Abstract
IT HAS at times been alleged that the establishment of minimum wages will result in a transfer of business from inefficient to efficient establishments, with the result that inefficient plants will be forced out of business. This, it is claimed, would create a serious problem of unemployment in the neighborhood of the closed plant. The present report is directed exclusively to this one question: What was the effect on employment in low-wage seamless hosiery mills between October 1938 and September 1939 of the 25-cent minimum wage that became effective on October 24, 1938? The Bureau of Labor Statistics made a study of hourly earnings in the seamless hosiery industry in August 1938. At that time, when the average hourly earnings of 18,270 workers in a sample of 97 plants were 35.1 cents, it was found that there were 27 plants with 4575 wage earners that paid on the average less than 30 cents an hour, as follows :
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