Additionol Cost Per Employee of New L. A. Union Agreement

The following, very interesting analysis of the additional cost per employee of the new agreement with the Los Angeles lumber labor union, in the settlement last month which narrowly averted an industry shutdown, was contained in the July 27 bulletin of the Southern California Retail Lumber Association. It was prepared by Executive Vice-President Orrie W. Hamilton.

It should be remembered that while the following analysis immediately concerns only the Los Angeles area, it is generally believed it may eventually be the pattern for the entire Southern California lumber industry. It is also understood that Mr. Hamilton is now working on a further analysis ftr present soon to his SCRLA members.

The analysis follows:

Analyzing the new industry agreement with the Unions irr the l-os Angeles area, it is found that the cost to the employer will be $242.66 per employee the first year and 9624.00 per employee the second year or nearly 21 cents per hour more per employee spread over a two-year period. Of course, if rve were to get technical and charge the increase granted against the time actually worked by the employee, the cost over a twoyear period would exceed 22 cents per hour. Below is the mathematics to sripport our statement:

(a) The work year consists of 2,080 straight time hours (40 x52)

(b) $208.00 is the yearly wage increase per employee the first year (2,080 x 10 cents); add to this-

(c) 34.66 for two months pension payments of 10 cents per hour from May 1 to June 30,1957 (2/12 ot $208.00)

(d) $242.6 The above items are part of the total increases from July I,1956 to June 30, 1957. This cost to the employers is 11 2f3 cents per hour per employee the first year (9242.66 ; 2,080) ; add to this-

(.) 62+.00 for wages and pensions the second year ( 10 cent wage increase carried forward from the first year plus 10 cents per hour wage increase the second year and l0 cents per hour pension payments the second year (2,080 x 30 cents) total, irrg_

(f) $866.66 Cost per employee of the two-year package over the agreement that expirerl June 30, 1956. This will cost the employers 20.83 cents per hour per employee spread over a two year period ($866.66 -i 4,160 hours)

Since the ernployee receives 6-paid holiclays (48 hours) and two weeks paid vacation (80 hours) he will only work 1,952 hours per year but draw wages for 2,080 hours making better than a 22 cent per hour increase spread over. a two year period.

The above computations do not, however, take into consideration-

(1) The overtime pay increase after July 1,1956; (This is 15 cents per hour more the first year and 30 cepts per hour more the second year, than it was under the old contract.

(2) Pro-rated vacation pay for employees who are discharged or leave your services for any reason; (This will cost l/12 of one or two weeks vacation pay for each month of service after the employee's anniversary date depending on his length of service with you) ; and also

Comstock qnd Flomer Speok

fo Construction Specifiers

Two top lumber authorities u'ere the speakers at the recent meeting of the Construction Specification Institute at Rodger Young auditorium in Los Angeles. Erik Flamer, representing the Southern California Retail Lumber Association, told the specifiers of progress made on the new grade names of lumber, as 'ivell as a feui points on structural materials. Don P. Comstock of the Westeri Pine Association reviewed finish lumber.

(3) Time and one-half pay for boat checkers, carrier, stacker and crane operators after 3:00 P.M. when they are used in pirlling boats. (This applies directly to the cargo shippers in the Harbor area but indirectly to other dealers who buy from cargo shippers). Each company will have to determine its additional costs on these extras based on its experience the past year or so, but it will be substantial.

How this increase will affect the selling price of lumber and allied products in general will be discussed in our bulletins to follow. In the meantime, please let us know to what extent your price will have to be increased to meet these nelv additional costs.