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department she is a failure, but she might be very good as an adjuster in the audit department. She might work out very well as a stenographer, and she is given that opportunity. The school is supposed to find that fact out and give her an opportunity.
Q. Who finds that out? A. Well, she ought to help somewhat. She would know that she is not doing very well in the cashier's department. The head of that department would naturally know it. He should say, Now, Miss A , you are not doing very well here; isn't there something else in this business you could do better? We have had cases of that kind. We can always place them. The school has a tendency to do that.
Q. Before you discharge them you try to place them in a department where they will be efficient? A. Yes, sir.
Q. And usually you give them two or three trials? A. Yes, sir. By Commissioner McGUIRE:
Q. When did you increase the minimum to six dollars, Mr. Rosenbaum ? A. I think it was about two years ago, two or two and a half years.
Q. What was it prior to that time? A. Five. It has been five for a great many years.
Q. You think there would be very great difficulties in establishing a State-wide minimum? A. I certainly do. Do you mean by that an arbitrary minimum?
Q. Through legislation, say, rather than by the wage board ? A. I certainly do. A girl working in Olean, New York, can certainly afford to work for less than one working in New York city, or if you put it the other way, it costs the girl there less to live than it does the girl in New York city.
Q. You have three thousand employees? A. Yes, sir.
Q. If there should be a minimum fixed in New York city of ten dollars, how would that be reflected in your pay roll? A. Do you mean by that how much it would add to our pay roll ?
Q. Yes. A. I couldn't tell you that; that would need quite some calculation. Q. It would not add sufficient to justify you changing your
location? A. No, sir; not in our case. We are tied down by having a pretty large plant.
Q. In your opinion, would it in smaller plants? A. I think it would. I think any such minimum wage as ten dollars would drive a tremendous volume of business away from the State.
Q. Then it is your practical opinion, from practical experience, that if a ten dollar minimum were established here in New York, and there were no minimum in New Jersey, for instance, it would drive many people out? A. I think so, yes; but there might be a way of establishing a minimum wage that would not drive away business. If you made the minimum ten dollars I should think it would.
Mr. ELKUS: An arbitrary minimum?
Mr. ROSENBAUM: Yes.
Q. But you think six dollars for the class of work you describe is a fair minimum? A. Yes, we think it is fair. We do not pay people that wage longer than we can help.
Commissioner DREIER: You consider them apprentices?
Mr. ROSENBAUM: Yes; somewhat. I mentioned that less than 10 per cent. of our people got that rate.
Mr. ELKUS: You said 5 per cent.
Mr. ROSENBAUM: I said five and possibly ten, but not more than ten. Ten is the outside.
Commissioner McGUIRE: Do you think a minimum wage law is desirable for New York State ?
Mr. ROSENBAUM: If you are to have a law, I think the kind Professor Hammond indicated would be the best method.
By Mr. Elkus:
Q. These girls who receive six dollars a week are all young girls, sixteen or seventeen years of age? A. We have none under seventeen.
Q. Would you say they are practically all under eighteen? A. No; I wouldn't say that. There might be a case where a young woman of nineteen or twenty would come in and want to start working
Q. The majority are ? A. The majority I think are those who have recently left school.
Q. I am asked to ask you this: How do you protect yourself against employees availing themselves of the opportunity to study at your expense while in your employ and then leaving to go into some other employ? A. The only way we protect ourselves is by having such conditions and such surroundings that they would rather work for us than for someone else.
Q. You offer more advantages in the way of promotion? A. Yes, and in other ways. We try to offer them attractive places to work, and if our competitors offer them more is no reason why they should not get them.
Q. You do a great deal of welfare work? A. Yes, sir.
Q. You have recreation rooms? l. Recreation rooms, lunch rooms, rest rooms, a welfare secretary,- we try to look after them as well as we can.
Q. Do you amuse them? A. In a limited way. During lunch hour they have a pianola, talking machines and dances.
Q. Would you object to your employees being organized ? A. A part of our employees are organized. In our manufacturing department we deal with the tailors' union.
Q. Do you find it to your advantage or desirable? A. We do not particularly find it either to our advantage or disadvantage. We never had any difficulties with our employees, even with the tailors. During an experience of twenty-six and one-half years we have had only two strikes with our tailors. You know tailors in most places go out on strikes twice a year and the two strikes that we have had, that was when there was a general strike in the trade. Otherwise we have not had any trouble with them.
MANFRED W. EHRICH, Esq., addressed the Commission:
By Mr. ELKUS:
Q. What is your profession? A. I am a lawyer.
Q. And you have studied some phases of this wage question? A. Yes, sir.
Q. We would be very glad to hear you, Mr. Ehrich? A. There is only one point I care to make, and that is the argument is frequently made — I have heard it made at these hearings, and I have heard it made elsewhere -- that the State, by compelling the employer to pay a living wage, compels the employer to give the employee the difference between the living wage and what the employee earns — that is, he is practically making a present to the employee of the difference between the minimum wage and the value of the work he produces apparently on the assumption that the wages that are paid at the present time are the measure of what the work is actually worth, what the value of the work that he does is worth. I think that that assumption is altogether incorrect. There is no way of determining what is the value of the work involved in making a button-hole or in sewing a seam on a garment, or in pasting a label on a box or a can, or perhaps in merely carrying a box of materials from one end of the facotry floor to the other. You cannot arrive at the value of the labor by considering the selling price of the finished articles because the selling price of the finished article depends very much upon the labor cost and that is merely a circle. You cannot determine the value of labor by the law of supply and demand, which is what fixes prices at the present time, because the law of supply and demand only fixes prices it never fixes values. I think that is true not only for labor but for everything else. If you will conceive of a market which can absorb say nine carloads of a particular article, or a perishable article, and if ten carloads should happen to go into that particular market when it can only consume nine, the law of supply and demand, which means the sellers bidding against each other, would very likely drive the prices down, so that the price of ten carloads would actually be less than the price of nine -- that is disregarding the fact that one carload would go to waste altogether. The law of supply and demand would fix the price of ten carloads at less than nine. The same condition exists in the labor market. If you can conceive of a community which is employing whatever labor there is there, where there is a fairly balanced demand for the amount of labor, and there is no excess of labor, and at the same time there is enough labor to go around and they are all employed at a fair price, an increase of ten per cent.- that is, I mean the unskilled labor — in the class where they are bidding against each other, a slight increase means that those that are unable to get employment at the prevailing rate of wages will go about offering their services for less, and they will displace other employees, who, in turn, will offer their labor for less,' and displace still others, until it will get down to the point where we are now, the point where in a great many cases the wage that is paid is just a little above the starvation line, if it is ther3. Now, the product of that labor is worth just as much as it was when the higher wage was paid. That is, if we disregard the fact that the labor will be less efficient when it is underpaid — of course if it is going to be admitted that the difference in the cost of labor, the difference in the price of labor represents the difference in efficiency, then there is nothing further to be said in support of the living wage. The case is established. But if you disregard that fact, if we assume that the labor is just as efficient as it was before, the employees that are employed are producing exactly as much as they were before but they are being paid a great deal less and the law of supply and demand has cut prices, it has not cut values.
Now, the point I wish to make is merely that when the opponents of minimum wage legislation maintain that the establishment of a minimum wage will compel the State to pay a living wage regardless of what the employee may actually earn, regardless of what may be the value of what the employee produces, thie answer is that the present conditions tend to establish a starvation wage regardless of the fact that the employee may actually earn a great deal more.
Adjourned to Saturday, January 23rd, at 10.30 a. M., for the purpose of holding an executive session, at the office of counsel, 170 Broadway.
Adjourned to January 23rd, at 10.30 A. M.