any incidental and supplementary matters for which the Minister thinks it expedient for the purpose of the order to provide." Under the authority of this regulation, the Minister of Labor issued, effective July 25, 1940, the Conditions of Employment and National Arbitration order" of 1940. Strikes and lock-outs are prohibited unless a dispute which has been reported to the Minister of Labor has not been referred by him to the National Arbitration Tribunal within 21 days. The National Arbitration Tribunal consists of representatives of employers and labor and an impartial chairman; its decisions are binding. Although the awards of the tribunal in many cases relate to wages, they seem not to have been used as an instrument for the imposition of wage control by the Government. The tribunal has operated merely as an additional mechanism for the settlement of disputes on mutally acceptable terms. The numerous agencies established to protect labor in peacetime have continued to exercise that function during the war. The terms of the Trade Boards Act have been liberalized to permit more rapid determination of minimum wage rates in certain unorganized industries, and for the first time a national minimum wage in agriculture has been set. The act fixing maximum. hours of work for women and juveniles has remained in force, although the Home Office has used its authority to suspend the limitations in exceptional cases during the emergency. Standard hours of work for adult males are determined by collective agreement, not by law, in Britain. There has been no attempt to supersede these agreements; considerable amounts of overtime have been worked and paid for at overtime rates as agreed. 2. The course of wages.-As is shown in the table below, the average wage rate for a standard work week in Great Britain had risen fairly slowly since the war started. In the first 15 months of war it had advanced by about 15 percent; most of the rise occurring before the summer of 1940. This constituted a considerable lag behind the cost of living, which had risen over 26 percent in the same period. However, the wage-rate index does not take account of longer hours and overtime rates, steadier employment, and the shift of labor into the relatively higher-paid occupations, all of which tend to raise earnings more than the increase of standard rates. 1939: September-- November. December 1940: TABLE 36.-Bowley's index of standard weekly wage rates' [August 1939=100] January- March April--- Index 1940-Continued. 100. 2 100. 2 101.9 103. 3 October November December. 1941: January. 1 London and Cambridge Economic Service Report, February 1941, p. 15. 11 S. R. and O., No. 1305. May- July 104.5 105. 2 108. 3 109.5 August. September_. II. CANADA Index 109.5 110. 4 112.5 112.8 113. 0 113.5 113.5 113.7 114.7 No specific attempt has been made to establish direct or compulsory wartime wage control in Canada applicable to all industry. Such measures as have been taken by the Canadian Government relate only to wages in war industries and until very recently have been of a mild character only. The definition of what constitutes a war industry, however, is wide enough to cover the production of war supplies of every kind. Moreover, the hope has been expressed in Government publications that the civilian industries will adopt the wartime wage principles, which have been laid down by the Government for war industries. The ground, therefore, has been prepared for a more comprehensive regulation of wages if the need should arise. Wage control, like controls of commodities, prices, and rents, was designed to avoid inflation, but price and rent controls are administered by organizations' with no jurisdiction over wages and no influence on wage policies. 1. Background and legal basis of wartime wage regulations.-In peacetime the Canadian Provincial governments, rather than the Federal Government, exercise jurisdiction over labor matters. One of the few pieces of labor legislation on the Federal Government's statute books is the Industrial Disputes Investigation Act." This act, according to its preamble, was intended "to aid in the prevention of strikes and lockouts in mines and industries connected with public utilities." Its precise constitutional scope has been uncertain, but it has been applied generally to public utilities of an interprovincial character. The most important features of the Industrial Disputes Investigation Act are (1) Either party to an industrial dispute may apply to the Minister of Labor for the appointment of a three-man conciliation board consisting of a representative of each party and an impartial chairman; (2) Pending the decision of the conciliation board a strike or lock-out is illegal; (3) The decision of a conciliation board is not binding unless both parties have so agreed in advance. The basis of the Canadian Government's wartime labor policy has been the extension of the Industrial Disputes Investigation Act to apply to all war industries. This extension was accomplished by a Government order in council of November 7, 1939 (P. C. 3495), passed under the authority of the War Measures Act 13 which gives the Federal Government almost unlimited emergency powers." 14 2. Wartime legislation and administration.—A set of "principles for the avoidance of labor unrest during the war" were published in an order in council passed in June 1940 (P. C. 2685). The principle directly relevant to the wage regulation stated that wartime increases in wages "might well be in the form of bonuses." No machinery was established at that time, however, with power to put these principles into practice. By November 1940 the demand for certain types of skilled workers had become acute. Partly in order to prevent disruption and partly in order to prevent dislocation of wage schedules, the Government passed an order in council (P. C. 6286) prohibiting the enticement of workers from positions in war industries. Personal solicitation was prohibited and advertisers were compelled to state that they would not accept applications from workers already engaged in war employment. This order of November 1940 was slightly extended and amplified by another in June 1941 (P. C. 4642). The basic principles of Canadian wartime wage policy were laid down in order 7440 of December 16, 1940, which took the form of a set of instructions to guide conciliation boards appointed under the Industrial Disputes Investigation Act. These principles were that 1. Wage rates ought not to be permitted to rise above the level paid by the employer during the period 1926-29 or any higher level established thereafter but prior to December 16, 1940. 2. Flat-rate bonuses "may properly" be paid workers to cover increases in the cost of necessaries. A cost-of-living bonus was to be payable each time the cost of living indexes of the Dominion Bureau of Statistics rose by 5 percent of the level in August 1939. Conversely bonuses, but not basic wages, might be reduced when the cost of living fell by 5 percent or more from that level. Applications for changes in the cost-of-living bonus could not be made more frequently than once every 3 months. To the extent that the first principle became operative, a ceiling would be established for wage rates. The payment of flat-rate bonuses corresponding to increases in the cost of necessities would protect low-paid workers to a large extent against any deterioration in their standard of living, while workers with higher earnings would only be partially protected. The Government principles would, therefore, permit some wartime reduction of the standard of living of the higher-paid workers. Increasing efforts have been exerted by the Canadian Government in recent months to make these two principles effective and to clarify their nature and purposes. A number of uncertainties arose when order 7440 began to be put into practice, and in order to eliminate these a supplementary order-in-council was 12 Revised Statutes of Canada, 1927, ch. 112. 18 Revised Statutes of Canada, 1927, ch. 206. 14 All orders in council referred to in this memorandum were passed under authority of the War Measures Act (Revised Statutes of Canada, 1927, ch. 206). passed in June 1941 (P. C. 4643). The most important clarification occurred in connection with the cost-of-living bonus. Under the new order a specific bonus amounting to 25 cents a week for every increase of 1 percent in the cost of living index was established." This implies that a man earning $25 a week would be protected against increases in his basic living costs for such lags as occur between increases of the cost of living and the payment of bonuses, while workers with higher earnings would be less fully protected. The Government has further clarified its policy by indicating that these flatrate bonuses ought to be paid to all workers in war industries below the "executive" grade, not merely to workers obtaining $25 a week or less. A recent announcement indicated that the bonus regulations also are applicable to Government employees. In June 1941 the Canadian Government established a body which may be regarded as a counterpart of the American National Defense Mediation Board. When the Minister of Labor is asked to set up a conciliation board, he now usually refers the matter first to the Canadian Industrial Disputes Investigation Commission in the hope of obtaining a speedy settlement. The Government has, within the past 2 months, endeavored to educate the public generally and the workers in particular regarding the nature and purposes of Canada's wartime wage policy. It has published advertisements in the press and printed notices to be displayed in factories and elsewhere. Copies of two documents of this type are reproduced in appendix A.11a 15a 3. Present situation.-Wages in Canadian war industries are now, to an increasing extent, under the influence of restrictive Government policies, but no mandatory maximum exists. As a result of the evolution and elaboration of policies described above, increasing pressure is being applied to restrain the upward movement of wages in war industries. But there is nothing, either in legislation or in orders in council, which legally enforces a wage ceiling. No Government control is exercised over wage agreements reached outside the sphere of conciliation boards and the Industrial Disputes Investigation Commission. It is not illegal for employers in war industries to pay wages higher than those which would conform to the Government's principles. Canadian employers not infrequently pay wage rates or grant bonuses in excess of the rates and bonuses recommended in the Government's statements of wage principles. Many Canadian employers are disposed to be generous to their employees under present conditions. Amongst the incentives to generosity are the very high rates of taxation on profits, and the existence of "escalator" relationships between costs and prices where the Government is the biggest or sole buyer of the output. It is not illegal for employees to strike, even in the face of offers by employers which conform to the principles laid down by the Government. The fact that after a conciliation board has made its report, employees remain free to strike, rather than to accept wages and other conditions which conform to the principles laid down by the Government, emphasizes the absence of mandatory measures to restrict wages. The Government's policy of attempting to check increases in wage rates, while allowing cost of living bonuses, was explicitly undertaken as a measure to prevent an inflationary spiral of wages and prices. The publicity issued by the Canadian Department of Labor to popularize the wartime wage policy makes reference to its importance in avoiding inflation. It is also clear from statements issuing from the Canadian Treasury that the wage policy is considered as supplementary to the anti-inflationary fiscal policy involving heavy wartime taxation and savings campaigns. No statistics are available on monthly wage rate movements in Canada. An annual average of industrial wage rates, however, shows a rise of less than 3 percent in industrial wage rates between 1939 and 1940.16 (See table 36.) Wage rates in manufacturing are estimated to have risen about 41⁄2 percent during the 12-month period following the outbreak of war. 17 15 Except in the case of boys under 21 and women earning less than 50 cents an hour, in whose cases the bonus is payable at the rate of 1 percent of their basic wage rates. 15a See pp. 695-696, infra; for a third document of this type, see p. 456, supra. 16 United States Department of Labor. Economic Developments in Canada in 1940. Monthly Labor Review, April 1941, pp. 835-837. (Data in the article are from Canada, Department of Agriculture, Economics Division.) 17 Canada, Dominion Bureau of Statistics, Report on Wages, Hours, and Labor, 1929. 1939, and 1940. TABLE 37.--Indexes of average annual wage rates in Canada, 1939 and 19401 1 U. S. Department of Labor, Wages in Canada, 1940. Monthly Labor Review, August 1941, p. 502. III. GERMANY Regulation of labor in Germany now is so complete as to include not only direct control over wage rates and additional compensation but also control over hours and conditions of employment, labor mobility, and even job selection. Both the Ministry of Labor and the Labor Front share in the control of labor, the former setting up and administering the specific labor regulations, while the latter agency deals primarily with the workers themselves and their political and cultural activities. The labor trustees in the Ministry of Labor establish the wage rates and working conditions within the general framework of the enabling decrees and subject to the Minister of Labor, and, in addition, have almost unlimited power for enforcing their regulations. The regulation of labor conditions in Germany has no direct connection, in law or in administration, with the Government bureau controlling prices-the Commissar for Price Formation. 18 1. Direct control of wage rates.-Direct control of wage rates in Germany is now administered under the War Economy order of September 4, 1939, which required the labor trustees in the Ministry of Labor to fix compulsory maximum rates of wages and conditions of employment for all branches of economie activity. The labor trustees, in conformity with the instructions of the Minister of Labor, are, therefore, empowered to fix all wage rates whatsoever, and violations of their wage schedules are punishable by both fine and imprisonment, the specific penalties, for which no maxima are fixed, to be set by the trustees themselves. Nazi economic policy was strongly opposed to a general rise in wage levels. Direct control of wage rates under the Nazi regime was first introduced with the enactment of the Labor Regulation Act of January 20, 1934," which established the system of labor trustees and empowered these trustees to set the so-called collective agreements between employer and employee. All labor unions and other occupational organizations had been abolished on May 1, 1933, and the practice of collective bargaining between employers and representatives of the employees discarded. In the new Nazi collective agreements basic wage rates were specified, and such rates tended to be the maximum rates so long as a large reserve of unemployed laborers was available. However, the German reemployment and rearmament programs reduced the number of unemployed, and by 1938 there were definite labor shortages throughout the economy. The basic rate schedules previously established by the labor trustees ceased to be the maximum wage rates, and actual wages began to show a tendency to rise. A decree issued on June 25, 1938, empowered the labor trustees to fix maximum rates of wages in a certain number of industries specified by the Minister of Labor. In addition, no employer was allowed to grant his workers better conditions of labor without first obtaining the consent of the labor trustee. Complete wage-rate control was adopted with the outbreak of war. 2. Other controls of wage income.-In addition to direct wage-rate control, a number of indirect measures to control the earnings of workers, and the availability and cost of labor to industry have been used. Of these measures, three are of particular importance-control of hours and overtime pay, control of labor migration, and control of the labor supply. 18 Reichsgesézblatt, 1939, I, p. 609. 19 Reichsgesezblatt, 1934, I, p. 45. (a) Hours and overtime pay: One of the earliest labor acts of the Nazi regime established the normal working day at 8 hours, and required overtime rates for additional hours of labor, both regulations codifying previous practice. However, a decree of July 26, 1934, gave the labor trustees wide latitude to grant exceptions for overtime pay, and increased pay for several categories of overtime was abolished. At the same time the employer was given much greater latitude to decide on certain adjustments of the normal working day without first having to receive. the permission of the labor trustees." With the outbreak of hostilities, the Government took much more stringent steps. By the War Economy order of September 1, 1939, all restrictions on normal hours of work for adult men were abolished, and increased rates of pay for overtime, night work, and work on Sunday and public holidays were similarly abolished. Finally, holidays of all kinds, whether paid or not, were canceled. These restrictions were shortly afterward partially mitigated after their severity had caused unrest among the workers as well as a decline in efficiency. On September 3, 1940, all forms of overtime pay which had been in existence at the outbreak of hostilities were restored, but actual payment to the worker was generally withheld until the end of the war. (b) Labor migration: As early as 1934 labor shortages occurred in specific industries, especially those producing armaments, and higher wages were offered by these newly prospering industries to induce workers to transfer to new positions. Primarily to prevent the exodus of workers from important positions, but also to keep wage levels from rising, a series of decrees starting with the decree of December 29, 1934, forbade the transfer of workers from one employment district to another without specific permission." By a decree of September 1, 1939, control over hiring was made general, and all industries, with the exception of agriculture, mining, and certain forms of domestic service, were restricted from hiring without specific permission of the employment offices. At the same time general control over dismissals was introduced.24 In addition to the control of labor turn-over, control was also exercised over the occupational preference of workers, at first with reference to specific skilled workers and later more generally. By an order of February 13, 1939, any worker needed for work of national importance was subject to transfer by the labor authorities from one occupation to another." 26 (c) Labor supply: The increase in the labor supply has been an important factor in enabling the authorities to keep down wage rates. This increase has been the result of a conscious effort on the part of the German Government and not merely the natural result of broadened employment opportunities. An order of November 7, 1936, required certain industries to employ apprentices and terms of apprenticeships were subsequently shortened." On December 1, 1936, the priority formerly enjoyed by workers over 25 years of age was abolished. Women were encouraged to accept employment and a decree of October 1, 1937, allowed employers to employ married women in receipt of marriage loans, a class formerly prohibited from seeking employment. 20 Thus the employer was permitted to spread the 96 hours of labor contained in 2 normal workweeks in any manner he saw fit, provided that no day's work was in excess of 10 hours. Even this restriction was modified, however, since the employer might extend a normal working day to 16 hours once every 3 weeks, provided that 2 uninterrupted rest periods of 24 hours each were granted during the 3-week period. By an order of April 30, 1938 (effective January 1, 1939), the period over which normal hours might be distributed was extended from 2 to 3 weeks. (See Waelbroeck and Bessling, Some Aspects of German Social Policy Under the National Socialist Regime. International Labor Review, vol. XLIII, No. 2, February 1941, p. 148.) 21 "The employer was required either to pay into the Public Treasury the savings thus effected on wages or to use these savings in full for lowering manufacturing costs" (Waelbroeck and Bessling, op. cit., p. 150). 22 Decree-President of Employment Board-requesting employment of skilled metal workers. December 29, 1934 (Reichsarbeitsblatt, 1935, I., p. 12). Order to check change in employment, September 1, 1939 (Reichsgesetzblatt, 1939, I., p. 609). The shortage of agricultural laborers, a shortage which has been apparent from the beginning of the Nazi regime, has been dealt with by a large number of decrees and orders. These decrees are similar to the ones discussed in the text in that they put obstacles in the way of persons wanting to leave agricultural employment, but they are even more comprehensive Order to insure supply of labor required for tasks of particular importance to the state, February 13, 1939 (Reichsgesetzblatt, 1939, I., p. 206). 2 Hamburger, L., How Nazi Germany Has Mobilized and Controlled Labor, Washington, Brookings Institution, 1940. First decree of the Commissioner of the Four-Year Plan to assure an adequate future supply of skilled workers, November 7, 1936 (Reichsarbeitsblatt, 1936, I., p. 292). |