Lumber Industry Presents Vie*s on Labor Standards Bill

Washington, June 1S.-Wilson Compton, Secretary and Manager of the l$ational Lumber Manufacturers Association, today presented the joint meeting of the House and Senate Labor Committees on the Labor Standards Bill, a statement, as follows, on behalf of the lumber and timber prodticts industries of the United States-

To the Joint Committee of the Senate and House:

I speak here for the lumber and timber products industries of the United States, represented by the National Lumber Manufacturers Association, a federation of 16 associations including every region of lumber production. Lumber is a predominant factor in the industry of 5 states; a large factor in 7 others; and of commercial importance in more than 30 states. The forest products industries probably will be affected as much as any other industry by such legislation as is now proposed.

My comment is directed to four specific features of this Bill which, if enacted, will in our judgment afiect the forest products industries in a peculiar way, or to an extent greater than industry generally:

1. The proposed establishment of a class of exempt employers;

2. Industry Advisory Committees and hearings of industry;

3. Foreign competition; and

4. The effect on forest conservation..

First, as to the exemption of small employers proposed in Section 6 (a). I have here, and with your consent, will leave for your examination, an analysis showing the extent to which this provision would exempt production and proclucing units in the lumber industry in 18 of the principal timber states, and in the United States as a whole.

This is based on the assumption of an exemption limit of 25 employees which, I understand was originally contemplated by sponsors of this proposed legislation. If and to the extent that a lower limit is assumedlgthe resulting exemptions of lumber production and mills would be reduced in about ratable proportion. This provision applied to the lumber industry in the United States as a whole would exempt between 2O% and 22% of. the total production of the industry, and between 867o and 88/o of the operating mills. In the Southern Pine region it would exempt ?% of. the product and between 82% and 86/o of the mills; in the Western Pine region between 9% and 12% of. the product and between 74% and 8O7o of. the mills; in the Douglas Fir region 7/o ol the product and 67% of. the mills; and.in the Southern lfardwood region about 36% of. the production .and X)% of the individual mills.

This is based on the most complete available reports of the Census Bureau and the Bureau of Labor Statistics covering lumber production, average hours of employment and average output per employee. The Census reports are for tlre years 1929 and 1932, the latest available which show the classification between large and small mills, and the publications of the Department of Labor during the past twelve months.

In t9D, a Z5-employee limit would in the State of Georgia have exempted 52/o of the lumber production, 63% in Virginia, 39o/o in Alabama, ll% in Montana, 48% in North Carolina, 42o/o in Tennessee, 19% ln West Virginia; and in :percentage of producing units, the exemptions in 1929 'would have ranged 'between 45/o in Louisiana, 6l% in Calif.ornia, 927o in Tennessee. The same provision in 1932 would, in the Southern Pine region, have exempted total lumber production to the extent of. ll% in Louisiana. 18% in Mississippi, 39/o in Alabama, 65% in Virginia; in the Southern Hardwood region, amounts ranging between 26% in Arkansas and 52% in North Carolina; in the Western Pine region, between 7/o in California and 26% in New Mexico; and in the Douglas Fir region, 6/o in Washington and 9/o in Oregon. These percentages of exemption, in nrost regions, can be much increased by the easy device of contracting and sub-contracting of both logging and milling.

There is comparatively little difierence between these percentages in the active year of l9D, when the national lumber production was over 36 billion feet, and in the stagnant year of 1932 when the production was barely 10 billion feet. It may be fairly assumed that these same proportionate exemptions, within moderate margin of error, would result today when the national lumber production is at the rate of about 25 billion feet annually.

If you conclude to deal with this matter as proposed in Section 6 (a), you should at least know what its con'sequences will be as applied to one of the most difficult industries, and accordingly determine for yourselves what likelihood there may then be of a fair and impartial application of any proposed labor standards to competitors in this industry. If standards are to be applied, no competitor should be exempt.

Second, the pending Bill defines oppressive wage and the sub-standard wage. In Section 4 (c) it proposes to authorize a Labor Standards Board to vary the minimum wage standard "upward and downward" as the Board finds "necessary or appropriate." Then under Section 5 (a) it is proposed that the Board be empowered under certain conditions to fix a "minimum fair wage" higher than the minimum wage standard established by Section 2 (a) 10. Further, Section 14 authofizes the Board, before issuing an order fixing a "minimum fair wage" under Section 5, tor consult with an "advisory committee" for the industry in question. This same provision apparently does not apply to the determination of minimum wage standards or to ad- ministrative modifications under Section a (c). We hope that if you conclude to recommend to the Congress the establishment of a Labor Standards Board and the grant to such Board of powers as proposed in this Bill, that you will recommend, also, that such Board be not only authorized but required to consult rvith the affected industry and to give it a hearing before the Board issues any order, either to establish a "minimum fair wage" under Section 5, or a "minimum wage standard" under Section a (.).

We suggest, also, that the proposed Board, if established, should, upon appropriate application of any industry, be required to give hearing and due consideration to any facts which the applicant industry may submit in support of request for modification of the "minimum rvage standard" as it may be established by Section Z (a) lO. The pending Bill is deficient in this respect: every subject industry should be entitled as a matter of right, and not merely of convenience or discretion of the Labor Standards Board, to make application with respect both to "minimum wage standard" and "fair wage standard," and to have appropriate hearing on such application.

Third, as to foreign competition: Our Anrerican lumber industry is naturally and normally an export industry. We say so and the State Department says so. We are having a hard time maintaining that status. Eight years ago we rvere in first rank in volume of world lumber exports. Now we are fifth. Legislation of the kind here proposed will obviously make our export trade more difficult. Direct labor costs average about &/o of total production costs. In various regions this percentage varies from 30% to 5O%.

This Bill, if enacted, would result in substantial increases in cost. This will further handicap the much-needed recovery of our foreign lumber trade and will further accentuate our dependence upon our domestic markets. The moderate protection afforded in existing tarifts has been reduced by one-half in foreign trade agreements during the past year and a half. A tariff hardly more than nominal now separates us from the competition of lower-cost foreign lumber. Last year our lumber imports increased 507o and our lumber exports declined 27o. We are merely facing the plain fact when we say that legislation such as proposed in this Bill will retard our foreign trade and will substantially increase the need and the justification for more effective and more dependable protection in domestic markets. If Congress enacts such legislation as this, you cannot expect us to eat our cake and have it too.

Fourth, lumber manufacture probably can be decentralized as readily as any other American industry. This is an industry typically of small or moderate-sized units. There are no huge single lumber manufacturing enterprizes. The nature of the industry does not lend itself to concentration. There is an important place for small lumber enterprises. But their place should be determined naturally by their efficiency and by their local advantages, and not by statutory preferences or exemptions set up by Federal law. If, by statute, you force decentralization into small operating units, you will within a few years have nullified most of the progress u'hich in the past quarter century has been made toward forest conservation and sustained yield management of forest lands. Without that there will

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