
9.6 
15.0 


36/2 
35.3 
29.3 


34.0 
31.1 
41.5 


10.2 
24.0 
14.2 


3.0 
6.2 
4.6 


7.2 




17.8 




.9.6 








100.0 


85.2 


16.1 


35.5 


33.6 


14.8 


4.1 


10.7 







Source: U. S. Bureau of Labor Statistics. 

Variations between the large and small companies in the propor- 
tions of different occupations in eaoh skill group are not responsible to 
any great extent for the differentials between large and small companies 
shown for ea"ch skill group. Nor can the occupational differentials 
between large and small companies be explained in terms of different 
proportions of men and women, as indicated by the average earnings 
for men and women in each occupation. Average hourly earnings in 
plants belonging to the large companies exceeded those in the re- 
mainder of the industry in every occupation for which a comparison 
is possible. 8 The differences varied from 4.3 cents for male wrapping- 
machine operators to 33 cents for male loaders. Soap makers, who 
were the highest-paid employees in both groups of companies, earned 
10.5 cents more, on the average, <in the establishments of the large 
companies than in the other plants. The difference for men working 
as general laborers, who constituted the largest single occupation in 
each group of companies, amounted to 15.5 cents; 

8 See table 32. Due to the limited number of workers found in the small companies, as well as the rela- 
tively small difference in the wage level between the medium-sized and small companies, all further com- 
parisons are limited -to the plants belonging to the large companies and the remaining establishments of 
the industry. 



CONCENTRATION OF ECONOMIC POWER 



65 



Table .T2 Average hourly earnings, weekly hours, and weekly earnings •>( workers 
in so<if> industry, by size, of company, s<.r, skill, and occupation, January 1938 



Sex, skill, and occupal ion 



M A I BS 

Skilled: 

Carpenters ..... 

Electricians 

Engineers, powor house . 

Foremen, working 

.Machine set-up men 

Machinists 

Millwrights :.. 

Pipe litters 

Soap nmkers .. ..: 

Slillincn .. .... 

M iscellaneous skilled employees 
Semiskilled: 

Checkers and weighers 

Clerks, miscellaneous 

Crutcher operators 

Drier operators — 

Pilling and packaging machine 

operators . . .-.. 

Firemen, powerhouse 

Glycerine men 

Loaders . 

Machine operators (miscellane- 
ous machines) — 

Machinists' helpers 

Mill and plodder operator!! 

Grinding mill operators 

Pipe tillers' helpers ... ... 

Press operators, hand or foot 

Press operators, machine 

Pumpers .. '. 

Slabbers and cutters 

Soap makers' assistants 

Tower operators 

Tractor operators 

Truck drivers 

Wrapping machine operators. . 
Miscellaneous semiskilled em- 
ployees - ., 

Unskilled: 

Hulk packers ... .. 

< lean-up men and janitors 
Conveyor line workers (catchers, 
Feeders, and rockers) ... . 

Elevator operators . ... 

Kramers and striiipers 

Laborers, general 

Packers, snipping 

Shippers' helpers 

Truckers, bond 

Watchmen ... 

Miscellaneous unskilled employ- 
ees 



Largo companies 



Num- 
ber of 
em- 
ployees 

I 



Aver- 
agO 

hourly 
earn- 
ings 



raHAI.ES 

Semiskilled: 

Inspectors 

Packaging machine operators ... 

Press operators, machine . 

Wrapping machine operators 

Miscellaneous semiskilled em- 
ployees 

Unskilled: 

Conveyor line workers (catchers, 
feeders, and rackers) . 

Packers, shipping 

Wrappers, hand 

Miscellaneous unskilled employ- 
ees 



43 
42 
43 

12H 
70 
90 
52 
HO 
58 
61 

199 

07 
50 
HO 
80 

100 
59 
29 

C7 

75 
40 

."i2 
23 
45 
3 
87 
144 
79 
22 
34 
47 
30 
07 



40 
158 

12 

34 
52 
058 
102 
72 
119 
120 



31 
230 

34 

. 13 



$0. 954 
. 975 

1.013 
.894 
. 902 
. 980 
896 
. 940 

1.052 
.824 
.885 

'.800 
.708 
.815 
.708 

.048 
.834 
.808 
.911 

.797 
.743 

. 790 

. 087 

. 755 

(') 

. 795 

. 794 

.819 

.851 

.797 

.805 

.849 



.717 
. 730 

(') 
. 723 
. Hi 15 
. 676 
.636 
. 709 
.786 

88 



.1.11 



. 508 
. 505 
(') 
.571 

,611 



. 522 
. 543 
.616. 

(') 



Aver- 

ag 

wee y 

hoi rs 



39.0 
40.0 
42.4 
39. 7 
39.3 
40.3 
39.9 
39. 

38. 1 
3H.9 
39.9 

39.3 

39. 5 
38.5 
37. 9 

38.9 
40.4 
38.4 
39.7 

37.8 

40. 5 

37. 5 
30. 2 
39.4 
(>) 
38.7 

38. 9 
3H. 
37. 
31). 7 
3H. 7 
43. 9 
3H. 2 

39. 1 

39.4 
3H.4 

(') 

39. 5 
39. 5 
37. 5 
39. 2 
39. 1 
3H. 
42.4 

39.5 



34. fi 
30. 7 
(l.) 
38. 8 

?9.1 



(4. 1 
37.4 
39.3 

(') 



Aver- 
age 
weekly 

earn- 
ings 



$37. HO 

39. 55 
42. 98 
35. 4H 
37. 83 
39.77 
35.74 
37. 45 

40. 09 
32.08 
35.31 

31.46 
30.36 
31.38 

29. 11 

25^18 
33. 04 
31.00 
3G. 14 

30.16 
30. 07 

29.84 
24. 86 

29.73 

(0 

30. 70 
30. 80 
31.08 
31.54 
31.02 

31. 19 
37. 32 
28.87 

30. 50 

28.21 

2a oi 

C) 

28. 54 
31.70 
25. 39 

24. 94 
27. 70 
30.35 

29. 20 

25. 43 



19. 5H 

20. 73 
(') 

22. 19 

23.88 



17.79 

20. 28 
24. 22 

■(') 



Other companies 



Num- 
ber of 
em- 
ployees 



Aver- 
age 
hourly 

earn- 
ings 



71 
42 

20 

15 
J 13 
209 

78 

40 
160 

71 



73 
102 
161 



(') 
(') 
$0. 798 
.831 
(') 
(') 
(') 
(') 
.947 
(') 
.680 

.094 
. 600 
.577 
. 555 

. 558 
. 017 
. 598 
.581 

(') 
(') 

.512 

.017 

(') 

.511 

.042 

.637 

. 572 

.684 



(') 
. 605 
.712 

.041 



(') 
.591 
. 521 
. 550 
.528 
.013 
. 493 



(') 
.423 
. 445 
.470 

.443 



.429 
. 121 



w 



Aver- 
age 
weekly 
hours 



o 

45.1 

42.9 

(') 

(') 

(') 

(') 

41.9 

(') 

43.6 

40.6 
42.4 
42.2 
44.0 

40.9 
47.2 
43.5 
41.9 

0) 
(') 

36.1 

38.7 

(') 

34.8 

39. 9 

42.5 

40.9 

42.2 



(') 

44.1 

39.9 



43.1 
38.0 

(') 

0) 

39.7 

39.2 

38.7 

42.3 

39.3 

40. 5 

38.8 



(') 
38.3 
39.7 
39.8 

40.7 



38. 
37. fi 



0) 



Aver- 
age 
weekly 

earn- 
ings 



1 Not enough workers to justify an average. 
Source: U. S. Bureau of Labor Statistics, 
m Mo 14 '' 



66 



CONCENTRATION OF ECONOMIC POWER 



Since women usually earn less than men, these differences between 
large and small companies may be the result of different propprtions 
of men and women employed by companies of varying size. The 
number of women was only 10.2 percent in the large companies, as 
compared with 14.2 percent in the small and 24 percent in the medium- 
sized companies. 9 When the comparison by size of company is made 
for men and women in each skill group, however, the difference in 
average hourly earnings between the large and medium-sized concerns 
is still substantial and is much greater than that between the medium- 
sized and small companies. 10 For skilled men. workers the difference 
between the large and medium-sized companies amounted to 10.1 
cents, as compared with a ('if. rence of on]y 1.9 cents between the 
medium-sized and small companies. The respective differences for 
semiskilled men were 17 and 3.9 cents, while for unskilled men they 
amounted to '12.3 and 7.5 cents. 

The same contrast is shown by the distributions covering men 
employees by skills. 11 Skilled men earning under 77.5 cents an hour 
were only 10.8 percent of the skilled force in the large companies and 
42.4 percent in the other establishments. Conversely, 38.5 percent 
of the skilled workers were paid 97.5 cents and over in the large com- 
panies, and 21.4 percent in other plants. The same general differences 
appear for semiskilled and unskilled workers. 12 

Table 33. — Percentage distribution of male workers in soap industry according to 
average hourly earnings, by ski 1 ! and size of company, Jdnuary 19S8 



■ 


Skilled 


Semiskilled 


LTnskilled 


Average* hourly earnings 


Large 
com- 
panies 


Other 
com- 
panies 


Large 
com- 
panies 


Other 
com- 
panies 


Large 
com- 
panies 


Other 
com- 
panies' 


Under 32.5 cents.. 








0.2 

3.6 

7.8 

7.8 

11.8 

14.6 

8.7 

8.1 

11.5 

11.4 

9.1 

1.8 

1.6 

1.0- 

.6 

.1 

.2 




0.9 


32.5 and under 37.5 cents ■■ 










2.7 


37.5 and under 42.5 cents 




1.4 

2.7 

1.4 

6.1 

6.4 

. 5.8 

7.8 

10.8 

5.4 

8.6 

11.1 

11.1 

4.7 

3.4 

3.1 

3.7 

1.4 

5.1 




0.7 

2.7 

3.8 

5.7 

4:8 

22:8 

21.8 

W. 1 

' 6.5 

4.2 

3.2 

1.9 

4.1 

.9 

.5 

.2 

.1 


16.0 


42.5 and under 47.5 cents 




1.2 
2.3 
1.3 
3.2 
7.3 
11.7 
19.3 
19.4 
10.5 
8.9 
6.5 
3.5 
2.1 
1.6 
.8 
.3 
.1 


11.5 


4ff.5 and under 52.5 cents ..J. 




15.8 




6.2 
.5 
1.8 
2.0 
6.3 
11.0 
14.1 
17.3 
8.3 
14.6 
7.7 
6.8 
3.6 
3.2 
2.6 


12.5 


57.5 and under 62.5 cents. 


4.7 


62. 5 and under 67.5 cents 


11.9 


67.5 and uuder 72.5 cents 


11.6 


72.5 and under 77.5 cents 


9.2 


77.5 and under 82.5 cents 


2.6 


82.5 and under 87.5 cents 


.5 


87.5 and under 92.5 cents 


.1 


92.5 and under 97.5 cents . 




97.5 and under 102.5 cents 




102.5 and under 107.5 cents... 




107.5 and under 112.5 cents... 




112.5 and under 117.5 cents.. 


, 


117.5 and under 125.0 cents... 






125.0 cents and over 


.1 










Total :_' „ 


100.0 


100.0 


100.0 


100.0 


100.0 


100.0 







Source. U. 8. Bureau of Labor Statistics. 



Likewise,, marked differences were found between the large com- 
panies and other companies in the distributions of hourly earnings of 
women employees. 13 Less than 2 percent of the women employed in 
semiskilled occupations in the large companies averaged less than 47.5 



• See table 31. 
'» See table 28. 

11 See table '33. 

12 See table, 33. 
11 See table 34. 



CONCENTRATION OF ECONOMIC POWER 



67 



cents an hour; in the other companies 61.7 percent of the women in 
similar occupations averaged less than this amount. Inversely, 46.1 
percent of the semiskilled women had hourly earnings of 57.5 cents 
and over in the large companies, while only 5.4 percent of the women 
employed in similar occupations by the smaller companies were in 
that wage group. In the unskilled group 9.8 percent of those em- 
ployed by the larger companies and 80,6 percent of those in the smaller 
companies received less than 47.5 cents per hour. Nearly one-half 
of the unskilled women in the large companies received 52.5 cents 
and over, but less than 9 percent of this group in the smaller companies 
were included in the higher wage grOup. 

T^ble 34. — Percentage distribution of female workers in soap industry according 
to average hourly earnings, by skill and size of company, January 1988 





Semiskilled i 


Unskilled 


Average hourly earnings 


Large 
com- 
panies 


Other 
com- 
panies 


Large 
com- 
panies 


Other 
com- 
panies 


25.0 and under 27.5 cents ..- _-. 








1.3 






9.8 
7.3 
18.3 
26.3 
18.3 
14.6 
2.4 
2.4 




10.0 








23.2 






4.1 
5.7 
42.0 
18.2 
12.1 
11.5 
4.5 
1.9 


29.8 




1.5 
20.0 
32.4 
24.6 
12.3 
'5.4 
3.8 


16.3 




10.7 




4.5 
2.7 
1.3 




.2 




.6 








Total 


100.0 


100.0 


100.0 


100.0 







1 Includes 24 foreladies who were classed as skilled. 
Source: U. 8. Bureau of Labor Statistics. 



DIFFERENCES IN WEEKLY EARNINGS AND OVERTIME RATES BETWEEN 
LARGE AND OTHER COMPANIES 

Although the 40-hour week predominated in the soap industry in 
January 1938, the full-time hours differed among the 3 types of 
companies. Eleven of the plants operated by large companies re- 
ported a normal workweek of 40 hours, while the other 2 reported a 
35-hour week. Forty hours constituted a normal workweek for 14 
of the medium-sized companies, but 2 reported a workweek in excess 
of 40 hours. In contrast, only 2 plants of the small companies had a 
workweek of less than 40 hours, 23 plants had the 40-hour week, while 
in the remaining 18 establishments the scheduled hours exceeded 40. 

As a result of these differences in the number of hours represented 
Dy a full workweek, the average number of hours worked per week 
was 38.8 in the large, 39.9 in the medium-sized, and 41.7 in the small 
companies. 

The fact that the number of hours worked varied inversely with 
size of firm tended to reduce the differences in weekly earnings among 
employees of the three types of companies. In. fact, the avergage 
weekly earnings of all wage earners in medium-sized and small 
•companies were almost identical, although there was a difference of 
4.3 percent in their average hourly earnings. The average weekly 
earnings of workers in plants belonging to the large companies 



68 



CONCENTRATION OF ECONOMIC POWER 



amounted to $29.56, or $6.40 above the figure for the remainder of 
the industry ($23.16). 

The distributions of weekly earnings by size, of company show that 
only 8.5 percent of all workers in the plants owned by large companies 
received less than $20 a week, while 38.8 percent of the workers in the 
other companies received less than $20 per week. 14 In contrast, the 
number earning $35 and over amounted to 22.6 and 8.8 percent, 
respectively. 

Table 35. — Percentage distribution of 'workers in soap industry according to weekly 
earnings, by size of company, January 1938 



Weekly earnings 


Larue 
com- 
panies 


Other , 
com- 
panies 


Weekly earnings 


Large 
com- 
panies 


Other 
com- 
panies 


Under $."> 


0. 1 

.3 

.9 

7.2 

lfi.fi 

28.0 

24.3 

13.8 


0.7 
3.0 
10.9 
24.2 
22. 1 
19.5 
10.8 
4.8 


$40 and under $45 


6.1 
1.5 

.6 
^.4 

.2 


2.3 


$.5 and under $10 . . 


$50 and under $55 

$55.and under $«0 

$00 and over 

Total 


.9 


$i.s arid under $20 . 


.5 
.2 




.1 




100.0 


100.0 













Source: U. S. Bureau of Labor Statistics. 

The size of the company also played an important part in the soap 
industry with respect to the rates paid for overtime work. All of the 
large companies provided time and one-half for work beyond the 
regular scheduled time, which was usually 8 hours per day and 40 
hours per week. Of the 16 medium-sized companies, however, only 
6 paid time and one-half for overtime. One company paid time and 
one-fourth, but the majority' of the remaining companies paid only 
the regular rate for such work. Only 7 of the 43 small companies 
paid time and one-half for overtime, one paid time and one-third, 29 
paid straight time for such work, while 6 provided no compensation 
whatsoever for overtime. 

» Sec table 35. 



APPENDIX D 
THE MEAT-PACKING INDUSTRY 

DESCRIPTION OF THE INDUSTRY 

Meat packing is one of the larger industries in the country. Accord- 
ing to the Census of Manufactures, meat-packing establishments 
reported a total of 134,440 wage earners in December 1937, the month 
covered by the special survey On which this discussion is based.' The 
definition of the industry used by the Bureau of Labor Statistics was 
similar to that of the Census of Manufactures, the principal difference 
being that the Bureau's survey excluded all plants with less than 10 
workers. The survey was made, on a sample basis, and included 258 
establishments 2 and 49,235 wage earners. 

There are fairly distinct lines drawn between the three types of 
companies in this industry. The "Big Four" packers are well known 
in the industry. Each of them has a wide distribution of products, 
employs a considerable number. of workers, and has a large number of 
plants scattered throughout the country. Secondly, there is a group 
of intermediate companies which are much smaller than the "Big 
Four." In general, however, they resemble the "Big Four" in that 
they have a fairly wide distribution of products, employ a large number 
of workers, and own more than one establishment. The small com- 
panies, on the other hand, usually have a restricted market, although 
in some cases it covers more than one State. Of the small companies, 
furthermore, few employed more than 500 w r orkers, and most of them 
had only one plant. Plants included and workers covered by the 
Bureau's special survey of the industry were distributed as follows: 



Size of company 


Number of 
establish- 
ments 


Percent of total wage earners 
covered 


United 
States 


North 


South.' 


"Hie Four" 


50 

17 
182 


54 
19 
27 


54 
21 
25 


52 


Intermediate . ; ., 


I « 


Small 







1 Owing to the fact that only 1 establishment of an intermediate-sized company was included in the 
southern sample, no distinction was made here between the intermediate and small companies. 



DIFFERENCES IN AVERAGE HOURLY EARNINGS BY SIZE OF COMPANY 

The average hourly earnings of all workers in the meat-packing 
industry for the entire country amounted to 64.9 cents in December 
1937. According to table 36, however, there were sharply contrasting 
wage levels among the three types of companies. For all workers in 
the United States, the average was 70.1 cents for the "Big Four", 

1 U. S. Department of Commerce. Bureau of Census, "Biennial Census of Manufactures, 11)37, pt. I," 
p. ISO. 

J The study of meat packing included most of the larger plants in the Industry. However, in order to 
give the latter the same weight In the coverage as they constituted in the total industry, only part of the 

wage earners were included in sonic of these establishments These workers were selected to obtain a 
represent at i\ e cross seel ion of the labor force with respc< t to occupation, sex, color, and department. The 
procedure of sampling the employees of the larger plants instead of using a sample of these establishments 
has Dccessaril) increased I lie total number of such plants in the coverage. 

G9 



70 



CONCENTRATION OF ECONOMIC POWER 



63.6 cents for the intermediate companies,. and 56.2 cents for the small 
companies. A comparison of the distribution of earnings throughout 
the whole range, as shown in table 37, indicates the extent to which 
earnings of employees of the "Big Four" are consistently above those 
of the intermediate and smaller companies. 

Since average hourly earnings paid by the "Big Four" are con- 
sistently higher than those paid by the other companies, the question 
arises whether the size of company in itself is a principal factor in the 
differentials in average hourly earnings or whether they are a reflec- 
tion of other factors associated with size of company, such as size of 
establishment, region, and size of community in which the plants are 
located. 



Table 36.- 



Average hourly earnings of workers in meat-packing industry, by wage 
district, type of company, sex, and skill, December 1937 





Num- 
ber of 
plants 


Total 
workers 


Males 




Wage district and type of company 


All 


Skilled 


Semi- 
skilled 


Un- 
skilled 


Females 




258 
59 

16 
183 
218 

Si 

16 
151 

40 
8 

32 


$0,649 
.701 
.636 
.562 
.667 
.715 
.636 
.597 
.497 
..580 
.418 


$0. 669 
.724 
.659 
.579 
.089 
.739 
.659 
.615 
.512 
,598 
.430 


$0. 798 
.874 
.781 
.697 
.820 
.887 
.781 
.733 
.638 
.761 
.541 


$0,651 
.702 
.650 
.554 
.670 
.717 
.650 
.590 
.493 
.57a 
.405 


$0,587 
.633 
.599 
.491 
.607 
.649 
.599 
.525 
.430 
.501 
.360 


$0. 497 


"Big Four".. 


.539 


Intermediate ' 


.492 


Small 2. 


.415 


Northern wage district » 

"Big Fourl' : 


.511 
.550 


Intermediate . 


.492 


Small... r 


.439 




.368 


"Big Four" ..... 


.422 


Others •-: 


.317 



1 Excludes 1 plant bplonging to an intermediate company in the southern wage district. 

2 Includes 1 plant belonging to an intermediate company in the southern wage district 

Source: U. S. Bureau of Labor Statistics. 

Table 37. — Percentage distribution of workers according to average hourly earnings 
in meat-packing industry, by region and type of company, December 1937 



b 


United States 


Northern wage district 


Southern wage 
district 


Average hourly earnings 


























Total 


"Big 
Four" 


Inter- 
medi- 
ate! 


Small 2 


Total 


"Big 
Four" 


Inter- 
medi- 
ate 


Small 


Total 


"Big 
Four" 


Other * 


Under 17.5 cents 


0.1 

.4 
.5 
1.2 






0.5 
1.2 
1.5 
3.6 


(») 
(?) 
0.1 
.3 






0) 
0.2 
.4 
1.2 


1.2 

2.8 
3.8 
7.7 


0.3 

1.6 
2.2 


2.5 


17.5 and under 22.5 cents... 


(?) 
0.2 
.2 


"'b~2 






5.3 


22.5 and under 27.5 cents .. 






6.3 


27.5 and under 32.5 cents.. . 




0/2 


13.5 


32.5 and under 37.5 cents. .. 


1.6 


.2 


.9 


5.1 


1.0 


P) 


.9 


3.1 


7.4 


1.8 


•13.5 


37.5 and under 42.5 cents.. . 


3.4 


1.1 


2.0 


8.8 


2.3 


0.1 


2.0 


7.7 


11.1 


9.3 


13.2 


42.5 and under 47.5 cents... 


3.7 


1.4 


2.8 


8.8 


3.0 


■ .2 


2.8 


9.2 


9.2 


11.0 


•7.3 


47.5 and under 52.5 cents... 


9.6 


• 6.4 


11.8 


14.3 


9.2 


6:5 


11.8 


12.7 


12.6 


5.6 


20.3 


52.5 and under 57.5 cents... 


7.1 


5.3 


6.8 


10.7 


6.3 


3.6 


6.8 


11.7 


13.1 


19.6 


6.1 


57.5 and under 62.5 cents... 


15.4 


13.7 


26.0 


11.6 


16.3 


13.8 


26.0 


13.6 


8.3 


12.9 


3.3 


62.5 and under 67.6 cents... 


18.1 


20.7 


20.3 


11.6 


19.4 


. 21.6 


20.3 


13.7 


7.6 


12.5 


2.3 


67.5 and under 72.5 cents... 


11.4 


14.5 


9.6 


' 6.6 


12.3 


15.2 


9.6 


7.9 


4.8 


7.7 


1.7 


72.5 and undar 77.5 cents... 


8.9 


11.6 


6.4 


6.2 


9.6 


12.5 


6.4 


6.1 


3.0 


4.4 


1.4 


77.5 and under 82.5 cents... 


6.8 


7.8 


4.3 


2.9 


6.3 


8.3 


4.3 


3.5 


2.1 


3.3 


.8 


82.5 and under 87.5 cents... 


4.0 


£.2 


3.2 


2.2 


4.3 


5.6 


3.2 


2.6 


1.8 


2.8 


.8 


87.5 and under 92.5 cents... 


2.5 


3.3 


1.6 


1.6 


2.7 


3.6 


1.6 


1.8 


1.1 


1.4 


.8 


92.5 and under 100.0 cents . 


2.5 


3.5 


1.6 


1.2 


2.7 


3.8 


1.6 


1.4 


.8 


1.2 


.3 


100.0 and under 110.0 cents. 


2.0 


2.6 


1.2 


1.4 


2.2 


2.8 


1.2 


1.7 


.7 


1.0 


.3 


110.0 and under 120.0 cents. 


1.0 


1.3 


.6 


.7 


1.1 


1.4 


.5 


.9 


.4 


.7 


.1 


120.0 cents and ever. 


.8 


1.0 


.8 


.5 


.9 


1.1 


.8 


.6 


.5 


.7 


.fr 


Total 


100.0 


100.0 


100.0 


100.0 


100.0 


100. 


100.0 


100.0 


100.0 


100.0 


100.0- 


Number of workers 


49. 2:-:. r i 


26, 670 


9,055 


13.510,43,717 


23, 810 


9, 055 '10, 852 


5,518 


2,860 


2,658- 



-Excludes 1 plant belonging to an intermediate company in the southern wage district. 
- Includes 1 plant belonging to an intermediate company in the southern wage district. 
: 'Le.sy than one-tenth of 1 percent. 

Source: U. S. Bureau of Labor Statistics. 



CONCENTRATION OF ECONOMIC POWER 



71 



Table 38. — Average hourly earnings of workers in meat-packing industry in 
northern wage district, by size of community and type of company, December 
1937 





All communities 


Under 50,000 '• .; . 


50,000 and under 100,000 


Type of company 


Number 

of 

plants 


Number 

of 
workers 


Average 
hourly 
earnings 


Number 

of 

plants 


Number 

of 
workers 


Average 
hourly 
earnings 


Number 

of 

plants 


Number 

of 
workers 


Average 
hourly 
earnings 


"Big Four".. 

Intermediate 

Small... 


51 

16 

151 


23, 810 
9,055 
10; 852 


$0. 715 
.636 
.597 


4 
4 
32 


2,006 
3,012 
1,807 


$0. 649 
.682 
.540 


4 
3 
10 


2,062 

1,928 

664 


$0,688 
.614 
.640 








100,000 and under 500,600 


500,000 and under 1,000,000 


1,000,000 and over 


''Big Four" 

Intermediate. 

Small 


15 
3 
30 


" 4,279 
1,096 
2,780 


$0,711 
.642 
.565 


10 
3 

17 


5,255 

1,482 

781 


$0,720 
.597 
.557 


18 10, 208 
3 1 1,537 
56 1 


$0. 734 
.628 
.653 






. 









Source: U. S. Bureau of Labor Statistics. 

In the case of the meat-packing industry, region and size of com- 
munity have an important relationship to average hourly earnings, 
while size of establishment apparently does not. The distribution 
of average hourly earnings of workers in the northern wage district, 
by size of community and type of plant, is given in table 38. This 
shows that the larger companies generally pay higher wages .than 
smaller companies in the same community. There are, however, 
some important exceptions! In towns of under 50,000 average 
hourly earnings in companies of intermediate size are 68.2 cents, 
while~ in the "Big Four" they are only 64.9 cents. At the- other 
extreme, in cities of over 1,000,000 population, employees of small 
companies earn slightly more than those of the intermediate com- 
panies, although much less than those of the "Big Four." In the 
other three city-size groups, average hourly earnings increase with 
each increase, in the size of company. In the northern region as a 
whole the "Big Four" companies pay 8 cents more on the average 
than the intermediate companies, while the intermediate pay only 4 
tents more than the small companies. 

Data are not available for a sufficient number of plants to permit 
a similar analysis for the southern region. 

The question remains as to whether there is a differential in the 
wage rate paid by large and small companies for the same skill. The 
distribution of average hourly earnings for men, by wage district, 
type of company, and skill is shown in table 36. The rates paid 
by large companies were higher for each skill group than those paid 
by smaller companies. However, these differentials varied consid- 
erably when studied according to. either degree of skill or wage 
district. 

The racial factor must also be considered in analyzing differences 
between the average hourly earnings of each skill group in large and 
small companies in the meat-packing industry, since it employs a 
substantial number of Negroes, and Mexicans. In the North, where 
Negro and white workers are paid at the same rate for the same job, 
their presence in the industry does not affect the difference between 
large and small companies. In the southern region the "Big Four ' 
employed relatively fewer Negroes than the small companies, but 
this did not account to any great extent for the differential in aver- 



72 CONOKNTUATION OF KOONOMIC POWER 

age earnings, since tlioy also paid substantially higher wages to each 
race than the smaller companies. * 

The influence of size of community is not discussed in detail here, 
since it could not be fully eliminated, but available evidence indi- 
cates that the conclusion that higher earnings are made in large 
companies would not have been affected appreciably. 

In this industry unionization is also of some importance in the 
wage structure, but it was not possible to determine the relationship 
between unionization and the differences between large an4 small 
companies in average hourly earnings. For small companies, em- 
ployees in union plants were paid more than those in nonunion plants, 
but the plants of the large companies could not be classified into 
union and nonunion groups. Thus it was not possible to. determine 
the extent to which the higher earnings of large company employees 
might be attributable to the extent of their unionization. 

OTHER DIFFERENCES JtV SIZE OF COMPANY 

As a general rule, differences in hourly schedules are not so pro- 
nounced as those for wages. At the time of the survey, the full- 
time hours were somewhat shorter for the "Big Four" than for the 
other companies. Forty-eight of the fifty-nine "Big Four" plants 
reported a 40-hour week, while 52 of the 199 other establishments 
normally worked 40 hours. 

In December 1987, the average actual hours worked by all wage 
earners in the country as a whole amounted to 42.5 per week. By 
size of company, the averages were 40.7 hours for employees in the 
"Big Four", 44.2 4 hours in the intermediate companies, and 44.9 5 
hours in the small companies. v Hence, while the differential between 
the intermediate and small companies was not very large, the average 
actual weekly hours were considerably lower in the "Big Four" as 
compared with the remainder of the industry. 

Due to- the fact that the employees of the intermediate and small 
companies worked on the average longer hours per week than those 
of the "Big Four", the differences in average weekly earnings among 
the three types of companies are relatively smaller than the ones 
shown in connection with average hourly earnings. In the northern 
wage district, the average weekly earnings amounted to $29.25 for 
the "Big Four"., $28.13 for the intermediate, and $26.87 for the 
small companies. In the southern wage district, the average earnings 
per week were $22.80 for the "Big Fmir" and $18.63 for the other 
companies. 8 

' Excludes 1 intormoiliiitp plant in the southern wngc district. 
f Includes i intermediate-plant in ttic southern wape district. 
« See table 39. 



CONOKNTRATION OK RCH iNo.MIC l'oWKK 



73 



Table 39. — Average weekly (tunings of workers in meat-packing industry^ by 
wage district, size of company, sex, <m<l skill, December 1987 



Wage district and size of compaii) 



United Slnles 

•'lii'j Pour" 
Intermediate ' 
Small -' 

Northern wajie dislricl 

"Hij! Kuur" 

Intermediate 

Small 
Soul hern wage dislrict . 

"Hit; I'our" ... 

Other-: 



Total 
workers 



$27. . r .7 
2S M 
•_'N. 13 
25. 25 

28. 43 
2!l. 25 
28. IK 
2«] N7 
211.751 
22.8(1 
1« 03 



Males 



All 



$28. (ill 
20.01 

2! I. '.'7 
21. I' l 

2!). r>«.i 

:di :;i 
2! i. 27 
28 111 
21. Ml 
23. (17 
HI. 52 



Skilled 



$34. II 

35 77 
:ti «.i7 

.12.1111 

:tr.. 2!i 

30 13 

:m.«i7 
33. i. r > 
27. 7:i 
30. 17 
25. II 



Seint- 
skilled 



2!). 1 1 
28. Ml 
25. 30 

2jj j,2 
2!l. 7! I 
28. Ml 
27. (Ml 
21. Ill 

2:1 i:i 

is , r ,s 









. emales 


1 II- 

killed 




$24. so 


$19. 'J! 


2. r >. 2.S 


21.20- 


2<>. 04 


21.03 


22. 32 


10.27 


25. mi 


20. 58 


20. in 


21.82 


20. 04 


21.03 


21 22 


17.27 


17.37 


13.07 


M. 112 


15. 7H 


15. 52 


12.21 



i Excludes I plant Ixdonginu to an intermediate company in the soul hern wage district.. 
> Includes I plan! belonging to an intermediate company in the southern wave dislricl. 

Source: U. S. 1 Hurcau of Labor Stat isl ics. 



Tn practically all of the establishments belonging to the "Big 
Four" companies, workers received time and one-half for overtime, 

which applied in most ease-; alter 10 hours per day. Of the other 
plants in the industry, over one-fourth paid time and one-half and a 
few granted time and one-third or time and one-fourth, usually after 
10 hours per day. In more than one-half of these plants, however, 
the regular rate applied to overtime. 

Approximately 24.3 percent of all workers in the industry were 
paid under production bonus plans. These employees were found in 
40 pi ants,, nearly all of which belonged to the larger companies. 



APPENDIX E 
THE FERTILIZER INDUSTRY 

DESCRIPTION OF THE INDUSTRY 

According to the Census of Manufactures, the average number of 
wage earners employed in the fertilizer industry was 20,893 in 1937. 
In view of the extreme seasonality in the making of fertilizers, how- 
ever, this figure is not entirely indicative of the size of the industry, 
which reported 36,782 wage earners in April 1937, the month of the 
highest activity during the- year. 1 

According to the Bureau of Labor Statistics' survey, 2 covering wage 
■data for the spring months of 1938, employees of large firms receive 
higher hourly earnings than do the employees of the smaller firms. 
Average hourly earnings paid the "Big Seven." were 37.0 cents, as 
compared with the 33.0 cents paid by the medium-sized companies 
and the 26.9 cent's- paid by the single-establishment companies. 

The Bureau's survey did not cover any establishments with less 
than 10 workers. .The group of plants studied were selected to be 
representative of the remaining plants in the industry and included 
283 establishments employing 15,657 wage earners, or about two- 
fifths of the total working force in the industry. 

From the standpoint of corporate affiliation, there are 3 kinds -of 
companies in the industry. The "Big Seven" concerns are fairly well 
known, each of them having a large number of establishments scat- 
tered throughout the country. There is also a substantial number 
of concerns of intermediate size, each of which owns 2 or more plants 
in various localities. Lastly, there are a number of small companies, 
each having only one establishment. Of the plants covered in the 
sample,, 60 belonged to the "Big Seven", 72 to the intermediate, and 151 
to the 1 -establishment companies. The proportion of all employees 
whose earnings were reported was 35 for the first group of large plants, 
. 29 for the second group, and 36 percent for the third. 

In terms of production the "Big Seven" concerns are vastly more 
important than is indicated by their relative number of wage earners. 
This is also true to a lesser degree of the intermediate companies. 
This is due to mechanization, which has affected principally the large 
and intermediate companies. In the small concerns, on the other 
hand, owing to the shortness of the production* season and small 
volume of sales, the, installation of certain types of machines is not 
always justified, and for this reason many hand workers are still 
employed. 

' U. 8. Department of Commerce, Bureau. of Census, "Biennial Census of Manufactures, 1937, pt. I," 

* For a detailed description of the wage structure in this Industry, as determined by the survey, see the 
following: Mimeographed report on "Average Hourly Earnings in the Fertilizer Industry, 1938," which 
-was issued on January 7, 1939: and the article on "Wages and Hours in the Fertilizer Industry, 1938, 
-which appeared in the Monthly Labor Review, March 1939, pp. 666-681. 

75 



7G 



CONCENTRATION OF IOCONOMIC ROWER 



From the standpoint of integration, there are 3 types of estab- 
lishments in the fertilizer industry, namely, acid-making, superphos- 
phate, and dry-mixing plants. Acid-making establishments arc com- 
pletely integrated, manufacturing their own sulfuric acid and super- 
phosphates and mixing the various ingredients to make complete 
fertilizers. Superphosphates or wet-mixing plants, on the other hand, 
purchase their acid requirements, but they make their own super- 
phosphates and mix them with the various ingredients. Dry -mixing 
establishments do not manufacture any of the fertilizer ingredients 
but arc engaged entirely in mixing fertilizers from purchased mate- 
rials. The degree of integration tends to vary directly with the con- 
centration of ownership in the industry. Of the 206 dry-mixing plants 
in the sample, only 20 belonged to the "Big Seven." On the other 
'hand, of the 35 acid-making establishments, 21 belonged to the "Big 
Seven" and only 7 to the one-plant concerns. 3 

A number of the large companies control the sources of their raw 
materials, such as phosphate rock and nitrates, and to a limited ex- 
tent the organic nitrogen carriers, in addition to making their own 
superphosphates and in some cases their own acid. On the other 
hand, nearly all of the one-establishment concerns have to buy their 
superphosphates and other raw materials. 

Table 40. — Average hourly earnings of workers in fertilizer industry, by region, type 
of plant, and size of company, during the spring months of 1988 





"Big Seven" companies 


Intermediate companies 


Onc-cstaWishinent com- 
panies 


Region and l.ype of plant 


Num- 
ber of 
plants 


Num- 
ber of 
work- 
ers 


Average 
hourly 
earn- 
ings 


Num- 
ber of 
plants 


Num- 
ber of 
work- 
ers 


A verage 
hourly 
earn- 
ings 


Num- 
ber of 
plants 


Num- 
ber of 
work- 
ers 


Average 
hourly 
earn- 
ings 


Northern wage district 

Acid-making plants. .. 
Superphosphate plant* 
Dry-mixing plants . 

Upper southern wage dis- 
trict. . ... 

Acid-makinc plants. 
Superphosphate plants 
Dry-mixing plants.. ... 

Lower southern wage dis- 


14 

4 
4 

8 
4 

2 

38 
11 
13 
14 


1.418 
042 
194 
282 

929 
S95 
156 

178 

3.213 

1.295 

1,030 

888 


$0 574 
. 005 
. 538 
.487 

.392 
.394 

(') 
(') 

.270 
.288 
.271 
.208 


28 
3 

20 

9 
I 

2 
6 

35 
3 
3 

29 


1,301 

507 
323 
531 

780 
245 
87 
451 

2,377 
591 
2«4 

1, 502 


$0. .503 
. 543 
.548 
.442 

. 355 

<<) 

(») 

.331 

.241 
.339 
.240 
.'204 


30 
1 
5 

30 

12 
1 

1 
10 

103 
5 

91 


1,233 

52 

349 

832 

459 
04 
85 

310 

3,881 
030 
575 

2, 070 


$0. 438 
(') 
.474 
.419 

.310 
(') 
(') 

.294 

.208 


Acid-making plant" 

Superphosphate plants.. 
Dry-mixing plants 


.244 
.222 
.196 



' Less than 3 plants; no average computed. 
Source: U. S. Bureau of Labor Statistics. 



There is keen competition, however, between the large and small 
companies, especially with respect to certain local markets, where the 
one-plant concerns have a distinct advantage in being able to adapt 
their formulas to the more highly specialized needs resulting from the 
peculiarities of the local soil. 



DIFFERENCES IN AVERAGE HOURLY EARNINGS BY SIZE OF COMPANY 

In the spring of 1938, the average hourly earnings of the 15,657 
wage earners covered in all of the 283 fertilizer plants, regardless of 

« See table 40. 



CONCENTRATION OF ECONOMIC POWER 



77 



the process used or the degree of integration, amounted to 32.6 cents. 
Earnings in the plants owned by the "Big Seven" averaged 37.0 cents, 
3.1 cents more than the 33.9 cents received by employees of inter- 
mediate-sized companies and 10.1 cents more than the* '2V>.\) cents which 
single-establishmenl companies paid their workers. The distribution 
of the average hourly earnings in individual plants by the size of the 
company owning them also indicates that there was a close associa- 
tion between size of company and average hourly earnings for the 
country as a whole. 

However, a more detailed analysis of the wage structure in the 
fertilizer industry reveals that average hourly earnings also vary with 
the region and the size of community in which the plants are located, 
but size of establishment is unimportant. In table 41, the distribution 
•of average hourly earnings is shown by size of company, by region, 4 
and by size of community. It is seen from this table that, within a 
particular district, each type of company increases its wage rates as 
the size of the community increases. However, substantial wage 
differentials are shown to exist , between the districts. The lowest 
wage level paid by each type of company was in the low r er southern 
wage district; higher rates were paid in- the upper southern districts, 
while the highest rates were found in the northern district. Thus, 
while rates paid by each type of company in communities of less than 
10,000 were the lowest in that wage district, the rate paid in a com- 
munity of that size in the North was much higher than the rate paid 
in a community of the same size in the low r er southern region. 



Table 41. — Average hourly earnings of workers in fertilizer industry, by region, 
size of community, and size of company, during the spring months of. 1938 





"Big Seven" companies 


Intermediate companies 


One-establishment com- 
panies 


Kegion and size of com- 
munity 


Num- 
ber of 
plants 


Num- 
ber of 
work- 
ers 


Aver- 
age 
hourly 
earn- 
ings 


Num- 
ber of 
plants 


Num- 
ber of 
work- 
ers 


Aver- 
age 
hourly 
earn- 
ings 


Num- 
ber of 
plants 


Num- 
ber of 
work- 
ers 


Aver- 
age 
hourly 
earn- 
ings 


Northern wage district. ..... 

i Oder L0;000 

10.000 and under 100.000... 
100,000 and under 500,000.. 
500,000 and over 


14 

1 

I 

9 

8 
1 


1,418 

• 49 

43 

149 

1,177 

929 
100 


$0,574 
(') 
(') 
.438 
.600 

.392 


28 
7 
7 
7 

7 

9 
2 
2 
5 


1,361 
146 
170 
313 

732 

786 

. 34 

210 

542 


$0,503 
.407 
.431 
.465 
.557 

.355 

(') 
.399 


36 
17 

7- 
5 

12 
6 
2 
3 
1 

103 
06 
30 

7 


1,233 
407 
124 
274 
428 

3 

66 
244 
35 

3,881 

1,749 

1,851 

281 


$0,438 
.366 
.390 
*.472 
.507 


I'pper southern wage dis- 
trict 


.316 


Under 10,000 


.255 


10,Ou0 and under 100,000 . 


C> 


100.000 and under 500,000.. 

"00,000 and over 


6 
1 

38 

3 

24 

. 11 


588 
241 

3,213 

213 

1,997 

1,003 


.409 
(') 

.276 
.209 
.273 
.298 


.369 


Lowe.r southern wage dis- 
trict 


35 
15 
14 
6 


2, '377 
509 

1,153 
715 


.241 
.170 
.237 
.300 


.208 


Under 10,000. _, 


.178 


10,000 and under 100,000 . 
100,000 and under 500,000. . 
500,000 and over 


.226 
.268 























1 Less than 3 plants; no average computed. 
Source: U. S. Bureau of Labor Statistics. 



4 The regions have been defined for this analysis as follows- The northern region includes Connecticut, 
Illinois, Indiana (except 1 plant in southern part), Maine, Massachusetts, Michigan, New Jersey, New 
York, Ohio, Pel i, and the western shore of Maryland ami northern Delaware. The upper south- 

ern region includes the eastern shore of Maryland and southern Delaware, Indiana (1 plant in southern p:irt 
only), Kentucky. Tl nnessee, and Virginia. The lower southern region includes Alabama, Arkansas, Flor- 
ida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Texas. 



78 CONCENTRATION OP ECONOMIC POWER 

When these important geographical and size of community differen- 
tials are taken into account, the size of company differentials diminish 
substantially. The intermedrte companies have higher average 
earnings in three of the six comparisons which are possible between 
the earnings of their employees and those of workers in the "Big 
Seven" companies. In only one instance, however, are earnings in 
single-establishment companies higher than those of either of the 
"Big Seven" or the intermediate companies. In that case — plants 
in cities of 100,000 and under 500,000 in the northern wage district — 
the one-establishment companies had higher average hourly earnings 
than either of the other two groups of companies, partly because the 
"Big Seven" do not own any acid- making plants, in which wages are 
higher. It would appear on the basis of these figures that there is 
relatively little difference between earnings in plants of the "Big 
Seven" companies and of the intermediate companies when allowance 
is made for their location. 

The differences in, degree of integration between companies in the 
different size groups suggests that the skill composition of the working 
force of the large and small companies may differ substantially and 
may affect materially the relationships between the earnings of em- 
ployees of companies of different size. Analysis indicates that, 
although this is a factor, the differentials in earnings between large 
and small companies still persist. The importance of integration to 
earnings is indicated in part in table 40, in which earnings of em- 
ployees of ack 1 -making plants in each region are compared with those 
of employees In superphosphate and dry-mixing* plants, by size of 
company.. Although it was not possible wholly to eliminate the 
influence of size of community; the earnings of employees in acid- 
making plants are sufficiently higher that those of workers in super- 
phosphate and dry-mixing plants to indicate that the skill composi- 
tion of the working force is materially affected by the degree of 
integration, and that the more integrated plants employ a larger 
percentage of skilled workers. Nevertheless, the plants of the "Big 
Seven" companies in each region which engaged in the same types 
of production paid higher wages than the single-establishment com- 
panies in every case, and more than the intermediate companies in 
the majority of cases in which comparison was possible. In the lower 
southern region it was possible to allow for the influence of size of 
community on the earnings of employees in dry-mixing plants of 
the large and small companies. 5 In these plants the differential 
between earnings in large and small companies persists, and it may 
be concluded that skill composition is not primarily responsible for 
the higher earnings of employees of the larger companies. Unfor- 
tunately no data were available on the percentage composition by 
skill groups of the working forces of plants owned by companies of 
various sizes or on the average hourly earnings of employees in the 
different skill groups or in different occupations. Hence, the extent 
to which skill composition affected the size of company differential 
could not be tested directly. 

* See table 42. 



CONCENTRATION OF ECONOMIC POWER 



79 



Table 42. — Average hoitrly earnings in dry-mixing plants of fertilizer industry in 
lower southern wage, district, by size of company and size of community, during 
spring months of 1938 



Size of company and size of community 



Number Of 
plants 



"Big Seven" companies 

Under 10,000 population 

. 10.000 and under 100,000 population.. . 

100,000 and under, 500,000 population. 

500,000 population and over 

Intermediate companies. 

Under 10,(X)0 population 

10,000 and under 100,000 population. .. 

100,000 and under 500.000 population. . 

500,000 population and over 

One-establishment companies 

Under 10,000 population 

10,000 and under 100,000 population... 

100,000 and under 500,000 population. . 

500,000 population and over 



Nuraberof 

workers 



A vernse 

hourly 

earnings 



43 
533 

312 



1. 502 
509 
802 
131 



$0,268 

. 2113 
. 288 



2,670 

1.356 

1,074 

240 



(') 



.204 
.170 
.220 



.196 
.160 
.217 
.258 



1 Le; than 3 plants; no average computed. 
Source: U. S. Bureau of Labor Statistics. 

Since there were very few unionized plants and practically no 
women are employed in the fertilizer industry, no special analysis has 
been made of the importance of these factors in the differential in 
average hourly earnings between employees of large and small com- 
panies doing similar work. Race may be of more importance, since 
a substantial number of Negroes were employed in the industry^ par- 
ticularly in the South; however, no data were available for this 
industry on average hourly earnings by race in plants owned by 
large and small companies . 



APPENDIX F 

CYCLICAL STABILITY OF EMPLOYMENT IN LARGE AND 
SMALL COMPANIES IN 10 INDUSTRIES 1 

In an attempt to test the relative stability of employment provided 
bj* large and small firms, special tabulations were made from reports 
to the Bureau of the Census showing cyclical changes in total employ- 
ment and pay rolls for the 4 or 8 largest companies, separately from 
the other companies, in each of 10 manufacturing industries. The 
years covered were 1929, 1933, 1935, and 1937. The period thus 
includes the years marking the high point of business activity in the 
twenties, the depth of depression in 1933, and the subsequent early 
years of recovery. The industries include shoes, cement, flour, meat 
packing, steel, tin cans, and other tinware, paints and varnishes, paper, 
soap, and petroleum refining. For petroleum refining, tabulations 
cover the 8 largest companies, and in all other industries the 4 largest. 

The degree of stability of employment and pay rolls shown was 
quite different in the different industries, and there is no conclusive 
evidence to indicate that size alone is a major factor in employment 
stability. The data assembled here relate only to manufacturing and 
cover only a very few industries. It is clear, from this limited record, . 
however, that in some industries there are forces which in the pr~ + . 
have prevented the largest concerns from providing as stable employ- 
ment and earnings in times of depression as the smaller concerns taken 
as a group, even where their position is outstanding. In other indus- 
tries the reverse is true. In considering the data presented here, it is 
important to. note that the measure of stability for the group of 
companies exclusive of the 4 (or 8) largest concerns reflects the effects 
both of changes in employment and pay rolls in established concerns 
in operation throughout the period and of firms coming into and drop- 
ping out of the industry. Thus, many individual small companies- 
may well have had a more favorable record than the large companies, 
while others had a less favorable one. All this is necessarily concealed 
by the summary form of the statistics. 

In a majority of the 10 industries studied, the 4 (or 8, in the case of 
petroleum) largest companies cut their employment and wage pay- 
ments more from 1929 to 1933 than the rest of the concerns in the 
same industry. These included the manufactures of soap, cement, 
flour, meat packing, and paint and varnish, and the companies engaged 
in petroleum refining. In the soap industry the small companies 

1 The contents of this chapter were prepared by Edwin M. Martin, Marshall Spaulding, Manuel 
Cambouri, and Harry Brenner, of the Temporary National Economic Committee Studies Section of the 
Bureau of Labor Statistics, with the cooperation of the Bureau of the Census, which generously arranged, 
for special tabulations by companies, from its f'ata by individual establishment. 

This task could not have been undertaken without the guidance of the study, made by Mrs. Grace Knott, 
for the National Resources Commit tee, of the 4 largest companies in each industry, based on the 1935 Census 
of Manufactures. The list of the 4 largest companies used in the present tabulation is her ranking as of 
1935 on the basis of the average number of. employees during the year. Her lists of the establishments 
controlled by each of these companies in 1935 have also been invaluable. 

81 
J25S849 — 40— No. 14 -7 



82 



CONCENTRATION OF ECONOMIC POWER 



actually increased their employment by about 15 percent from 1929 
to 1933, while employment in the 4 largest companies declined 10 
percent. In the other industries the differences in the record of the 
large companies and the other companies in the industry were not 
great. 

The four largest concerns decreased their employment from 1929 
to 1933 by less than the smaller concerns in the shoe, paper, and steel 
industries. As compared to 1929, the four largest companies in the 
ateel industry had reduced their employment by 1933 by only half 
as much as the other companies in the same industry. 

These changes are summarized in two forms: In tabic 44 the per- 
centage change in the total number of employees is given separately 
for the industries in which the four largest companies provided most 
sustained employment and for those in which the balance of the 
industry had the better record in three periods: 1929-33, 1929-35, 
and 1929^37. The level of employment for each of the 3 years 1933, 
1935, and 1937 relative to 1929 is shown in table 43. 

Table 43. — Stability of employment in large and- small concerns in 10 industries, 

1929-37 



tfndcx— 1929=1001 



1929 



Boots and shoes: 

Co) 4 largest companies 

(6) All other companies 

Cement: 

(a) 4 largest companies 

(6) A 11 other companies 

Flour and other grain mill products: 

(a) 4 largest companies 

(6) All other companies 

Meat packing: 

(a) 4 largest companies 

(6) All other companies 

Paints and varnishes: 

fa) 4 largest companies^ 

• N A.11 other companies 

Paper: 

(a) 4 largest companies 

(6) All 6ther companies 

Petroleum refining. 

(a) 8 largest companies.. 

(6) All other companies 

Soap: 

(a) 4 largest companies 

(6) All other companies 

Steel works and rolling mills: 

(a) 4 largest companies 

(6) All other companies 

Tin cans and other tinware: 

(o) 4 largest companies 

(h) All other companies 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100. (P- 



100.0 

100.0 



100.0 
100.0 



100.0 
100.0 



1933 



104.6 
90.0 



42.6 
50.3 



80.5 
87.5 



89.7 
96.4 



87.2 
84.0 



81.8 
92.8 



90.9 
116. 7 



78.4 
55.6 



73.5 
75.4 



109.6 
95.6 



53.0 | 
67.4 ! 



89.3 
100.7 



93.7 
97.7 



100.4 
92.5 



107.0 
99.0 



94.8 
100.9 



92.7 
78.9 



87.9 
85.8 



1061 
104.6 



60.6 
90.3 



81.6 
102.7 



100. 
109.7 



105.7 
109.5 



115.5 
106.0 



101.9 
105.7 



104.2 
84.4 



119.1 
108.3 



118.1 



On the recovery, as indicated in the second section of table 2, the 
industries were evenly divided bctweeh those in which the large com- 
panies had restored employment to a level more nearly approaching 
that of 1929 than the other firms in the industry, taken as a group. 
To the group in which large companies provided a relatively higher 
level of employment in 1933 (steel, shoes, and paper) were added 
paints^and varnishes and the manufacture of tin cans and other 
tinware. 



(0N( KXTKATION OF ECONOMIC POWER 



83 



Table 44.— Relative stability of employment provided by large and small concerns in 

10 industries 



4 larccst companies provid 


1 ibility 


All other c... ii. in? provide more stability 


(l) 


(3) ! (4) 

1 1 


(5) 


(8 ' (7) 


(8) 




Image 

■st 

hange 
other 

in per- 

hange 




hange 
other 

liange 
est 


6§ 



Industry 



>w jrwt.--.i- — 



CHANGE, 1929-3" 

Steel works and rolling mill 

products -21.6 -44. 4 

Boots and shoes '. . +4.6-10.0 

Paper -12.8-18.0 



CHANGE, !920-3p 



14.6 
3.2 



CHANCE, 1(129-33 • 

Soap - +16.7 

Petroleum refining — 7.2J 

Cement —49.7: 

Flour and other grain mill 

products ..—12.5 

Meatpacking ...i —3.61 

Paints and varnishes .. .. — i9.8i 

Tin cans and other tinware —24. 6 



Boots and shoes.. .. J +9. 6i -4.4j 14.0 

Steel works and rolling mill 

products , -7.3-21.1 

Paper.... +7.0; -1.0 



Paints and varnishes 

Tin cans and other tinware . 



CHANGE, 1929-37 



+.4 1 -7! 5 



13.8 
S.O 



.J-12.li-14.2l 2.1 



CHANGE, 1929-35 

Petroleum refining __ 

Cement 

Flour and other grain mill 

products 

Soap 

M eal jacking 

CHANCE, 1929-37 



. +4.21-15.61 

Steel works and rolling mill I 

products +19.11 +8.3i 

Paper... . ... +15.5 +6.0 

Boots and shoes... .. +0. li+4. fi 



+5.8 
-32.6 

+.7 
+.9 
-2.3 



10.8 
9. 5 
1.5 



Cement.... . ... -9.7-39.4; 29.5 

Flour and other grain mill 

products +2.7-18.41 

Tin cans and otln -r tinware. . ,]+18. 1 —.61 

Meatpacking.- ,.|+9.7 

Paints and varnishes ■ +9.5' +5. 7| 

Petroleum refining : ] +5. 7 +1.9; 



-9.2 
-47.0 



-10.7 

-5.2 



15.0 
14.4 

11.4 
6.1 
4.0 



21.1 
18.7 
9.7 
3.8 
3.8 



In petroleum refining, cement, flour, soap, and meat packing, the 
reverse was true. By 1937, after another 2 years of recovery, much the 
same situation prevailed as in 1935. except that the other companies 
than the large ones in the tin-can industry had advanced employment 
much more than the large companies relative to 1929. 

It is evident from this record that the stability of employment and 
earnings are not related either to the degree of concentration in the 
industry or the nature of the goods produced. In each category are 
industries making consumers' goods and industrial goods; and those 
characterized by many small- or moderate-sized companies as well as 
those in which a few large companies form a major portion of the 
industry. 

The general story is much the same when total wage payments are 
used instead of employment as the criterion of stability from a period 
of high activity to depression, although the portion of the larger con- 
cerns may be slightly better. The only industry in which the relative 
position of the largest companies is "hanged is the manufacture of 
tin cans. In this case, although the four largest concerns did not 
maintain employment as well as th remainder of the industry from 
1929 to 1933, their wage payment.* in 1933 were at a higher level 



84 



CONCENTRATION OP ECONOMIC POWER 



relative to 1929 than those of the remainder of the industry. Data 
for wage payments similar to those for employment are given in 
tables 45 and 46. 



Table 45. — Stability of wage payments in large and small concerns in 10 industries, 

1929-87 

[Inae*— 1929=100] 



Boots and shoes: 

(a) 4 largest companies 

(6) All other concerns 

Cement: 

(a) 4 largest companies-.- 

(6) All other concerns 

Flour and other grain-mill products: 

(a) 4 largest companies.. 

(6) All other concerns 

Meat packing: 

(a) 4 largest companies 

(6) All other concerns." 

Pair's and varnishes: 

iu) 4 largest companies 

(6) All other concerns 

Paper: 

(a) 4 largest companies 

(6) All other concerns 

Petroleum refining: 
' (a) 8 largest comparjies 

(6) All other concerns 

Soap: 

(a) 4 largest companies 

(6) All other concerns 

Steel works and rolling mills: 

(a) 4 largest companies 

(o) All other concerns 

Tin cans and other tinware: 

(a) 4 largest companies 

(6) All otheni concerns 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100:0 

100.0 



100 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



100.0 
100.0 



82.5 
60.0 



22.6 
31.5 



61.5 
65.4 



65.0 

71.8 



51.7 
58.2 



61.2 
57.3 



65.1 

74.7 



68.3 

87.4 



41.2 
34.6 



00.9 
56.1 



1935 



104.1 
72.0 



35.1 
46.9 



76.0 
77.7 



84.5 
80.6 



83.9 
73.0 



86.3 

77.4 



80.9 
88.5 



81.2 
79.7 



61.4 
74.2 



1937 



106.5 
82.0 



54.1 
78.1 



84.2 
86.9 



103.5 
103.1 



106.4 
99.0 



110.1 
99.9 



108.1 
105. 1 



110. 5 
79.2 



118.4 
108.9 



94.8 
103.4 



Table 46. — Relative stability of wage payments provided by large and small concerns 

in 10 industries 



4 largest companies provide more stability 



(1) 



Industry 



CHANGE, 1929-33 

Boots and'shoes 

Steel works and rolling" mill 

products 

Tin cans and other tinware 

Paper _• 



CHANGE, 1929-35 



Boots and shoes 

Paints and varnishes. 
Paper .- 



Steei worts and rolling mill 

products 

Tin cans and other tinware 

Meat packing 

Soap 



(2) 



c o ° 

si"** o 
Ph 



-58. 8 
-39.1 
-38.8 



+4.1 
-16.1 
-13.7 



-33.2 
-25.8 
-15.5 
-18.8 



(3) 



-65.4 
-43.9 

-42.7 



-28.0 
-27.0 
-22.6 



-30.1 
-19.4 
-20.3 



(4) 






4.8 
3.9 



32.1 
10.9 



5.4 
4.3 
3.9 
1.5 



All other concerns provide more stability 



(5) 



(6) 



Industry 



(7) 



CHANGE, 1929-33 

Soap. - 

Petroleum refining. 

Cement. 

Meat packing 

Paints and varnishes 

Flour and other grain mill 
products 

CHANGE, 1929-35 

Cement 

Petroleum refining 

Flour and other grain mill 
products 



-25.3 
-68.5 
-28.2 
-41.8 



-34. 6 



-53.1 
-11.5 



-22.3 



(8) 

.5 -a 
3 u 

£- i 



12.6 -31.7 



-34. y 
-77.4 
-35.0 
-48.3 

-38.5 



-64.9 
-19.1 



9.6 
8.9 
6.8 
6.5 



11.8 

7.6 



CONCENTRATION OF ECONOMIC POWER 



85 



Table 46. — Relative stability of nag: paynn nts provided by large and stnall concerns 
,n to industries — Continued 



4 largest companies provide more stability 


All other concerns pro\ 


ide more stability 




(1) 




(4) 


(5) 




6) 


(8) 


Industry 


Percent change 
for 4 largest 

Percent change 

for Ml other 
concerns 


5 


Industry 




Percent change 
. fur nil other 

concerns 

Percent change 

for 4 largest 


£ on 

S — 

7 ~ 

cog 

— -- w 

p 


CHANCE, 1925-37 




+ 10.5 -20. S 


31. 3 
24.5 

9.5 
7.1 
3. (i 

.4 


CHANCE, 1929*37 

Cement 

ins and other tinware 

I- lour and other grain products. 


-21.9-45.9 
+3.4' -5.2 
-13.1-15.8 


24 




+(i.5-18.0 

+10.1! -.i 

+ 18. 1 


8 6 




2 7 


Steel works and rolling 


mill 




Paints and varnishes 

Petroleum refining 

Meat packing.. 




+6.4 -1.0 

+8. 1 +5. 1 
+3. . r > • 3 1 


. 



After the recovery of L935 and 1937, however, the position of the 
four largest concern? in each industry was relatively better than that 
of the smaller concerns in more industries and by a larger margin when 
stability is measured by wage payments rather than by employment. 
Presumably this reflects the major conclusion of this study that for 
various reasons the largest companies in an industry pay higher wages 
on the average than the small companies. 

This analysis has been directed solely at the problem of stability 
during a business cycle depression. It would also be of great interest 
to explore the effectiveness with which large concerns, as compared 
with small concerns, meet the problem of seasonal fluctuations in 
employment in each of a number of representative industries. 

Ttclmical Limitations oj, the Data. 

The data on which these comparisons are based are not entirely 
satisfactory. The necessity of using* figures lor the entire year 1933, 
a year in which employment end earnings were somewhat abnormal 
in certain industries, due to the enactment of the National Industrial 
Recovery Act in June of that year, prevents placing too much reliance 
on them as an indicator of the record of large or small agencies in 
the cycle from prosperity to depression. 

Furthermore, the figures may understate the stability of employ- 
menl offered by the large concerns. Most of them are engaged in 
making a fairly wide range of products, and thus may be able to shift 
workers making products hard hit by depression to the production 
of goods with a more stable demand. Such a shift would be more 
difficull for the smaller companies. It would not be reflected Loathe 
figures presented here which represent only the workers of the four 
largest companies in each industry who are employed in establish- 
ments classified in that industry/ They do not represent the total 
volume of employment provided by these companies. 

In addition, there are certain technical difficulties arising out of the 
nature of census reports which, in brief, result in giving, in these tabula- 
tions, not the total employment of a corporation as a whole (e. g., 



86 



CONCENTRATION OF ECONOMIC POWER 



General Motors), but the employment of those plants of a corporation 
which are engaged in a particular industry, as defined by the Census 
of Manufactures. Thus, the data are reported to the Census Bureau 
by establishments. To secure totals for each of the four largest 
companies it is necessary to add the figures for all establishments con- 
trolled directly or indirectly by each company, which are classified 
by the Census Bureau within the industry under analysis. For years 
prior to 1935 the figures given here include all establishments owned 
by one of the four largest companies in 1935, whether or not operated 
in that year, regardless of by whom owned or operated in prior years, 
except that establishments whose industrial classification has changed 
during the period due to a change in the proportion which different 
products were in the total output, have been eliminated in all years. 
But in one or two cases when it was known that a change in industrial 
classification represented a complete change in the character of out- 
put, the figures for years in which the plant was included in a covered 
industry have been included. For 1937 the list of establishments has 
included those establishments owned by the four largest concerns 
in 1935, regardless of whether owned by one of the four largest in 1937, 
plus those built by one of the four largest since 1937, but has excluded 
establishments purchased from a smaller concern by one of the four 
largest since 1935. The purpose of all these decisions has been to 
secure the fairest possible comparison of the stability of employment 
and wages provided by large and small concerns through the depres- 
sion years, unaffected by changes in ownership between the two groups 
of companies. 

The following table 47 gives the size of each group of companies, as 
measured by employment, in 1929. 

Table 47. — Average annual number of employees — 1929 



Industry 



Boots and shoes 

Cement. 

Flour and other grain mill products 

Meat packing 

Pajnts and varnishes 

Paper.. '.. 

Petroleum refining (8 largest) 

Soap 

Steel works and rolling mills 

Tin cans and other tinware 



4 largest 


All other 


companies 


concerns 


40, 047 


165, 593 


12, 439 


20,929 


6,296 


20, 732 


64,278 


57, 082 


8,552 


20, 659 


13, 403 


89,917 


52, 444 


28, 152 


9,538 


4,825 


179, 422 


245, 152 


21, 624 


9,873 



Percent, 4 
largest 
of total 



19.47 
37.28 
23.29 
52.96 
29.28 
12.97 
65.07 
66.41 
42.26 
68.65 



INDEX 



BEAL, ARTHUR F. Man-hour statistics for 105 selected industries; Page 

cited (n.) 1 42 

BENAY, M. ADA. Differentials in industrial wages and hours in the ■ 

United States: cited (n.) 46 

BONUS PLANS. .See Production Bonuses. 
BOOT AND SHOE INDUSTRY: 

Earnings of workers, differentials- .. 5 

Size of community 7-8 

Union v. nonunion plants 8 

Earnings of workers, hourly: 

1939. By size of company; comment and table 12 . 31-32 

Employment: 

1929. Average annual number of employees, 4 largest com- 
panies, all other concerns, percent 4 largest of total; comment 

and table 5 86 

1929-1937. Stability of employment in large and small concerns, 

1929, 1933, 1935, 1937; index"; comment and tables 1-2 81-83 

Wage payment: 

1929-1937. Stability of wage payments in large and small con- 
cerns, 1929, 1933, 1935. 1937; index; comment and tables 

3-4 . 84-86 

BRENNER, HARRY. Coauthor of appendix F 81 

Coauthor of chapter 3 27 

BUREAU OF LABOR STATISTICS: 

Average hourly earnings in the fertilizer industry; cited (n.) 75 

Average hourlv earnings in the radio manufacturing industry; cited 

(n.) . 47 

Earnings and hours in the explosives industry, October 1937; cited 

(n.) . . 57 

Earnings and hours in the soap industry, January 1938; cited (n) 61 

Hourly earnings data compiled bv, scope of 45-46 

CAMBOURI, MANUEL. Coauthor of appendix F 81 

Coauthor of chapter 3 27 

CENSUS OF MANUFACTURES: 

Hourlv earnings data compiled in 1933, 1935, 1937; scope of 42-43 

CIGARETTES AND TOBACCO: 

Concentration, degree of, 1935: table 8 24 

Earnings of workers: Hourly: 

Differentials ; Race and size of company 20 

Differentials: L^nionization and size of company 20 

COAL MINING: BITUMINOUS: 
Earnings of workers: Hourly: 

1936. By size of establishment: Captive and noncaptive union 
underground mines, and noncaptive nonunion underground 
mines, respectively, bv mining regions; comment and table 13. . 32-34 

CONCENTRATION IN INDUSTRY: 

1935. Degree of concentration in selected industries; comment and 

table 8 24 

EARNINGS OF WORKERS. See WAGE STRUCTURE. 
ELECTRICAL MANUFACTURING INDUSTRY:, 

Divisions of with distinct wage structures 5 

Earnings of workers: Hourly: 

1937. All workers, by skill; sex by skill; table 4.. 17 

Production bonus system 21 

87 



g# INDEX 

EMPLOYMENT: , . Page 

Cyclical stability 81 

Statistics : 

1929. Average annual number of employees in each of 10 named 
industries, by 4 largest companies, all other concerns, percent 

4 largest of total ; comment and table 47 86 

1929-37. Stability of employment in large and smail concerns 
in each of 10 named industries, 1929, 1933, 1935, 1937; index: 

comment and lablcs 43-44 . _ _ .. i Sl-83 

EXPLOSIVES INDUSTRY : 

Concentration, degree of, 1935; table 8 24 

learnings of workers, hourly: 

Differentials: Unionization and size of company 20 

1937. All workers-, by skill; sex by skill omitted; table 4 17 

1937, October. By skill and size of company; comment and 

table 26 ..,._ " 60 

1937, October. Distribution of plants, by type of plant; -com- 

. ment and table 24.. — 58 

1937, October. Percentage distribution of workers, by earnings, 
type of plant, and skill; comment and table 25 59 

1937, October. Percentage distribution of workers, by skill and 

size of company ; comment and table 27 60 

Earnings of workers, overtime 60 

Earnings of workers, weekly 60 

Hours of work, large and small companv differentials 60 

LAIR LABOR STANDARDS ACT (June 25, 1938. 52 Stat, 1060): 

Industrv approach to wage structure under act _ . 4 

FERTILIZER INDUSTRY : 

Concentration, degree of, 1 935; table 8 24 

Bureau of Labor Statistics data, i 75 

Census of Manufactures, 1937, data 75 

Earnings of workers, hourly: 

Differentials : Unionization and size of company _. 20 

More important by size of community than by size of concern, _ 16 

1938. All workers, bv skill; males, bv skill; females, all workers; 
table 4 "_ . '_ 17 

1938. Spring months. By region and size of community, and 

size of company; comment and table 2 13-14 

1938. Spring months. By *ize of community, size of company, 

and wage district; comment and table 41 77-78 

1938. Spring months. By type of plant aud size of company; 

comment and table 6 19-20 

1938. Spring mouths. By wage district, type of plant, and size 

of company ; comment and table 40 . - '. . - 76 

1938. Spring months. In the lower southern wage district, • 
size of companv and size of community; comment and table 

42 . : > 79 

Integration in . 76, 78 

Negroes ... 79 

Unionization ■ _.•__'.._, 79 

J U R NITURE I X DUSTRY : 

Earnings of workers differentials: 

Union i>. nonunion plants ■. - - 8 

FURNITURE INDUSTRY; METAL, OFFICE: 
Earnings of workers, hourly: 

1937, October. By size of plant in terms of number of employees : 

comment and table 10 30 

FURNITURE INDUSTRY: WOOD. HOUSEHOLD: 
Earnings of workers, hourly: 

1937, October. By size of plant in terms of number of employ- 
ees; comment and table 9 ._ 29-30 

GLOSSARY: 

Size of community ... - - 

Union plant -- 

Wage structure — 2 

HOSIERY INDUSTRY: 

Branches of, with distinct wage structures 



INDEX §g 

HOSIERY INDUSTRY: FULL-FASHIONED: 

Earnings of workers, hourly: Page 

1938. By wage district, viz, northern, by size of plant, extent of 

unionization; southern, bv size of plant, comment and table 11- 31 
HOURS OF WORK: WEEKLY: 
Explosives industry: 

Large and small company differentials 60 

Meat-packing industry: 

Large and small company differentials 72 

Soap industry: 

1938, January. By size of company, sex, skill, and occupation; 

comment and table 32 ' _ _ 65-66 

INDUSTRIAL LOCALIZATION: 

Wage structure and '. 6 

IRON AND STEEL INDUSTRY: 
Earnings of workers, hourly: 

Differentials, size of company 22-23 

Regional figures prohibited by Census Bureau regulations 14 

Southern v. northern State variation? 14 

Employment: 

1929. Average annual number of employees, 4 largest companies, 
all other concerns, percent 4 largest of total; comment, and 

table 5 86 

1929-37. Stabilitv of emplovment in large and small concerns, 

1929, 1933, 1935, 1937; index; comment and tables 1-2 81-83 

Wage payment : ' 

1929-37. Stability of wage payments in large and small con- 
cerns, 1929, 1933, 1935, 1937; index: comment and tables 3-4.. 84-86 
LUBIN, ISADOR. Letter transmitting T. N. E. C. Monograph No. 14.. ix-x 

M ARTIN, EDWIN M. Coauthor of chapter 3 . 27 

And others. Coauthors of appendix F 81 

MEAT-PACKING INDUSTRY: 

Concentration, degree of, 1935; table 8 24 

Earnings of workers, differentials: 

Race and size of company 18, 71 

Size of community . 7 

Skill, large v. small companies 71 

Union v. nonunion plants 8 

Unionization and size of company 20 

Earnings of workers, hourly: 

1937. All workers: sex by skill: table 4 117 

1937, December. By wage district and type of company, males 

by skill, and females; comment and table 1 13 

1937, December. By wage district, type of company, sex and 

skill; comment and table 36 70 

1937, December. Northern wage district, by size of community 

and type of company; comment and table 3 15 

1937, December. Percentage distribution of workers, by wage 

d'strict and type of company; comment and table 37__. 70 

Earnings of workers, weekly: 

1937, December. By wage district, size of company, sex and 

skill: comment and table 39 73 

Employment: 

\92'J. Average annual number of en 4 largesl com- 

panies, all Other concerns, percent 1 largesl of total; comment 

and table 5 86 

192U 37. Stabilitv of emplovment in large and small concerns, 

1929, 1933, 193o, 1937; index; comment and tables 43-44 81-83 

Hours of work, weekly: 

Larue v. small company differentials 72 

Production bonus system: 

Percentage total labor force working under 21 

Unionization: 

Large v. small companies, workers' hourly earnings differentials.. 72 

Wane payment ; 

1929-37. Stabilitv of wage payments in large and small con- 
cerns, 1929, 1933. 1935, 1937: index: comment and tobies 45-46. 84-86 



90 INDEX 

NATIONAL INDUSTRIAL CONFERENCE • BOARD. Report No. 

238, differentials in industrial wages and hours in the United States; Page 

cited (n .) ' 45 

NATIONAL RECOVERY ADMINISTRATION: 
Codes: 

Industry approach to wage structure 4 

Regional variation in wages recognized 6 

NEGROES: 

Earnings differentials 9-10 

Fertilizer industry employment 79 

OVERTIME RATES. See Wage Structure. 

PERLMAN, JACOB. Hourly earnings of employees in large and small 

enterprises; T. N. E. C. Monograph No. 14, written bv x 

PRODUCTION-BONUS WAGE PAYMENT: 

Differentials, size of company 21 

PRODUCTION-BONUSES '...'. 5-6 

PUBLIC CONTRACTS ACT (June 30, 1936. 49 Stat. 2036): 

Industry approach to wage structure, procedure under act 4 

R unal variation in minimum rates recognized 6 

RADIO' MANUFACTURE: 

Concentration, degree of, 1935; table 8 24 

RADIO MANUFACTURE: PARTS AND TUBES BRANCH: 

Earnings of workers in relation to size of establishment 54-55 

RADIO MANUFACTURE: SETS BRANCH: 
Earnings of workers, hourly: 

1 937. All workers, by skill; sex, by skill; table 4 17 

1937". By occupation and size of company; table 5 18 

1937, August. By sex, skill, and size of company; comment and 

table 18 . 48 

1937, August. By skill, occupation, sex, and size of company; 

comment and table 21 50-53 

1937, August. Percentage distribution of all workers, according 
to hourly earnings, bv type of company and skill; comment 

and table 19 ___.!__. 49 

1937, August. Percentage distribution of all workers, by .size of 

company, sex, and skill; comment and table 20 50 

1937, August. Percentage distribution of male and female 
workers, respectively, bv size of company and skill; comment 

and tables 22-23 . 53-54 

Earnings of workers differentials: 

Unionization and size of company 1 _ 20 

Production-bonus system 21 

SPAULDING, MARSHALL. Coauthor of appendix F 81 

Coauthor of chapter 3 ' 27 

SOAP INDUSTRY:" 

Concentration, degree of, 1935; table 8 24 

Earnings of workers, hourly: 

193S. All workers, by skill; sex, by skill; table 4. j> . 17 

1938. By occupation and size of company; table 5 18 

1938, January. Bv size of company, sex, and skill; comment and 

table 28.-1 '_ ." 62 

1938, January. By size of company, sex, skill, alid occupation; 

comment and table 32 . 65-66 

1938, January. Distribution of plants according to earnings of 

all workers, by size of company; comment and table 29 63 

1938, January. Percentage distribution of workers according to 

earnings, by size of company; comment and table 30 63 

1938, January. Percentage distribution of male and female 
workers, resp., according to earnings, by skill and size of com- 
pany; comment and tables 33-34 66-67 

Earnings of workers: overtime: 

By size of company- . 68 

Earnings of workers, weekly: \j 

1938, January. By size of company, sex, skill and occupation; 

comment and table 32 65-66 

_ 1938, January. Percentage distribution of Workers, by size of 

company: comment and table 35 T ..! 67-68 



INDEX 91 

SOAP INDUSTRY— Continued. Page 

Earnings of workers differentials: Unionization and size of company. 20 

Employment: 

1929. Average annual number of employees, 4 largest com- 
panies, al 1 other concerns, percent 1 largest of total; comment 

and table 5 _. 86 

1929-37. Stability of employment in large and small concerns, 

1929, 1933, 1935, 1937; index; comment and tables 43-44 81-83 

1938, January. Percentage distribution of workers, by sex, skill 

and size of company; comment and table 31 64 

Hours of work, weekly: 

1938, January. By size of company, sex, skill and occupation; 
comment and table 32 • 65-66 

Production bonus system* ■ 

Size of company differential 21 

Wage payment: 

1929-37. Stability of wage payments in large and small con- 
cerns, 1929, 1933, 1935, 1937; index; comment and tables 45-46. 84-86 
STEEL AND IRON INDUSTRY. See Iron and Steel Industry. 
TABBERT, LEWIS E. Responsible for tabulations of average hourly 

earnings in factories reporting to the Bureau of Labor Statistics 35 

UNION v. NONUNION PLANTS: 

Hourly earnings differentials 8 

UNIONIZATION: 

Fertilizer industry .- 79 

Meat-packing industry: 

Large v. small companies workers' hourly earnings differentials.. 72 
WAGE PAYMENT: 

Earnings differentials and wage payment methods 5 

Production bonus plans 5-6 

1929-37. Stability of wage payments in large and small concerns in 
each of 10 named industries; index; 1929, 1933, 1935, 1937; com- 
ment and tables 45-46..-.' 84-86 

WAGE RATES: 

■ Economic significance slight '.. 2 

Hourly wage rates and piece rates, comparison not/ possible . — 2 

WAGE'STRUCTURE: 

Defined .-- 2 

Industrial localization, effect of r 6 

Industry approach: 

Fair Labor Standards Act (June 25, 1938, 52 Stat. 1060) 4 

N. R.A. codes 4 

Public Contracts Act (June 30, 1936. 49 Stat. 2036) 4 

Interindustry comparisons . 5 

Interplant comparisons 4 

Occupational differentials.- 9 

Regional variations: 

N. R. A. recognition of ; ' 6 

Public Contracts Act, recognition of 6 

Size of community variations 7-8 

WAGE STRUCTURE: HOURLY EARNINGS: 
Boot and shoe industry: 

Differentials . 5 

1939. By size of company; comment and table 12 .. 31-32 

Comparison of data compiled by the Bureau of Labor Statistics and 

the Census of Manufactures '..: 45-46 

Electrical manufacturing differentials ; 5 

Differentials: « 

Product and size of company 

Race and size of company ; cigarettes and tobacco 

Race and size of company ; meat-packing . 18 

Racial variations 9-10 

Sex basis variations '. 9-10 

Size of community differentials -- m 7 

Size of community; boot and shoe industry — 7-8 

Size of community; meat-packing 7 

Size of company 1 1-26 



92 INDEX 

WAGE STRUCTURE: HOURLY EARNINGS— Continued. 

Differentials— Continued. Page 

Size of company; general characteristics of variant industries 23-24 

Size of company ; iron and steel industry _ 22-23 

Size of establishment . 27-29, 42-46 

Southern v. northern areas 6-7 

Southern v. northern State variations; iron and steel industry 14 

. Union v. nonunion plants * 8 

Union. v. nonunion plants; boot and shoe industry 8 

Union versus nonunion plants ; furniture industry 8 

Union versus nonunion plants; meat-packinp- 8 

Unionization and size of company , 20 

Wage payment and earnings differentials 5 

Durable and nondurable goods industries: 

1937, August. By size of establishment; comment and table 15. 39-40 

Electrical manufacturing: 

1937. All workers, by skill; sex by skill; table 4 17 

Explosives industry: 

1937. All workers, by skill; sex by skill omitted; table 4 17 

1937, October. Bv skill and size of company; comment and 

table 26 60 

1937, October. Distribution of plants, by type of plant; com- 
ment and table 24 58 

1937, October. Percentage distribution of workers, by skill and 

size of company; comment and table 27 60 

1937, October. Percentage distribution of workers, by earnings, 

type of plant and skill; comment and table 25 59 

Fertilizer industry: 

1938. All workers. By skill; males, by skill; females, all work- 
ers; table 4 17 

1938, spring months. By region and size of community, and 

size of company; comment and table 13-14 

1938, spring months. By type of plant and size of company; 

. comment and table 6 19-20 

1938, spring months. By wage district, type of plant, and size 

of company; comment and table 40 76 

1938, spring months. By size of community, size of company 

and wage district; comment and table 41 77-78 

Fertilizer industry; dry-mixing plants: 

1938, spring months. In the lower southern wage district, by 
size of company and size of community; comment and table 42. 79 
Furniture industry; metal, office: 

1937, October. By size of plant in terms of number of employees 

comment and table 10 30 

Furniture industry; wood, household: 

1937, October. By size of plant in terms of number of employ- 
ees; comment and table 9 29-30 

Hosiery industry: 

Hosiery workers' earnings differentials - 5 

Hosiery industry: Full-fashioned: 

1938. By wage district, viz: northern, by size of plant, extent of 
unionization; southern, by size of plant; comment and table 11. 31 

Industries reporting to the Bureau of Labor Statistics: 

1937, August. Manufacturing industries. By size of establish- 
ment and industry; comment and table 35-40 67-76 

1937, August. Selected industries. By size of establishment, 

13 named industries; comment and table 16 -11 

Industries reporting to 1937 Census of Manufactures: 

1937. Manufacturing industries; in relation to size of establish- 
ment; comment and table 17 42-46 

Iron and steel industry: 

Regional figures prohibited by Census Bureau regulations 1-4 

Meat packing industry: 

1937. All workers; sex by skill; table 4 17 

1937, December. By hourly wage district and type of company, 
males by 'Skill and females; comment and table 1 13 



INDEX 93 

WAGE STRUCTURE: HOURLY EARNINGS— Continued. 

Meat packing industry — Continued. Page 

1937, December. By wage district, type of company, sex, and 

skill: comment and table 36 70 

1937, December. Northern wage district, by size of commu- 
nity, and type and size of company; comment and table 3<S 71 
1937, December. Northern wage district, by size of community 

and type of company: comment and table 3 15 

1937, December. Percentage distribution of workers, by wage 

district and type of company; comment and table 37. _ 70 

Pattern of earnings usually referred to as wage structure 2 

Production bonuses 5-6 

Radio manufacture: Parts and tubes branch: 

Darnings of workers in relation to size of establishme^* 54-55 

Radio manufacture: Sets branch: 

1937. All workers, by skill: sex by -kill; table 4 17 

1937, August. By sex, skill, and size of company: comme 

and table 18. .. 48 

1937, August. By skill, occupation, sex, and size of company; 

ment and table 21 50 53 

1937. August. Percentage distribution of male and female 
workers, respectively, bv size of company and skill; comment 

table»?22 23 . ' 53-54 

1937, August. Percentage distribution of all worker.-, by size of 

company, sex, and skill; comment and Table 20 50 

1937, August. P< rccntage distribution of al! workers, according to 
hourlv earnings In tvpe of companv and skill: eommeni and 

table 1!) 49 

Soap industry: 

1938. All worker?, by skill; sex, by skill: table i.-. 17 
1938, January. By size of company, sex, and skill; commi 

and table 28 62 

1938, January. By size of company. I occupation: 

I'-n 1 and table 32 65-66 

I'J.'iS. January. Distribution of plants according to earnings of all 

workers, by size of company; commenl and table i'.t 63 

.1938, January. Percentage distribution of male and female 
workers, respectively, according to earnings, by skill and size of 

company; comment and tables 33 34 - 66-67 

1938,' January. Percentage distribution of workers according to 

ings, by -ize of company; comment and table 30 63 

Studies; 

National Industrial 'Conference Board. Report 238. Benay. 

Wage and hours differentials: cited in.) . 46 

WAGE STRUCTURE: OVERTIME RATES: 
Electrical goods: 

1937. Number of plants paying extra rates for overtime, by 

size of company: comment, and table 7 _•: '21 

Explosives industry: 

1937. Number of plants paying extra rates for overtime, by 

size of company: comment and table 7 21 

Fertilizer industry : 

1938. Number of plants paying extra rates for overtime, by 

size of company: comment and table 7 - r 21 

Meat-packing: 

1937. Number of plants paying extra rates for overtime, by size of 

company; comment and table 7 - . 21 

Radio manufacture; sets branch: 

1937. Number of plants paying extra rates for overtime, by 

size of company ; comment and table 7 _" 21 

Soap industry, by size of company 6& 

1938. Number of plants paying extra rates for overtime, by 

size of company; comment and table 7.- - 21 



94 INDEX 

WAGE STRUCTURE: WEEKLY EARNINGS: Page 

Explosives industry 60 

Meat-packing industry: 

1937, December. By wage district, size of company, sex and 

skill ; comment and table 39 73 

Soap industry: 

1938, January. By size of company, sex, skill and occupation; 
comment and table 32 65-66 

1938, January. Percentage distribution of workers according to 

weekly earnings, by size of company; comment and table 35 .... 67-68 
WOMEN: , 

Earnings differentials " 9-10 

. o 



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