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8361 27 NOC
Washington, D. C.
April 5, 1938
IN THE MATTER OF
PREVAILING MINIMUM WAGES IN THE MANUFACTURE OF
AEROPLANES, AIRCRAFT ENGINES, PROPELLERS, AC-
CESSORIES, AND THE MANUFACTURING AND FINISHING
OF PARTS
PURSUANT TO SECTION 1(b) OF THE ACT OF
JUNE 30, 1936, PUBLIC ACT NO.846, 74th.
CONGRESS
FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATION IN THE
ABOVE-ENTITLED MATTER BY THE PUBLIC CONTRACTS BOARD FOR
THE CONSIDERATION OF THE SECRETARY OF LABOR
WRITTEN BY - O. R. STRACKBEIN
A public hearing was held before the Public Contracts
Board on March 10, 1938 in the matter of Prevailing Minimum
Wages in the Aircraft Manufacturing Industry, including the
Manufacture of Aeroplanes, Aircraft Engines, Propellers,
Accessories and the Manufacturing and Finishing of Parts.
Notice of the Hearing was sent to all manufacturers of the
aforementioned products listed in recognized commercial reg-
isters, to the Aeronautical Chamber of Commerce of America,
to interested labor organizations, including the International
Association of Machinists and the United Automobile Workers
of America, and to other interested parties. Testimony at
the public hearing was given by the Aeronautical Chamber of
Commerce, by a number of manufacturers of aircraft and air-
craft products, by representatives of the two labor organiza-
tions above mentioned and by the Public Contracts Division of
the United States Department of Labor. A written record was
made of the proceedings.
-2-
SCOPE OF THE EVIDENCE:
1.
The Aeronautical Chamber of Commerce presented a wage
survey covering all branches of the aeronautical industry com-
prehended in the Notice of Hearing. This survey was made by
the Chamber and included 32,792 employees of an estimated total
of approximately 35,000 in the industry (R 32, 34). The survey
was prepared and conducted in a manner calculated to give proper
representation to (1) the various types of equipment, (2) the
uses to which the equipment was destined, (3) size of companies,
and (4) geographical distribution of the industry (R 24, 161-2).
The wage data presented were classified by 5-cent wage intervals,
broken down in appropriate tables to reveal wage differentials
between products, between military and commercial equipment, and
between geographical areas classified as East, Middle-West and
West (Exhibits F and G). The original information was supplied
by the members of the industry in reply to a questionnaire
which called for representative payroll data for one week in
the month of January 1938 (See Exhibit P for a copy of the form).
The representative character of the survey, its adequacy and
accuracy is conceded by the International Association of
Machinists in their supplementary brief, p. 2. The Board finds -
no reason for questioning the authentic and representative
character of the Chamber's wage data and concurs in the con-
clusion reached by the Machinists' Union.
In a supplementary tabulation (Exhibit H) the Chamber
has supplied a breakdown of its wage data by states, based on
the original data presented at the hearing (See R 97-8).
2.
The United Automobile Workers submitted wage data on
approximately ten manufacturers (Exhibit 0); and in a supple-
mental brief submitted union wage rates in effect in certain
automobile factories.
-3-
3.
The International Association of Machinists submitted
wage data summarizing minimum wages written into contracts with
three manufacturers employing 4,759 workers (Exhibit N), and
the wage contracts from which the tabular data were derived
(Exhibits K, L, M). A further and more comprehensive table
(Exhibit J) covering wage data representing 12,706 employees was
also presented.
The Board is of the opinion that the wage data re-
ferred to under (1), (2) and (3) above, supplemented by other
testimony in the record are sufficient for the finding of the
prevailing minimum wage.
WAGE STRUCTURE:
1. PRODUCT DIFFERENTIALS:
An examination of the wage data supplied by the
Aeronautical Chamber of Commerce, classified on the basis of
products covered, namely, aircraft, engines, propellers,
instruments, parts and accessories (Exhibit G), reveals
certain differences in the respective wage levels. These
differences are readily brought out by determining separately
for each product how far the first 25% and the first 50% of
the workers reach in the wage scale. This determination may
be made by the simple statistical operation of locating the
wage interval into which fall the first quartiles and the
medians of the wage frequency table.
The following table shows the different wage levels
existing in the manufacture of the various aeronautical
products as determined by the method just set forth:
First quartile
Median
Product
falls between:
falls between
Aircraft
52.5 - 57.5¢ per hr.
67.5 - 72.5¢ per hr.
Engines
62.5 - 67.5¢
=
=
72.5 - 77.5¢
=
=
Instruments
52.5 - 57.5¢
11
=
72.5 - 77.5¢
#
=
Propellers
57.5 - 62.5¢
If
II
62.5 - 67.5¢
If
=
Parts and
Accessories
52.5 - 57.5$
=
If
62.5 - 67.5¢
=
If
The Board concludes from this table that the wages in
the manufacture of engines are somewhat higher than in the other
branches of the industry; and that the wages in the manufacture
of propellers are higher only when the first quartile is con-
sidered. The table shows that for the remainder of the products
the first quartiles fall within the same wage interval: from 52.5
to 57.5 cents. This is evidence of notable uniformity of wages
in the lower quarter of the wage structure, and since more than
three-fourths of the wage earners in the industry are found in
these remaining branches (Exhibit G), only extraordinary consid-
erations could justify the Board in recommending separate
minimum wages for engines and propellers. These considerations
are lacking. On the contrary, the representatives of the
industry gave testimony pointing to the desirability of finding
one prevailing minimum wage for the entire industry (Exhibit F,
p. 9; R 32, 40, 169-70); and they were supported in their view
by the International Association of Machinists (R 176).
Evidence showing that a degree of overlapping exists in the man-
ufacturing of various products was also received (R 172-6); and
this fact adds to the urgency of uniformity in the minimum wage.
The Board finds that the prevailing minimum wages in
the various branches of the aircraft industry exhibit a suf-
ficient degree of homogencity to make possible the finding of
a single rate applicable to the entire industry.
-5-
2. Geographical Differentials:
Exhibit H presents the wage data gathered by the
Aeronautical Chamber of Commerce in the form of a wage
frequency table arranged in 5-cent wage intervals and
broken down by states, but consolidated with respect to
product. The same number of employees, or 32,792 are
covered by this State Classification as were included under
the product classification considered in the previous para-
graph. Fourteen states are represented in the tabulation
and the following grouping of those states provides a com-
parison of the respective wage levels as reflected in the
incidence of the first quartiles and the medians.
First quartile
The Median
State
falls between:
falls between
California
52.5 - 57.5¢ per hr.
62.5 - 67.5¢ per hr.
Washington
72.5 - 77.50
"
=
77.5 - 82.5¢
II
=
Connecticut
57.5 - 62.50
=
#
67.5 - 72.5¢
=
=
New York
52.5 - 57.5¢
"
=
67.5 - 72.5¢
=
=
New Jersey
67.5 - 72.5$
"
"
82.5 - 87.5¢
"
=
Pennsylvania
47.5 - 52.5¢
If
"
62.5 - 67.5¢
=
If
Maryland
47.5 - 52.5¢
"
If
57.5 - 62.5¢
=
=
Illinois
42.5 - 47.50
"
=
52.5 - 57.5¢
=
"
Indiana
72.5 - 77.5¢
"
=
77.5 - 82.5¢
#
=
Michigan
67.5 - 72.5¢
"
"
87.5 - 92.5¢
11
=
Ohio
52.5 - 57.5¢
=
=
67.5 - 72.50
=
If
Missouri
52.5 - 57.5
=
=
67.5 C 72.50
=
=
Kansas
47.5 - 52.5$
If
=
52.5 - 57.5$
=
=
Oklahoma
47.5 - 52.5¢
"
"
52.5 - 57.5¢
=
=
This tabulation follows the method employed under
paragraph 1, above, and reveals wage differences of grater
magnitude than those existing between the various products.
For example, the first quartile, which is located in the wage
interval which is reached by the first 25% of the workers in
each state, ranges from the 42.5-47.5 cent interval in
Illinois to the 72.5 to 77.5 cent interval in Washington and
in Indiana. This is a spread of 30 cents and such a diver-
gence would ordinarily strongly suggest the establishment of
an appropriate geographical differential. Several other wage
-6-
differentials are visible in the table. Pennsylvania and
Maryland in the Middle Atlantic section, on the one hand, and
Kansas and Oklahoma in the South Central section, on the other,
all fall with respect to their first quartiles into the
47.5-52.5 cent interval. New Jersey and Michigan, also widely
separated, fall into the 67.5-72.5 cent interval. On the
other hand, California and Washington, though located in the
same section of the country, exhibit a difference of 20 cents
between the first quartiles. Illinois and Indiana, adjacent
states, show a difference of 30 cents.
Additional, but narrower, variations, as well as
similarities, are visible in the table, but enough has been
said to show that the differences and similarities follow no
sectional line. Nor does an examination of the medians in the
table lead to a different conclusion. The wage scale for
New York, at both the first quartile and at the median, is the
same as that of Ohio and Missouri. The difference between
Illinois and Indiana at the median is only 5 cents less than
at the first quartile. Obviously there is no clear pattern
from which satisfactory geographical groupings could be made
for the application of geographical wage differentials.
Both the representatives of industry and of organ-
ized labor were of the opinion that a national minimum rather
than sectional minima would meet the condition of the industry
(R 134-6; 176). Freight is no consideration because the planes
are flown from the locality of the factory (R 136).
The Board concludes that geographical differentials
in the prevailing minimum wages do not exist between any
ascertainable sectional divisions.
-7-
PREVAILING MINIMUM WAGE:
The prevailing minimum wage must be found in the
lower part of the wage structure; but it does not, except
possibly in the rarest instance, represent the lowest wage
paid. In order that any wage clearly fulfill the condition
under which it might be described as "prevailing", it should
predominate; it should have superior force and influence in
relation to other wage rates which fall above and below it.
A prevailing minimum wage, although lying in the lower part
of the wage structure, should therefore be the wage which
predominates within its field; it should have superior force
and influence in relation to the lower and higher wages which
surround it within the lower part of the wage structure.
Such a wage is not always clearly revealed in a wage frequency
distribution table. The wage structures of some industries show
such a lack of concentration of workers within single wage
brackets that the provailing minimum wage as described above
is not SO readily located. Under these circumstances other
evidence must be utilized to supplement the statistical
exhibits.
An examination of the wage frequency tables of the
aeronautic industry (Exhibits G and H) shows that this indus-
try exhibits no point of concentration of wages in the lower
part of its wage structure. The following table, constructed
from data contained in both Exhibits G and H, shows the dis-
tribution of the 32,792 wage earners included in the wage
survey submitted by the Aeronautical Chamber of Commerce, by
5-cent wage intervals:
-8-
Wage interval
No.employees
Wage interval
No.employees
17.5 - 22.5¢
2
62.5 - 67.5¢
3,537
22.5 - 27.5¢
28
67.5 - 72.5¢
3,954
27.5 - 32.5¢
70
72.5 - 77.5$
3,773
32.5 - 37.5¢
189
77.5 - 82.5¢
2,847
37.5 - 42.5¢
650
82.5 - 87.5¢
2,154
42.5 - 47.5$
1,364
87.5 - 92.5¢
1,888
47.5 - 52.5¢
2,492
92.5 - 97.5¢
1,298
52.5 - 57.5$
3,299
97.5 -102.5¢
905
57.5 - 62.5$
3,020
102.5 and over
1,322
An examination of this table shows an almost steady
rise, interval by interval, of the number of employees, from 2
in the lowest interval to 3,954 employees in the 67.5 - 72.5
cent interval, and then an almost steady subsidence, interval
by interval. The 67.5-72.5 cent interval, which contains the
maximum number of employees is also the mid-point of the whole
frequency distribution, i.o., one-half of the total employees
fall below and one-half above some point between 67.5 and 72.5
cents an hour. This interval clearly lies above the lower
part of the wage structure and the concentration of employees
in the interval is not very pronounced.
A further difficulty complicates the search for the
prevailing minimum wage.
This lies in the practice of the
industry to employ a. varying but substantial number of learners
in the manufacturing process.
Before proceeding to find the prevailing minimum
wage it is necessary to dispose of the "learner" question.
The evidenceon this subject may be summarized as follows:
1.
The average number of learners in the indus-
try was estimated by the Aeronautical Chamber of Commerce to
represent at least 15% of the personnel in the industry, with
seasonal and company variation (R 49). In some exceptional
instances the proportion of learners might rise as high as 35
or 40% (R 49, 55). The International Association of Machinists
-9-
accepted the Chamber's estimate of the average proportion of
learners and agreed that 15% represented the minimum (R 219).
2.
Employment of learners during the past several
years has been especially pronounced because of the great ex-
pansion of the aeroplane manufacturing industry (R 54,55). The
expansion of the industry may be judged partly by the increase
in the value of the output and partly by the increase in em-
ployment. The following table shows the expansion in output
measured by value of product:*
Year
Military
Commercial
Total
1927
$17,428,000
$8,376,000
$25,805,000
1929
26,183,000
71,769,000
97,952,000
1931
31,921,000
15,231,000
47,152,000
1933
19,859,000
13,626,000
33,485,000
1935
22,807,000
22,407,000
45,215,000
1936
50,481,000
26,629,000
77,111,000
1937
65,831,000
49,161,000
114,992,000
Employment showed an increase commensurate with the
expansion in the value of the product. In 1934 employment was
about 13,000; in 1937 it was about 35,000 (R 44).
3.
This expansion came to a halt in recent months.
The manufacture of commercial aircraft has declined rather
severly (R 45-6). Unless new business trends assert themselves
or unless governmental purchases are expanded, recruiting of
learners will subside to the point of merely supplying such
replacements as the ordinary turn-over in employment may demand
(R 55, 59-60, 72-3, 114-15, 210). On the other hand, repre-
sentatives of the industry anticipate expansion in government
purchases (R 86, 44-5; and Supplementary Brief of the Aeornau-
tical Chamber of Commerce, pp. 16-17).
4.
Representatives of the industry gave uncon-
tradicted testimony that learners are employed in the execution
of government contracts and that during recent years the
* R 27, 28.
-10-
industry could not have dispensed with learners (R57, 77, 211,
and Supplementary Brief of the Aeronautical Chamber of Commerce).
About 10,000 men or 50% of the new personnel employed by the
industry during the last three years began as learners
(Supplementary Brief, p. 20). The International Association
of Machinists sharply challenged the practice of employing
learners, contending that the practice was unnecessary and
represented a means of securing cheap labor (R 200 ff., and
Supplementary Brief of International Association of Machinists).
The United Automobile Workers of America express the opinion
that aircraft manufacturers abuse the word "learner" and retain
employees in the classification of learners long after they
have qualified for the wage rate paid to experienced workers
(Supplemental Brief, p.3).
5.
It is a general practice to employ learners
at 40 cents an hour or at rates approximating 40 cents and
to advance the rate of pay at the end of stated periods of
time, or sooner, according as the learners progress in their
work. High schools and trade schools are usual sources of
learners (R 61, 73, 115).
(a)
The largest company in the industry has an estab-
lished minimum of 40 cents an hour for learners. Learners
who come from training schools may be started at 45 or 50
cents. No learner is retained at 40 cents beyond 4 months at
which time he is advanced 2-1/2 cents an hour or discharged.
Promotion may come sooner. At the end of another four-month
period the procedure is repeated, bringing the learner who
began at 40 cents an hour to 45 cents in eight months. Sub-
sequent advancements are given in a like manner until the
learner reaches his maximum wage, which in the case of riveter
might be 75 cents an hour. Ten steps may possibly be involved
-11-
in the ascent (R 73-4, 81, 89).
(b)
Another company which also employs learners also has
an established minimum of 40 cents an hour. This firm advances
learners 2-1/2 or 5 cents an hour after three months of em-
ployment or less, or transfers them to different work. These
advances continue until 70 or 75 cents an hour is attained in
occupations for which those rates are the maximum, but the
period between advancement may increase to six months as the
higher wages are approached (R 102-4, 112-13).
(c)
A third company, a manufacturer of aircraft engines,
starts high school boys at 40 to 45 cents an hour and trade
school boys at 45 to 50 cents an hour (R 61), while it starts
machine operators at 50-55 cents an hour (R 62). This company
follows no system of periodic wage advances but increased the
wages of learners according to their ability (R 62). Labor
"off the street" is considered unsuitable except for employ-
ment as janitors, material handlers, etc., groups which
represent a very small percentage of the total (R 69).
(d)
The International Association of Machinists testified
that one of their contracts provided for a minimum wage of 62.5
cents an hour, applicable to learners or "probationers"
(R 214-15). The only exceptions to this rate are bona fide
indentured apprentices who receive from 40 to 60 cents. The
minimum of 62.5 cents an hour applies to only 22 workers even
though the next wage bracket is 70-75 cents (R 215) which
applies to 479 workers. Another contract provides for a hiring
rate of 40 cents an hour for minors and 50 cents for adults
with two 10% increases which have been granted, bringing the
rates to 48.4 cents and 60.5 cents an hour, respectively, for
minors and adults. New untrained employees, however, would
enter at 40 or 50 cents according as they were minors or adults
-12-
(R 216; also Exhibits K and L).
(e)
The United Automobile Workers in Exhibit 0 present
evidence showing that in one company the starting wage for
inexperienced workers is 40 cents an hour and 60 cents for
first year journeymen; in another company 200 apprentices
are reported at 40 cents an hour and 40 time-keepers at 45
cents, with no lower wage specified. In the same company
150 sheet metal workers are listed at 60 cents. In a third
company 40 cents is given as the lowest wage paid. This rate
is described as applicable to boys and to run for a period of
three months when a 5-cent increase is granted. A fourth
firm is shown as paying a minimum of 50 cents an hour; a
fifth, a minimum of 40 cents; a sixth, one of 45 cents (paid
to girls); a seventh, one of 50 cents; and an eighth, one
of 40 cents, paid only to helpers, while 60 cents is shown
as the lowest rate paid to other workers than helpers.
(f)
Learners in the industry generally work under the
supervision of trained men (R 61, 77, 100).
(g)
The number of employees now working at the entrance
rate is low. In one company employing approximately 1800
workers, only 37 are at 40 cents, which is the entrance rate
(R 107, 114). In another firm, where employment is between
2500 and 3000, approximately 150 boys fall into the lowest
bracket, which is from 40-45 cents an hour (R 61). Finally,
a company employing about 9000 workers has a very small per-
centage of its workers in the group receiving 40 cents an
hour (R 82, 83).
The Board concludes with respect to learners: (1)
that they form a distinct group separate from trained workers
BO far as wages are concerned; (2) that systematic but no
strictly uniform methods of wage increases are adhered to by
-13-
a great part of the industry, with intervals approximating
three or four months between advancements in the lower
brackets and somewhat longer intervals as training advances;
(3) that at the present time not many workers in the industry
are actually found in the lowest bracket of learner-wages
because of business decline but that an expansion of manu-
facturing activity might lead to the employment of more
learners; (4) that approximately 15% of the total number of
workers in the industry are learners; and (5) that this pro-
portion is unstable.
Turning now to the question of the prevailing
minimum wage, it is clear that if the past practice of the
Board is adhered to, the Board must find a separate minimum
applicable to trained workers. The lower rates paid to
learners are furthermore subject to possible obsolescence
(R 86-7) since they relate to a group which has an unstable
status and is vitally affected by transitory ovents.
The tables submitted by the Aeronautical Chamber
of Commerce make no scparation of learners from trained
workers but the evidence already cited (including the
estimates with respect to the proportion of learners), in-
dicates that the employees falling into wage intervals below
the 52.5-57.5 interval are undoubtedly learners in various
stages of advancement. The evidence already cited also
indicates that a considerable part of those falling into the
next wage intorval are learners in the last stages of training.
Two-thirds of the workers receive 62.5 cents an hour or more.
The weight of the evidence points distinctly to the 57.5-62.5
cent interval as the bracket in which the prevailing minimum
wage of the trained employees is to be found. This is the
interval which includes the rate which appears most frequently
-14-
in the wage information submitted by the United Automobile
Workers as representing the minimum wage of trained workers
(sec. (e) above); it also includes the lower level of the
bracket which in the tables submitted by the International
Association of Machinists (Exhibit J) includes most of the
trained workers in the lower wage brackets of the industry.
The Board finds that the 57.5-62.5 cent interval contains
the prevailing minimum wage of trained employees in the
aircraft industry and feels justified in following the
statistical practice of taking the midpoint of this inter-
val as representing the fairest division that can be made
for its purposes, in the absence of specific evidence of
greater concentration of workers at some other point within
the interval.
The Board consequently finds that 60 cents an hour
is the prevailing minimum wage in the aircraft manufacturing
industry as previously defined.
LEARNERS:
In view of the importance of learners in the aircraft
industry and in view of the evidence (1) that the great
majority of the employees are concentrated in plants which have
a starting rate of 40 cents an hour, and (2) that approximately
15% of the employees in the industry are learners, the Board
is of the opinion that a tolerance for learners should be
allowed, and finds that a tolerance of 15% of the total number
of productive employees in any plant represents a reasonable
allowance for employment of learners; and finds further that 40
cents an hour represents the entrance rate for the great
majority of learners in the industry.
-15-
APPRENTICES:
While a distinction between apprentices and learners
is generally recognized and while one of the manufacturers of
aircraft engines drew a distinction between the two groups
(R 58-60), apprentices in the aircraft industry are small in
number. The Board is of the opinion that no separate pro-
vision should be made for apprentices and that they should be
comprehended within the 15% tolerance recommended for learners.
HANDICAPPED AND SUPERANNUATED WORKERS:
The Board finds no evidence to indicate need for
any special provision for handicapped and superannuated
workers. The only evidence received was that no wage dis-
tinction is made between such workers and normal employees
(R 114).
OCCUPATIONAL CLASSIFICATIONS:
The Board was unable to take into account occupational
classifications in its search for the prevailing minimum wage
since the Aeronautical Chamber of Commerce was unable, because
of the great diversity of occupational designations and lack
of uniformity of occupational classifications in the industry,
to present wage tables broken down by occupations (Exhibit F,
p. 2 and R 25, 39, 83).
RECOMMENDATION
Upon the basis of the foregoing findings of fact,
the Board respectfully recommends to the Secretary of Labor
that the minimum wages for employees engaged in the performance
-16-
of contracts with agencies of the United States government,
subject to the provisions of Public Act No. 846, 74th Congress,
for the manufacture or supply of aeroplanes, aircraft engines,
propellers, accessories, and for the manufacture and finish-
ing of parts, be determined to be 60 cents an hour or $24.00
per week of forty hours, arrived at either upon a time or a
piece work basis; provided that a tolerance not to exceed 15%
of the workers in any one establishment be granted for those
workers who are in fact learners or apprentices and provided
further that they be paid not less than 40 cents an hour or
$16.00 per week of forty hours, arrived at either upon a time
or piece work basis; and provided further that it be under-
stood that the magnitude of the tolerance is not to be regarded
as fixed if the conditions in the industry upon which it is
based should change.
THE PUBLIC CONTRACTS BOARD
Thormas ifolland
OR Strasbein
(363)
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"ocrText": "8361 27 NOC\nWashington, D. C.\nApril 5, 1938\nIN THE MATTER OF\nPREVAILING MINIMUM WAGES IN THE MANUFACTURE OF\nAEROPLANES, AIRCRAFT ENGINES, PROPELLERS, AC-\nCESSORIES, AND THE MANUFACTURING AND FINISHING\nOF PARTS\nPURSUANT TO SECTION 1(b) OF THE ACT OF\nJUNE 30, 1936, PUBLIC ACT NO.846, 74th.\nCONGRESS\nFINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATION IN THE\nABOVE-ENTITLED MATTER BY THE PUBLIC CONTRACTS BOARD FOR\nTHE CONSIDERATION OF THE SECRETARY OF LABOR\nWRITTEN BY - O. R. STRACKBEIN\nA public hearing was held before the Public Contracts\nBoard on March 10, 1938 in the matter of Prevailing Minimum\nWages in the Aircraft Manufacturing Industry, including the\nManufacture of Aeroplanes, Aircraft Engines, Propellers,\nAccessories and the Manufacturing and Finishing of Parts.\nNotice of the Hearing was sent to all manufacturers of the\naforementioned products listed in recognized commercial reg-\nisters, to the Aeronautical Chamber of Commerce of America,\nto interested labor organizations, including the International\nAssociation of Machinists and the United Automobile Workers\nof America, and to other interested parties. Testimony at\nthe public hearing was given by the Aeronautical Chamber of\nCommerce, by a number of manufacturers of aircraft and air-\ncraft products, by representatives of the two labor organiza-\ntions above mentioned and by the Public Contracts Division of\nthe United States Department of Labor. A written record was\nmade of the proceedings.\n-2-\nSCOPE OF THE EVIDENCE:\n1.\nThe Aeronautical Chamber of Commerce presented a wage\nsurvey covering all branches of the aeronautical industry com-\nprehended in the Notice of Hearing. This survey was made by\nthe Chamber and included 32,792 employees of an estimated total\nof approximately 35,000 in the industry (R 32, 34). The survey\nwas prepared and conducted in a manner calculated to give proper\nrepresentation to (1) the various types of equipment, (2) the\nuses to which the equipment was destined, (3) size of companies,\nand (4) geographical distribution of the industry (R 24, 161-2).\nThe wage data presented were classified by 5-cent wage intervals,\nbroken down in appropriate tables to reveal wage differentials\nbetween products, between military and commercial equipment, and\nbetween geographical areas classified as East, Middle-West and\nWest (Exhibits F and G). The original information was supplied\nby the members of the industry in reply to a questionnaire\nwhich called for representative payroll data for one week in\nthe month of January 1938 (See Exhibit P for a copy of the form).\nThe representative character of the survey, its adequacy and\naccuracy is conceded by the International Association of\nMachinists in their supplementary brief, p. 2. The Board finds -\nno reason for questioning the authentic and representative\ncharacter of the Chamber's wage data and concurs in the con-\nclusion reached by the Machinists' Union.\nIn a supplementary tabulation (Exhibit H) the Chamber\nhas supplied a breakdown of its wage data by states, based on\nthe original data presented at the hearing (See R 97-8).\n2.\nThe United Automobile Workers submitted wage data on\napproximately ten manufacturers (Exhibit 0); and in a supple-\nmental brief submitted union wage rates in effect in certain\nautomobile factories.\n-3-\n3.\nThe International Association of Machinists submitted\nwage data summarizing minimum wages written into contracts with\nthree manufacturers employing 4,759 workers (Exhibit N), and\nthe wage contracts from which the tabular data were derived\n(Exhibits K, L, M). A further and more comprehensive table\n(Exhibit J) covering wage data representing 12,706 employees was\nalso presented.\nThe Board is of the opinion that the wage data re-\nferred to under (1), (2) and (3) above, supplemented by other\ntestimony in the record are sufficient for the finding of the\nprevailing minimum wage.\nWAGE STRUCTURE:\n1. PRODUCT DIFFERENTIALS:\nAn examination of the wage data supplied by the\nAeronautical Chamber of Commerce, classified on the basis of\nproducts covered, namely, aircraft, engines, propellers,\ninstruments, parts and accessories (Exhibit G), reveals\ncertain differences in the respective wage levels. These\ndifferences are readily brought out by determining separately\nfor each product how far the first 25% and the first 50% of\nthe workers reach in the wage scale. This determination may\nbe made by the simple statistical operation of locating the\nwage interval into which fall the first quartiles and the\nmedians of the wage frequency table.\nThe following table shows the different wage levels\nexisting in the manufacture of the various aeronautical\nproducts as determined by the method just set forth:\nFirst quartile\nMedian\nProduct\nfalls between:\nfalls between\nAircraft\n52.5 - 57.5¢ per hr.\n67.5 - 72.5¢ per hr.\nEngines\n62.5 - 67.5¢\n=\n=\n72.5 - 77.5¢\n=\n=\nInstruments\n52.5 - 57.5¢\n11\n=\n72.5 - 77.5¢\n#\n=\nPropellers\n57.5 - 62.5¢\nIf\nII\n62.5 - 67.5¢\nIf\n=\nParts and\nAccessories\n52.5 - 57.5$\n=\nIf\n62.5 - 67.5¢\n=\nIf\nThe Board concludes from this table that the wages in\nthe manufacture of engines are somewhat higher than in the other\nbranches of the industry; and that the wages in the manufacture\nof propellers are higher only when the first quartile is con-\nsidered. The table shows that for the remainder of the products\nthe first quartiles fall within the same wage interval: from 52.5\nto 57.5 cents. This is evidence of notable uniformity of wages\nin the lower quarter of the wage structure, and since more than\nthree-fourths of the wage earners in the industry are found in\nthese remaining branches (Exhibit G), only extraordinary consid-\nerations could justify the Board in recommending separate\nminimum wages for engines and propellers. These considerations\nare lacking. On the contrary, the representatives of the\nindustry gave testimony pointing to the desirability of finding\none prevailing minimum wage for the entire industry (Exhibit F,\np. 9; R 32, 40, 169-70); and they were supported in their view\nby the International Association of Machinists (R 176).\nEvidence showing that a degree of overlapping exists in the man-\nufacturing of various products was also received (R 172-6); and\nthis fact adds to the urgency of uniformity in the minimum wage.\nThe Board finds that the prevailing minimum wages in\nthe various branches of the aircraft industry exhibit a suf-\nficient degree of homogencity to make possible the finding of\na single rate applicable to the entire industry.\n-5-\n2. Geographical Differentials:\nExhibit H presents the wage data gathered by the\nAeronautical Chamber of Commerce in the form of a wage\nfrequency table arranged in 5-cent wage intervals and\nbroken down by states, but consolidated with respect to\nproduct. The same number of employees, or 32,792 are\ncovered by this State Classification as were included under\nthe product classification considered in the previous para-\ngraph. Fourteen states are represented in the tabulation\nand the following grouping of those states provides a com-\nparison of the respective wage levels as reflected in the\nincidence of the first quartiles and the medians.\nFirst quartile\nThe Median\nState\nfalls between:\nfalls between\nCalifornia\n52.5 - 57.5¢ per hr.\n62.5 - 67.5¢ per hr.\nWashington\n72.5 - 77.50\n\"\n=\n77.5 - 82.5¢\nII\n=\nConnecticut\n57.5 - 62.50\n=\n#\n67.5 - 72.5¢\n=\n=\nNew York\n52.5 - 57.5¢\n\"\n=\n67.5 - 72.5¢\n=\n=\nNew Jersey\n67.5 - 72.5$\n\"\n\"\n82.5 - 87.5¢\n\"\n=\nPennsylvania\n47.5 - 52.5¢\nIf\n\"\n62.5 - 67.5¢\n=\nIf\nMaryland\n47.5 - 52.5¢\n\"\nIf\n57.5 - 62.5¢\n=\n=\nIllinois\n42.5 - 47.50\n\"\n=\n52.5 - 57.5¢\n=\n\"\nIndiana\n72.5 - 77.5¢\n\"\n=\n77.5 - 82.5¢\n#\n=\nMichigan\n67.5 - 72.5¢\n\"\n\"\n87.5 - 92.5¢\n11\n=\nOhio\n52.5 - 57.5¢\n=\n=\n67.5 - 72.50\n=\nIf\nMissouri\n52.5 - 57.5\n=\n=\n67.5 C 72.50\n=\n=\nKansas\n47.5 - 52.5$\nIf\n=\n52.5 - 57.5$\n=\n=\nOklahoma\n47.5 - 52.5¢\n\"\n\"\n52.5 - 57.5¢\n=\n=\nThis tabulation follows the method employed under\nparagraph 1, above, and reveals wage differences of grater\nmagnitude than those existing between the various products.\nFor example, the first quartile, which is located in the wage\ninterval which is reached by the first 25% of the workers in\neach state, ranges from the 42.5-47.5 cent interval in\nIllinois to the 72.5 to 77.5 cent interval in Washington and\nin Indiana. This is a spread of 30 cents and such a diver-\ngence would ordinarily strongly suggest the establishment of\nan appropriate geographical differential. Several other wage\n-6-\ndifferentials are visible in the table. Pennsylvania and\nMaryland in the Middle Atlantic section, on the one hand, and\nKansas and Oklahoma in the South Central section, on the other,\nall fall with respect to their first quartiles into the\n47.5-52.5 cent interval. New Jersey and Michigan, also widely\nseparated, fall into the 67.5-72.5 cent interval. On the\nother hand, California and Washington, though located in the\nsame section of the country, exhibit a difference of 20 cents\nbetween the first quartiles. Illinois and Indiana, adjacent\nstates, show a difference of 30 cents.\nAdditional, but narrower, variations, as well as\nsimilarities, are visible in the table, but enough has been\nsaid to show that the differences and similarities follow no\nsectional line. Nor does an examination of the medians in the\ntable lead to a different conclusion. The wage scale for\nNew York, at both the first quartile and at the median, is the\nsame as that of Ohio and Missouri. The difference between\nIllinois and Indiana at the median is only 5 cents less than\nat the first quartile. Obviously there is no clear pattern\nfrom which satisfactory geographical groupings could be made\nfor the application of geographical wage differentials.\nBoth the representatives of industry and of organ-\nized labor were of the opinion that a national minimum rather\nthan sectional minima would meet the condition of the industry\n(R 134-6; 176). Freight is no consideration because the planes\nare flown from the locality of the factory (R 136).\nThe Board concludes that geographical differentials\nin the prevailing minimum wages do not exist between any\nascertainable sectional divisions.\n-7-\nPREVAILING MINIMUM WAGE:\nThe prevailing minimum wage must be found in the\nlower part of the wage structure; but it does not, except\npossibly in the rarest instance, represent the lowest wage\npaid. In order that any wage clearly fulfill the condition\nunder which it might be described as \"prevailing\", it should\npredominate; it should have superior force and influence in\nrelation to other wage rates which fall above and below it.\nA prevailing minimum wage, although lying in the lower part\nof the wage structure, should therefore be the wage which\npredominates within its field; it should have superior force\nand influence in relation to the lower and higher wages which\nsurround it within the lower part of the wage structure.\nSuch a wage is not always clearly revealed in a wage frequency\ndistribution table. The wage structures of some industries show\nsuch a lack of concentration of workers within single wage\nbrackets that the provailing minimum wage as described above\nis not SO readily located. Under these circumstances other\nevidence must be utilized to supplement the statistical\nexhibits.\nAn examination of the wage frequency tables of the\naeronautic industry (Exhibits G and H) shows that this indus-\ntry exhibits no point of concentration of wages in the lower\npart of its wage structure. The following table, constructed\nfrom data contained in both Exhibits G and H, shows the dis-\ntribution of the 32,792 wage earners included in the wage\nsurvey submitted by the Aeronautical Chamber of Commerce, by\n5-cent wage intervals:\n-8-\nWage interval\nNo.employees\nWage interval\nNo.employees\n17.5 - 22.5¢\n2\n62.5 - 67.5¢\n3,537\n22.5 - 27.5¢\n28\n67.5 - 72.5¢\n3,954\n27.5 - 32.5¢\n70\n72.5 - 77.5$\n3,773\n32.5 - 37.5¢\n189\n77.5 - 82.5¢\n2,847\n37.5 - 42.5¢\n650\n82.5 - 87.5¢\n2,154\n42.5 - 47.5$\n1,364\n87.5 - 92.5¢\n1,888\n47.5 - 52.5¢\n2,492\n92.5 - 97.5¢\n1,298\n52.5 - 57.5$\n3,299\n97.5 -102.5¢\n905\n57.5 - 62.5$\n3,020\n102.5 and over\n1,322\nAn examination of this table shows an almost steady\nrise, interval by interval, of the number of employees, from 2\nin the lowest interval to 3,954 employees in the 67.5 - 72.5\ncent interval, and then an almost steady subsidence, interval\nby interval. The 67.5-72.5 cent interval, which contains the\nmaximum number of employees is also the mid-point of the whole\nfrequency distribution, i.o., one-half of the total employees\nfall below and one-half above some point between 67.5 and 72.5\ncents an hour. This interval clearly lies above the lower\npart of the wage structure and the concentration of employees\nin the interval is not very pronounced.\nA further difficulty complicates the search for the\nprevailing minimum wage.\nThis lies in the practice of the\nindustry to employ a. varying but substantial number of learners\nin the manufacturing process.\nBefore proceeding to find the prevailing minimum\nwage it is necessary to dispose of the \"learner\" question.\nThe evidenceon this subject may be summarized as follows:\n1.\nThe average number of learners in the indus-\ntry was estimated by the Aeronautical Chamber of Commerce to\nrepresent at least 15% of the personnel in the industry, with\nseasonal and company variation (R 49). In some exceptional\ninstances the proportion of learners might rise as high as 35\nor 40% (R 49, 55). The International Association of Machinists\n-9-\naccepted the Chamber's estimate of the average proportion of\nlearners and agreed that 15% represented the minimum (R 219).\n2.\nEmployment of learners during the past several\nyears has been especially pronounced because of the great ex-\npansion of the aeroplane manufacturing industry (R 54,55). The\nexpansion of the industry may be judged partly by the increase\nin the value of the output and partly by the increase in em-\nployment. The following table shows the expansion in output\nmeasured by value of product:*\nYear\nMilitary\nCommercial\nTotal\n1927\n$17,428,000\n$8,376,000\n$25,805,000\n1929\n26,183,000\n71,769,000\n97,952,000\n1931\n31,921,000\n15,231,000\n47,152,000\n1933\n19,859,000\n13,626,000\n33,485,000\n1935\n22,807,000\n22,407,000\n45,215,000\n1936\n50,481,000\n26,629,000\n77,111,000\n1937\n65,831,000\n49,161,000\n114,992,000\nEmployment showed an increase commensurate with the\nexpansion in the value of the product. In 1934 employment was\nabout 13,000; in 1937 it was about 35,000 (R 44).\n3.\nThis expansion came to a halt in recent months.\nThe manufacture of commercial aircraft has declined rather\nseverly (R 45-6). Unless new business trends assert themselves\nor unless governmental purchases are expanded, recruiting of\nlearners will subside to the point of merely supplying such\nreplacements as the ordinary turn-over in employment may demand\n(R 55, 59-60, 72-3, 114-15, 210). On the other hand, repre-\nsentatives of the industry anticipate expansion in government\npurchases (R 86, 44-5; and Supplementary Brief of the Aeornau-\ntical Chamber of Commerce, pp. 16-17).\n4.\nRepresentatives of the industry gave uncon-\ntradicted testimony that learners are employed in the execution\nof government contracts and that during recent years the\n* R 27, 28.\n-10-\nindustry could not have dispensed with learners (R57, 77, 211,\nand Supplementary Brief of the Aeronautical Chamber of Commerce).\nAbout 10,000 men or 50% of the new personnel employed by the\nindustry during the last three years began as learners\n(Supplementary Brief, p. 20). The International Association\nof Machinists sharply challenged the practice of employing\nlearners, contending that the practice was unnecessary and\nrepresented a means of securing cheap labor (R 200 ff., and\nSupplementary Brief of International Association of Machinists).\nThe United Automobile Workers of America express the opinion\nthat aircraft manufacturers abuse the word \"learner\" and retain\nemployees in the classification of learners long after they\nhave qualified for the wage rate paid to experienced workers\n(Supplemental Brief, p.3).\n5.\nIt is a general practice to employ learners\nat 40 cents an hour or at rates approximating 40 cents and\nto advance the rate of pay at the end of stated periods of\ntime, or sooner, according as the learners progress in their\nwork. High schools and trade schools are usual sources of\nlearners (R 61, 73, 115).\n(a)\nThe largest company in the industry has an estab-\nlished minimum of 40 cents an hour for learners. Learners\nwho come from training schools may be started at 45 or 50\ncents. No learner is retained at 40 cents beyond 4 months at\nwhich time he is advanced 2-1/2 cents an hour or discharged.\nPromotion may come sooner. At the end of another four-month\nperiod the procedure is repeated, bringing the learner who\nbegan at 40 cents an hour to 45 cents in eight months. Sub-\nsequent advancements are given in a like manner until the\nlearner reaches his maximum wage, which in the case of riveter\nmight be 75 cents an hour. Ten steps may possibly be involved\n-11-\nin the ascent (R 73-4, 81, 89).\n(b)\nAnother company which also employs learners also has\nan established minimum of 40 cents an hour. This firm advances\nlearners 2-1/2 or 5 cents an hour after three months of em-\nployment or less, or transfers them to different work. These\nadvances continue until 70 or 75 cents an hour is attained in\noccupations for which those rates are the maximum, but the\nperiod between advancement may increase to six months as the\nhigher wages are approached (R 102-4, 112-13).\n(c)\nA third company, a manufacturer of aircraft engines,\nstarts high school boys at 40 to 45 cents an hour and trade\nschool boys at 45 to 50 cents an hour (R 61), while it starts\nmachine operators at 50-55 cents an hour (R 62). This company\nfollows no system of periodic wage advances but increased the\nwages of learners according to their ability (R 62). Labor\n\"off the street\" is considered unsuitable except for employ-\nment as janitors, material handlers, etc., groups which\nrepresent a very small percentage of the total (R 69).\n(d)\nThe International Association of Machinists testified\nthat one of their contracts provided for a minimum wage of 62.5\ncents an hour, applicable to learners or \"probationers\"\n(R 214-15). The only exceptions to this rate are bona fide\nindentured apprentices who receive from 40 to 60 cents. The\nminimum of 62.5 cents an hour applies to only 22 workers even\nthough the next wage bracket is 70-75 cents (R 215) which\napplies to 479 workers. Another contract provides for a hiring\nrate of 40 cents an hour for minors and 50 cents for adults\nwith two 10% increases which have been granted, bringing the\nrates to 48.4 cents and 60.5 cents an hour, respectively, for\nminors and adults. New untrained employees, however, would\nenter at 40 or 50 cents according as they were minors or adults\n-12-\n(R 216; also Exhibits K and L).\n(e)\nThe United Automobile Workers in Exhibit 0 present\nevidence showing that in one company the starting wage for\ninexperienced workers is 40 cents an hour and 60 cents for\nfirst year journeymen; in another company 200 apprentices\nare reported at 40 cents an hour and 40 time-keepers at 45\ncents, with no lower wage specified. In the same company\n150 sheet metal workers are listed at 60 cents. In a third\ncompany 40 cents is given as the lowest wage paid. This rate\nis described as applicable to boys and to run for a period of\nthree months when a 5-cent increase is granted. A fourth\nfirm is shown as paying a minimum of 50 cents an hour; a\nfifth, a minimum of 40 cents; a sixth, one of 45 cents (paid\nto girls); a seventh, one of 50 cents; and an eighth, one\nof 40 cents, paid only to helpers, while 60 cents is shown\nas the lowest rate paid to other workers than helpers.\n(f)\nLearners in the industry generally work under the\nsupervision of trained men (R 61, 77, 100).\n(g)\nThe number of employees now working at the entrance\nrate is low. In one company employing approximately 1800\nworkers, only 37 are at 40 cents, which is the entrance rate\n(R 107, 114). In another firm, where employment is between\n2500 and 3000, approximately 150 boys fall into the lowest\nbracket, which is from 40-45 cents an hour (R 61). Finally,\na company employing about 9000 workers has a very small per-\ncentage of its workers in the group receiving 40 cents an\nhour (R 82, 83).\nThe Board concludes with respect to learners: (1)\nthat they form a distinct group separate from trained workers\nBO far as wages are concerned; (2) that systematic but no\nstrictly uniform methods of wage increases are adhered to by\n-13-\na great part of the industry, with intervals approximating\nthree or four months between advancements in the lower\nbrackets and somewhat longer intervals as training advances;\n(3) that at the present time not many workers in the industry\nare actually found in the lowest bracket of learner-wages\nbecause of business decline but that an expansion of manu-\nfacturing activity might lead to the employment of more\nlearners; (4) that approximately 15% of the total number of\nworkers in the industry are learners; and (5) that this pro-\nportion is unstable.\nTurning now to the question of the prevailing\nminimum wage, it is clear that if the past practice of the\nBoard is adhered to, the Board must find a separate minimum\napplicable to trained workers. The lower rates paid to\nlearners are furthermore subject to possible obsolescence\n(R 86-7) since they relate to a group which has an unstable\nstatus and is vitally affected by transitory ovents.\nThe tables submitted by the Aeronautical Chamber\nof Commerce make no scparation of learners from trained\nworkers but the evidence already cited (including the\nestimates with respect to the proportion of learners), in-\ndicates that the employees falling into wage intervals below\nthe 52.5-57.5 interval are undoubtedly learners in various\nstages of advancement. The evidence already cited also\nindicates that a considerable part of those falling into the\nnext wage intorval are learners in the last stages of training.\nTwo-thirds of the workers receive 62.5 cents an hour or more.\nThe weight of the evidence points distinctly to the 57.5-62.5\ncent interval as the bracket in which the prevailing minimum\nwage of the trained employees is to be found. This is the\ninterval which includes the rate which appears most frequently\n-14-\nin the wage information submitted by the United Automobile\nWorkers as representing the minimum wage of trained workers\n(sec. (e) above); it also includes the lower level of the\nbracket which in the tables submitted by the International\nAssociation of Machinists (Exhibit J) includes most of the\ntrained workers in the lower wage brackets of the industry.\nThe Board finds that the 57.5-62.5 cent interval contains\nthe prevailing minimum wage of trained employees in the\naircraft industry and feels justified in following the\nstatistical practice of taking the midpoint of this inter-\nval as representing the fairest division that can be made\nfor its purposes, in the absence of specific evidence of\ngreater concentration of workers at some other point within\nthe interval.\nThe Board consequently finds that 60 cents an hour\nis the prevailing minimum wage in the aircraft manufacturing\nindustry as previously defined.\nLEARNERS:\nIn view of the importance of learners in the aircraft\nindustry and in view of the evidence (1) that the great\nmajority of the employees are concentrated in plants which have\na starting rate of 40 cents an hour, and (2) that approximately\n15% of the employees in the industry are learners, the Board\nis of the opinion that a tolerance for learners should be\nallowed, and finds that a tolerance of 15% of the total number\nof productive employees in any plant represents a reasonable\nallowance for employment of learners; and finds further that 40\ncents an hour represents the entrance rate for the great\nmajority of learners in the industry.\n-15-\nAPPRENTICES:\nWhile a distinction between apprentices and learners\nis generally recognized and while one of the manufacturers of\naircraft engines drew a distinction between the two groups\n(R 58-60), apprentices in the aircraft industry are small in\nnumber. The Board is of the opinion that no separate pro-\nvision should be made for apprentices and that they should be\ncomprehended within the 15% tolerance recommended for learners.\nHANDICAPPED AND SUPERANNUATED WORKERS:\nThe Board finds no evidence to indicate need for\nany special provision for handicapped and superannuated\nworkers. The only evidence received was that no wage dis-\ntinction is made between such workers and normal employees\n(R 114).\nOCCUPATIONAL CLASSIFICATIONS:\nThe Board was unable to take into account occupational\nclassifications in its search for the prevailing minimum wage\nsince the Aeronautical Chamber of Commerce was unable, because\nof the great diversity of occupational designations and lack\nof uniformity of occupational classifications in the industry,\nto present wage tables broken down by occupations (Exhibit F,\np. 2 and R 25, 39, 83).\nRECOMMENDATION\nUpon the basis of the foregoing findings of fact,\nthe Board respectfully recommends to the Secretary of Labor\nthat the minimum wages for employees engaged in the performance\n-16-\nof contracts with agencies of the United States government,\nsubject to the provisions of Public Act No. 846, 74th Congress,\nfor the manufacture or supply of aeroplanes, aircraft engines,\npropellers, accessories, and for the manufacture and finish-\ning of parts, be determined to be 60 cents an hour or $24.00\nper week of forty hours, arrived at either upon a time or a\npiece work basis; provided that a tolerance not to exceed 15%\nof the workers in any one establishment be granted for those\nworkers who are in fact learners or apprentices and provided\nfurther that they be paid not less than 40 cents an hour or\n$16.00 per week of forty hours, arrived at either upon a time\nor piece work basis; and provided further that it be under-\nstood that the magnitude of the tolerance is not to be regarded\nas fixed if the conditions in the industry upon which it is\nbased should change.\nTHE PUBLIC CONTRACTS BOARD\nThormas ifolland\nOR Strasbein\n(363)"
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