MIGRATION OF THE SHIRT INDUSTRY (Prepared by Gladys Dickason, Director, Research Department, Amalgamated Clothing Workers of America) One of the causes of the migration of workers from one State to another is the migration of industry itself. When factories long established in one locality move, the workers who have previously been employed there are left without jobs. What happens to people thus thrown out of work? Those who would be willing to move with their migrating shops often find that their employers will not hire them because the towns in which they plan to open their factories require them to employ local help. Some of the workers left behind may be reabsorbed into local industries, others may find it necessary to accept some form of relief or private charity, while still others begin themselves to travel around in search of employment. Particularly in those areas where the migrating plant has been the main industry in the town, workers often find it necessary to resort to migration themselves. Such has been the experience of many shirt workers in various towns and cities in Pennsylvania and in New York. Statistical data on the number of these workers who migrate are not available because, as yet, no group, private or public, has attempted a study of this subject. During the last few years, however, increasing number of shirt workers, left stranded when their factories moved away, have been wandering from State to State in search of employment. These individuals who have all of their lifetime remained in one town and worked steadily at regular employment, suddenly find themselves transformed into migratory workers. Migration within the shirt industry is typical of the tendency toward migration in certain other branches of the apparel industry and exhibits characteristics similar to the migration of the cotton textile industry. The evidence indicates that this migration of industry is induced by two major factors, first, the search for lower wage rates, and second, removal to take advantage of subsidies, such as free rent and power, tax exemptions, etc., offered by communities. The migration of factories in the shirt industries during the past 5 years has taken place not only from the North to the South, but from larger towns to smaller communities within the New England and Middle Atlantic States. Frequently, garment factories which have been moved from one location to another, have been the only industry existing in the first community and after the removal of the garment factory, workers formerly employed there have been compelled either to exist on relief if it were available, or to migrate themselves in search of employment. Relation of wage rates to numbers employed in the dress-shirt industry by States.--The Women's Bureau made a survey of average hourly earnings in the dress-shirt industry in 1936. Wide variation was found to exist in the average hourly earnings paid from State to State. The highest hourly earnings, 43.4 cents per hour, were received by shirt workers in New York. The lowest, 15.7 cents per hour, or only a little more than one-third as much as is paid in New York, were paid to shirt workers in the State of Tennessee. Employment, according to the United States Census of Manufactures, decreased in the dress-shirt industry in New York between 1935 and 1937 from 11,596 to 10,747, a decrease of nearly 8 percent. During this same period employment increased in the State of Tennessee by 57 percent. Average hourly earnings in Missouri and Maryland were 28.9 cents and 29.6 cents per hour, respectively. These earnings amount to about two-thirds of the average hourly earnings received by shirt workers in New York State. While employment in New York was decreasing, employment in Missouri and Maryland increased by 25 and 39 percent, respectively. There is some disagreement on what the course of employment has been in Pennsylvania between the years 1935 and 1937. While figures from the Census of Manufactures show an increase of 5 1/2 percent in employment, State indexes show a decline of 2.2 percent. Our records indicate that the State index is, in this particular case, more accurate. (Attached are tables showing employment and average hourly earnings by States.) The States of New York and Pennsylvania are examples of areas that are losing industry because of the concessions offered manufacturers in other sections of the country. As a result of this trend, many workers in both of these States find it necessary to travel in search of employment. They add to the already growing ranks of the migratory workers. The enforcement of the apparel order under the Fair Labor Standards Act providing for a minimum of 32 1/2 cents per hour in the dress shirt industry, will tend to eliminate unfair competition based on wages paid to labor. The factors determining location of industry will be other than the search for low wages, at least insofar as a 32Y2 cents minimum affects this search. In the New York Times of March 26, 1939, however, specialists in industrial locations, were quoted as saying that migration of certain types of industry from New York city has not been halted by the wages-and-hours law and that the trend is attributable to causes other than labor conditions. Stimulation of migration by community subsidy.--While the offering of inducements of cash contributions to pay for removal, free rent, alteration of building without cost to prospective occupant and other forms of subsidy is by no means unknown in the New England and middle Atlantic States, at least in the shirt industry, this form of inducement to removal has been more common in the Southern States. That it has not been without effect is evidenced by the fact that the number of wage earners in the Southern States increased by 194 percent between 1933 and 1D37, whereas, in all Northern States combined, the increase was only 14 percent, and in some States actual decreases were noted. The number of establishments in the South increased by 48 percent, while the number in the North decreased by 14 percent. The increase in the South during the period from 1937 to 1939, with a corresponding decrease during the same period in the Northern area, has undoubtedly been more marked, although census figures for 1939 are not yet available on this point. Chambers of commerce, local governments, railroads, and power companies, working directly or through factory-locating agencies, make every effort to encourage industry to migrate to their particular locality. Concessions in the form of free rent, gifts of factory buildings, tax exemption, and free power, light, and water are offered as inducements. Aiding industrial migration are professional factory-locating services whose business it is to sell firms the idea of moving their factories to other areas. Attached to this statement are copies of letters sent to a northern manufacturer by various local groups interested in having him locate in their communities. Free rent is offered as one of the attractions. One of the most highly developed plans for encouraging industry to migrate to the South is that of the Southeastern Governors Conference. In a descriptive circular sent out by the Southeastern Governors Conference upon request for information, they state their objectives to be the aid and protection of industrial development in the Southeast. They announce that they plan by means of advertising to publicize the opportunity which the Southeast offers to industry in the form of "unlimited supplies of raw materials, ample power at low rates, native-born labor, efficient and reasonable " They also offer to any organization, without cost, any specialized engineering and survey facilities that may be required by any industry interested in moving to the Southeast. A copy of this circular is attached hereto. In 1936 the State of Mississippi began what was known as the Balance Agriculture with Industry program. At the suggestion of Gov. Hugh L. White the State legislature passed a law which provided that any municipality, with the approval of the industrial commission and a two-thirds vote of its electors, could issue bonds to be used by the municipality for the acquisition of land and construction of buildings for new industries. The municipalities, upon authorization by the industrial commission, "are * * * empowered, if they so desire, by and through their governing board, to sell, lease' or otherwise dispose of such industrial enterprise or enterprises."1 Power companies, too, have been instrumental in encouraging industry to move southward. In Mississippi a private power concern wanted to buy the city's municipal power plant and the town wanted a factory. The power company was sold to the private company and in order to get around legal technicalities the chamber of commerce set up a corporation which received a sum of money from the power company to build a garment factory. In another case a power plant was reported to have contributed a large sum of money to help erect a factory building in Mississippi. This kind of contribution by power companies as part of a general program to induce industry to settle in the South is not unusual. Another method frequently used to raise money for the subsidizing of new industries is to deduct a percentage every week from the wages of the workers in the plant. Illustrations of this practice are included in the Appendix. New industries not always beneficial to towns to which they migrate.-In many cases, however, new concerns which have migrated to the South have not proved to be assets to the towns in which they have settled. Wages paid by these companies have sometimes been as low as 10 cents an hour. It has been necessary, in some cases, for communities to supplement incomes earned in these plants with home relief or some form of private charity. Sometimes hours worked in these establishments have run as high as 50 or 60 a week. In North Carolina one shirt firm was convicted of violating the State law which prohibits women working more than 55 hours a week and a law which prohibits girls under 18 working after 9 p. m. In discussing this case, Thomas Stokes. staff writer of the New York World-Telegram, states in the January 18, 1937, edition of that paper as follows: "The testimony of a 17-year-old girl that she had worked 69 hours a week for 8 cents an hour; of a 15-year-old girl that she had made $4.93 for 2 weeks of piece work, and of a 46-year-old woman that she made 8 cents an hour, provoked the prosecuting attorney to this outcry: 'This is the Good Samaritan come down from New York to do charity to the good people of Dixie. I'll tell you why they come down here. Such things have been outlawed up North.'" The experience of Meridian, Miss., with subsidizing industry was not entirely successful either. In 1934 the citizens of this town raised $100,000 to build a factory for the Phillips-Jones Shirt Co. This was given rent-free and tax-free to the company, with the understanding that when the company had paid out $1,000,000 in wages it was to receive title to the building. In May 1939, after Phillips-Jones had dispensed $1,000,000 in wages and acquired title to the building the firm ceased operations completely. They then offered to sell the building to which they had obtained title free of charge from the town. APPENDIX I SAMPLE LISTING OF TYPES OF SUBSIDY OFFERED TO INDUCE REMOVAL OF SHIRT FACTORIES The following material has been drawn from newspaper clippings, reports of townspeople, and examination of contracts between various companies and local Government agencies. The cases that follow are typical examples of how industry is induced to migrate through offers of various kinds of subsidies. Mississippi.--Levine, Harris & Smith, a firm which manufactures shirts and pajamas in Pennsylvania, bought a building in Gulfport, Miss., which originally had been built by the town. The concern began operating February 1937, tax exempt. Before the opening of the Gulfport plant, the factory at Williamsport, Pn., employed about 700 people, but after the opening of the Gulfport plant employment was reduced to two to three hundred workers, and at the present time the Williamsport plant is closed down entirely. Bernstein & Sons, another shirt firm, which for many years operated in Allentown, Pa., opened a plant in Crystal Springs, Miss., in August 1936. This company was given free light and water and was exempt for 5 years from the payment of taxes. The Daily News Record of February 25, 1938, reports that the Amory Garment Co., located at Amory, Miss., refused the town's offer to erect a factory through a $50,000 bond issue. The company, however, accepted a 5-year tax exemption on its site, building, and equipment. Tennessee.--According to our records in Tennessee, in 1937, out of a group of S6 factories investigated, 50 were found to be receiving some form of subsidy. The town of Waverly, Tenn., built a factory which it turned over rent-free for 10 years, to Snelbaker Manufacturing Co., producer of work shirts and work pants. This firm had maintained plants at Mechanicsburg and York Springs, Pa., for years. In addition to free rent, the town of Waverly agreed that after the 10-year period rent was not to exceed $150 per month. Free water and free lights were also provided. No taxes were to be paid by the company. Workers in this shop were required to sign a contract that they would pay a percentage of their wages to the town to cover the cost of the subsidy. Henry I. Siegel, a shirt and pants manufacturer, opened a plant at Dickson, Tenn. He closed his factory in Scranton, Pa. Many of the 450 people thus thrown out of work were forced on to the relief rolls. The plant in Dickson was built by the citizens of the town and rented to the company for $1 a year. The company received 5 years of tax exemption, free power, light, and water. For a considerable period of time 6 percent of the wages of the employees were deducted to pay for the building. Eventually, after much litigation, the company was forced to pay rent and taxes. On December 2, 1937, the newspaper, the Sparta Expositor, announced that negotiations had been completed with the Mylan Manufacturing Co. of New York for locating their shirt plant in Sparta, Tenn. The cost of moving the company's machinery to Sparta was partly defrayed by $5,000 donated by the townspeople. The Washington Manufacturing Co. was offered the following inducements by the town of Milan to open a plant-rent of $1 a year, free water. free electricity, and no taxes. Deductions were made from the workers' wages to pay the cost of building the factory. Mississippi.--H. D. Bob & Co., manufacturers of dress shirts, work shirts, and pajamas, operated a number of plants in Pennsylvania and one in New York. In 1937 the firm opened a new plant in Picayune, Miss., under the name of the Picayune Manufacturing Co. Money for the construction of the building was raised by the town. It was agreed that the company would pay no rent and no taxes. In 1938 H. D. Bob & Co. opened a dress shirt plant in Natchez, Miss., under the name of the Natchez Fabricating Institute. The factory building in Natchez was erected by the town and it is reported that a Mississippi power company pledged a large sum of money for this purpose. It was agreed that if within 7 years the pay roll of the factory amounts to $1,000,000, the deed for the land and building be given to the company. It was agreed further that the plant was to operate tax-exempt and rent-free. More than 1,200 workers, formerly employed by the H. D. Bob & Co. in New York and Pennsylvania, have been left without jobs since the firm opened its Mississippi plants. A few of these workers have been able to find employment, many of them were forced to go on relief, while others began to migrate in search of work. South Carolina.--The Daily News Record of January 13, 1939, reports that "Mayor B. B. Owens, of Columbia, S. a., has announced that sites suitable for erection of industrial plants have been offered by Columbia, rent free, by property owners of Richland County. The mayor said an effort would be made to have manufacturing plants locate in Columbia or its trade area. Offers received by the municipality are conditioned on the erection of industrial plants and will remain rent free as long as the plants are in operation * * * the proposition being offered manufacturers was free rent on property and free taxes for a 5-year period." The Daily News Record of July 3, 1940, reports the following: "Mayor S. M. McAdams of Iva, S. C., states that plans are under way here for establishment of a new shirt factory. The city council has voted to permit the shirt factory company to go free of taxation for 5 years and to be granted a free license." Georgia.--When the Royal Manufacturing Co., makers of dress shirts and underwear, came to Washington, Gal, the town contributed $20,000, and the workers, by signing notes for future deductions, contributed $20,000. This firm also operates plants in Pennsylvania. The workers there have lost a substantial part of their employment because of the opening of the Georgia plant. Before the wage-hour law, it was reported that these workers in the Georgia plant were receiving from $3 to $5 per week. 1 According to the Daily News Record of January 29, 1940, Gov. Paul B. Johnson, who took office January 16 of this year, stated that the "balance agriculture with industry" program will be amended or abolished.