6 WAGES AND PRODUCTIVE LABOR COSTS ®

Adequate wages for women workers were not necessarily accompanied by high productive labor costs, nor did low wages assure low productive labor costs. The American Institute of Laundering, on the basis of cost information supplied them by 409 member laundries, reported average productive labor costs of 35 percent in 1944; that is, 35 percent of receipts was expended on productive labor costs.

A sufficient number of employers in six cities reported information on productive labor costs for the year ended 1944 so that a comparison could be made of one city with another. Average costs were not identical in these cities, nor did all correspond to the 35-percent national average reported by the American Institute of Laundering. More significant, however, is the relationship of productive labor costs. to the average hourly earnings of women productive workers in these cities. Chicago showed the lowest costs. Here, productive labor costs consumed an average of 30 percent of revenue, but average hourly earnings were highest in this city. Comparing Chicago with Memphis, we find that Memphis, where productive labor costs averaged only slightly more than in Chicago, showed average earnings about half those of Chicago. Comparisons of other cities point to the same conclusion. Average productive labor costs in Indianapolis and Kansas City were almost the same, 34 and 35 percent, respectively, but average hourly earnings differed substantially, being almost 15 percent higher in Indianapolis than in Kansas City. The six-city comparison can be seen in table 7 in which the cities are listed in the order of average productive labor costs expressed as a percent of

revenue.

Table 7.—Earnings of Women Productive Workers and Productive Labor Costs in Six Cities

Narrowing the comparison to individual laundries within the same city, one comes upon many illustrations, not only of laundries whose women had low earnings compared to the average for the city yet whose productive labor costs were comparatively high, but also of laundries showing comparatively high earnings and low costs. The following illustrations are typical. Laundries designated as plant "A" reported higher earnings and lower costs than those shown as plant "B."

• Productive labor costs, expressed as a percent of revenue, represent the percent which laundry productive labor costs consumed of total laundry receipts. Dry-cleaning costs and receipts were excluded. This percent does not show actual dollar costs, nor should it be confused with unit labor costs.

From the foregoing comparisons and from table 7 it can be seen that productive labor costs are obviously influenced by factors other than the wage level of productive workers, most of whom are women. A Virginia laundry owner whose 1944 productive labor-costs ratio was lower than in 1941 attributed the reduction directly to the vastly improved production methods and more modern equipment instituted after a study revealed that many production bugs could be ironed out. In 1944 the laundry did a substantially higher volume of business with fewer employees than in 1941. Productivity increased substantially as did employee's earnings.

Laundry owners, expressing themselves through their own trade journals, have similarly declared that good wage standards can stimulate the attainment of efficiencies so necessary in the industry. An editorial in the May 1945 issue of the American Laundry Digest stated that

"Laundry owners should remember that higher wages do not necessarily mean higher labor costs. In well operated plants higher wages have acted as a spur to management, and lower labor costs have resulted. This has meant that higher wages have not come out of profits but out of increased production." LAUNDRY EARNINGS COMPARED WITH EARNINGS IN OTHER INDUSTRIES

The 1945 wage level of women laundry workers in any one city did not evolve in a vacuum. It has been influenced by a variety of forces among which is the prevailing wage level for women in other industries of the same city. Competition in a labor market area for the available labor supply sets up a cross-current of influences affecting the wage level of all industries in the area. Such competition is of more limited effect in the South, however, because of the restricted employment opportunities of Negro women workers, hired readily for many laundry jobs but only for a few jobs or not at all in other industries. It is significant to see how women's laundry earnings stack up against earnings in other industries. Information on women's earnings is available for one or more other industries in 12 of the cities visited during the laundry survey. As table 8 shows, women's earnings in laundries generally came closer to approximating those in limited-price stores (5 and 10's) than those in any other industry. Women workers in department stores and clothing stores usually earned substantially more than in laundries. Manufacturing earnings in industries important to women in each city were far and away above those in laundries.

Table 8.-Comparison of Average Hourly Earnings of Women Production Workers in Power Laundries With Earnings in Other Industries in the Same City

CHAPTER IV. PRICES

LAUNDRY SERVICES

Familiarity with the services offered by laundries is essential to an understanding of their pricing practices. Most family laundries sell several types of services, offered under a variety of names.

PRINCIPAL TYPES OF SERVICE

A bachelor bundle is usually composed of shirts and other items that are completely finished and mended. All items are priced individually, by the piece, rather than at pound rates as in most other services. This type of service is also known as "custom work," "piecework," "list price work," or "bundle work."

In a damp-wash service (often called "wet wash"), all items are washed, extracted, and returned damp. The customer must iron the laundry.

The several semi-finish services are known by various trade names, such as, "fluff dry," "rough dry," and "soft dry." In a semi-finish service the flatwork is ironed, and the wearing apparel, after being washed and dried, is returned to the customer for ironing. Another type of semifinish service, generally known as "thrifty," also calls for ironed flatwork, but the wearing apparel is returned damp instead of dry, as in the other types.

The family-finish service offers washing and ironing of all articles in the bundle. In the less expensive type, everything is completely machine-finished and ready for use, while the more expensive type (a deluxe service) also includes hand touch-up (hand ironing) and sometimes mending.

A rate per pound is usually charged for the above services (except bachelor bundle), and a bundle of a specified minimum size is generally required. In each of the pound-price services, except frequently family-finish, shirts are generally finished at an extra charge. Individual laundries may offer one, more, or all the services and may or may not offer delivery service. Some laundries are exclusively of the "pick-up and deliver" type, whereas others are exclusively of the "drive-in" or "walk-in" type offering all their services on a cashand-carry basis and may or may not have different sets of prices for each.

WARTIME REGULATIONS ON SERVICE AND PRICES

In common with many other industries, power laundries experienced shortages during the war, of labor, materials, and equipment, which necessarily limited the quality and types of service that could be provided the public. Government regulations on prices, transportation, and manpower also affected the services offered. Inasmuch as

information was secured on conditions in effect in July 1945, a month before VJ-day, the services then offered were influenced by wartime controls.

The Office of Price Administration permitted the elimination of many practices, called "frills," without corresponding price decreases. Among them were the discontinuance of hand finishing on machinepressed articles, the ironing of handerchiefs in the semifinish services, mending, special starching, and the delivery of list-price bundles priced under $1. Under OPA regulations, laundry prices were frozen at the March 1942 level. Price relief was granted to individual laundries when management return fell below 8 percent of sales or in other specified circumstances. In Chicago, area-price relief (applicable to all laundries) was granted, but in the other cities visited only individual establishments, upon application and approval, were allowed to increase prices. Price relief, when granted, was generally expressed as a percentage of existing prices. The approved increase was added as a surcharge to each customer's bill, first totaled according to previous prices.

The industry was also affected by regulations of the War Manpower Commission which set up requirements for laundries to meet before they could be declared essential or "locally needed," thereby assuring themselves some measure of stability in retaining workers. Establishments wishing to be classified as "locally needed" were required, among other things, to offer a maximum of three services-wet wash, semifinish or rough dry, and press or family finish; to eliminate hand ironing, retouching of flatwork and wearing apparel, and ironing of articles already dry-tumbled; to do all starching in the wash wheel (rather than as a process separate from washing) and to use only one grade of starch; to discontinue the use of shirt boards and other packaging frills; and to reduce labor requirements for pick-up and delivery service by establishing nonoverlapping delivery zones and a 7-day delivery schedule for semifinish and family finish services, that is, simultaneous pick-ups and deliveries once a week in any zone.

Regulations of the Office of Defense Transportation materially affected the delivery service of laundries which, among other requirements, had to reduce mileage of their motor trucks; were not allowed to make special deliveries, call-backs, or more than one delivery a day at the same point of destination; and were required to eliminate wasteful and duplicating delivery operations.

WARTIME CHANGES IN SERVICE

Among the establishments included in this survey, family finish was the service most frequently eliminated during the war by laundries reporting a change in basic services. Many discontinued it entirely, and a few reported that they limited the amount of family-finish work by discouraging customer requests for this service or by accepting only a certain amount. Laundering of curtains was quite generally eliminated, and a few laundrymen also reported they had discontinued laundering silks, rayons, rugs, blankets, spreads, pillows, and handkerchiefs. Some laundries did not iron bath towels, fancy work, overalls, or socks.

Defined as profit before provisions for executive salaries and Federal income taxes.