ECONCHIC DEVELOPMLNT AND GBOGhAPHICAL DISPAhITlES 1N Flhh WAGJ hAffiS IN MICHIGAN, 1940—1957 By Kenneth Chien lng Cheng Submitted to the School for Advanced Graduate Studies of Michigan state University of Adriculture and Applied Science in partial fulfillment of the requirem nts for the degree of DOCTUn OF PHILOSOPHY 0 Department of Agricultural ficencuics 1959 a: ACKNOWLEDGEMSNT The author wishes to express his deep gratitude to the chairman of his guidance committee, Dr. Dale E. Hathaway for his competent guidance, timely encouragement and patience in directing the study, reviewing and correct— ing the manuscript. The author is greatly indebted to Dr. L. L. Boger, head of the Department of Agricultural Economics, whose financial assistance made it possible for the author to complete his study at michigan State University. Special thanks are extended to Dr. Lawrence W. Witt for his kind and generous encouragement, and to Dr. Milton h. Steinmueller for his helpful suggestions and for reviewing a part of the manuscript. To Michigan Department of Labor, michigan Employment Security Commission, Lansing Office, and Michigan Cooperative Crop deporting Service, thanks are due for their cooperation and assistance in providing the primary data for this study. Appreciation is also expressed to other members of the facu ty and to graduate students for their enlighten— 'ng suggestions. The author is also indebted to firs. Shirley F. Brown for her help in typing and to Mrs. Arlene King and other members of the statistical pool for their computational assistance. Last, but not least, the author is grateful to his wife, Chou Chao. Without her continued encouragement, forbearance and help back in home country during the entire period of the author's graduate study, this thesis would not have been completed. The author assumes full reaponsibility for errors that remain in this manuscript. Kenneth Chien Ing Cheng September, 1959 ii ECONOMIC DEVELOPMENT AND GEOGRAPHICAL DISPARITIES 1N FARM WAGE RATES IN MICHIGAN, 1940-1957 By Kenneth Chien Ing Cheng AN ABSTRACT Submitted to the School for Advanced Graduate Studies of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of DOCTOR OF PHlLOSOPHY Department of Agricultural Economics 1959 ApprovedW ABSTRACT There have been studies on geOgraphical disparities in farm wage rates but few have treated the process as the outcome of the dynamic process of economic development. This study is an attempt to examine the geographical diSparities of farm.wage rates in Michigan as they are related to economic growth . The classical equilibrium model of perfect competi— tion does not provide an adequate analytical framework when the problem is concerned with a dynamic process. For this reason, the retardation hypothesis was used as the general framework for the analysis. rhe settlement of michigan began early in the 17th century but its develOpment took place only after the Open- ing of the Arie Canal and the discovery of iron and copper mines in the first half of the last century. The exhaustion of timber resources in the northeastern states and the great movement to the west eXpedited the develOpment of lumbering industries in Michigan at almost the same time. michigan thus developed not exclusively as an agricultural state but with agriculture and extractive industries together. The relative decline and growth rates in different industries played a unique role in differentiating the pace of economic progress in the different regions of Michigan. iv The Civil War, together with a large inflow of people from the eastern states and Europe, accelerated greatly the de- velopment of agriculture and industries in michigan. But, the exhaustion of timber resources and the competition from new mining industries in the other states brought the decline of extractive industries in Michigan at the turn of the cermury. Under the pressure of the declining extractive iruiustries, the economic structure of Michigan underwent a asevere change. In the southern part of the Leger Lenin- suLLa.manufacturing industries, especially automobile manu- fac3turing, replaced the extractive industries as the major inc:ome generator in Michigan. Agriculture also underwent Changes. fhe transition from ex ractive to manufacturing indiistries in michigan changed the pace of develOpment in the (different regions of Michigan. The rate of development in ‘the nonfarm sector in Michigan during the study period froni 1940 to 1997 showed a divergent pattern of develOpment betvneen different regions. The developed regions indicated a teruiency to outgrow the underdeveloped regions as pro— Pounded by the retardation hypothesis. Agriculture is not an independent economic or— EjanlZation separate from the other sectors of economy. Both or. ross farm income and farm wage rates in different Peg." ,, . . _. fl . . . . . oleS in michigan revealed a sinilar diverging trend during the period studied. The geographical disparities in farm wage rates in the different regions of michigan were associated with marginal productivity of labor but the farm product price seemed not to be a cause of the disparities in farm wage ruites between the different regions. The rate of natural é;rowth of population also was found not to be the cause of tile disparities in farm wage rates between areas. The differentials in farm income and wages were .fOLLnC to be related to the develOpment in nonfarm sector of the economy. The industrialization in the nonfarm sector terided to offer higher wage rates and more employment op- poxrtunities to farm peeple, thus avgravating the disparities in \vage rates between farm and nonfa'm sectors. It was also foeuad that there was a higher percentage of farmers who weiiied off farms in the develOped regions. The uneven rate 0f cievelopment in the nonfarm sector between the different TGJiJens widened the geographical disparities in farm wage 1.4 in C». (D U) I" iechnclogieal progress in farming reduced consider- a the labor requirement in michigan farms but the effect P- +1. 7, , . ,. . . . CL‘ Mae geographical disparities in farm wage rates was not (i. N L ' ". 1 0 \ ~ , leBIYMlfle cue to the compleXity of the effects of the (A. t ‘ I ' n - eCEHMllOglcal develOpment and the crudeness 01 the available me o p ‘ ‘ a°ur€nien t8 vi . ‘ i . I \ " ‘ 3" , ‘u '-. . ‘ ' V V. .L - . mlglfitlcu is a iaetOI tlut snodld tend to efiualize \ .— - ‘a- o , . ‘ . . A: . m , ‘ . . r . fl . “7' . v. fl’v V vv' (1 the ¢eourapeical dispa it es in idra ”ace intes. it has - Ll.. 4» 4 . . ,. +...' ,, J—' ‘- “ .Llrl Ludo theie was a larve outaioravien irom t.e less .i-.1...;-.—..' A...‘ ~- - ‘. - seneio ed lubl Lo and inni-iation to tne deVelOped regions. 'V ‘ «r. V'I ‘ . '4.—‘. ‘,r~\ I; r l ’\ 0’ ‘ "l‘ .r . ‘ 'fine rate c; mflblllcd hub, lOueVCI, not large eno.5n to close the *ap in SUObTapnlCS diSparities in iarm income and wage , -‘ ‘ 1 a v‘ \ 7 x -- ‘ t I 1 .‘ » ’V . v ‘ ‘I "‘ . 4‘ . ~ 1 ’ '_ EJtLS, suooestiuo tie neceCSitj 10; additional we sures to a . ' . u ‘ I|’ .II-c‘ 1 o ' - tf. _ o A luxbLOVe rescuiCe mooiiitd in mlCAlQBH. ‘ vii J TABLE OF CONTENT’ Chapter Pare I I‘ILLtCUDCTIO o o o o o o o o o o o o o o o o l I I. TI EU hun‘ i I (1:11; l‘xhl‘Lis‘lfi II'C‘liK o o o o o o o o o o o 1 O Retardation hy'potr esis . . . . . . . . . lO Retardation hypothesis and conventional approach. . . . . . . . . . . . . . . . l7 ’eneral theory . . . . . . . . . . . . . 55 IILL LCONChIC nsvchrnsnr CE MICthAN IAICA EC 1940 . . . . . . . . . . . . . . . . . . . 45 Physical and climatic setting. . . . . . 46 narly history. . . . . . . . . . . . . . 50 Early development. . . . . . . . . . . . 51 Mining and development of Upper Peninsula 53 Lumbering industry . . . . . . . . . . 55 Impact of mining and lumbering industry. 58 Cities and towns . . . . . . . . . . . . 58 Transportation development . . . . . . . 59 Manufacturing industry . . . . . . . . . 61 Population growth. . . . . . . . . . . . 64 Characteristics of pepulation. . . . . . 68 Agriculture. . . . . . . . . . . . . . . 70 Summary. . . . . . . . . . . . . . . . . 84 IV NDUolnlALIuAlle Lb ADS TO DI”BNGnJl iNcoxs M31) IHIAG’A.‘ lhEb‘DS, 1939-19b7 o o o o o o o o 87 Characteristics of western economic de— velopment is increasing disparity of income. . . . . . . . . . . . . . . . . 90 Income per worker in nonfarm sector. . .95 Value added per capita by manufa ctures . 104 Iroportion of pepulation that is nonfarm as a criterion of economic development. 110 Chanb es in farm and nonfarzn pOpulation . 117 A s ruary of tzie development trends in nonfarm sector. . . . . . . . . . . . . 118 Farm wage and income under the uneven economic development between regions. . 121 Gross farm income per farm . . . . . . . 124 viii ”A315 CF CCNiEN”S (continued) Chapter lvap'e Daily farm wages and industrialization . 128 Geographical differentials in daily farm wage, 1940—1957. . . . . . . . . . 152 Summary. . . . . . . . . . . . . . . . . 141 V iniACT or UNEViN INDUSTfilALIZATICN TO Finn "AGE 0 o o o o o o o o o o o o o o o o o o 145 Demand for labor . . . . . . . . . . . . 146 Wage rates and marginal value of labor. . . . . . . . . . . . . . . . 146 Supply of labor. . . . . . . . . . . . . 149 hate of natural growth of population. 150 Replacement ratios of Michigan rural males. . . . . . . . . . . . . . . . 155 Technological develOpment in farm . . 159 Economic development in nonfarm sector . . . . . . . . . . . . . . . 165 . Part time farming and underemployment 01‘ farillero o o o o o o o o o o o o o 180 The Upper Peninsula, the problem area 185 Migration, the phenomenon of adjust- ment . . . . . . . . . . . . . . . . 186 Summary. . . . . . . . .’. . . . . . . . 191 V H JULIU‘ILAEX‘I A‘LND CUIVCLUSIOIIS o o o o o o o o o o 193 ‘iPl’EEIDIX. o o o o o o o o o o o o o o o o O o 0 0 0 0 200 BlBLIOGRAl)liYo o o o o o o o o o o o o o o o o o o o o 207 . LIST OF TABLLS Table Page 1 Average Cash Value Per Acre of the Principal Crops of the Western States, 1875—1880. . . . . 78 2 PrOportion of Rural and Urban Iopulation in 51101115811, 1840-1950 0 o o o o o o o o o o o o o 82 5 Number of Manufacturing Establishments in Michi— 3311, 1939 o o o o o o o o o o o o o o o o o O o 93 ‘4 Income Per worker of Major Nonagricultural In- ) Value Added Per Capita by Lanufactures in Michi- 5am, 1939"].9940 o o o o o o o o o o o o 0. o o o 106 0 Percentage of Nonfarm Population in Michigan, 1940"].950 o o o o o o o o o o o o o o o o o o o 112 7 Chanée of Farm and Nonfarm Population in Nichi- {Sal-l, 1940-19)00 o o o o o o o o o o o o o o o o 119 8 Comparison of Gross Farm Income Per Farm to Income Per worker of major Nonagricultural Industries in Michigan, 1959—1954 . . . . . . . 125 y helationship of Daily Farm Wage and Income Ier worker of Major Nonagricultural Industries in Michigan, 1959-1954 . . . . . . . . . . . . . . 150 10 Geographical Differentials of Daily Farm wage Without Room and Board in Michig n, 1940-1957 . I55 11 Coefficient of Variation for Income per worker of Major Nonagricultural Industries, Value Added Per Capita.by Manufactures, Gross Income Per Farm and Daily Farm Wage Without Room and Board in Michigan . . . . . . . . . . . . . . . I42 12 lielationship Between Gross Income Per Farm and Jaily Farm Sage Jithout doom and Board, 1946— 1954. . . . . . . . . . . . . . . . . . . . . . I48 13 Skitural Rate of Increase in IOpuIation in hichi- .San, 1920-1930. . . . . . . . . . . . . . . . . 152 LIST CF TABLES (continued) Table Iage 14 Replacement Ratios of Michigan aural Hales Aged 25 to 69, 1940-1900 c o o o o o o o o o o o o o 154- 15 Natural Rate of Increase in Population in the Developed and the UnderdeveIOped Regions of iIliChisan, 1920-1950 0 o o o o o o o o o o o o o 158 113 Index Number of Man Hours hequired to Produce a Given Amount of Livestock and Crops in East North Central Division, 1920-1957 . . . . . . . 162 137 Farm Mechanization in hichigan, 1940—1954. . . . 164 1£3 Sample Size of Monthly Farm Wage with House in Michigan, 1951-1957 . . . . . . . . . . . . . . 171 19 Comparison of Annual Farm and Nonfarm Wage Rates in liliChiQal’l, 1991“].9970 o o o o o o o o o o o o 172 20 Annual Wage Disparity Between Farm and Nonfa m Sectors and the Proportion of People Employed in manufactures in Michigan, 1951-1957. . . . . 175 21 Alternative Employment Opportunities Available to Farmers in Michigan, 1940-1950 . . . . . . . 178 22 Farmers Aorking Off Farm 100 Days or More in michidan, 1959-1954 . . . . . . . . . . . . . . 181 23 dates of Migration in michiéan in Different Re- Sions’ 1940-1957. 0 o o o o o o o o o o o o o o 188 xi Figure \.\‘ LIST OF FIGUnJS Page Crop heporting District and Major Cities. . 9 Geographical Differential of Daily Farm Wage Without Boom and Board in Michigan, 1940— 1957 o o o o o o o o o o o o o o o o o o o 134- Diagram of the Average Daily Farm Wage dith— out Room and Board in michigan, 940-1945. 156 Map of the AVerare Daily Farm Wage fiithout L) Room and Board in Michigan, 1940-1945. . . 157 Diagram of the AVerage Daily Farm «age with- out noom and Board_in Michigan, 1946—1957. 159 Map of the Average Daily Farm Wage Without J hoom and Board in Michigan, 1946-1957. . . 140 xii CHAPTER I. INTRODUCTION Need for Study Man who lives in a world of hazards is compelled to seek for security. He has sought to attain it in two ways. One of them began with an attempt to propitiate the powers which environ him and determine his destiny. It expressed itself in sup- plication, sacrifice, ceremonial rite and magical cult....lf man could not conquer destiny he could willingly ally himself with it; putting his will, even in sore affliction, on the side of the powers which dispense fortune, he could escape defeat and might triumph in the midst of destruction. The other course is to invent arts and by their means turn the powers of nature to account; man constructs a for— tress out of the very conditions and for- ces which threaten him. He builds shel— ter, weaves garments, makes flame his friend instead of his enemy, and grows into the complicated arts of associated living. This is the method of changing the world through action, as the other is the method of changing the self in emotion and idea.1 "Men have been glad enough to enjoy the fruits 0f Slush arts as they possess, and in recent centuries have increasingly devoted themselves to their multiplication. "2 J°hn Dewe 1John Dewey, Intelligence in the Modern World, '8 Philoso h , ed. Joseph Ratner (New York: Random House, Inc.. 1939), p. 275. Zing” p. 276. "Few things are deemed to be immutable because preordained. Change is to be expected and encouraged. The individual does not accept his personal status with resignation; and for society as a whole the status quo only shows the pos- 1 This is the fundamental sibilities of further progress." thinking which characterizes modern civilization. The de- sire for man to improve his environment is everywhere. For poor countries it is the problem of accelerating de- velopment, and for rich countries it is the problem of nuaintaining progress. In the pursuit of progress, effort needs to be ezrtended. To maximize gains from a given effort, man tries to economize. In a society, the available productive resources are not sufficient to produce all that is desired by consumers. The role of the price system is to allocate the available resources among alternative uses. In the realm of the human resource the wage is the price of labor, Performing the function of allocating human resources among alternative uses. For the progress of a nation, a Batlafactory functioning of the wage mechanism is of great importance. It relates to the economic efficiency of the soc’j—ety and the welfare of its members. For this reason, s"Nady on wages is of importance. A second need for this study originates in the \_ 1Norman 3. Buchanan and Howard S. Ellis, 52- Geo ches to Economic Development (New York: The Twentieth 11tum; Fund, 1955).p p. 77. rapid economic progress in the United States and the in- creasing productivity in agriculture arising from new technology. The mechanization of agriculture means that more agricultural products can be produced with many fewer laborers. This decreases the role of labor in agriculture and creates a problem of human resource adjustment. There are a number of studies focussing on farm wages at the national level, but there has been no such study in Michigan in recent years. In view of the indus— trialization and rapid economic progress in Michigan, it is; desirable to examine the relationship of farm wages to other economic changes. The third reason for this study is the continu- izug' problem of low farm wages. The low level of farm wage rates is a'concern of many peOple. Ducoff stated that "i?611:m wage rates and earnings of farm laborers were subjects ‘31? .Eniblic concern 10 years ago because they were so low. "They Starve That We May Eat" was the dramatic title of l t11e’ Jeeport of a survey of farm labor. The cutover areas (Dir inichigan are encumbered with the problem of low income.2 Lkle’ lproblems of low income and low wages are interrelated. \ the 1Louis J. Ducoff, Wages of Agricultural Labor in “1‘: [Inited States, U. S. Department of Agriculture Tech- Agrgl Bulletin No. 895 (Washington: U. S. Department of ILCBulture, July, 1945), on the back of the front cover. 2U. S. Department of Agriculture, Developgent of A . EéfiEiéiglgure's Human Resources, A report on problems of low- preolpe armers prepared in the USDA and transmitted to the mensldent of the United States (Washington: U. S. Govern- Printing Office, April, 1955), p. 7 and p. 14. The existence of such problems in an era of rapid economic progress is a handicap to the progress of Michigan's econ- omy. The solution to these problems, however, is not sim- ple. Witt observed, "No single, simple solution will bring prosperity to northern Michigan comparable to that normally enjoyed in the southern Michigan."1 A wise policy requires a good understanding of the nature of the problem. The final reason for this study is that Michigan has a unique combination of conditions for a study of eco- nomic deveIOpment. Michigan is one of the most developed areas in the world in an economic sense. It is highly industrialized and the level of living is very high, yet there are still problems of poverty within the state. Objectives of this Study The first objective of this study is to provide information on farm wage differentials between different areas of Michigan. This will be achieved by measuring the farm \wage differentials between crop reporting districts. ‘ The second objective is to measure the wage dif- ferinitials between farm and nonfarm sectors of the economy \ lLawrence Witt, "There is No Single Solution to Under‘develoPment in Northern Michigan," A summary state- gint.2released before the subcommittee on Production and thébl-lization, Senate Banking and Currency Committee, at Mi: hearings on Area Redevelopment Legislation, Detroit, hIi-gan, March 2, 1959, P. l. in Michigan. The third objective is to determine some of the causes of farm wage differentials. This will be achieved 1 by the application of retardation hypothesis in the proc- ess of analysis. The fourth objective is to evaluate, based on the findings of this study, some of the public policy pro- grams that have been suggested to bring better resource allocation. The fifth objective of this study is to provide data and information for more comprehensive studies on the interrelated segments of the economy of Michigan and the Nation. Other phases of these comprehensive studies are now under way in the Department of Agricultural Economics at Idichigan State University and in the United States De- Partment of Agriculture. Methodology The methodology used in this study is the com- bihflifiion of retardation hypothesis and the classical theory °f PeJPfeCt competition. The classical theory of perfect N no , 1Theodore W. Schultz, "A Framework for Land Eco- Xi§1¢£3, The Long View," Journal of Farm Economics, Vol. on £131, No. 1 (May, 195577'pp. 204-215; also, 1"infeflections o o*Verty Within Agriculture," Journal of Political Econ- 33.» Vol. LVIII, No. 1 (February, 1950), pp. 1-15."‘""'" competition is powerful and exact. For explaining static general equilibrium, it is very efficient and useful, but it does not give much light on the dynamic process of eco- nomic change. The insights which can be drawn from the classical model of perfect competition are that imperfec- tion in resource adjustment exists but nothing more. It does not tell how the imperfection arose in one area but not in the other area or why the disparity in the return to labor persists or increases over time. Therefore, it is necessary to select an analytical framework sufficiently comprehensive to include conditions under which economic progress can give rise to the disparity of return to labor over-time between areas. For this reason, the retardation hypothesis was used in this study. But the adoption of retardation hy- Pothesis does not mean that classical theory is useless. After the locational attributes and the characteristics of economic structure are considered, classical theory be- gins ‘to bear more sense. Another advantage of using the retardation hypothesis is that it helps narrow the problem to a Inore manageable proportion. Sources of Data This study is mainly concerned with the geograph- lcal (lifferential of farm wages, income, and other economic variables related to wages. Since the analysis was based upon comparison of changes of these variables between dif— ferent crop reporting districts, most of the tables were computed from county data. The data on county level are fragmentary, requiring considerable time in collection, adjustment, and computations. _The farm wage data is from the unpublished quar- terly wage reports of the Michigan Cooperative CrOp Report— ing Service; industrial wages from the Department of Labor, State of Michigan; industrial employment from the Michigan State Employment Security Commission. The other major sources of data are the Census of Agriculture, Manufactur— ying, Business, Mineral Industries, and County Business Patterns. Agricultural data before 1940 are mainly from the monthly Michigan Crop Report. Some unpublished data fitun the Department of Agricultural Economics, Michigan State University, were also used. Additional data were 8180 obtained from various publications. Geographical Division of Michigan There are several ways to divide the State of Mi°h1€§an. Depending on the purpose of the analysis, it can bee divided by economic area, type of farming area, °r°p reporting district, or by the simple division of upper penjllaula and lower peninsula. Since the farm wage data were available primarily by crop reporting districts, the analyses were carried out on this basis. The numbering of crop reporting districts is from north to south (Figure 1). In some cases, to facil- itate analysis, the crop reporting districts were combined into four regions: 1. 2. Upper Peninsula Region District 1 Upper Third Region District 2 District 3 Middle Third Region District 4 District 5 District 6 Lower Third Region District 7 District 8 District 9 1W": t0?“ " ‘ *1 1 , "h” I i": ' ' ° i . i {OER-«mil lawman! b'AC-xmé _“l 5. . f . ' : ‘ Viscous”. 'icunnum on Aura—n; ‘ LILAW N" """luo runny ; . ... .,.. A. WCK’ORD 13135 ”I! “and . Muskegon 543111th (R ., u m ‘ mun . «cum cumon muvns ' ‘ ' Flint_.__ I r‘" O.‘ -..._.- .._.. “.14.... mm P Trio—flu— IVI 573:1 @i 01 'Qihna z . 9W!!!“ um: EAT—noun luéfié’u' asmmwTwAvut . Kalaziazoo Battlei Jacks n Detroit Benton i...“ e ___. 51— . Harbor la" "”W” "M0" INN-L mom" |”°"" ummi . ' v - u um {ml "‘1; --i.,$‘ " “l“; r— j” ' moi—u Al WT azure 1. (bop Reporting District and Major Cities in Michigan. C ’1 Q. ,oaxuuo pl; 1 l (4 ‘w ,_./ l l a ”URON L..-___-V _._._. mou {uncut 3T0 CLAII Enron ~.—.4 ,; CAEUCA l l 1 | 6 CHAPTER II. THEORETICAL FRAMEWORK The distinctive characteristic of practical activity, one which is so in- herent that it cannot be eliminated, is the uncertainty which attends it.... Through thought, however, it has seemed that men might escape from the perils of uncertainty. The exaltation of pure in- tellect and its activity above practical affairs is fundamentally connected with the quest for a certainty which shall be absolute and unshakable. In this chapter, the theoretical framework to be used in this study is presented. Retardation Hypothesis The retardation hypothesis is essentially an ex- Plaxuation of economic development.2 The basic thesis of the retardation hypothesis is that the disparity of income between and among communities is fundamentally due to the “fly Tflie economy of the United States has developed. Com— munities suffer from low income not as the result of deteri- oratit>n of their economy, but simply because the other \ 1John Dewey, op. cit., p. 280. b 2The retardation hypothesis was first developed ufi Prtlfessor T. W. Schultz in two important articles: eflfictions on Poverty within Agriculture," Journal of Political Econom , Vol. LVIII, No. 1 (February. 1955). ED. l-— 5; "A Framework for Land Economics, The Long View " Tigrnal of Farm Economics, Vol. XXXIII, No. 1 (May. 1951 , o 4- . . 10 11 communities have enjoyed a higher rate of economic progress. This salient characteristic of economic develop- ment was presented by Schultz in three pr0positions: 1. In general, the differences in per capita income and level of living among communities were not so great at the time when people pioneered new areas or at the time industrialization began as they have since become. Poverty of whole communities did not generally exist under pioneering conditions because levels of living were in their essentials quite similar, although, if we look back, people were undoubtedly exceedingly poor by present-day standards. 2. The marked differences in level of living that have emerged within agriculture are not mainly the result of a deterioration on the part of those communities in which peOple are now living under conditions of poverty, but largely the consequences of the increases in per capita incomes that have been realized by people in other communi- ties.' This proposition means that families in some locali- ties have been virtually stationary in their level of living. Others have advanced somewhat in their level of living, and still others have shown marked advances. The gap be- _tWeen the first and third types of community has become exoeedingly wide, is becoming ever wider, and will continue to increase as long as the first type remains stationary (H'advances less rapidly than does the third. 12 3. These gaps, consisting of differences in level of living, are basically consequences of the way in which the economy of the United States has develOped and not primarily the results of any original differences in the cultural values or capabilities of the people them- selves.1 The first two propositions are the mere depiction of the changes that have occurred in the relative position of neighborhoods since the deveIOpment took place. This part raises few problems. The third proposition is the 'critical part to which attention should be given. It is that the community income disparity is basically the result of the way in which the economy has developed and not pri- marily due to original differences in the cultural values or capabilities of the people in the community. In this connection, two questions arise. The first is why economic development will give rise to dis— Parity in community income, and the second is why the dis- Parity of community income is not the result of original Cultural differences, values, capabilities of the peOples themselves, etc. Regarding the second question, some ex— Plorations will be made later. Let us concentrate on the first question for a moment. The community disparity of income was attributed lSchultz, "Reflection....," ibid., pp. 4-5. 13 by Schultz to basic attributes of economic development in the Western world, namely: The structural attributes and the locational attributes. nhe structural attributes are, in essence, the explanation of our need for transferring people from farm to nonfarm sector as economy develops.1 According to Schultz they are: 1. Economic development occurs in a specific locational matrix. There can be one or more such matrices in a particular economy. The process of economic develop- ment does not necessarily occur in the same way, at the same time, or at the same rate in different locational matrices and at different locations in the particular matrix (say, within the American economy). ~2. These locational matrices are primarily in- dustrial-urban in composition; the centers of these matrices in which economic development occurs are not mainly in rural or farming areas, although some farming areas are Situated more favorably than are others in relation to such Centers. 5. The existing economic organization works best 1In another type of economy, economic develop- ment might necessitate transfer of capital and human re- 80nrces to agriculture from the rest of the economy. For §Iamp1e, the type of economy treated by John Stuart Mill 1n Principles of Political Economy, ed. W. J. Ashley (Lon- don: Longmans, Roberts, and Green, 1929), pp. 695-794; or the economy in New Zealand during 1926 to 1936, and Aus- ‘hmlia between 1911 to 1955, see J. R. Bellerby, Agriculture and Industr Relative Income (London: McMillan and Com- mum, Ltd., 195 , p. 74. But this type of economy is not considered here . 14 at or near the center of a particular matrix of economic deveIOpment, and it also works best in those parts of ag- riculture which are situated favorably in relation to such a center; it works less satisfactorily in those parts of agriculture which are situated at the periphery of such a matrix.1 Two further questions arise. One is why economic development has occurred at a specific location, the other is why economic organization works best for agriculture at or near the center and less efficiently at the periphery. As to the first question, the author has not found any general theory that gives a satisfactory explana- tion of the "causation" of this process taken in its en- tirety.2 However, it can be said in a very general way that economic develOpment is a consequence of new and better production possibilities that have been realized by particu- lar communities from advances in technology, accumulation 0f capital, improvement in skills, growth in population, and improvements in economic organization. ¥ 1Schultz, "Framework....," op. cit., pp. 205-206. 2There are theories of social evolution developed by Shumpeter, Riardo, Marx, Toynbee, Hansen, and other econcmists. However, it is not believed that these theories can predict how a society chan es. See W. Arthur Lewis, The Theor of Economic Growth Homewood, Illinois: Rich- era D. Irwin,Inc., I955), pp. 9-22; For a survey of these Tweories see Benjamin Higgins, Economic Develo ment (New thk: W. W. Norton and Compan , Inc., I959), Part II- 15 Since there is no theory to explain why economic development occurs at a specific location, we will accept this as a fact and leave it for other studies. This study will not determine why the develOpment in certain parts of Michigan has taken place. The pattern of development in nonfarm sector will be taken as given, and only the economic adjustment which took place in agriculture through the in- teraction with the nonfarm economy will be analyzed. The geographical wage differentials are regarded as the con— sequences of agricultural adjustment or lack of it in the development of the nonfarm economy. This is the reasoning underlying the hypothesis tested in later chapters. Two questions regarding the retardation hypothesis are left yet to consider. One is whether the disparity of community income is not the result of original cultural differences or capabilities of the peOple themselves; the other is why economic organization works best in agricul- ture areas located at or near the center of developmental matrix. This study is concerned with geographical dif- ferentials of farm wage in Michigan. The hypothesis for this problem can be formulated in many ways. However, it is believed that by using the retardation hypothesis, the results may be fruitful. Regarding the second question, Schultz brought mnzfour points. He observed (1) "....the differences in l6 economic organization (between periphery and center), does not have its origin in the political process as such.";1 (2) "....the prices of the product produced by farmers who are situated at or near these centers are the more stable of the two. This difference in price stability provides at least a clue to the comparative efficiency of the economic organization at the two locations.";2 (3) "The markets from which farmers buy and to which they sell factors of produc- tion work much less satisfactorily at the periphery than‘ they do at or near the centers....";3 (4) "....the basic explanation for the relatively poor performance of the existing economic organization in adjusting to economic development is to be found in the factor markets. The un- even rate of economic progress of regions and of farming areas can be traced, so it appears to us, very largely to major imperfections in the various factor markets on which farm people are dependent."4 These observations are used in formulating the hypothesis tested in later chapters. The next task is to examine why the community income disparity is not the consequence of original dif— ference in cultures or values or capabilities of the people ‘— T. w. ohultz, The zconomic Organization of ggri~ CUIture (New York: McGraw-Hill Book Co., Inc., 1955), p. 281. 2 Ibid. 3Ibid., p. 282. 41bid. l7 themselves. The examination of the popular arguments will help clarify this question and also will demonstrate why the economic development approach or retardation hypothesis is more promising and, at the same time, will help define the problem more clearly. The conventional exPlanation of uneven develop- ment is not limited to those who rest their arguments on differences in culture, value, or human abilities. There are several explanations. Broadly, however, they can be grouped into the five categories presented below. It should be recognized that the following arguments are concerned with the long-run and not the short—run problem. Retardation Hypothesis & Conventional Approach 1. Those which attribute the geographical income disparity Epinly to differences in the natural abilityipf men in dif- igrent communities.1 In a society some individuals have more energy or more disposition to work with than others. The difference ‘ 1Some of these arguments were reviewed by T. W. SChultz, but his discussion was not exhaustive. Refer to §Chultz, "A Framework for Land Economics," op. cit., and Reflections on Poverty within Agriculture,‘ op. cit., pp. 1-5. Tang made a similar review on this problem. Refer t0 Anthon M. Ta , Economic Development in the Southepp_ 3 n8 Ifledmont, 1860-1950 (Chapel Hill, N. C.: The University 0 ort arc ina Press, 1958), pp. 5-21. 18 in disposition and ability is owing to biological inherit- ance which is not related to their environment. The poorly endowed people of a similar stock "tend to gravitate to 1 thus income disparity arises between communi- poor land," ties. Schultz reflected this argument by observing, "Al- though the evidence is tenuous, it may be held that, whereas there are now poor and rich communities in agriculture, they are essentially more alike than they are unlike one another, in the distribution of natural human endowments."2 This position is supported by recent studies of Johnson who concluded that farm people have roughly the same earning capacities as that of nonfarm people.3 A similar argument along this line is that the proportion of these biologically industrious persons is greater in some races or countries than it is in other races or countries. There are, however, many peOple who hold an entirely different view, believing that "the dis- tribution of the biologically industrious or lazy does not Vary from race to race and that the observed differences can all be explained in terms of physical environment and ‘ 1Schultz, ibid., pp. 3-4, and "A Framework for Land Economics," 0p. cit., pp. 207-208. p 2Schultz, "Reflections on Poverty....," op. cit., '40 . 3D. Gale Johnson, "Comparability cf Labor Capaci- tues of Farm and Nonfarm Labor " AmericaniEconomic Review, Vol. xun, No. 2 (June, 19535. pp. 296-314. l9 cultural tradition."1 In concluding this argument, Lewis stated, "The great majority of the world's scientists deny that there is acceptable evidence linking human attitudes with racial biology."2 From the above, it seems difficult to establish that the geographical income disparity can be attributed to community differences in natural human endowment either on biological grounds or on the ground that poor people gravitate to poor land. Of course, this does not mean that therezue no observed community differences in human ability. There might be differences, but they are attributable to variations in acquired human ability. In other words, this is the consequence of different rates of investment in people rather than the difference from natural endow- ment. This, in turn, leads to the fact that the observed community differences in human ability are, in effect, the result of income disparity, because the investment on human agent is the function of income. If formulated in this Way, it is a part of the retardation hypothesis. In conclusion, community income disparity does n0t appear to be the function of natural differences in hUman endowments. lW. Arthur Lewis, The Theory of Economic Growth, .20 0 Cite, p0 35' 21bid. 20 2. The second group attribute the_geographical income disparity to the differences in culture and non-economic factors. Buchanan and Ellis observed: The quality and quantity of the factors of production in their relation to one another do not alone determine a society's economic productivity, or how much and how rapidly this productivity can be increased. What real incomes these factors will yield in combination depends upon the whole social and cultural environment within which economic activity is pursued. In any society, this environment tends to be the external expression of the fundamental religious, moral and cultural beliefs and aspirations of the people who compose that society. Moreover, these ultimate values tend to manifest themselves in certain religious, social, political and cultural institutions which prescribe the Way of life for the people and determine the motivations and behavior patterns to which they will respond.1 The same reasoning was observed by Thomas R. Malthus a long time ago: "....the powers of production, to whatever extent they may exist, are not alone sufficient to secure the creation of a proportionate degree of wealth. k lNorman S. Buchanan and Howard S. Ellis, Approaches to Economic Development (New York: Twentieth Century Fund, 1955) 3 P0 74. 21 Something else seems to be necessary in order to call these powers fully into action....Unless the estimation in which an object is held, or the value which an individual, or the society places on it when obtained, adequately compensates the sacrifice which has been made to obtain it, such wealth 0 will not be produced in future."1 The differences in values, social and cultural environments accounts much for the income disparity between East and West. Western society tends to be rationalistic in approach and secular in outlook. There is enormous faith in "the scientific approach" to secular affairs. Few things are deemed to be immutable because preordained. The prevailing attitude toward both the physical and social environment is rationalistic and materialistic rather than traditional or religious absolution. The secular in human affairs are separate and distinguishable. In contrast, secular affairs are considered more or less inseparable from the nonsecular in the East. The distinction lacks meaning. In the Middle East, for example, "The Koran pro- Vides for the believer not only the forms and content of‘ ownership, but also a complete rule of life and a social and legal system."2 Material achievements are deemed 1T. R. Malthus, Principles of lolitical Economy (2d ed.; London: William Prikering, 1836; London School of Economics reprint, 1936), p. 361. 2 Royal Institute of International Affairs, The ” li ic (London: Oxford University Press, 1950 22 insignificant before the appeal of mystic entity that is the universe. Man is expected to disdain the relative and transitory in favor of the absolute and timeless. Recog- nizing this type of impediment to economic development, many people put emphasis on non-economic factors to account for disparities of community incomes. In expounding causes for persistent low-income farms in the United States, Back began with these observa- tions: "Economists often assume that the choice in occupa- tion, or the production and consumption decisions of people are directly related to mainly a money interest. But money may not be the main moving force in explaining the low farm income situation."l After seeking answers for three ques- tions: (1) do the motives and values of peOple in low farm income areas differ significantly from other Americans, (2) do the values and motives of low farm income people account, in part, for the low income situation, and (3) do some characteristics of the "way of life" in low income Communities contribute to a lag in the economic development of these communities?, Back gave affirmative answers to these questions by an observation that "standards of con- sumption or standards of living are important status or Prestige measurements in the higher income cultural groups. 1W. B. Back, "Perpetuation of Low Farm Income Areas," Farm Policy Forum, Vol. 8, No. 4 (Spring, 1956), p. 20. 23 On the other hand, a pleasing and desirable personality and social habits are far greater measures for prestige and social status in the low farm income areas. One of the social habits expected of individuals in low income areas is to conform with the cultural standards of the community."1 He continued: "People in low farm income areas do not have these strong economic motives. This results in the use of more 'feeling' or 'emotion' in the decision making process as applied to economic problems and less use of careful thinking process."2' "A major consequence of this is that what we consider to be 'relevant' alternatives in occupa— tion or farm production are not seriously considered as alternatives by low income farmers."3 "Thus, it is evi— dent that values and motives of individuals and cultural influences on people in low income areas can be barriers to the movement of the peOple from such areas to better income opportunities. Or they can be barriers to develop— ing better economic opportunities."4 The above position is supported by many people. For example, Kauffman said "....evidence exists to support the position that for a number of families in low-income H Ibid., p. 22. 24 areas the attachment of local community and agriculture as a way of life is much stronger than the pull of higher paying jobs elsewhere...."1 In a study on long distance migration, Smith mentioned that "The consequences of migra- tion are themselves related to the value and habit systems of the migrants."2 "Of the migrants interviewed in Indian- apolis, a considerable proportion reported a definite plan or desire to return to farming. This and other evidence suggests that considerable proportions of the migrants, particularly southern whites, were generally dissatisfied with their urban experience despite the superior income "3’ they were able to command. lHerold F. Kauffman, Rural Families with Low In- comes: Problems of Adjustment, Mississippi State Agricfil- 'tural Experiment Station, Sociology and Rural Life Series INo. 9, (State College: February, 1957), p. 6, quoted in RUJton H. Steinmueller's "An Extension in the Use of Re- tardation Hypothesis" (unpublished Ph. D. thesis, Dept. of .Agricultural Economics, Michigan State University, l958),p.14. 2Eldon D. Smith, "Urban Employment for Rural People: The Problems and Possibilities of Long Distance Migration" (unpublished monograph, Department of Agricultural Economics, University of Tennessee, 1956), p. 9. 3Ibid., p. 5. For the migrants in Indianapolis, see Eldon D. Smith, "Migration and Adjustment Experiences of Rural Migrant Workers in Indianapolis" (unpublished Ph. D. thesis, University of Wisconsin, 1953). For case studies along this line, see at Lewis Killcain, "Southern White Migration on Chicago's West Side" (unpublished Ph. D. thesis, Department of Sociology, University of Chicago, 1949). ‘b. Grace C. Leybourne, "Urban Adjustments of Migrants from the Southern Applachian Plateaus," Social Forces, Vol. XVI, No. 2 (1937). c. Erdman Beyon, "The Southern White Laborer Migrants to 25 Another approach of a similar line is to eXplain the community income disparity by difference in wants. Sup- pose two communities "A" and "B" exist with identical pOpu- lation and labor forces. "A" is assumed to have greater preference for leisure. The indifference curves of "A" are then steeper (with income on the vertical and leisure on the horizontal axis), indicating higher marginal rates of sub- stitution of income for leisure at any given level of in- come and leisure. Under these situations, if "A" and MB” receive the same labor reward per hour, "A" will reach its equilibrium at a point where its total income or its per capita income is less than "B" when "B" is at equilibrium. In this formulation, the community income, thus, differs but they are at equilibrium in terms of resource allocation. Based on this approach, one worries little about the income disparity between communities or nations. This, however, appears invalid. Values and motives of individuals are partly inherited and partly due to environment or sur- 1 roundings. Knowledge is an aspect of the social environ- ment. Individuals inherit their inclination for survival, security, and the like. In general, they acquire modifica- tions and extensions of these inward inclinations as a Michigan," American Sociological Review, Vol. III, No. 3 (1938). d. Morris G. Galdwell, "The Adjustment of Migrant Fami- lies in an Urban Environment," Social Forces, Vol. XVI, No. 3 (1938). 26 . result of their experience with their surroundings or with the realities of life. Therefore, it can be said that com- munity wants differ because community cultural deveIOpments are not independent of economic development which bears the characteristics of uneven pattern. In this formation, wants are no longer given and constant but change with the pattern and stage of economic development.1 It is the de- gree of economic development, rather than differences in given wants as such (if, indeed, there are any) that must be held accountable for community income differences in agriculture. When stated in this way, the differences in wants between communities in different stages of economic development can be looked upon as "cultural impediments" through which uneven economic growth gives rise to uneco- . . 2 nomic resource allocation and unequal income. lCustom, habit, and peOple's behavior in general changes if their environments change, see John Dewe , Human Npture and Conduct (New York: Modern Library, 1950 , es- Pecially Chapters III and IV. Since economic development in a nation or a part of the nation is associated with changes in communication, transportation, and education, it is not difficult to infer that culture, value, and wants also change as a result of economic development because the developed Country or part of the developed country tends to be exposed 'MD new ideas from other places. For the discussion related to this point, see Buchanan and Ellis, 0p. cit., Chapter 4, Particularly pp. 86-91; also R. A. Dixon and E. Kingman, I3<2onomics and Cultural Change (New York: McGraw-Hill Book Company, 1938). 2Schultz, "Reflections on Poverty....," op. cit., pp. 13-14, No 240 27 In conclusion, community income disparity based on differences in wants or culture may be the result of uneven pattern of economic growth, and it then becomes a part of the retardation hypothesis. 3. The third_group attribute community income differences in agriculture to natural differences in the varyipgppat- tern of secular drifts in farm commodity prices. Improvement in technology has greatly expanded the productive capacity and reduced the costs of production in agriculture. Farm production per dollar spent in pro- duction was 32 per cent greater in 1950 than 1910.1 The rate of increase in supply of farm products has exceeded domestic demand for farm commodities. This "excess" supply has created downward pressure on prices of foods and fibers. When the supply of farm commodities increases, the percent— age decrease in price is greater than the percentage in- crease in quantity (price elasticity is less than one). The prices of farm products also are depressed by the low income elasticity of demand for farm products. As real national income increases, a relatively larger Proportion of income is spent for nonfarm commodities than for farm commodities. An additional factor contributing t0 the decline in farm income has been the decline in exports due'to a dollar shortage in foreign countries. This secular ‘_ lSchultz, Economic Organization...., p. 109. 28 decline of farm product prices affected communities in varying degrees, thus inducing the disparities in community income. The secular decline of farm products price is not incompatible with the process of economic development. "The long-run decline (or rise) of a farm product price is not necessarily a factor contributing to the poverty that has come to exist among communities in agriculture."1 "Take any major farm product, and, regardless of whether the price has declined or risen over the years relative to other farm products, there are farmers -- in fact, whole communities of farm families -- who are distinctly well to do and who are mainly dependent for their income on that product."2 This argument also can be rejected by consider- ing the failure of price support for solving the low income problem in America. "The view that I am advancing is simply that long run price flexibility has not brought about the "3 kind of poverty under our consideration. We can, therefore, conclude that the community income disparity is not mainly the result of secular price decline but largely the consequences of the increases in per capita incomes that have been realized by peOple in 1Schultz, "Reflection on Poverty....," op. cit., 29 other communities in the process of economic development and those now in poverty simply have been left behind in the process of economic growth. 4. The fourth group attribute community income differences to natural differences in the quality of the land. There are many people who expound that the com— munity income disparity is the result of low quality land, including fertility, sunshine, rainfall, and other physical factors. Since the land of low productivity can be aban- doned any time, unequal factor returns must be explained by imperfection in factor mobility rather than the differ- ences in fertility. Hence, it cannot be concluded that quality of land is the cause of difference in factor return between communities. Therefore, geographical differences in wages, in the long run, should not be induced by dif- ferences in the quality of land. Difference in quality of land might induce com- munity income differentials because farm income includes return to land and capital as well as to labor. In other words, peOple might argue that the return to labor might be the same but the total income including land and capital are different if quality of land differs. This view, how- eVer, was rejected by Heady. He observed: If the market for resources and the imputational process result in a price for land which is in line with its marginal value productiv- ity and farming systems and the population are appropriately 30 adapted in both areas, then it is possible for farmers with the same amount of funds in region I and II to have equal incomes. Income per farm may actually differ between regions either because farmers have different quantities of resources or the market and imputational processes do not result in factor prices which conform with resource productivity. These differences arise, however, not be- cause of differences in soil productivity per se but be- cause of the many forces mentioned previously which affect the quantity of resources per farm and the concentration of labor and capital on a given land area.1 Another argument is that the product price dif- ferentials between regions might also cause differences in return to labor. This view, however, also is not accept- able. The difference in product price between two locations certainly brings forth the difference in marginal value productivity for labor. However, if labor is mobile, the return to comparable factors should be identical. Hence, the community income disparity (indeed, if any) should be attributed to imperfection in labor market rather than difference in product price. One aspect related to the above argument is that imperfection of labor market will, in some cases, bring . 1E. O. Heady, Economics of Agricultural Produc- tlon and Resource Use (New Ybrk: Prentice Hall, Inc., 1952), p. 754. 31 about equality of income. Suppose two communities origin- ally had the same income per capita. Owing to an irriga- tion project in one community, the income per capita in this community increased over night. If the rate of popu- lation growth of the community with this windfall gain is greater than the other community, in the course of time, its high income will be reduced to subsistence level and the income disparity between these two communities will disappear. This is the classical model of income deter- mination.l ‘ Factor price equalization, however, will not occur if the community with windfall gain has a pOpulation of industrial demographic type. This generalization, never- theless, does not always hold, unless we Specify that there is no trade between two communities. Trade tends to equal- ize factor returns without factor mobility. There is con- troversy with respect to this point, however.2 1David Ricardo, The Principle of Political Econ- any, (Everyman's Library Edition;‘New York: E: P.2Dutton & Co., Inc., 1937), Chapter 5. 2This thesis was first expounded in the Aklin- Eeckcher theorem and later elaborated by Samuelson, first In "International Trade and Equalization of Factor Prices," Egpnomics Journal, Vol. LVIII, No. 230 (June, 1948), pp. 163-184; second, in "International Factor-Price Equaliza- tion Once Again," op. cit., Vol. LIX, No. 234 (June, 1949), PP. 181-197. The conditions specified were stringent and fax-removed from reality. S. E. James and I. F. Pearch attacked this hypothesis in "The Factor Equalization th," Review of Economic Studies, Vol. XIX, No. 4 (1951-1952 , pp. Il-lZO. Samuelson answered the attack by observing that the 81mpler analysis was a better approximation of reality in "A Comment on Factor Price Equalization," ibid., pp. 121-122. 32 In short, community income differences are not due to differences in quality of land but rather to the imperfections in factor mobility or trade. 5. The fifthggroup attribute community income disparities to institutional factors. The argument used is that monOpolistic power exists in the nonfarm sector of the economy. This accounts for the disparity of income between farm and nonfarm sectors of the economy but not the disparity of income between farm communities. The institutional factors attributed to community income disparity are legal systems, land leasing arrange- ments, racial discrimination, labor union policy, initial institutions related to adjustments,l imperfection in capi— tal market, the tendency of government to invest less per person in education in low income areas, taxation structure, etc.2 lHeady attributed partially the income disparity to the initiation of a slave economy in Southeast. A sudden conversion to small—scale firms and creation of homesteads and presumption units in the southern cornbelt gave rise to undersized units. See Heady, 0p. cit., pp. 744-747. 2This is not the exhaustive enumeration of all the institutional factors. For the need of institutional flexibility in economic development, see Raymond J. Penn, Egeded Institutional Adaptations to Implement Economic Develo ment, a paper given at Association of South Agri- cultural Worker's Meeting, Louisville, Kentucky, February 8, 1955. 33 These factors might account for community income disparity, but we do not have measures of the extent of these effects which lead to a persistent tendency of in— creasing income disparity. In any case, institutional fac- tors are not incompatible with our economic development approach. In many cases, it might account partially for the factor and capital market imperfections. General Theory The retardation hypothesis helps narrow the prob- lem and casts more light on the critical points to be ex- amined, but it does not indicate how the return to labor is determined. The economic theory of wage determination is still indispensable and it is the fundamental theoretical framework to be used in this study. The current generally accepted theory is imperfect. It will be helpful to review how the present theory differs from the past theories brief- ly in order that we may have a good grasp of the current theory. Egst andppresent wage theories. The first coherent wage theory is the Subsistence Theory of Wages. It was outlined by the Physiocrats, de- VGJOped by Adam Smith, and later refined by the writers of the Classical School. The essence of the subsistence theory of wage is that, in the long run, because of the rapid 34 population growth, wages would tend towards that sum which is necessary to maintain a worker and his family. Marx supplemented the subsistence theory of wages by pointing out that the pressure of population on the wage rate was not due to some inherent human desire for prOpagation up to the pos- sible limit, but was due to the unemployment created by mechanical production made possible by capital accumulation. Thus, capitalism created an "industrial reserve army" which would have a depressing effect on wages, not only in the long run but also in the short run.1 The subsistence theory, because of its special assumptions, explained natural wages exclusively from the supply side. A theory developed in the 19th century after the subsistence theory was the Wage Fund Theory. The essence of this theory is that at a given moment wages are deter- mined by the relative magnitude of laboring population and the whole or a certain part of the capital of the country. In other words, at any given moment of time the capital that could be spent on wages was a fixed quantity. Any attempt of the workers to raise wages was therefore bound t0 fail. The weakness of this theory lies in the mistake 1K. w. Rothchild, The Theory of Wages (Oxford: Basil Blackwell, 1956), pp. 3-13. Also refer to George Stigler, Production and Distribution Theories: The Forma- Eggs Period (New York: McMillan Co., 1941). 35 of looking at the goods available for consumption as a fixed stock accumulated in the past. In fact, goods for consump- tion are the outcome of current production, and this in turn largely depends on how productive labor is being used.1 To correct these shortcomings, the marginal pro- ductivity theory was developed. The essence of this theory is that the employers pay laborers the value of the output produced by the laborers. The first hint in this direction was found in Mountiford Longfield's lectures on Political Economy in 1833. Later the concept was developed by Von Thunen. Unfortunately, this idea was left untouched after Von Thunen and it took about another half century until the same idea was independently developed by various writers such as Wicksteed, Walras, and particularly J. B. Clark in America.2 In this study we are going to use the marginal theory for our analysis simply because it is the best avail- able at the present time. As in other theories, marginal productivity theory does not give us an all-embracing wage theory.3 Like the other theories, it rests on some very 1Rothchild, op. cit., pp. 3-12. 3The marginal productivity theory obtained its full development in J. B. Clark, The Distribution of Wealth (New Thork: MacMillan & Co., 18997T' Some of the ideas, however, are found in earlier writers. For the historical deveIOpment 36 specific assumptions. The theory is supposed to work smooth- ly in a perfectly competitive labor and commodity market, with a complete absence of bargaining advantages and similar sociological factors, namely, with perfect competition. Demand for laborppmarginalAproductivity theory. In a simplified economic model of perfect com- petition, economic units are classified into two groups: (1) households, and (2) business firms. Markets are also classified into two groups: (1) resource markets, and (2) consumer markets. .Households as resource owners sell the services of their resources to business firms. Incomes received are used to buy goods from business firms. Busi— ness firms receive income from the sale of goods to con- sumers. Business income in turn is used to buy resources from resource owners. This basic model can be expanded to include several variables and assumptions. of this theory, see George J. Stigler, Production and Dis- Lpibution Theoriesp_The Formative Period, op. cit. The modern refinement of marginal productivity approach can be found in J. R. Hicks, The Theory of Wages (New York: P. Smith, 1948). There is another book on the Same subject by M. Dobb, Wages (London: Nisbet & Co., Ltd., 1928). This book gives a more general survey of the various theoretical and practical aspects of wages. An attempt to Supplement the theoretical picture by quantitative analysis 48 made by P. H. Douglas, The Theory of Wages (New York: 1AacMillan Co., 1934). For a convenient collection of arti- Qles on distribution theories, refer to W. Fellner and B. F. Iialey, Readings in the Theory of Income Distribution (Phila- .‘rth of every other commodity available to them. Firms 38 are assumed to maximize profit, hence they produce at the point where marginal cost equals price.1 The concept to maximize profit is similar to minimizing cost. Hence, firms buy inputs to the point where value of marginal prod- uct equals price of input or wage rate. The final outcome under perfect competition is that no shift of resources to alternative used can increase consumers' satisfaction or firms' profit. To ensure this outcome, however, further simplifi- cation of the model is necessary -- namely, no changes occur in the state of the arts, population numbers or composition, institutional arrangements, the patterns of wants on the part of individuals, and income distribution. To simplify it further, it assumes no international trade -- a closed economy. Given this model and these rules and conditions the Operations of the labor market in the economic system can be analyzed. Assume at the outset that the economic system is in equilibrium and full employment of labor pre- vails through the economy -- that is, everyone who desires to work is employed in such a manner that an individual, given his training, aptitudes, and preferences could not earn more by transferring his employment to another site 1To be exact, it should be stated that marginal cost curve cuts the mar inal revenue curve from below (Second order condition . 39 or occupation. Suppose an increase of labor in agriculture brought forth an increased supply of agricultural products. The price of agricultural products will fall, the marginal productivity of labor will fall, and the marginal value productivity of labor will also fall. If the price of labor has not changed, firms will reduce employment of labor to the point where marginal value of labor equals wage. The unemployed workers will compete in the labor market and a readjustment of wages and redistribution of laborers will take place until the economic system is in equilibrium again. If instantaneous adjustment of the economic sys- tem is assumed, the price of labor is always equal to the value of the marginal product. This is the core of the marginal productivity theory of labor. It should be stressed that the mechanism which brings the equalization of wages in the economic system is perfect mobility of labor. Even if the demand for labor is perfect, if the mobility of re- sources is imperfect, the wage rate would not be equal at any place. Another concept to be stressed is that the value of marginal product is the maximum or ceiling on wages. No employer, assuming he is rational, will be willing to pay a wage higher than the value of the marginal product. A third point to be recognized is that the marginal produc- tivity does not determine wage at all. It determines only 40 the demand side of wage determination. The wage rate must be determined by supply of labor as well which is neglected in the marginal analysis.1 For wage rates to be equal, however, more sim- plifications are necessary. On the demand side of labor, employers must be able to substitute factors freely and no technical or social restrictions can exist in increasing or decreasing labor input; on the supply side, labor must be homogeneous and divisible. The marginal productivity theory has wide accept- ance but many criticisms are attached.2 Some of them are: (l) The marginal productivity thedry can not serve as a general theory of employment. The theory can not explain the demand for labor in the economy as a whole. This is generally recognized as a result of the work of John Maynard Keynes. (2) Some economists object to the whole notion of marginality and marginal calculations on the ground that "businessmen don't think that way."3 Motives other than profit maximization affect the demand for labor and the - 1K. W. Rothchild, The Theorypof Wages (Oxford: Basil Blackwell, 1956), p. 11; pp. 20-35. 2For the controversy on marginal theory, refer to: R. A. Lester, "Shortcomings of Marginal Analysis of Wage- Employment Problems," American Economic Review, Vol. XXXVI, No. 1 (March, 1946), pp. 63:82, and Fritz Machlup, "Marginal Analysis and Empirical Research," American Economic Review, Vol. XXXVI, No. 4 (September, 1946), pp. 519-554. 3Ibid., p. 313. 41 wage level. (3) The supply of labor is a function of the wage. The supply of labor changes in response to wage. 1 (4) "Econ- Marginal theory neglected this important point. omy of high wages" may lead to other equilibrium. If wages are raised and continue at the higher level for some time, the improved health condition may increase the productivity of labor and, on the other hand, the increased spending of labor may increase employment which leads to a different equilibrium point. There is no unique solution.2 (5) Sociological, political, ideological and institutional factors are not considered. The noneconomic factors affect greatly the wage determination. As observed by Rothchild, "....the purely economic theory of wages....represents only one aspect, and not even the most important one, of the entire problem."3 There are other criticisms, but these will suffice as warnings in the application of the marginal theory in this study. Supply of labor Both demand and supply are the factors governing prices. Since the marginal productivity theory largely 1Douglas, op. cit., pp. 269-270, also Rothchild, 0E0 Cite, pp. 36-600 2hothchild, op. cit., pp. 29-30. 3Rothchild, op. cit., p. 175. 42 disregarded the supply of labor, it is in order now to examine the characteristics of the supply of labor. Supply of labor is one of the most difficult variables in economic analysis. Supply of labor differs in the long run and short run. In the long run, supply of labor is determined by the rate of population growth which is closely related to cultural as well as economic forces. In the short run, it is determined by the size of p0pu1a- tion, age and sex composition of population, number of hours worked by each worker, intensity of work, and in the skill of workers. To make it more complicated, all these factors change with the level of wages. Depending on the wage level, the number of people in the labor market changes and the length of hours they desire to work differs.1 For this reason, Douglas observed that: "The supply of labor may differ very appreciably between two countries which have equal populations and identical age distributions. First, within the same age- groups the proportion gainfully employed may vary because of differences in social tradition and in wages. Second, the number of hours worked per day may differ. Third, the number of days which the worker absents himself from labor may differ. The supply of labor is not, therefore, as most classi- cal economists have conceived it, identical with the stock of labor available but may vary quite widely as between two otherwise identical p0pu1ations. It follows, there- fore, that changes in the rate of remuneration 1For a well organized discussion of supply of 43 may affect the quantity of labor which ‘ offers itself at any one time, since each of the three variables, enumerated above may fluctuate with variations in the rate wages." It will be recalled that mobility of labor is the factor which leads to equilibrium of wage rate. For labor to be fully mobile, first the transportation must be painless in terms of money costs;-second, all individuals must be motivated entirely by maximization of money profits; third, all individuals must have complete knowledge; and finally, there must be no coercion or restraint on the part of any persons or groups who may want to maintain the dis- equilibrium status quo, i.e., labor unions, employers, or unorganized employees. All of these are not likely to exist in reality. Transportation is seldom costless; profit maximization is seldom, if ever, completely operative; complete knowledge and complete absence of coercion or restraint are seldom, if ever, realized. Besides, even in the same p0pu1ation, mobility of workers differs by age, sex, race, marital, and family status. Mobility of workers is not limited to geographic mobility. There is mobility between occupations. If we call the former horizontal mobility, the latter might be called vertical mobility. The vertical mobility of workers lDouglas, 0p. cit., pp. 269-270. 44 is also one of the important factors leading wages to an equilibrium. If one profession is highly remunerative, in the long run, peOple will try to get the necessary training and move from the lower paid work to the higher paid job. The vertical mobility can never be perfect because educa- tion is not costless and the biological and social inherit- ance of people is not identical. The difference in the quality of people and cost of education thus limit the supply of workers for each "noncompeting group" in the labor market, and tend to create wage differentials, called rent. The difference in nerve strain, tiresome responsibility, tedium, low social prestige, irregular employment, many seasonal layoffs, shorter working life, and other factors involved in different occupations, necessitate wage dif- ferentials that serve to compensate for the nonmoney dif- ferences among jobs. These are the "equalizing differences". Real life, thus, deviates greatly from the simple model of perfect competition. Wage differentials exist due to "equal- izing difference," and rent, even if horizontal and vertical mobility is perfect.1 1For a general equilibrium of wage with considera- tion on "noncompeting group", "equalizing difference" and rent, see Paul A. Samuelson, Economics, An Introductory Anal sis (3d ed.; New York: McGraw-Hill Book Co., Inc., 1955 , PP. 536-540. CHAPTER III. ECONOMIC DEVELOPMENT or MICHIGAN PRIOR TO 19401 The purpose of this chapter is (l) to outline briefly the_historica1 economic transition of Michigan before 1940, (2) to point out the characteristics of in— dustrialization of Michigan, (3) to show the way in which different regions of Michigan developed different economic patterns, and (4) to trace the emergence of the cutover area. ' lBooks concerned with the history of Michigan are numerous, but there is no single copy treating the de- velcpment of Michigan rigorously with a comprehensive theory of economic development. For bibliography on each subject, Willis Frederick Dunbar's Michigan Through the Centuries (New York: Lewis Historical Publishing Company, Inc., 1955), Vol. II, Chapter XIX, "Literature," pp. 393-406, has the most comprehensive coverage. This bibliography has a brief summary on the nature of each publication and is an invaluable guide. The most comprehensive work on Michigan's history prior to 1939 is George H. Fuller's Michi an A Centennial History of the State and_£ts People, 5 vols. zNew York: Lewis Historical Publishing Company, Inc., 1939). A modern one-volume history of Michigan was written by Milo M. Quaife and Sidney Glazer, Michigan from Primitive Wilderness to Industrial Commonwealth (New York: Prentice-Hall, Inc., 1948). In each chapter, this book also has a valuable bibliography. Another useful volume is Michigan: A Guide to the Wolverine State, published in 1941 and prepared by W. P. A. Writers' Program in Michigan. This is a very good guidebook to historic spots in Michigan and contains a wealth of information on history and resources of the State. For detailed study, Michigan History Magazine contains abundant materials. r 45 46 Economic development depends, on the one hand, on the natural resources available, and on the other, on human behavior. Human behavior might be analyzed from three points of view, namely, effort to economize, increase of knowledge and its application, and capital accumulation. Behind these factors, there are environments which may pro— mote or retard changes. The study of environments leads to noneconomic variables, institutions, idealogies, ethics and many other factors. This chapter is limited to some aspects of natural resources which determined the direction or pattern of economic deveIOpment in Michigan. The economic development of Michigan was char— acterized by four factors, namely, peninsularity of the State, extraordinarily rich mineral resources, great quanti- ties of timber, and the great variation in climate and latitude which resulted in the diversified agriculture. Physical and climatic setting. Michigan is the land of the "greater water" as 1 The total theIAhgpnquin origin of the name testifies. area is only 57,980 square miles, about that of Illinois, but it spreads over much on the map. It is as far from Michigan's copper country to the metrOpolitan city of De- troit as from Detroit to the national capital. lLew Allen Chase, Rural Michigan (New York: The MacMillan Company, 1922), pp. 1-4. 47 The most striking physical characteristic of Michigan is its peninsularity. The State consists of two peninsulas, the Upper Peninsula and Lower Peninsula, sepa- rated by the Straits of Mackinac. For thousands of miles this peninsular feature places Michigan in direct contact with the world's most extensive and widely used inland waterway. This contributed to the earlier development of Michigan as compared to some other states in the west. On the other hand, however, the Great Lakes iso- late Michigan from neighboring states and interfere with communication east and west in the Lower Peninsula and north and south in the Upper Peninsula. Separation of the two peninsulas prevented the peOple in either peninsula from having close contact until the completion of the Mackinac Bridge in 1958. This peculiar geographic characteristic accounts greatly for the different processes of economic change that have taken place in the Upper Peninsula and the Lower Peninsula. "It throws the southern peninsula into closest business and social contact with Ohio and Indiana, while the similar trend in (Upper Peninsula) is in the direction of Wisconsin."1 The second characteristic of Michigan is the abundance and excellence of its forest resources. Trees native to Michigan soil had a variety nine times greater 1Ibid., p. 5. 48 than those native to Great Britain. No part of the United States was more favored for tree growth. This wealth and variety of forest was due mainly to climate and soils. houghly, the forests appear to have presented two strongly marked divisions, one north and another south of 43rd paral- lel of latitude. To the north were "the murmuring pines and hemlocks," and to the south the hardwoods.l The general difference in the variety of timber was due to soil type. North of the 43rd parallel are great areas of sandy land, and there pine and soft woods predom— inated. The pines consisted of two white pines, Norway and Jack pine. The growth of soft woods extended on sandy soils as far south as Oakland County and in southwestern Michigan to the Indiana line. The hardwoods in the south were pri- marily found on lime and clay soils. The mechanical com— position of the soil also affected forest distribution. White oak, ash, black walnut, cherry, hemlock, beech, elm, cedar, and maple were found in large quantities.2 With the exception of a few prairie areas in the southwestern part of Michigan, approximately five per cent of the total area, 3 the entire state was heavily forested by these trees. This abundant timber resource gave rise to many industries lFuller, op. cit., Vol. 1, pp. 507-508. 21bid. 3Quaife and Glazer, op. cit., p. 218. 49 using timber as raw material, but the unplanned cutting of trees became one of the major causes for the emergence of cutover area, rural poverty, and the conservation movement in the 1920's. The third characteristic of Michigan was the abundant deposits of copper and iron in the Upper Peninsula, where the metalliferous rocks are found under a shallow covering of glacial drift. The discovery of copper and iron was made by Dr. Houghton who was in charge of the first State Geological Survey through 1838-1841.1 In the southern peninsula there are coal, gypsum, limestone and salt. Both sections are well supplied with gravel for road material, clay suitable for brick, (and in the southern peninsula, for the manufacture of pottery), and with build- ing stone, glacial boulders and quarry material, although their distribution is not uniform and equal. These rich mineral deposits and timber contributed to early develop- ment in transportation and provided bases for rapid indus— trialization. The fourth characteristic of Michigan is the great variation in latitude, soil, and climate. This leads to the development of divergent agriculture in Michigan. A more detailed investigation of this subject will be made in the last part of this chapter. 1Chase, Rural Michigan, op. cit., p. 86. 50 Early History Michigan was under French rule during its earliest period. "From its first discovery, about 1610, until 1763, the territory was claimed, or governed by the French."1 "French navigators of the lakes skirted the shores of Michi- gan as early as 1612. Jesuit missions are said to have been founded in the Upper Peninsula in 1641."2 The first industry in Michigan was trade with the Indians by bartering inexpensive merchandise for furs,3 but "neither priest nor trader cared for permanent settlement and development of the country by the immigration of French farmers."4 As a result of British and French War in Canada, Quebec, the stronghold of French dominion, became the pos- session of Britain in 1760 and on February 10, 1763, Canada was ceded to Great Britain by treaty. With the cession of Canada to Britain, Michigan also came under the British rule.5 1Semi-Centennial Commission (compiler), Early History of Michigan (Lansing: Thorp & Godfrey, State Print- ers and Binders, 1888), p. 5. 21bid., p. 6. 3Ibid. 41bid. 5Ibid. 51 "At that time there were about 75,000 whites in all Canada, and possibly two thousand in Michigan. ....in 1768, 514.5 acres of land (were) under cultivation, and 9,789 French bushels of corn (were) produced."1 "Except the little settlement at and about Detroit, there were a few French traders at Mackinac, and one family at St. Marie. There was practically no increase of population under British rule."2 In 1785, at the close of war of Revolution, Michi— gan was transferred to the United States.3 In 1800, Detroit contained about three hundred houses. The only cultivated lands were contained in a strip three miles wide, bordering on the Detroit River and the Lakes, except a few hundred acres near Mackinac. More than three—fourths of the total population was French, and Catholic in religion. Two thirds were males.4 The population in this early period was stable. There was inflow of population to the State. The economy of early Michigan was static up to 1810.5 Early Development. Until the discovery of copper and iron, Michigan Ibid., p. 7. 3Ibid., p. 9. 41bid., p. 12. 51bid., p. 18. 52 was in the primitive status and little sign of economic transformation was apparent. The development of Michigan received its first impetus from the opening of the Erie Canal in 1825, and the discovery of copper and iron in 1838. After the opening of the Erie Canal, emigrants could, for the first time, reach Michigan by water from A1bany.l The government increased the sale of land as emigrants arrived. On June 50, 1827, 373,000 acres were sold. "Within six years, more than six times as much land had been sold and settled upon as in the entire previous history of the territory."2 Emigrants flooded into the State and the population had increased from 8,896 in 1826 to 31,639 in 18303 and 212,267 in 1840.4 The emigrants at this period were mostly farmers. They settled for farming and the proportion of rural popu— lation increased steadily from two thirds in 1810 to 95 Per cent in 1840.5 On January, 1857, when Michigan became a state in the Union, practically the entire white population was living south of a line drawn from Port Huron to the l-‘ Ibid., p. 18. Ibid., p. 19. 3Ibid. 4 Quaife and Glazer, op. cit., p. 150. 51bid., p. 150. 53 mouth of the Grand River at Grand Haven. Furthermore, within thisregion, the p0pu1ation was largely located toward the eastern end. The entire region of Michigan was covered with thick forest. The pioneers paid heavily in toil, privations, and hardships for the new home they obtained. The work of clearing the land was exceedingly arduous.l Minigg_and development of Upper Peninsula. As stated before, Michigan was primarily an ag- ricultural state until the discovery of copper and iron in the Upper Peninsula. The establishment of the mining in- dustry gave impetus to improvement of transportation, to growth of p0pu1ation attracted by mining industry, and the expansion of agriculture for producing food to feed the increased population. From this time on, the economy of Michigan began to undergo transition from an agricultural state to an industrialized territory. "The Upper Peninsula, at the time it was annexed to Michigan in 1856, was that it was mostly a rocky, barren region, too far north for successful agriculture, and of little value except for its fisheries and fur trade; and so isolated by the Sault de Ste. Marie, as to be of com- paratively small value for even those products."2 1Ibid., pp. 151-152. 2Henry M. Utley and Byron M. Cutcheon, Michigan, A ProvinceLgTerritory and State, The Twenty-Sixth Member of the Federal Union (New York: American Press, 1906, Printed for the Publishing Society of Michigan), p. 327. 54 The existence of copper on the south shore of Lake Superior had been known to the Jesuit missionaries 1 But it was not until 1840 very early, in the 1720's. that Dr. Douglass Houghton carried his official investiga- tions into the Upper Peninsula, and in his first report of 1841 he gave the world.its first real knowledge of the source and extent of the copper of the Lake Superior re- gion.2 On September 19, 1844, on a land survey for the government at the south of Teal Lake, he was astonished to notice the remarkable variations of the magnetic needle, and discovered the immense deposits of iron ore, near the site of the present city of Negaunee in the County of Mar- quette.3 The discovery of cepper and iron gave rapid es- tablishments of mining companies. The economic transfor- mation of Upper Michigan took its first stride on July 17, 1846, when a hundred and four mining companies had opera- tions in the Upper Peninsula.4 The mining industry, how- ever, was hampered greatly by the lack of transportation and the necessity of transshipment and portage at the falls of St. Mary. This made mining of copper unprofitable and 55 was absolutely prohibitory of successful iron mining in the Lake Superior country. In 1852, with the appropriation of 750,000 acres of public land by government, the ship canal was built, and in 1857, the Marquette and Iron Moun- tain Railroad was completed. From this time on, capital and labor poured into that region, and villages and mining camps sprang up on every side.1 The mining industry from this time on kept expanding and reached its peak in 1889, when Michigan became the greatest copper producing state in the United States.2 The development of mining industry resulted in the concentration of p0pu1ation, and gave birth to cities. Ironwood, Bessemer, Negaunee, Ishpeming, Crystal Falls, Iron Mountain, Hancock, Houghton, and Calumet are primarily the cities that grew in the era of mining develOpment.3 Lumberingindustry. The opening of Erie Canal in 1825 gave the first impetus to the economic development of Michigan by enabling farmers to migrate to Michigan in large numbers through Albany. The opening of the Erie Canal also expedited greatly the export of goods produced in Michigan to the eastern states which were the center of development at this time. lIbid.. pp. 333-534. 2Quaife and Glazer, op. cit., pp. 251—232. 3Fuller, V. 1., op. cit., p. 526. 56 One of the large exports from Michigan was timber. The development of lumber industry took place almost simul- taneously with the discovery of copper and iron in the Upper Peninsula. Undoubtedly some small scale lumbering was at— tempted at a very early time in the French and British periods, but their Operation was limited to the local de- mand. The great lumbering boom, however, did not material- ize until the Maine and other eastern sources of white pine had been considerably depleted. This exhaustion of supplies in the East, which afforded a great market for western products, was contemporary with demand for lumber in the prairie states whose main source of supply was the Chicago market. This market came to be linked with Michigan mills slowly in the years prior to the Civil War and very rapidly l The lumbering industry came into full swing thereafter. at this period. The export of lumber began early before this lumber boom. Saginaw Valley was the lumbering center at this time owing to the extensive stand of excellent pine. The first important cargo of clear lumber shipped from Saginaw to the East went out in 1847 to Albany by way of the Great Lakes and the Erie Canal. Its peculiar value attracted attention and an immediate demand was created lQuaife & Glazer, op. cit., pp. 218-219. 57 for Saginaw pine lumber. By 1854, there were twenty-nine mills with nine under construction in Saginaw. Areas im- mediately north of the Saginaw district also became centers of lumbering development. A regular lumbering business began in 1858. In 1874, this business turned out 85,000,000 board feet of lumber in addition to large quantities of shingles. Logs were often rafted down Lake Huron to Detroit where mills cut as high as 15,000,000 feet. By 1890, mills were to be found along all the streams draining into Lake Huron.1 On the west side of the peninsula the principal lumbering centers were Grand Rapids, Grand Haven, Ludington, Manistee, Muskegon, and Traverse City. Lumbering activity along the Grand and Muskegon rivers began as early as 1857. At many towns along the streams in the interior of the State, lumbering operations were on a smaller scale than in the lake shore towns. In the Upper Peninsula the great— est lumbering center was Menominee, where the first sawmill was erected in 1852. In 1865, 561,000,000 feet of logs floated down the Menominee river. Most of the cut was shipped to Chicago. Lumbering in Menominee reached its height in 1889 when the city boasted that it was the largest lumber port in the world.2 1Ibid., p. 220, also Fuller, op. cit., Vol. 1, pp. 513-514. 2Quaife and Glazer, op. cit., p. 220. 58 Until 1890, most of the cargo was transported by water and frequently the important Operators owned their own fleets. The major Lake Michigan markets were Chicago and Milwaukee. From Lake Huron, shipments were made to Cleveland and other ports. After 1890, an increasing amount of lumber was transported by rail, especially to the furni- ture centers of the country.1 Impact of mining and lumbering industry. The economic development Of Michigan in the nine- teenth century was characterized by the lumber and mineral industries. The deveIOpment of these industries contributed greatly to the economic and social progress of Michigan. The growth of these industries attracted a large number of new migrants, gave rise to many cities, provided major impetus to transportation improvement, and enriched the cultural life of the people. The increase of p0pu1ation generated by these industries provided additional demand for agricultural products and accelerated the growth of agricultural industry in Michigan. Some of the impacts generated by mining and lumbering industry are traced in the following sections. Cities and towns Many cities and towns grew because of mining and lumbering industries. Towns owing their origin to mineral 59 industries were mainly in the Upper Peninsula. Cities which grew primarily as mill towns are Traverse City, Manis— tique, Menominee, East Jordan, Boyne City, Tawas, Cheboygan, Munising, and Gladstone. The production of timber also gave rise to the establishment of many related industries, especially the production of furniture, paper, agricultural implements, carriages and wagons, and even some chemical industries received a stimulus from lumbering. These re- lated industries were responsible for the growth of the following towns: Manistee, Ludington, Petoskey, Alpena, and Marquette.1 Transportation development. The lumber and mining industries accelerated the growth of transportation facilities, especially by encour- aging the construction of railroads and ports which were afforded revenue through the carrying of timber and mineral products. The first railroad built in the Upper Peninsula was the mining road from Marquette to the Jackson mine, known as the "Marquette and Iron Mountain Railroad." It was commenced in 1852, Operated at first by horse power, and was not fully completed and equipped until 1857. The construction of railroad in the Lower Peninsula, however, was earlier than in the Upper Peninsula. It started as early as 1855 in the southeast corner of Michigan and passed 60 Adrian in 1856.1 In 1854, New York Central connected Buffalo and Windsor. Detroit, thus, became favorably situated on a pioneer New York-Chicago route. Beginning in 1856, exten— sive grants of land were made by Congress for the building of railroads. The greatest amount of railroad construction in Michigan took place between 1870 and 1890. In 1860, there were only 779 miles of railroad within the limits of the State. But the figure increased to 7,245 miles in 1890. The peak of railroad mileage was attained in 1902 with 8,200 miles.2 The railroad construction, however, started to decline in the nineties and was replaced by the construction of interurban and suburban railways Operated by electricity. These suburban railways reached their peak in the first 3 decade of this century. The emergence of bicycles stimu- lated the construction of good county roads. In 1895, the County Road Commission was appointed to establish county road system. The first rural concrete road in the United States was constructed in Wayne County in 1909, and the state highway system was perfected in 1915.4 The lFuller, V. 1., op. cit., pp. 85-84. 2Quaife and Glazer, 0p. cit., pp. 240-246. 3Ibid., pp. 240-246. 4Ibid., pp. 294-295. 61 popularization of automobiles at the beginning Of this century gave another great impetus to the development of transportation network in Michigan. From this time on, the highway tranSportation began to replace the railroad. Manufacturingpindustry. Michigan throughout the 19th century was predom— inantly agricultural. Its industries were primarily "ex— tractive" -- lumbering and mining. The peak of these in- dustries was in the last decade of the last century. As these primary industries declined, manufacturing industry expanded. The great strides toward high industrialization in Michigan,1 thus began with an elegy of lumbering and mining. Industrialization took place mainly from the manufacturing industries whose raw materials were locally available. Except soil crops and animal products from the farm, Michigan's chief raw materials for manufacturing have been timber, copper, and iron ores, salt, gypsum, coal, stone, and clay. In the decade before the depression, factories turned out 160 different products with an average annual value of about $5,600,000,000. The products in which the State was outstanding were automobiles, furniture, re- frigerators, paper, chemicals, cement, stones, machine tools, foundry products, brass goods, adding machines, lFuller, v. 1., o . cit., p. 526. 62 gas engines, pumps, boats and ships.1 The automobile in- dustry was the most important. The automobile manufacturing attained the fore- most position in the first decade of this century,2 and transformed Michigan to the undisputed center of automobile industry in the world. The dominance of the automobile industry in Michigan was well manifested by the fact that, of the wage workers in automobile industry, 65.9 per cent were in Michigan in 1934.3 Various interpretations have been advanced to explain the circumstances that made Detroit, Flint, and other cities the capital of automobile industry. Some of the reasons are (I) both skilled and unskilled labor were available because of the decline in lumber industry and the result of part-time farming; (2) Michigan cities were origin- ally the center of carriage, wagon, bicycle, and marine engine manufacture before the emergence of automobile in- dustry; the carriage industry in Detroit was the second largest in the United States by 1900; and (5) many critics, however, contend that the fundamental circumstance was the success of certain Michigan pioneers who believed in the Ibid. 2Quaife and Glazer, Op. cit., p. 286. 3Ibid., p. 291. 63 large scale production of moderately priced cars.1 The mass production of automobiles began early in 1902. In that year, the R. E. Olds Company produced 2,500 cars and in the next year, the figure rose to 4,000. The present Ford Company was organized in 1903 and a stand— ard low-price car called the Model T was produced by Ford in 1909. There were 18,600 cars sold in the first year and the figure rose to 308,000 with the develOpment of assembly plant principles. The number rose to 785,000 in the next two years. The other two large automobile com- panies were also organized at this time. w. C. Durant organized the General Motors Corporation in 1908 which acquired Cadillac, Pontiac, Olds, and Buick plants in Flint. Michigan also is the home of the Chrysler Corporation. It acquired the Dodge Motor Company in 1914 and became one of the "Big Three" in the automobile industry.2 The relative rank of the manufacturing industries in 1938, as measured by the number of employees, the weekly payrolls, and other factors, was as follows: (1) making the equipment for transportation; (2) iron and steel prod- ucts; (3) food and kindred products; (4) chemicals and applied products; (5) paper and paper products; (6) lumber and its products; (7) non-ferrous metals; (8) textiles and Ibid., p. 287. Ibid., pp. 286-290. 64 clothing; (9) printing and publishing; (10) leather and its products; (11) miscellaneous industries; and (12) stone and clay.1 The geographical area occupied by manufacturing industries prOper is the southern two—fifths of Michigan. This area also contains between eighty and ninety per cent of population, most of the wage earners, and all the large cities. The metropolitan district of Detroit alone con- tains more than half of the wage earners, and more than half the value of manufactured products of the State. In this general area are the great automobile centers, Detroit, Flint, Lansing, and Pontiac. The old lumber-mill towns of Muskegon and Saginaw are occupied by plants making engines and foundry machine shop products. In this area are also Jackson, with its motor accessory and automobile body plants; Kalamazoo, the paper center; Battle Creek, the cereal food center; and Grand Rapids, the world's furniture center. In the Saginaw Bay district, besides the city of Saginaw, are chemical works based on the salt deposits.2 Populationhgrowth. A brief review has been made on the development of mining, lumbering, transportation industries, and its subsequent growth of manufacturing industries. The major lFuller, V. 1., op. cit., p. 541. 2Fuller, V. 1., op. cit., p. 527. 65 faCtors of economic development are technology, natural resources, and labor. Without an observation on the popu- lation growth as the source of the supply of labor, our discussion will be incomplete. The most salient characteristics of p0pu1ation growth in Michiganzne the large proportion of new immigrants. In the last century, there were many periods in which the new immigrants constituted a high proportion of the p0pu- 1ation. The in-flow of immigrants can be divided into three periods —- the period of encouraging immigration which lasted until 1873; the period of no encouragement extending from 1887 to 1923; and the period of restricted immigration after 1923 to the present. The opportunity most conspicuously Open to the newcomer in Michigan prior to 1860 was that associated with the development of lands for agricultural purposes. Development of the mineral and timber resources, the build- ing of railroads, and the increasing manufactures as des- 1 To cribed before, gave rise to a great demand for labor. attract immigrants, an agent was sent to New York in 1845 with printed pamphlets giving detailed information about lands and public improvements. The plan was not very suc— cessful, but by 1850, of the 21,000 residents of Detroit, forty-four per cent were foreign-born. In 1859, the lFuller, V. 1., o . cit., p. 377. 66 Legislature authorized the appointment of a Commissioner of Immigration and in 1869, representatives were sent to Europe for encouraging emmigration. This policy was so successful that by 1870, the population of Michigan reached 1,184,059.1 In the decade from 1840 to 1850 Michigan's popu- 1ation nearly doubled. However, above the line running along the northern borders of Ottawa, Clinton, Shiawassee, and Lapeer, no county had more than 5,000 inhabitants in 1850. The decade 1850 to 1860 saw several counties in the Saginaw district reach approximately a p0pu1ation of 5,000 each, including Saginaw County itself, also Sanilac and Tuscola. During the same decade Houghton County in the Upper Peninsula increased in population from 700 to more than 9,000, and Ontonagon, adjacent to it, increased from less than 400 inhabitants to more than 4,500. This develop- ment, in the case of the Saginaw Bay Counties, was due to lumbering and in the Upper Peninsula to COpper mining de- velopments.2 Following this period, the population of Michigan again experienced a period of growth. It doubled in the twenty years between 1860 to 1880. Thirty—five Lower Penin- sula Counties, among which Bay was farthest north, contained lQuaife and Glazer, op. cit., pp. 317-318. 2Fuller, op. cit., v. 1., p. 341. 67 an aggregate population of approximately 1,362,400. Each of these counties had over 20,000 inhabitants. Less than 300,000 people lived outside this p0pu1ation area. In only two counties of the Upper Peninsula, Houghton and Marquette, were there more than 20,000 souls.l Up to this period, the in-flow of new immigrants was encouraged by the government. The rapid in-flow of immigrants, however, created some difficulties for the laborers in finding employment opportunities. Observing the increasing difficulty of peOple in finding employment opportunities, the Governor closed the Immigration Bureau in 1887, and since then, no active effort was made to en- courage European immigration. The result was a sharp de- 2 In 1923, the na— cline in the number of new immigrants. tional government imposed restrictions on immigration. Michigan thus closed its door to newcomers from Europe. The immigrants after 1923 were accepted according to a quota system and since then the new immigrants contributed comparatively little to the population growth of Michigan. However, there were still some immigrants after 1923. They 3 were mainly Canadians and Mexicans. Although the immigrants from foreign countries lFuller, op. cit., V. 1., p. 377. 2Quaife and Glazer, op. cit., pp. 318-319. 3Quaife and Glazer, op. cit., pp. 319-320. 68 declined after 1923, the migrants from other states were considerable in number. Nearly forty-two per cent of the state's p0pu1ation in 1930 was born elsewhere. About 23 per cent was native to other states, and nearly 18 per cent was foreign-born. While American—born who came to Michigan during the last two decades represented nearly every state, most of the migration has been from the Middle West, with Ohio, lllinois and Indiana leading all other states.1 Characteristics ofgpqpulation. The characteristics of the Michigan population demonstrate great heterogeneity. It comprises immigrants from as many as forty-four nations when the Michigan popu— lation reached 5,256,106 in 1940. The first considerable settlement of Germans was at Washtenaw County, and Saginaw also began a substantial period of growth due to the influx of Germans in 1850. In 1930, about eighteen per cent of the total population of Michigan was German.2 There were some Irish in Detroit, but the large scale Irish immigration began during the late forties and fifties of the last century. The Italian immigration began in the last two decades of the nineteenth century. Polish families settled in Detroit and were scattered in rural lFuller, v. 11, op. cit., p. 303. 2Quaife and Glazer, op. cit., p. 320 footnote. 69 communities before the Civil War, but the considerable increase of Polish was after 1882. They found employment in lumber mills and later in farms. After 1910, most Polish immigrants settled in Detroit and by 1930, it was estimated that approximately 300,000 persons of Polish background were in Detroit and its suburbs.1 Scandinavians were originally attracted to Michi- gan because of the Opportunity to continue in some skilled occupation that they had acquired in the Old World. The largest Scandinavian groups were Swedish, who founded com- munities in Kent and Muskegon before the Civil War. The Finns first made their appearance in Michigan in 1864 and mainly worked in mining areas. The Upper Peninsula thus became the cultural center of the Finnish people of the United States. The English—born have always constituted an important element in Michigan population, but the British have never formed distinct settlement. The influx of these people created heterogeneous background of Michigan and by 1940, there were ninety different denominations in the De- troit metropolitan area.2 The varying racial and religious backgrounds of the population have played a significant role in determining the development of Michigan. The French were the first to 1Ibid., pp. 319-329. 2 Ibid. 70 come to Michigan, but they were few in number and did not exert a large influence upon the later history of the State. The major contributions to the institutional life in Michi- gan were made by the New England settlers. They arrived at a time when an American pattern was lacking in Michigan and thus found no difficulty in creating here the institu- tions with which they had been familiar. The township and school district, in particular, are New England contribu- tions. The general emphasis upon education and government served as a model for other institutions. This fact ex; plains why the English culture and institutions are dominant in Michigan despite the fact that the p0pu1ation contains great heterogeneity.l Agriculture. Up to the present, our observation was mainly limited to nonfarm sector of the economy. To get a general idea of Michigan agriculture, the type of farming is first examined. The factors deter- mining the type of farming may be classified under two groups: (1) physical factors and (2) economic factors. Physical factors include climate, soil, and tOpography, determining which products may be produced most efficiently in a given area. The economic factors determine the kinds of products that are most profitable to produce on a farm. llbid., pp. 317-319. 71 This influence is in the form of prices received by farmers for farm products, cost of production, and types and near- ness of markets. The most prominant characteristic of Michigan's agriculture is the wide variety of products. There is no dominant crop in Michigan to compare with corn in Iowa or cotton in Alabama. There are a number of reasons for this wide diversity. T‘e first reason is the wide climatic range, extending from a 90 day growing season in the in- terior of the Upper Peninsula to 180 days in parts of Ber- rien County, in the southwest part of Lower Peninsula. This climatic difference in the State is caused by the variation in latitude of almost six degrees, the differences in elevation, and the influence of the surrounding lakes. Lake Michigan moderates the climate. 1t retains summer heat, prolongs autumn and delays warming of spring. This creates a favorable condition for growing fruit in the western coast of the Lower Peninsula. hainfall in Michigan averages about thirty-one inches per year. The thumb area and some north central portions of the Upper Peninsula have the least rainfall, while a few counties along the Indiana border have the most.1 The second reason for diversified agriculture is lElton B. Hill and Russel G. Mawby, Types of Farming,in Michigan, Michigan Agricultural Experiment Sta- tion Special Bulletin 206, East Lansing, Michigan (Septem- ber, 1954), pp. 11-21. 72 the wide variation of type of soils. There are plastic, compact clays and there are also sands so loose that they are shifted by winds. There is a wide range in humus and nitrogen between the black swamp and prairie soils and the well drained gray forest soils. Some soils are penetrable to great depth while some others are thin and stony. The soils do not occur, generally, in uniform individual types covering large areas, but more commonly they are found in small bodies and in associations comprising a number of types. One farm in many cases embraces many types of soils.1 The third factor influencing Michigan's diversity in agriculture is economic. It includes distance to mar- kets, the availability of transportation facilities, and the presence or absence of competitive enterprises. Al- though the climatic factors are probably dominant in making southwest Michigan an important fruit—producing area, the proximity of the great Chicago market is certainly a heavily contributing factor.2 Over five million persons live in the major met- rcpolitan areas of southern Michigan and about twice that number live in nearby out-of-state markets. This large population increased the local demand for bulky farm prod- ucts and for products of a high degree of perishability. 73 Thus Michigan farmers tend to produce such products as fluid milk, vegetables and small fruits in season, tree fruits, and poultry products.1 Because of the diversity of farming, Michigan is divided into seventeentypes of farming areas.2 The total agricultural income for 1939 was esti- mated at $228,182,000 of which $12,009,000 were government payments. Dairy products contributed the largest amount of income, amounting to 27.8 per cent; meat animals, 21.4; poultry and eggs, 10.0; grain crops, 8.6; truck crops, 6.5; fruits, 6.4; potatoes, 4.1; sugar beets, 2.8; hay and hay seeds, 2.1; other cr0ps and nursery, forest and greenhouse products, 3.5; wool and miscellaneous livestock items, 1.6; and government payments, 5.2 per cent.3 The geographical distribution of these crops and livestock in 1950 can be summarized as follows: So far as acreage is concerned, forage (hay and tillable pasture) is the major crop of Michigan. Forage and oats are grown llbid., pp. 16-18. 21bid., pp. 27-42. 3Michigan C00perative Crop Reporting Service, Crop Report for Michigan (Lansing, 1939), p. 6. Census of Agriculture is another source to compute the relative im- portance of cr0p in value. Because census tends to under- estimate the value, this data were taken from Cooperative Cr0p Reporting Service. The bias of Census data amounted to as much as 35 per cent in 1950. See Hill, op. cit., p. 6 footnote. 74 throughout Michigan.1 Corn is concentrated in the southern five tiers of counties in the Lower Peninsula where the growing season is longest.2 Winter wheat is confined largely to the southern half of the Lower Peninsula, while field beans and sugar beets are concentrated on the thumb area and Saginaw Valley.3 Potatoes are still an important cash crop; Bay, Montcalm, and Presque Isle are the leading potato counties in the State.4 Tree and vine fruits are concentrated in the west coast of the Lower Peninsula, while vegetables are mostly found in the areas near the urban markets.5 Dairy is the major source of income on 43 per cent of the commercial farms in Michigan. The sale of dairy products provides about 30 per cent of the annual cash income of Michigan farmers.6 Dairy is an intensive enterprise and is widely distributed throughout Michigan.7 Commercial feeding of steers and heifers for beef produc- tion is largely confined to those counties of the southern l11111, Op. cit., pp. 44 and 46. Ibid., p. 45. 3Ibid., pp. 47—49. 41bid., pp. 50-51. 51bid., pp. 52-56. Ibid., p. 58. 71bid., p. 61. 75 half of the Lower Peninsula where corn is produced.1 The major centers of hog production are largely outside the milk market areas, while ewes are found largely in south— central Michigan, and chickens are well distributed through- out the state but are most numerous in the neighboring counties of Ottawa, Tuscola, Monroe and Hillsdale.2 In the early days of settlement, farming was a self-contained, diversified industry. The farmer consumed what he produced and had only little to sell. Likewise he also depended little on the central market for supplies. As the economy develOped, transportation was improved, cities grew and the market area was extended. These and other forces induce farm specialization. Detroit was the oldest city in Michigan and ag- riculture developed first around Detroit. Later it was extended to the lower part of the Lower Peninsula. "In the three rows of counties along the southern border, gen- eral farming was the chief industry from the earliest period of settlement."3 North of that region agriculture followed in the wake of lumber and mining industries. The timber industries created a local demand for farm produce and livestock feed. A great many pioneers were woodsmen in Ibid., p. 63. 76 the winter and farmers in the summer. Only 94 farmers were reported in the Upper Peninsula in the census of 1860. The development of mining industry gave the chief impetus to the agricultural development of Upper Peninsula.1 Another factor expedited the agricultural devel— Opment was land policy of the government. The thirty-six million acres of Michigan passed from federal to private ownership through various processes. Much of it was sold to purchasers at the government land offices which were conveniently located throughout the State. The homestead policy of 1862 disposed of three million acres. According to this policy, the head of a family was entitled to 160 acres of land after residing on it for five years. More land went to private ownership throughgrants to railroads. After the completion of the railroad, the railroad company sold the land at higher prices because of its favorable location near the transportation arteries. Extensive grants were also made by the Federal government to the state for educational purposes. Seven million acres were declared swamp land and were given to the State by the Federal gov— ernment. These lands were disposed of at a later date.2 The most substantial settlement came at the latter half of the last century. In 1850, there were 1,929,110 Ibid. 2Quaife and Glazer, 0p. cit., pp. 249-250. 77 acres of improved land in the State and 34,089 farms. Thirty-one years later the number of farms and acreage increased by three times —- to 119,769 farms and over six million acres of land in farms. Prior to 1870 most of the cultivated farms were to be found in the four southern tiers of counties. Between 1870 and 1881 there was an on- rush of settlers to the northern counties, which practically doubled the amount of land under cultivation. In 1879, agriculture was an important industry in Michigan. Agri- cultural products account for approximately one—half of the income received from all the natural products. The process of acquiring land for farming was virtually ended by 1900, although some additional tracts have been added since that date.1 Factors induced this great agrarian development in Michigan are many. One of the most important factors was, though the cost might also be higher, that the farming in Michigan was very profitable during this period compared with other states as shown in the following table. llbid., pp. 250—251. 78 Table 1 Average Cash Value Per Acre of the Principal Crops of the Western States, 1875 to 1880 States 1875 1878 1880 Michigan $17.53 $13.88 $16.96 Ohio 13.55 12.08 16.60 Indiana 12.00 9.85 13.82 Wisconsin 13.08 9.77 12.46 Minnesota 12.70 7.76 11.54 Illinois 11.46 7.68 11.64 Missouri 10.59 7.69 10.85 Kansas 9.51 7.58 7.98 Iowa 8.60 5.80 9.34 Nebraska 7.28 6.55 6.88 (Source: USDA Annual Report of the Commissioner of Agricul- ture, 1875, p. 32; 1878, p. 270; 1880, p. 198.) Economic develOpment is a dynamic process char- acterized by changes. The type of crop grown in Michigan - also was not static but underwent a considerable change due to technological and economic progress. Before Europeans came to Michigan, Indians had corn, pumpkins, squash, and beans. Immigrants brought in new crOps and the subsequent establishment of agricultural college gave a great impetus to the improvement of variety. Hybridization of corn began at the agricultural college about 1877,1 the Moore-Hascall invention of the harvestor combine was first tried in Michigan for wheat and was put 2 into use in 1842. Rosen rye was introduced to Michigan lFuller, Vol. 1, o . cit., p. 475. 21bid., p. 477. 79 in 1908,1 and the first sugar beet factory was built at Bay City in 1898.2 Indians grew crops, but they did not know live- stock farming. Hogs, cattle, sheep, and horses were brought 3 into Michigan by Europeans. The first purebred Berkshire was introduced by William Smith in 1868, and the importa- tion of dairy breeds of cattle began as early as 1850.4 These are some of the technological developments that af- fected the transformation of agriculture. Economic forces also accounted greatly for the transition of agriculture. This was most conspicuous in wheat. Wheat was one of the major cash crops which experi- enced a substantial change in the past. Up to 1850, wheat was grown by farmers for local consumption.5 The invention of the harvestor combine enabled the cultivation of wheat on an extensive scale as stated previously. During the Civil War, the price of wheat went as high as $1.77 a bushel, which was not reached again until 1917. The production of wheat rose from 5,000,000 bushels to 15,000,000 bushels in 1866. The maximum acreage of wheat was reached in 1880-82 Ibid., p. 478. Ibid., p. 480. 3ibid., p. 486. Ibid., p. 488. 5Ibid., p. 477. 80 with more than 1,950,000 acres, and an average production of 30,000,000 bushels. The price of wheat declined after the Civil War, and by 1888, it was the general conviction of Michigan farmers that they could no longer put their reliance upon wheat as the main money crop. Cats and corn, thus, began to take over the land of wheat.1 Another significant change occurred in the forage crops. In the old days, horses and mules were the major draft animal. During the lumbering era, there were great acreages of tame hays, red clover and alsike in the Upper Peninsula as well as Lower Peninsula.2 The develOpment of railroad and automobile replaced these draft animals, and the forage crop also lost its importance, except some were kept for conservation purposes or raising cattle and dairy cows. The third significant change was in dairy industry. The dairy industry rose with urbanization. The dairy indus- try before 1860 was the work of the woman of the household. 3 The production was for home and local consumption. When dairying first came to be considered as a distinct feature of livestock farming, the chief emphasis was upon butter production. Then came cheese, and still later the production Ibid., pp. 477-478. Ibid., p. 481. 31616., p. 490. "fi 81 of milk to be converted into commercial products at the condenseries. with the rise of cities the main emphasis was directed to the production of whole milk for daily dis- tribution on the doorsteps of the urban homes. It was es- timated in 1936 that approximately half of the milk produced in Michigan was consumed either on farm or cities in the form of fluid milk or cream.1 Beans, sugar beets, wool also underwent a considerable transition since the last century. One of the most conspicuous characteristics of economic develOpment in Michigan was the persistent decline in the proportion of rural people. Colin Clark maintained that as economy develops, the proportion of its working population engaged in primary production declines, the proportion in tertiary production increases, and the pro— portion engaged in secondary production rises to a maximum and then begins falling -- thereby indicating that each nation reaches a stage of maximum industrialization beyond which industry begins to decline relatively to tertiary production.2 Although there is no ready data to support this thesis in every detail, the pattern of population 1Ibid., p. 492. 2Colin Clark, The Conditions of Economic Progress (London: McMillan & Co., Ltd., 1957), Chapter IX. For a general discussion of the classification of economic patterns and the use of stages in economic history, see N. S. Woytin— sky and E. S. Woytinsky, World Population and Production (New York: Twentieth Century Fund, 1953), Chapter 13. 82 change in Michigan since its settlement shows a steady decline in the primary industry supporting the first part of his thesis. As shown in the following table, the per- centage of rural population declined from 95.7 per cent in 1840 to 31.8 per cent in 1930 and 35.7 per cent in 1950, indicating a persistent downward trend in the p0pu1ation engaged in farminv.l Table 2 PrOportion of Rural and Urban Population in Michigan, 1840-1950 Per Cent Census Year Urban Rural 1840 4.3 95.7 1870 20.1 79.9 1900 39.3 60.7 1920 61.1 38.9 1930 68.2 31.8 1940 65.7 34.3 1950 64.3 35.7 1. Source: U. S. Bureau of Census, U. S. Census of POpu— lation, 1950, Vol. 1, Number of Inhabitants, Chapter 22, Michigan. 2. The classification of population is based on old defini- tion. See page 23, Chapter IV. The cutover area in Michigan includes the Upper Peninsula and the northern part of the Lower Peninsula north 1The rise in the proportion of rural population after 1940 might be partially due to the increased number of urban workers living at urban fringe. 83 of Bay—Muskegon line.1 The characteristics of cutover area are rural poverty and isolated settlement. More than half of the counties in this area had income per inhabitant less than $200 in 1929, while no counties in the lower part of the Lower Peninsula had income per inhabitant less than 2 4300. Since the income was so low, by June, 1934, 2,160,690 acres of cutover land had reverted to the State of Michigan for nonpayment of taxes.3 A study by Goodrich and others concluded the un— successful settlement to the following reasons:4 (1) Natural conditions unfavorable for agriculture. The qualities of the land -- sandy soil, excessive stoniness, thin soil, poor drainage, excessive peat, and rough topography -- together with extreme variability of these characteristics, made the land all unfavorable for agriculture. (2) Competitive and technological change in mining. The Michigan copper mining is deep, the lCarter Goodrich and others, Migration and Boo— nomic Opportunipy (Philadelphia: University of Pennsylvania Press, 19367} P. 164; also see Milton Homer Steinmueller, "An Exploration in the Use of the Retardation Hypothesis as an Explanation of a Low-Income Area in Northern Michigan" (unpublished Ph. D. thesis, Department of Agricultural Eco— nomics, Michigan State University, 1958), pp. 34-35. 2 Ibid., p. 167, Figure 31. 3Ibid., p. 172. 4ibid., pp. 179-186. 84 cost of mining is high, much more costly than that of Utah and other mines. The high cost and the reduction of miners due to technological progress resulted in the loss of p0pu1ation in this area. The loss of population decreased local demand for farm products and the reduction in employment due to technological development in mine deprived farmers of the opportunity for part-time work. The same situation also prevailed in iron mining area. Summary of the chapter. The purpose of this chapter was to outline the historical process of economic develOpment in Michigan and some of the factors which induced the development to take a partiCular course. Economic development of Michigan was characterized greatly by its physical endowments: extensive waterways, rich minerals, and lumber resources. The extensive water- way and great lakes contributed greatly for Michigan to develop earlier than other western states. But the penin~ sularity and the isolation caused by the Mackinac Straits prevented the Upper and Lower Peninsulas from having close 1The factors limiting the development of agricul- ture in this area are attributed to four factors by Black and Gray. Pine stumps increased the initial cost of clear- ing land; short growing season; poor quality of land; re- moteness to market. See Steinmueller, op. cit., pp. 35-37. economic and social ties. As a result, the Upper Peninsula became tied more to Wisconsin and the Lower Peninsula to the states bordering on the south. Up to 1810, the economy of Michigan was static. The great development took place mainly after the Civil War. The rich mineral and lumber resources of Michigan stimulated the economic development of Michigan together with agrarian settlement. Many peOple migrated to Michigan to work in lumbering and mining. The growth of the lumber and mining industries resulted in earlier construction of railroad and transportation facilities and establishment of manufacturing industries using wood and mining products as raw materials. The growth of mining, lumbering and manufacturing industries gave origin to many cities and accelerated the rapid flow of migrants. The growth of p0pu1ation provided demand for agricultural products and facilitated the commercialization of agriculture together with the development of tranSportation. Michigan is a state where the nonagricultural sector grew in parallel to farm sector during the period of its great expansion. Simultaneous with the decline of lumber and mining industries and the close of frontier land which occurred roughly at theend of the last century, the automobile in— dustry replaced these industries as the generator of economic growth. Beginning about the turn of this century Michigan shifted from extractive industries to manufacturing. Many 86 manufacturing industries other than automobile industries also sprang up in this century. The pace of industrializa- tion in Michigan did not slow down due to this smooth tran- sition from extractive industries to manufacturing. The early development in nonfarm sector caused agriculture to take different patterns of development from the west. Agriculture was develOped to supply food to the many mining or mill-towns in Michigan and the states adjoin- ing Michigan on the south. These forces coupled with the large variations in climate and types of soil, caused ag- riculture of Michigan to be an intensive and diversified farming. Much fruit, vegetables, fluid milk and poultry products are produced. Since the industrial development has been con- tinuous in Michigan except for an occasional setback caused by depression, there has been a persistant down trend in the farm population. CHAPTER IV.I INDUSTRIALIZATION LEADS TO DIVERGENT INCOME AND WAGE TRENDS, 1939-1957 A brief summary of the economic progress of michi- gan before 1940 was made in the last chapter. This chapter is to examine the economic progress in Michigan after 1940 to 1957. The years 1940 to 1957 include a period of un- precedented economic prosperity and high war—induced resource mobility. The primary question is, under the high mobility of resource and war prosperity, has the disparity of income between geographical regions in Michigan narrowed or widened? For analysis, the economy is divided into two sectors, name- ly, the farm and nonfarm sectors. The first part of this chapter is devoted to the growth trend in nonfarm sector and the balance of the chapter to the growth trend in the farm sector. Measuring economic development Before proceeding, it is necessary to develop a rule for measuring the rate of economic develOpment. No single definition of economic deve10pment is entirely satis- factory. There is a tendency to use economic development, economic growth, and secular change interchangeably. Al- though it is possible to draw some fine distinctions among these terms, they are in essence synonymous. A concise answer, given by Meier and Baldwin, is as follows: 87 88 "Economic develOpment is a process whereby an economy's real national income increases over a long period of time. And, if the rate of development is greater than the rate of population growth, then per capita real income will increase. 'Process' implies the Operation of certain forces; these forces operate over the long period and em— body changes in certain variables. Details of the process vary under diverse conditions in space and time. But there are some basic common features. And the general result of the process in growth in an economy's national product —- in itself a particular long-run change."l Since economic develOpment is defined as a "proc- ess," it is possible to measure the fruits of economic de- ve10pment by the increase in real national product. In a closed economy, national income or national product must be equal, therefore, we can use any of the two measures.2 Here the "real national income or product" is used as a short expression for "net national product corrected for price "3 changes. 1G. M. Meier and R. E. Baldwin, Economic Develop— ment, Theory, History, Policy (New York: John Wiley & Sons, 1957), p- 2. 21h a closed economy, national income and total output are identical. In an economy Open to foreign trade, however, national income will be greater than total output if the country is receiving income from foreign investments or is receiving gifts and grants from abroad. 3For a discussion of the problems related to this measurement, see 5. Kuznet's "Measurement of Economic Growth," ggoblems in Study of Economic Growth (New York: National Bureau of Economic Research, 1949). pp. 137-172. 89 Many peOple, however, interpret develOpment as meaning something more than merely an increase in aggregate output. They believe that it should also denote a rising standard of living. Such a view requires economic develOp- ment to be defined as a process whereby the real per capita income of a country increases over a long period. By re— lating develOpment to the problem of removing poverty, many would use as the test of development an increase in real per capita income.1 If the criterion is only an increase in real national income, then a situation is possible in which real national income rises, but the standard of living does not. This is because if p0pu1ation growth surpasses the national income growth, per capita income will fall as eXperienced in some underdeveloped countries in Asia where the rate of p0pu1ation growth is high. T. W. Schultz stated that "when the concept of economic progress is restricted to an increase in aggregate income with per capita income remaining constant, it is conceived altogether too narrowly."2 He prOposed with the following statement: "Economic development consists of an increase in aggregate income with changes in per capita 1Refer to the following books on this point: (a) Buchanan and Ellis, Approaches to Economic DevelOpment, pp. git., p. 12; (b) H. F. williamson and J. A. Buttrick, £99- nomic Development, Principles and Patterns (New Jersey: Prentice—Hall, Inc., 1934), PP. 6—13; (0) J. Viner, Inter- national Trade and Economic DevelOpment (Oxford: The Clar— endon Press, 19537, p. 100. 2 T. w. Schultz, The Economic Organization of Agri— culture (New York: mcdraw-Hill Book Company, Inc., 1953), p. 100. V 90 income unspecified, except that no community becomes worse off."1 From the above, the general agreement seems to be the economic deveIOpment is a process whereby an economy's real income increases with the real income per capita being equal to or greater than the previous level. Characteristics of western Economic BevelOpment Are Increasin: J Disparity of Income with economic development defined as above, the salient characteristic of economic develOpment in the Western World and the American scene is the increasing disparity of income between countries or regions of a nation or a country. This condition was delineated in three prOpositions on page 11 of Chapter 2. with these propositions as a guide, the hy— pothesis of this chapter is that if the developed area tends to grow faster than the relatively less developed, the dis- parity of income among the different regions of the state also must increase, and this tendency must be greater fol- lowing a period of very rapid growth. In this study, the pattern of economic develOpment of the study area is taken as given and no attempt will be made to explain why the develOpment has taken place at par— ticular locational matrices of the state. The main purpose of this chapter is to measure the different level of economic 91 deveIOpment achieved by the different regions of the state in 1939 at the end of the historical development described in the last chapter. After the relative level of economic deveIOpment is measured for different regions of the state, an enquiry will be made as to whether the development since 1939 has revealed the tendency toward increased income dis- parity between regions hypothesized above. The extent of development in the nonfarm sector is to be measured first. Instead of real income, money in- come was used. This modification will not affect our find- ings because our concern is with relative levels rather than with absolute levels. Instead of income per capita income per worker was used. The effect of population growth was not considered because it will be treated separately in the next chapter. The income per worker also appears more use— ful for this study than income per capita of the total pop— ulation. Besides the income per worker, the value added by manufacture per worker and the percentage of populatiOn that is nonfarm were also computed. The value added by manufacture per worker is often used as a criterion of industrialization, and the percentage of population that is nonfarm also is presumed to be a good index of the level of economic development. The purpose is to determine the relative level of development in nonfarm sector between the different 92 regions of Michigan and to specify whether the trend of development between regions is diverging or converging. As a first step, it is necessary to determine which regions of the state were relatively more developed than others at a particular starting point for measuring the trend. The year of 1939 was selected as the starting year. As shown in Table 3, the lower Third Region has the largest number of manufacturing establishments and the Upper Third Region the smallest. A glance on Table 3 gives us an idea that the lower part of the Lower Peninsula is the most industrialized and the Upper Third Region the least industrialized. Hence, we may hypothesize tentatively that the degree of industrialization in Michigan in 1939 was that the Lower Third Region had the highest degree of industrialization, the next was the middle Third Region, followed by the Upper Peninsula and the least developed, the Upper Third Region. Since rank correlation will be used in testing our hypothesis, it is convenient to eXpress this tentative hypothesis in rank.1 As shown in Table 3, the Lower Third hegion and the Middle Third Region, each has three districts. Our hypothesis is that the Lower Third hegion has a higher 1In this study, the rank correlation always means the correlation of Spearman‘s P unless otherwise stated. For a detailed study of rank correlation, refer to M. G. Kendall, Hank Correlation Methods (New York: Hafner Pub- lishing Co., 1955). 93 TABLE 3 NUMBER OF MANUFACTURING ESTABLISHMENTS IN MICHIGAN, 1939 Region Number of Manufactu- Hypothetical ring Establishments Rank Upper Peninsula District 1 369 7 Upper Third Region District 2 132 8 5 District 3 54 8.5 Total for region 186 Middle Third Region District 4 187 5 District 5 126 5 District 6 344 5 Total for region 657 Lower Third Region District 7 1,095 2 District 8 665 2 District 9 3,341 2 Total for region 5,101 Source : Computed from the Census of Manufacture, 1939 Vol. III. 94 level of development than the Middle Third Region. Accord- ing to the routine procedure of ranking a tie in rank cor- relation,1 it is possible, hence, to assign middle rank of the first three ranks, namely second rank, for all three districts of Lower Third Region to represent the level of deveIOpment in that Hegion. In the same way, the mid-rank of the second group of the three ranks, namely fifth rank, was assigned to all districts in the middle Third Region to represent the level of develOpment in that negion. For the Upper Third Hegion, the mid—number of the last two ranks, 8.5, was assigned by the same procedure. The result is shown in the last column of Table 3. By correlating this hypothetical rank to the actual rank of our variable, say income per capita, it is possible to ascertain statis- tically the relative level of develOpment between regions. In this case, it is possible to tell the relative level of development between regions simply by observing the data without any statistical test. However, if some inverse relationships exist between districts of a given region, it becomes difficult to compare the relative level of develop- ment with other regions. A rank correlation between the ‘hypothetical rank and the rank of the observed variable can save this trouble and give a clear idea of the 1F. E. Croxton and D. J. Cowden, Applied General Statistics (2d. ed.; New Jersey: Prentice—Hall, Inc., 1955). pp. 478-479. “337‘ 95 relationship. For this reason, the hypothetical rank was designed and used throughout this chapter. Income Per Worker in Nonfarm Sector The first analysis will concern income per worker in the nonfarm sector in a given year. The types of pro- feSsions are numerous and the period of employment of an individual differs greatly within a year. In some cases, it is almost impossible to separate the wage earning and the return to capital of an individual prOprietor. As an estimate, however, the average payroll per capita in the retail, wholesale, service trades, manufacturing, and min- eral industries was computed and will be used as an approx- imation of the income per worker in the nonfarm sector (Table 4). Source and limitation of data. The average income per worker in major nonagricul— tural industries was approximated by adding the total wage and salary payment reported by the 1940 and 1954 censuses for retail, wholesale, selected service trades, manufactur—. ing and mineral industries and dividing this total payroll by the total of the average number of employees in these industries in the corresponding year (Refer to Appendix I and its footnote). The data are from the census of business, census of manufacturing, and census of mineral industries. TABLE 4 INCOME PER WORKER 0P'HAJ08.NONAGRICULIURAL INDUSTRIES IN MICHIGAN, 1939 - 1954 Average Income Per Worker Increase of Ave. Hypo- Region thetica 1939 1954 incomigPerZor- Rank —$LI-__2_'.'___. 8 Rank 3 Rank 3 Rank Upper Peninsula District 1 7 1,062 6 3,130 6 2,068 7 Upper Third Region ° District 2 8.5 857 9 2,949 7 2,092 6 District 3 8.5 950 7 2,860 9 1,910 9 Middle Third Region District 4 5 1,091 5 3,676 3 2,585 2 District 5 5 876 8 2,931 8 2,055 8 District 6 5 1,186 2 3,639 4 2,453 5 Lower Third Region District 7 2 1,127 3 ,3,629 5 2,502 4 District 8 2 1,118 4 3,702 2 2,584 3 District 9 2 1,543 1 4,218 1 2,675 1 State Average 1,090 3,415 Rank Corre1ation Coefficient 0.77 0.77 0.75 Coefficient of Variation 17.751 12.851 Source : Appendix 1. 97 Another source of data is County Business Patterns issued by the U. S. Department of Commerce and the U. S. Depart- ment of Health, Education and Welfare. The data in County Business Patterns were taken from the Bureau of Old Age and Survivors' Insurance records, while the census data were obtained by field enumeration. Hence, there is a difference in coverage. The number of employees and payrolls covered in the census is larger than that reported by the Bureau of Old Age and Survivors' Insurance. The definitions of em- ployees by the Old Age and Survivors' Insurance Program are more restrictive. LFor this reason, this study took data from census of business, manufacturing and mineral indus— tries because it was believed that they would provide a wider coverage of the number employed in an industry. Another reason for not using the County Business Patterns is that the Bureau of Old Age and Survivors' Insurance had no report prior to l939. Although census data has a wider coverage than the Old Age and Survivors' Insurance, they are by no means complete. Compared with the number of employees reported in the Population Census, for each industry in a given year, the number of employees reported either in the Census of Manufacturing or Census of Business was generally less. This is partly due to the difference in the definition of ach industry or trade and partly due to the manner in which 98 the part—time employees were counted. The definition of the POpulation Census is more inclusive. As a result, it tends to report a larger number of employees. Besides, the time of the survey for these two series is different, which might also account for some of the differences in the number of employees. For this study the number of employees in the Population Census was not used in computing the average income per worker because there was no report of payroll for the number of employees. A few words need to be added about limitations of data. On Table 4, one notices that the income per worker seems lower than is generally believed. For instance, the average payment per capita for 1939 is only $1,395 and for l954, $5,990. This is partly because of the inclusion of some part-time workers in the number of employees reported and partly due to the time when the census survey was taken. Besides this shortcoming, the average income per capita in major nonagricultural industries for 1939 is not strictly comparable with that for 1954. The number of employees reported for retail, wholesale and selected services in the l94O census is the average for the entire year, while the same for 1954 census is the number in the November 15 work week only. As a result, the average income derived by dividing the sum of payrolls by the number of employees in l939 is not strictly the same for 1954 because the defini— tion of the number of employees is different between 1939 99 and 1954. Another factor limiting the comparability is the change in definitions of industries between 1939 and 1954. The definition of retail, wholesale, service trades, manu— facturing and mineral industries in 1939 census is not exactly the same as that in 1954. There is a minor change in the scope of coverage. For instance, the motion picture film distributors were included with wholesale trade in 1939 census but not in the 1954 census. Beginning with the 1948 census, the motion film distributors were pub- lished in a separate bulletin entitled "motion Picture Distributors" and they were not counted in the wholesale trade in 1954 census.1 Coffee roasting and leaf tobacco stemming and redrying establishments were covered by the census of business in 1939, but were excluded in the 1948 census of business. They were covered in the 1947 census of manufactures.2 The definition of payroll between industries in a given census year also is different. In the case of manufactures in 1939, the payroll includes only the workers lip to foreman while the payroll in retail or wholesale includes all compensation (salaries, wages, commissions, 11948 Census of Wholesale Trade, Area Statistics, Volt ‘V, Introduction Chapter, Page IX. 21bid. 100 and bonuses) paid during the year to all employees including salaried officers of the corporation. Minor changes in the definition of industry and scope of coverage are numerous between census years. However, these differences were not drastic and it is assumed they would not affect our study appreciably. With these shortcomings and limitations it should be remembered that the average income per worker in major nonagricultural industries be regarded as an index repre- senting the income trend among geographical regions and their trends over time rather than the absolute level of income for a particular region or a given year. Since more appropriate data are not available at the present time, these data are used for testing our hypothesis: Since the relationship tested is the relative levels of income between geographical regions and their trends over time, it is believed that the test will be reliable enough for the purpose of the study. Test and findings. Our preliminary hypothesis was that the Lower Third Region ranked highest in the relative level of indus- trialization, the Middle Third Region second, the Upper Peninsula third, and the Upper Third Region fourth. Exam- ination of Table 4 indicates that income per worker in 1939 was highest in District 9 and lowest in District 2. By ranking the level of income per worker in 1939, a lOl distribution of rank is achieved, as shown in column 4 of Table 4. Generally speaking, the higher ranks are in the Lower Third Region and the next higher ranks are in the Middle Third Region, indicating that the hypothesis is supported by the data. A close examination of the distribu- tion of ranks, however, shows some discrepancies, such as the rank 4 in Lower Third Region and the rank 8 in the Middle Third Region. According to our hypothesis the rank 4 should be in the Middle Third Region and the rank 8 in the Upper Third Region. To ascertain the relationship, the hypothetical rank developed in page 96 (second column of Table 4) and the rank of 1939 (fourth column of Table 4) was correlated. If they are significantly correlated, we are sure that the geographical difference of per capita income between regions is distributed in the hypothesized pattern. For 1939, the correlation coefficient between the hypothetical rank and the income per capita in nonag- ricultural sector was 0.77; in 1954, it was also 0.77. Since the critical value for rank correlation for N=9 at 5 per cent level is 0.6 and at l per cent 0.783,1 the hy- pothesis of‘rso is rejected at 5 per cent level. Our 1E. G. Olds, "The 5% significance levels for sums of squares of rank differences and a correction," Annals of Mathematical Statistics, Vol. 20 (1949). pp. 117—l15. Hereafter, this table will be used for testing the significance of rank correlation, unless otherwise stated. 102 hypothesis is thus, supported. In other words, in 1939 the relative level of income per capita in nonfarm sector was highest in Lower Third Region, second in Middle Third Region, third in Upper Peninsula, and fourth in the Upper Third Region. Since the test for the year of 1954 is also sig- nificant, r being at a same value as in 1939, we conclude that the relative relationships among regions remained the same over the period. This indicates that even under the unprecedented prosperity and the high mobility of resources induced by the Second world War and the Korean War, the industrial growth of Michigan has not eliminated disparity among the geographical regions per worker income in the nonagricultural sectors. Does the above fact indicate that the rate of economic growth in the highly developed regions was higher than the less developed regions? In other words, is it true that the developed regions tend to grow faster and the less developed regions grow slower and, consequently, cannot catch up with the developed regions as suggested by the retardation hypothesis? The last column of Table 4 shows that the increase of income per worker in nonagricul— tural sector was highest in District 1, second in District 4, and lowest in District 3, manifesting a substantial tendency to support this proposition. The rank correlation coefficient between the hypothetical rank and the increase 103 of income per worker in nonagricultural sector was 0.75 and significant at 5 per cent level. Hence, it is concluded that the rate of growth was higher in the developed regions than in the less developed regions. In other words, the V growth trend between geographical regions was diverging rather than converging. Does this mean the geographical differences of the per worker income in nonagricultural sectors have widened both absolutely and relatively? The above test indicates that the per worker income has widened in absolute sense but gives no clue regarding changes in the relative dis- persion of income per worker in each district. To measure the change of the geographical dis- persion of income per worker between districts, the coef- ficient of variation was computed. By using the coefficient of variation V=§, the absolute variation of a statistical distribution is reduced to a pure, relative value and the differences of means between two periods will not confuse the analysis. The coefficient of variation for the income per worker in 1939 was 17.75 per cent and that for 1954 was 12.8 per cent, indicating the dispersion of income per worker was converging. In conclusion it appears that from 1939 to 1954, the economic growth in the nonfarm sector resulted in greater absolute differentials in nonfarm income per worker among regions. In other words, developed regions showed a greater 104 increase in income per worker than the less develOped re- gions despite the unprecedented prosperity and high mobility of resources induced by World War II and the Korean War. However, owing to the general rise of nonfarm income per worker in the state, the relative differences of income per worker in different regions narrowed over the time span covered in the study. Value Added Per Capita by Manufacture Another measure to determine the economic growth in nonfarm sector is the value added per capita by manufac- ture in different regions.1 Source and limitation of data. The value added per capita by manufacture was computed from the Census of Manufactures for 1939, 1947 and 1954 and is shown in Table 5. The value added per capita by manufactures for each district was computed by adding the value added by manufacture in each county of the district in a given year and dividing this total value by the total of the number of production workers in the __ 1The value added by manufacture is different from the "net income produced" by manufacture. Only sev- enty—five per cent of the value added by manufacture could be called "net income produced" by manufacture. See Colin Clark, 02° cit., pp. 326-330o 105 corresponding district.l Because of the withholding of data by the Census Bureau to prevent the disclosure of the operations of individual firms, Some counties were not in- cluded in the computation of value added per capita for a district.2 As shown in footnote 2, counties withheld were more numerous in the census year of 1939, than in 1947 or 1954. For this reason, the average value added per capita 1The number of production workers is the number of wage earners in manufacturing plants including foreman. The salaried employees are excluded. For details see Foot- note C of Appendix 1. 2The following counties were not included in the computation of average value added by manufacture per worker. The data of these counties were withheld by the Census Bur- eau to prevent the disclosure of the Operations of individual firms. For 1939: ‘ District 1 —- Baraga, Dickinson, Keweenaw District 2 -- Charlevoix, Missaukee, Kalkaska, ~ Leelanau District 3 -- Alcona, Crawford, Iosco, montmorency, Ogemaw, Oscoda, Presque Isle, Ros- common District 4 -- Lake, Newaygo District 5 -- Midland District 8 -- Ingham District 9 -- Genesee, Oakland For 1947: District 1 -- Houghton, Keweenaw District.2 -- Missaukee ' District 4 -- Lake District 5 -- Midland There is a substantial reduction in the number of counties not included in the computation of average value added per worker in 1947. For 1954: District 4 -- Lake District 5 -- Midland District 6 -- Arenac .onma a soon noun hucsoo .asacoo mo vacuum .ooucaaoo mo uccauucacn .m .D scum vuuaaaou mum: «use enma.u .32 " tea-4.82:8 2: ca tenuous» ow sows: 03Nc> ouuw>ou can on: head you venom o=~u> :.ncafiumu:usnmNNndunc mcuusuouwscmfi dad: «Nnafi N xoom «use mwcaoo .uancco mo auuuam .oouuascu mo uncauucaua .m .D scum counasou ouua «use quu.n :.mmm~umucosnmudncuao mauusuosussmzz enema " soon dune Nassau .aaacou we acouam .ouuusaou uo usuauuuaoo .m .D scum vou9a80u who: dump aman.o u Oahu—om Nc.cN NN.as chscssc> Ne schcNNNceo eNc.o mNm.o NmN c NcN.o an.o No.o sschNNNNcoo schchssco aces mam.N ans.s snm.N anN.oN mNn.c ess.n cwcsc>< ocean s nmN.N N NNn.s N Ncc.N n som.oN s nmN.c N NNc.n N a uchcesa N cam.N N Na~.n n acN.N N aso.NN N NnN.c N nme.n N m chNcesa N aNN.N n sen.s N nNN.N N mem.oN n msn.c s sNN.m N N chnsesn sowwom awash nosed 6 mm m wsc.s s sNN.n. N st.N n ch.m c Nom.n n nno.n n c schssNa N me.m N one.N s Nnm.N c smN.m n ch.c n Nms.m n n suspense c «MN.c n men.m c ch.N N NNm.n N sen.m c mNN.N m s noses-Na sechm cuNsa «Nessa n NoN.N a aNN.N N Nms.c s Nno.oN N an.m N Nmn.N n.n m coNussNa m Ncm.n e NoN.n a ocN.N a MNc.N a NNs.s a NeN.N n.m N ccsuucsa coflwuu muggy noun: a Nsm.s m sme.N m cmc.N m ch.e m ch.s m eNN.N N N chsseNa a daaucwaom Home: ass a as; a sales a same at. sees n 32 smas-cnes encN-Nsea NseN-mmeN Nccscesc scNmeN waUHOGH Godunov—H OQQOHOa—H «no.— héaa ammu toga smmN - mmaN .zschoN: zN mammnuoamazsx um ast< N NNN.s N oON.o N NNN.o N mNo.N N men.N N a NcNuueNa s NoN.s e Nms.n N NoN.n n eon.N s wNN.N N m ochcoNa N nno.s N NNN.o n oNo.m s saN.N m NNN.N N N soNuocNo :ONwom which nosed n NoN.s N oNo.n s emo.m N st.N N omN.N n o ooNusoNo c oNc.N o an.s n Nma.N m smo.N m on m m ooNuocNo n NNo.n n Nam.s m oNo.n o one n Noo.N m s NchooNa . conoa euNsa «Nous: a NNn.N a oao.n a sow.N a aNN N one m.m n ooNusoNo N mon.n N mwN.s N «so.N N was a Nnm n.m N scNuooNo scamom check some: a NNs.N N sNN.N o omN.m m NnN o Noo.N N N ooNuooNa sasucucom some: xcsm w soon a xcsm w sass wt scum w, uses smmN-mmmN sutwwosomcm suNmso yum sham osoucH suNmso MoMI. unoNo>oa so new ausm\oeoocu sham sash macaw osoosu shewcoz lush eeouo osoosn Busunoz no « cacao MO oesouosn enmN anmN xcsm I, II ‘ti’l’v [litil‘llll AQIIIIII'I lilt"1.(l.l- III, III :AIIIII'AII.'.IIIIII iii-III! snoN - onmN .zauNnuaz 2N muNaamsazN NaasaasoNacazoz 82: .No amuse: a: 8.85 2. 53. a: 5.85 was. «some no 32583 w MAQ¢H 126 farm is the gross value of farm products sold by commercial gggmg. Gross income in this case does not include govern- ment payments. In the 1940 Census Of Agriculture there is no classification comparable to those classed as commercial farms bathe 1954 Census of Agriculture. Adjustments were made1 to the 1940 data to make it comparable with that of 1954, therefore, the gross income per farm Of 1939 is not strictly comparable with that of 1954, but the differences were not assumed to be important to the analysis. Test of hypothesis. The geographical differential in gross farm in— come per farm between districts is shown in Table 8. The groSs farm income per farm for 1939 was higher in the developed region than in the less developed region. In the Lower Third Region, which is relatively developed, the level of gross farm income per farm ranked first in District 9, third in District 8, and fourth in District 7. In the next most develOped region, the level of gross farm income per farm ranked second in District 6, fifth in Dis- trict 5 and sixth in District 4. In general, the gross farm income per farm is higher in relatively developed regions, manifesting that the pattern of geographical dis- tribution of gross farm income per farm is similar to that 1See Footnote Of Appendix 3. 127 Of the level Of nonfarm development, with an exception for District 6. According to our hypothesis, District 6 should rank at either fourth, fifth, or sixth.1 Since the deviation is only in one District and the distributiOn Of gross farm income per farm in Districts 1, 2, and 3 shows an approximate pattern as hypothesized, it appears that the gross farm income per farm is higher in a relatively in- dustrialized district than in a less industrialized dis- trict. In other words, the more industrialized a district is, the higher was its gross farm income per farm in 1939. The geographical differences in gross farm income per farm has a same pattern Of distribution as the geographical differences in industrialization or develOpment in nonfarm sector. Rank correlation between gross farm income per farm and income per worker in major industries for 1939 was computed. The income per worker in major industries was used as an indicator showing the relative level of development in nonfarm sector between districts. The r was 0.8, being highly significant at l per cent level. Our conclusion, hence, is supported statistically. lThe nonfarm sector of Lower Third Region is: more developed than the Middle Third Region. If this hy- pothesis is true, Districts 7, 8, and 9 must rank at either first, second, or third but not lower than third, and Dis— trict 4, 5, and 6 must rank at either fourth, fifth, or sixth but not higher than fourth. 128 The rank correlation between income per worker in major industries to gross farm income per capita for 1954 was 0.72, and significant at 5 per cent level. Therefore, it appears, the economy has been growing as hypothesized, namely, the higher the level Of develOpment in the nonfarm sector, the higher the gross farm income. TO ascertain whether the growth of gross farm income per farm has been diverging or converging during the fifteen years from 1939 to 1954, a rank correlation was computed between the increase of gross farm income per farm during the period from 1939 to 1954 and the rank of development. r was 0.89, and significant at l per cent level. The develOped districts showed larger gains and, it was concluded, the gross income per farm has been diverg~ ing in absolute terms. To determine the geographical dis- tribution of gross farm income per farm in relative terms, the coefficient Of variation was computed. It was 24.9 for 1939 and 22.5 for 1954 indicating that the relative levels Of gross farm income per farm has been stable or converging mildly. Daily Farm Wages and Industrialization In the last section, it was concluded that the gross farm income per farm is higher in develOped areas than in less developed areas. This is quite consistent 129 with the retardation hypothesis. Gross farm income increased in every district during the study period but it grows more in a developed than in a relatively less developed district. With the same hypothesis, this section concen— trates the analyses on the farm wage. In a perfectly com- petitive model, wage rates are equal everywhere, but in a dynamic process Of economic development, the retardation hypothesis suggests that the adjustment is not perfect. This will attempt to measure the degree of imperfection manifested by wage differentials and its trend through time among geographical regions.1 Since 1923, the Michigan Crop Reporting Service has maintained a quarterly survey Of farm wage rates, monthly with and without board, and daily with and without board.2 Of these four series of wage data, the daily wage without board is used for this test because "daily wage rates, without board, seems to be the best to use in comparing secular movements of farm wage rates and the wage rates Of unskilled factory laborers."3 1T. W. Schultz, Agriculture in an Unstable Economy, Op. cit., p. 63; and Kenneth Boulding, Economic Analysis, 3rd edition (New York: Harper & Brothers, 1955). p. 652. 2Daniel J. Ahearn, Jr., The Wages Of Farm and Factory Laborers, 1914-1944 (New York: Columbia University Press, 1945), p. 52. For detailed information on farm wage, refer to USDA Bureau of Agricultural Economics, Farm Wage RatesL Farm Employment, and Related Data, 1943. 3Ahearn, The Wages of Farm and Factorp Laborers, Op. cit., p. 58—59. .OON>uom «awakened noun o>Nusuoaooo sszaoax eau me some veg-NNasncs onu scum vausnsoo as: an .vuson so soon usonuws eN one: mNNsv shame .H xchone<.souu 6N soNuuesusN NousuN30Numssos sends mo posses use osoouus 13C) N ouusom flom.o _ Nmo.m . coNusNus> mo ucoNONwwooo No.0 mN.o mm.o ucoNuNumoou nONusNouNoo scum mmN mNN . omsuo>< N mNo N new N mNN.¢ N NNN N msm.N N m uoNuueNa o Nmn n mum N NoN.n a wNN n mNN.N N m uoNuusNo N «co m on m oNo.n m NNN e NNN.N N N ocNuooNn sonoM qunH uoaoa m soc N New e amo.m N NnN N owN.N m o NuNuuoNn N New N amN a Nma.N N NNN m on m n soNuNsNa a mom a mNm m oNo.m m oNN o Nao.N m a NONuueNa sonoNN ENE. 32:: o qu m Nee m cow.N m oNN a 0mm n.w m NONuuoNo n eon o NeN N mqm.N m mmN N Nnm n.m N NONuueNn sonom ONNAH some: m wmn m NmN o omN.m o «NN m Noo.N N N uONuueNa «Nscstom Home: xcsm ucuo Nona unou scum w scum ucoo Nana w uses $3-32 338. i. _--|c..o_Nd.oO!| one: Ilufldmul. -aoN ems: Mom owes pom osoo sash ANNso mom osoo uo>on seamed Bush ANNsn sash hNNsa tea ausmsoz -aH suswsoz no «0 oasouocN enaN osmN mmaN scum sneN - onoN .zauNmuNx.zN muNaamaozN NaaaaNsoNNoazoz .82: .No gas a: 8.8% 82 Nos: 5:; 523 so Tanzanian a mandfl 151 The geographical differential of the farm daily wage without board in 1940 was distributed between districts in a pattern roughly similar to that Of income per worker in major industries (Table 9). The daily wage was higher in developed regions. Rank correlation computed between income per worker in major industries and the daily farm wage for 1940 was 0.85, significant at the l per cent level. The same correlation coefficient for 1954 was 0.79, which was significant at the 5 per cent level. This indicates that both in 1940 and 1954 farm daily wage was significantly correlated with income in nonfarm sector. The higher the nonfarm income, the higher the farm wage. The amount of increase in farm wages between 1940 to 1954 showed a slight variation from the eXpected pattern. It was not always the most developed districts which ex- perienced the largest rise in wages. Irregularities exist, such as District 2 ranked sixth instead of lying in a range of first to third and District 5 seventh instead of in the range of fourth to sixth. TO ascertain the relationship, the rank correlation was computed between the rank of de- velopment and the increase of daily farm wage. r was 0.67, and significant at the 5 per cent level. It is concluded that the daily farm wage had a larger increase in developed areas than in less developed regions. The trend in absolute levels diverged. TO ascertain the trend in relative terms, the coefficient Of variation was computed for daily farm wages in 1940 and 1954. It was 5.05 for 1940 and 6.89 for 1954 respectively, also indicating a divergent trend. The geographical differential Of daily farm wage has been widen- ing in absolute as well as in relative terms. The small coefficient Of variation indicates little difference exists in absolute terms between districts.l Geographical Differentials in Daily Farm Wage, 1940—1957 In this section more attention is given to farm wages with emphasis only on geographical differences. Since daily wages best measures the farm wage, the daily farm wage without board or room was used. The wage rate without board and room does not include the perquisite and repre- sents a clear relationship. The wage rate for each district is listed in Table 10 and was plotted in Figure 2. Up to 1945, the pattern Of the geographical distribution of farm wages followed a very similar pattern each year. District 9 was always highest, followed by Districts 6, 7, 8, 5, 4, etc. (Figure 2). This is well represented by the average daily wage for this period (1940 to 1945). It was 34.00 for Districts 9 and 6, $3.89 for District 7, $3.80 for District 8, 83.63 for District 5, and $3.27 for District 2 (Table 10). This stable pattern Of geographical wage 1A more detailed analysis Of farm wages is made in the next chapter. .135 TABLE 10 GEOGRAPHICAL DIFFERENTIALS or DAILY FARM WAGE WITHOUT ROOM.AND BOARD IN MICHIGAN, 1940 - 1957 W ------------ n I s r R I c r - - - - - - - - - - - - - - - State Year Aver- 9 6 7 8 5 4 1 3 2 age 1940 $2.32 $2.37 $2.21 $2.18 $2.12 $2.16 $2.14 $2.10 $1.98 $2.17 1941 2.90 2.91 2.68 2.63 2.57 2.54 2.57 2.48 2.31 2.62 1942 3.60 3.59 3.42 3.30 3.19 3.06 3.11 3.02 3.77 3.23 1943 4.65 4.54 4.34 4.32 4.08 4.03 3.89 3.80 3.62 4.14 1944 5.05 5.16 5.20 4.98 4.69 4.57 4.56 4.42 4.42 4.78 1945 5.49 5.42 5.47 5.34 5.14 5.01 4.82 4.64 4.54 5.10 1946 5.83 5.52 6.04 5.82 5.66 5.10 5.51 5.61 5.34 5.60 1947 5.48 5.18 5.41 5.28 4.81 4.75 4.92 4.73 4.89 5.05 1948 6.30 5.72 5.88 5.50 5.45 4.93 5.11 5.29 4.74 5.43 1949 6.63 6.82 6.45 5.90 5.85 5.45 6.05 5.77 5.71 6.06 1950 6.62 6.83 6.23 5.99 5.66 5.53 6.07 6.30 5.58 6.08 1951 7.52 7.71 6.92 7.12 6.53 6.29 6.90 6.78 6.20 6.88 1952 7.72 8.02 7.64 7.81 6.60 7.52 6.97 6.69 6.41 7.26 1953 8.64 8.15 7.91 7.40 6.98 6.91 7.11 6.94 7.10 7.46 1954 8.45 8.41 8.26 7.75 7.59 8.19 7.52 6.67 7.67 7.83 1955 8.23 8.12 8.19 8.29 7.46 6.54 7.43 6.95 7.34 7.61 1956 8.45 8.85 9.11 8.49 8.69 8.39 7.66 7.41 8.45 8.37 1957 8.62 9.33 9.38 8.56 8.15 8.30 8.06 7.85 8.23 8.49 Average 1940-45 4.00 4.00 3.89 3.80 3.63 3.56 3.51 3.41 3.27 3.67 Average 1946-57 7.37 7.39 7.28 6.99 6.61 6.49 6.61 6.41 6.47 6.84 Average 1940-57 6.25 6.26 6.15 5.92 5.62 5.51 5.58 5.41 5.41 5.79 Source : 8From the unpublished data of the Michigan Cooperative Crop Reporting Service. The daily farm wage without board and room for a year was arrived by simple average of the quarterly report of daily wage for each district. cNO report was made for the daily farm wage of District 3 for July, 1955 and 1938, and for District 8, October 1952. The wage rates for these months were estimated by the method Of estimating the value of missing plot used in experimental design. h.cu 2.00 134 XX W\ I”? 4" 6 5° ‘ °o},.°o°° \ °o° o o I \A) M 9 6 7 8 5 h 1 D13 IRICT Figure 2. Geographical Differntial Of Daily Perm Wage Withc;t Room and Board in Michigan, l9LO-l957. difference, however, was obscured to a considerable extent after 1945, the end Of World War II. The wage level after War II is not always highest in District 9 followed by Districts 6, 7, 8, etc., as plotted in Figure 2. In some years, District 6, and other years District 7 showed the highest level Of farm wage, indicating a considerably dif- ferent pattern Of geographical distribution. To ascertain the geographical pattern of wage differential, tests of difference between two means were applied for each pair of districts. Since the fluctuations of wage differential between districts are substantial after War II, the wage series were divided into two periods and the test was applied separately; from 1940 to 1945, the period before War II and from 1946 to 1957, the period after War II. Another test of difference also was made for the whole period from 1940 to 1957. The average daily farm wage for these different periods is shown in the lowest three rows Of Table 10. The result Of statistical tests revealed that the wage differentials between Districts 9 and 6, and be- tween Districts 4 and l are not significant for the period from 1940 to 1945 (Figure 3A). The geographical pattern of Wage differentials after combining the area with same wage level is shown in pillar form in Figure 3B and in map form in Figure 4. For the period after War II, the test discloses that the wage differential was not significant 136 2.00 v IVMPE A. # Sign indicates ihc wage level is not fiiynificantly differnt. DISTRICT 9 ’1 '7 8 5 )1 1. 3 2 Figure 3. Diagram of The Average Daily Farm Wage Without Room and Board in Michigan, 19hO-19L5. ‘ 137 ' "W: a I-' ' I” L « r J I 1 ”mm ' __ - _ I I .nor‘~° —-—g g, E l } . l ficimm ., clmnaonl , _ _‘ — +— ' l ' 1°“ ' l Wm . L __ DIS w l ' I'M ‘4 r' L, I I (non-nu; WISCONSIN A‘ a j ‘. luv r" g/ \ _ ‘ . I. ’la‘mm ‘ “whit... g o ”1an— - ".00 IMORIICV J lit-UNA“ ‘ ‘ Jw-vgnmo‘s'c’éfl- Ph.-BEA DI mcr‘ \/ ’ ‘\~" - - _ -4 ' .xuxuu """L Em “nu-u. ' b - - Pin—07:6 Farina? ANS?! I 0151311: 2 ---——..— t. wuou [umuc ) / The m ber indicates "1111” level 'UI . of age. I Soure : Figure 33. t ' L__L.. : _'mmo ‘NACOMQ Eid- ' ‘Ttitfi‘fiionf IVIIOSTO1 1 " 2 ! 3 I #1 “a; “z QWFu‘Kaumo -uTH5b7.FEfi-o.~' fihth—Fuvu ‘~d‘J . ' mus». D : - \c in " ‘ ' \_.. (3 Q I l l. d a F3 alumni 'l ’ m'u‘ffiuhqr" ' [Jo-m: nufiififiw. 0- -.-TM nu) ANA ' ‘ Figure 11. Map of 1110 Average Daily Farm Wage yithout Eo- nnd Board in Michigan, DID-19115. Luna: .0 a; no pain 138 among Districts 9, 6, and 7, among Districts 5, 4, and l, and between Districts 3 and 2 (Figure 5A). The geographi- cal pattern of wage differential after combining the areas with the same level of wage as revealed by the above tests is shown in pillar form in Figure 5B and in map form in Figure 6. By comparing the Figure 3B and 5B, it should be noted that (1) after war II, the farm wage in District 7 advanced considerably and caught up with Districts 9 and 6; (2) Districts 4 and l caught up with District 5; and (3) District 2 caught up with District 3. The number of areas with different wage levels has been reduced, but the wage differential between each area has widened rather than closed after War II. Between the highest group and District 8, the differential widened from 9 cents to 29 cents, be- tween Districts 8 and 5 from 17 cents to 38 cents, between District 1 and 3 from 10 cents to 20 cents (compare the last second and third rows of Table 10). Roughly the wage differential between districts after Jar II widened by two times the differential before War II. This finding is consistent with our conclusion on pages 131—132 of this chapter concerning the diverging trend of daily farm wages under uneven development in nonfarm sector. without dividing the wage series into two periods before and after War II, the wage differential between each pair of districts was tested through the whole period from 139 Figure A. i Sign indicates the wage level is not significantly differnt. DISTRICT ' ‘ 7.5096785n132 Figure B. Figure 5. Diagram of The Average Daily Fern Wage hithout Room and Board in Michigan, l9b6-l957. 140 :— .I I u l L— .._.J \w I -l-s\.. - WISCONSIN f o r... ' . i (We. ' .w i ' ' "" ' ~ I. D A -m#._-, 1 I. 1 I‘m,” X‘CANA I I... __.. I Woman L __ _.I . ‘ “ea J 'oacxmsoul r o _,__ u I ‘I ...... —| ,, ~ . . M ' - .1 "4,901! 4 1 I F__.! I l 9 5' ab’fL‘IIfi-‘mfi/Vq’J/flw .‘ 1 f. L: I. /',.—.A\“ 'V “\.\fl\Nv3‘\-r ‘ w: 1;. we? . M mucous": \ \\ , _ ,A.‘ . . . . ' .421 '\ V ' {I éiffi‘: Source figure 1 o um'uu —» 5 I - — _:__- ’ 'I ' " , ““‘Eetuuu' r "' T“ '" ' ” i | , W 4‘05 A ,_ , r r ~“ng ‘—~ Hi ghe s t Third 1 A Lowest '72:. I - . “If Figure 58. 4 till] . ,l_ \" ‘ I L A. ‘ _ 2‘ '1‘" - w; t \/ INDIANA- o 1 J! I 6. Map of 1119 Average Daily Farm Wage Without Room and Board in Michigan, 1916—1957- I. .5 '7‘.” ea...—V»» is V... ,A MM..<.—_.——.—ud L... . .. . 141 1940 to 1957. The result is that wage level was not sig- nificant among Districts 9, 6, and 7, between Districts 5 and 4, and between Districts 3 and 2. Summarizing this section, it can beobserved that (1) before War II, Michigan had seven areas with different wage levels, but after War 11, it was reduced to only four areas because Districts 7, 4, and l and 2 caught up with other areas as a result of economic development; (2) but the differential between areas had widened by twice after the War II. Summary of the Chapter netardation hypothesis propounds that under the type of economic development characterizes the western world, uneven development tends to exist. Using the propositions of retardation hypothesis as guide lines, the economy of Michigan was divided into two parts; namely farm and nonfarm sectors, and the trend of development in nonfarm sector from 1939 to 1954 was ascertained first. The income per worker in major nonag— ricultural industries was used as the major variable to determine the relative level of development between dif— ferent regions of Michigan and its trend of growth over time. The value added per capita by manufacture and the percentage of nonfarm p0pu1ation were used as supplementary variables to cross-check the relationship determined by the major 142 TABLi ll CUEFFlClDNT 0F VAhlATlON FOR INCUmfi res NOKKEE OF EAJQn NONAGthULTUnAL lNDUSThle, VALUE ADDdD inn CAEITA BY MANU- FACTUnmS, GROSS lNCCME lam FAhm AND DAILY FARM wAGm JITHCUT noon AND BOARD IN MICHIGAN items Coefficient of Coefficient of Trend Variation, l939 VariationJ 1954 Nonfarm sector Income per work- er of major industries 17.75% 12.85% Converging Value added per capita by manu- facture 19.2 % 16.6 % Converging Farm sector Gross income per farm 24.9 % 22.5 A Converging Daily farm wage ‘ . without board 5.05w 6.89m Diverging variable. The findings of the tests are: (1) there are certainly uneven develOpments existing in Michigan. The Lower Third hegion is most developed, followed, in the order of the level of develOpment, by the Middle Third negion, Upper Peninsula and the Upper Third Region. (2) The rate of growth in each region is different. The highly develOped area experienced a larger gain than the relatively less develOped. (3) As a result, the trend of growth be- tween different regions is diverging rather than converging. The highly developed area tends to gain more in growth than the less developed. But this is only in absolute value. Since every region experienced growth in the process of develOpment, the coefficient of variation indicates a converg— ing trend (Table ll) for the study period mainly because of the 143 general rise in the level of develOpment in all regions. In other words, the trend of growth measured in relative terms is converging. The farm sector of the economy was examined to determine whether agriculture also followed the same pattern of development as in the nonfarm sector. as prepounded by the retardation hypothesis. Gross farm income per farm and daily farm wage were the vari- ables tested. The findings indicate that agriculture fol- lowed exactly the same pattern of development as in the nonfarm sector as propounded by the retardation hypothesis. The disparity of growth between areas widened during the study period. The tendency for increasing disparity in absolute term is undeniable. But this does not mean the underdevelOped regions were static. The underdeveloped areas also experienced a substantial growth, the problem is they have been left behind in the process of economic development. The retardation hypothesis denies the optimum adjustment of economic organization. The perfectly com- petitive model with instantaneous adjustment is not true in reality. It is our belief that the basic explanation for the relatively poor performance of the existing economic organization in adjusting to economic develOpment is to be found in the factor markets. The uneven rate of economic progress of regions and of farming areas can be traced, 144 so it appears to us, very largely to major imperfections in various factor markets on which farm people are depend- ent. In the following chapter, we are going to concentrate our analysis on the labor market with an effort to determine some of the causes resulting in the disparity of farm wage between different regions of Michigan for the period hetween 1940 to 1957. CHAPTJX V. IHEACT UE UHJVmN lNJUsThIALIhATIUN UN Sham «AGE lt was ascertained in the last chapter that uneven growth rates existed among the different regions of michigan during the deriod from 1939 to 1954.' it was also concluded that farm wages in an under—developed.region were lower than in a develOped region. The purpose of this chapter is to examine some of the causes of the geographical differentials in farm w ges. The basic concept underlying the analysis is the retardation hypothesis that the economic organization works best at or near the center of develOpment. since farm wages are determined in the labor market, the farm wage diSparity between regions must be due to the differences in the func— .tioning of labor market between regions. This in turn is assumed to be related to the rate of grewth in the region. since our hypothesis is based fundamentally on the idea that the labor market will function more efficiently in a develOped region than in a less developed region, the anal"sis will rely mainly on a comparison of the labor market between develOped and less developed regions. In other words, by comparing the behavior of the economic vari- ables of the labor markets over time in the developed and the less develOped regions it is believed that the causes underlying the geographical differentials of farm wage might 146 be isolated. DEMAND FOR LABOR Wage rates and marginal value of labor. Demand for labor is a derived demand. It is determined by the marginal value of labor. The marginal value of labor is determined in turn by the price of the product and its production function. The purpose of this section is to examine the relationships of the marginal value of labor and the geographical disparity in farm wages. since the retardation hypothesis suggests that economic organization works best at or near the center of develop- ment, it is supposed that agriculture in the developed re- gions would adjust more efficiently to economic progress and the marginal value of labor in develOped regions should be higher than in less developed regions. If this were the case, the geographic disparity of farm wage could be ex- plained partially by the geographical disparity of marginal value of labor in agriculture. ' however, difficulties exist in obtaining adequate data to represent the marginal value of labor in each dis- trict. To test this hypothesis, since the productivity of labor is closely correlated to the productivity of a farm, . l . the gross farm income per farm was used as an index to 1For the computation of gross farm income per farm, see pp. 124—126. 147 represent the relative level of marginal value of labor in each district. A rank correlation was computed between the gross income per farm in 1939 and the average daily farm wage without room and board during the period from 1940 to 1957. The ranks of average daily farm wage were derived from the analysis in the last chapter.1 The coefficient of rank correlation was 0.89, being significant at the one per cent level (Table 12). To recheck the relationship, the average daily farm wage was correlated to the gross farm income per farm in 1954. The coefficient of correlation was 0.92, again significant at the one per cent level. It is con- cluded from these tests that the geographical disparity in farm wage rates are partially attributable to the geographi- cal differentials in the productivity of a farm. Since the marginal value of labor is assumed to be closely correlated to the productivity of a farm, it appears that the geographi- cal disparity of farm wage is partially due to the geographi- cal differences in the marginal value of labor. In other words, the lower level of farm wage rates in the less 1The rank of average daily farm wage rates from 1940 to 1957 was derived from the analysis in pages 138 and 141. The pattern of geographical wage differentials from 1940 to 1957 was similar to that from 1946 to 1957 as shown in Figure 5B. Since the wage rates were the same in Dis- tricts 9, 6 and 7, they were assigned a same rank according to the routine procedure of rank correlation. $148 11313 12 RBIATIONSHIP BETWEEN GROSS moons PER PARK AND DAILY FARM “GE WITHOUT ROG! AND BOARD, 1940 - 1954 Rank of Avg. Renk of Gross Rank of Gross Region Daily Peru, Peru Income Per Fern Income Per - Peru 1 9 Peru 1954 Upper Peninsula District 1 6 8 8 Upper Third Region District 2 8.5 7 7 District 3 8.5 9 9 Middle Third Region District 4 6 6 5 District 5 6 5 6 District 6 2 2 3 Lower Third Region District 7 2 4 1 District 8 4 3 4 District 9 2 1 2 r between dsily fern wage and 1939 gross incoue per Earn 0.89 r between daily fern wage and 1956 gross insane per fern 0.92 Notes : s. For the rank of average daily farm wage see footnote p. 147. b. The ranks of gross income per £ern.in 1939 end 1954 are from Table 8. . I Jung”- fibre“. w - - I, . "(lhr p 149 developed regions were partially due to the lower marginal value of labor in those areas. The marginal value of labor is determined by the price of the product and its production function. If the production function is given and the relative prices of inputs remained constant, changes in product prices will affect the marginal value of labor and, in turn, affect wage rates. It is assumed that the market for the agri- cultural products of michigan is quite competitive and the prices of farm products are almost the same in different regions except for the differentials resulted from different tranSportation costs. Since the price differentials due to transportation cost probably are not great, it appears that differences in farm product prices were not the cause of the geographical differentials of farm wage rates in michigan. Therefore, the analysis focuses on the supply of labor and the factors underlying it. SUPPLY OF LABOR The supply of labor is affected, in the long run, by the rate of population growth, the age and sex composi- tion of p0pu1ation, and in the short run, by days, or hours worked, intensity of work, and finally, the level of wage. Our concern will be mainly on a long run factor, the natural rate of increase of population in different regions. It is ‘ a recalled that farm wage level in less developed regions of Michigan has been lower than that in developed regions in each of the periods studied and the gap has widened over time. Here we are going to examine some variables to deter- mine whether they have exerted a positive or negative effect in widening the wage differentials between regions of Michi- gan. hate of natural growth of_population. Since the farm wage level was lower in underdeveloped regions than in developed regions, it was suspected that the rate of natural growth of population might be higher in underdevelOped regions than in develOped regions, and in consequence, the higher rate of pouulation growth kept the wages in underdevelOped regions at a lower level than 0 in devel ped regions. The rate of natural growth of pOpulation is the eavess of births over deaths in a given period divided by NJ 1 the total p0pu1ation in the first year of the period. for this analysis, the rate of increase in pOpulation was com- puted for the period between 1920 to 1930. Babies born in this period reached tne age of ten to twenty in 1940 and fifteen to twenty-five in 1945. Thus, beginning in 1940, every rear sore babies born betaecn 1920 and 1930 would enter the labor market. If the natural rate of in- crease in pOpulation were larger in the underdeveloped LINII'IL'I” regions, ceteris paribus, the wage level, consequently, nust be relatively lower in these regions. The natural increase rate between 1920 to 1930 is shown in Table 15. The rate of population increase showed a random distribution between regions. It was ranked, from the lonest rate to the highest rate, and correlated with the rank of daily farm rages between 1940 and 19571 (Table 13). The coefficient of rank correlation was -O.ll7, show- ing no significant relationship (Table 13). Thus, it fails I (" to support the h voth>si‘ that the higher natural rate of ("<1 *1, of less developed regions has depressed C) (u population increa farm wages. Since the natural rate of increase in population £4) did not yiel an; significant relationships to the farm thought that a more refined examination of U} wages, it wa the p0pu1ation increase rate between different regions was necessary. In this connection, the rank of develOpment of different2 region was correlated gith tne natural rate of increase to determine whether the rate of p0pu1ation in- crease was higher in the developed regions between 1920 to 1950. The correlation coefficient was 0.04, and was insig- nificant. Thus, the interpretation must be that the natural l- * 1 '\ - v for the rann of daily farm wage see footnote on i). 1470 r) “for eXplanation of this rank, see footnote on p. 120. 152 .nqa .a ouocuoou ooo .Nmmauoqm .owgi anew agave ownuo>n mo xaau eau you .v .ou~ . :« succuoow «on .uaoaaoHu>ov mo scan you .0 .ma.@ ..mmmdmm savage Scum vvuanaoo on: cadence“ aqusuua mo nonaaz .n .H~-m.aa .Annaa .ocaev nuances an.» .enN cauoaaan assuage noun-um usuauuoaxm “anneanuaume admanowx .c gnu“: ca oceans dawned: on .auvuna .h .n scum vouaaaou an: nowuuasaom ouma any .1 u nouoz eo.o cadence“ coauuasaoa mo uuuu can usuaao~u>ov coozuon u BHH.0u ammouuau acauqfisaoa we sun» can one: Baum maauv coesuon u me~.~o¢ -¢.moo.n aqua» madam _ m a ~.o~ . nom.so~ AmH.soo.~ N N m uuauuuua N w n.h Hw~.N¢ mom.m¢¢ e N m uuauuaan n.m n.e o.o~ «mm.ne m-.nne N N a gouuuoaa seamed unana hobo; n m e.oa mnm.m~ ane.e- N n e noduuaaa n.n n.o o.o~ Nm¢.na mou.¢m~ o n n uoauuuua a n m.~a we~.e~ moe.maa e n e uoauuuaa acumen chunk caveat w N o.- moo.oH «mm.mm m.m n.w m uuwuuaqa a m m.o oco.m nw~.~n~ n.m m.w N uouuunaa newwcx whiny noun: A uUauumwa e e m.~a esn.~n enn.~nn e a «anueaemm.uuaa= «use “mono; onus snowman om-o~mH an - oema owma w yams one scum onu Scum swam mononucu :oHuuasaom o «3 oaoHo>ua newwmm wcqxanx wcwxaum announz o no : Baum hands a can undouocm auunumz mo nonaaz m he 2 .m>4 we xaam u x omoH : owma zccumUHx 2H ZOHH¢ADAOA no um¢flxUZH ho MH<¢ Auv we seen any you .6 .Nea .a .ouocu00u mom .owna Shaw Nadia umauo>¢ mo scan onu you .0 .mo-no .aa ..euna oaa .ooaa ou onaa uvlouv onu vs. 0mm~ cu oema ovuoov any now ovum“ ucuaoonaaou mo zuwdanquuqaou any you .n .fiN-oN .ma .onaa .uoam=< .NN .oz ANNuav mxdvu nausea magnum .ooaauoqoa .nodu: Hanna pom nouux vc< owunm uaoEuuaHmum «moauqunaom Bush .ou«>uom wcwuuxunz auuauuauwuw< a aaucou eau no suousn any loam wouaaaoo an: «adv 039 .u " auuoz Nn.o nH.o ~¢.o oo.o ouuou ucmaouuaauu was was: anew Ngaqv.aoa3uua u on.o Nn.o mm.o on.o ouuuu uaoaeoqgmou use uaqaao~o>ov nouzuon u n Nod m Neg e mod n med N N a uuNuuaan o Nod a NNH n cod a add e N w uouuuuan N Na n and N No m.N «NH N N N uowuunan seamed qunH Mason u” m.N mod a son n.N «Ha a mod N n o uoauuoan 1i m.¢ «ea c med 0 aca o sea o n n unquuuua m.¢ cod N «Na g cm n.N mNN o n e uouuuaaa coamou cause cave“: n.N mod m and a mad m end m.m m.» n uuauuuun m Mad q Nna m.N Nag c Nma m.m n.m N uowuuuan acumen vuwnw hogan N ooa N NnH M No“ N and o N a uowuuuaa uaancaaom yuan: u anm oawmm xcum caged Nnaduoeaa aqua _ coma - Oman Oman - cam“ osaa - anon enamn- oqaa «was at.» Nada: -aoao>oa noun-e Oflu a UGQEOUCH a“ Gdflvg owuqm ucqauuuaaom omuuo>< .m>< mo xaqx mo xaum ooaa - oeaa .ao ow nN amu< wage: gasps zau~=o~:.uo moHuse an: oeaa «a nose“ aquamauo «no .oeas on o>uunaou snag cu gaseous no sagas. «use eau oosvouu ou vouunwou use: one we eauuunvou «nu wcuaonn sauna cu unsuuocou ca .uaos :13 won vmuavoua xuouao>wa no mono mo unseen «nu ma naumu cw as: nunasa nova“ auawwuuo any .0 .Nu-o~ .ea .Ammma .uaaw:< .muamwo waaucunm unwasuo>oo .m .a .uceaauon mo unoccuuaguuasm " :Ouwcwnnuzv .nnu .om cwuoddsm auuauuuuwum .<.n.m.= .HHH ucoaoaanam .uuonom auuaasm uum :uuuoaom Hausuaauauwd a“ uuuv «a cannon .n .aumaoouwa can damage“: .nfioaqaam .ucuwvam .o«no « covaauca sowug>wa Hauuamo nuuoz umsm .u " mouoz mn.o ew.o . hm.o . mm.o on.o . nn.o mm.o Hm.o Nm.c um.o «5.0 snag MM aw.o om.o mm.c mn.o go.o ¢¢.o eo.o do.o mm.o mm.o. . oa.c onoH 1i oo.H oo.~ oo.H oo.H oo.a oo.H oo.~ oo.~ oo.~ oo.H oo.H cema oo.~ mo.~ go.~ om.~ mo.~ . «n.~ mm.~ sw.o mm.o no.a mo.a omoa na.a Nw.o Ho.H em.“ wo.~ na.~ aa.a aw.c m~.~ om.o No.a omaa unouo aunz a gummy onwauo «MWHOM ocwauo «mono muu n3ou naasmc< muonvoum can uuow -mmmwm -ouwsumu,.nmuowo>. y-voom :wcdmnx poem -Hfli. nasom xflfiz .usuz. secumo>MA dud Aooanoeaav anon - oNoa .onmH>Hn aaaezmu meaoz swam zH muons az< sooemm>ug no azsozHe 4 mangoes ca amaHaoum meson zucm undamaged mono o>uuuuomooo damaged: «a «use vonuaansass use scum vousaaco as: amusiahum «usage .59 .n .mod .a nu ouoauoou com .auuoo «cannon new own! as: Nod.o~ mo cauuosvuv u .nmnaaueo Hansen «a» Baum .uxooa waqxuoa on on: you» new» and» wad-sand A: no.» a mo oucanueo «axon: omduo>u any seam vausmaoo one nuoxuoa acuuusvoum mo endgame. finance «:9 .wcuuaueuusaua a“ «nexus: acauosvoua mo amnuauqa genes: can on «was Induce: gasses any .u !} '1' lacltll‘tlll'l llll'll Ivy! ” nouoz oo.o No.0 hm.o em.o annuopa mm eo~.~ o~.e. Nem.m mme.~ n~.c m-.n no~.~ ma.e mLL.n noo.~ mm.e no~.n o-.~ “mag 11 o~e.~ no.o a-.n «Ne.~ n~.o has.” nn~.~ om.o Ham.~ noe.~ «5.: eoo.n nun." snag mmo.~ mo.e mmo.n con.~ oas.e e~m.~ ene.~ mm.o e~a.~ sam.N ha.o Lao.n Loo.~ nnad Hoe.~ L~.o ~oe.n noe.~ mo.o e~m.~ nua.~ La.o <~m.~ nan.~ e~.o Hn~.~ onn.~ «nag Hme.~ H~.o oo¢.n no¢.~ mo.o cam." was.” mm.o o-.~ enm.~ a~.o ”mo.~ oNL.~ «nod eoH.~ an.o n¢¢.n aoa.~ oo.o Lon.~ oao.L em.o Hon.~ anfl.~ ~a.o nae.~ ea~.~ «nag o~¢.~w He.o hoo.n» Law.~w en.o oe¢.~» ann.aw nm.¢ oes.~m e~o.~» mm.o ehe.~m o-.~» Lnad 03am Bump—oz luau 0 ans 33:02 Burn 0.3.3 Eauaoz Bush 3qu anew—.02 Eon :3 . 311...... .. sews- N “we..§ i (use; unaananma .ZdUHMUHx 2H muadu mud: zudfizoz nadfxuafi A‘szz<.ho ZOmHm¢mxbo ma uqn¢H .Lha .m :« ueeueem com .033 oneness we eeaueueeaee of 5 wee—£93 a! 33 we nee» 05 5 m undue-3 we edge... omen 50:0... :5 you .33 5 :3 made we macaque... Jule» 03 an: 0.3!: we on: 05. Jul—«use 631.3 e a!» 3.3 5 n 3:33 we on!» luau 05 :5 @3323... on: u.“ .33 a.“ one: luau we all: we on: one use one: Induce: we venue .ueeaheaefle me use: 23 no 8.33.353 an wound 63333.3: clean menu 33 5 n 3.7.5.3 ea owes.luem we oawdeev doves. any .eemuseqz aw ueuuueav huo>o new «sea as: enouu ease .ueem huo>o «eau 05.0 ae.c nn.o eh.o nn.c mm n~.o oom.¢ end.n -.c owo.¢ mew.~ mm.o m~o.n Ano.n nn.o oeo.n nma.~ nu.o man.m hm ac.o ¢-.c cam.~ «5.0 osm.m nun.~ am.o ohm.n omm.~ en.c nan.m oom.~ n~.o hmn.n om mo.o N~H.¢ anw.u oo.c o~°.¢ fine." an.o non.n no¢.~ «5.9 mom.m mow.u us.c mn~.m mm c~.o ~nm.n oao.~ o~.o coo.n wen.~ ¢~.c m~n.n o¢¢.~ n~.c ~a¢.n coo.~ nw.o ona.n om «fie «sun «as; «0.0 303 09in n55 Gang. ~N¢.N «5.0 nnn.n mnn.~ hné ¢n~.n mm oo.o sfinan «Neg mod «aim wen.“ 2.0 0.3.5 nnuJ and onN.n on¢.~ and ~88 Nm 2.0 o-.mw 29an mod ~m~.nm .3wa mud gag» mafia» aod noinw 0.3.N» «5.6 :me A. . .. u _. . . . , H. J . a - we: ..... em 03 , . .meez luau e.“ .. games .44 - #1.. In . a (£313-: a. “nutmeg- - a 31:3, m Lorena. Judy! voadwucoo .. 3 was 174 with a wage ratio of around 0.70 comprises Districts 9, 8 and 4. Group 2 with a wage ratio of around 0.75 comprises Districts 7, 6 and 5. Group 5 with a ratio of around 0.85 comprises Districts 5, 2 and 1 (Table 20, column 5). One point to be mentioned is that Group 1 and Group 2 are the relatively developed areas. The difference of wage ratios between these two groups is small, being only 0.05 or 5 per cent. Group 5 is the so-called cutover area. The difference of wage ratio between this cutover area and the develOped area (Group 1 or 2) is relatively large, being 0.10 to 0.15 which is two to three times larger than the difference of wage ratio within the develOped areas (between Group 1 and 2). This fact indicates the distinctly different economic condition between the cutover area and the developed districts. The rank correlation coefficient between the rank of develOpment and the rank of average wage ratio was 0.64. Since it is significant at the 5 per cent level, the wage disparity between farm and nonfarm sectors was larger in the develOped regions than in the less developed regions. One factor accounting for the disparity of wage rates between farm and nonfarm sector was the relative pro— portion of people employed in manufacturing industries. As shown in Table 20, when the proportion of workers em- ployed in manufacturing industries in the labor force of a region rises, the disparity of wage rates between farm TABLE 20 175 ANNUAL RAGE DISEARITY BETWEEN EARH4AND NONEARH,SECTORS.AND THE PROPORTION OF PEOPLE EMPLOYED IN MANUEACTURES IN MICHIGAN 1951 - 1957 Average Annual Ratio of Manufacturing Bank Of Wage Ratio Be- Employment and the Em- Region Develep- tween Farm and ployment in Other Major ment Nonfarmil951-57 Nonfarm*;ndustries, 1954 Group 1 Rank Rank District 9 2 0.70 3 1.60 3 District 8 2 0.69 2 1.52 4 District 4 5 0.66 1 2.00 1 Around 0.70 Group 2 District 7 2 0.75 5.5 1.61 2 District 6 5 0.74 4 1.45 5 District 5 5 0.75 5.5 0.86 7 Around 0.75 Group 3 District 3 8.5 0.67c District 2 8.5 0.87 8 1.05 6 District 1 7 0.84 7 0.59 8 Around 0.85 r between wage ratio and development 0.64 r between wage ratio and ratio of employment 0.71 Notes 1. a. Average annual wage ratio between farm.and nonfarm sectors during 1951-1957 is from Table 19. b. Ratio of manufacturing employment and the employment in other major nonfarm industries is computed from.Appendix Table The employment in other major nonfarm industries includes re- tail trade, wholesale trade, service industry and mineral industry of each district in the census month of 1954. ment is excluded. Agricultural employ- A ratio more than one indicates that the number employed in manufacturing is more than the number employed in the other industries. c. The wage ratio of District 3 was ignored in the analysis because of its ssmll sample size as stated in footnot, p. 171. d. For the rank of develOpment, see footnote of p. 120. .H . . Jab Q. . .r ..~.,,_.. . .19.... (a. 176 and nonfarm sectors widens. A statistical test by rank correlation verified this hypothesis. The coefficient of rank correlation between the wage ratio of farm and nonfarm sectors and the ratio of employment between manufacturing and other industries was 0.71 which was significant at the five per cent level. The interpretation of this result is that in the process of economic development, the greater the proportion of manufacturing industries in a region, the wider the disparity of wage rates between farm and nonfarm sectors. The economic develOpment of Michigan had a divergent trend of growth between different geographical regions. Since the wage disparity between farm and nonfarm sectors was larger in developed regions than in less developed re- gions, it is not difficult to understand how development in .nonfarm sector tends to increase the wage disparity between farm.and nonfarm and thus offers strong incentives to farm peOple to seek employment in the urban area and thus reduce the rural p0pu1ation. The higher wage rates in the nonfarm sector are 2n1.incentive pulling farm people from farms. However, the higher wage rates alone are not sufficient to cause a trans- fer'<1f resources. The actual transfer of human resources Imaterialize only when employment Opportunities are avail- abl£3;for farm migrants in cities. Thus, an analysis of al— tezvuitive employment Opportunities for farmers in nonfarm 177 sector is in order. As shown in Table 21, during the period from 1940 to 1950, employment in the nonfarm sector increased 625,442. To determine the employment opportunities avail- able to farmers who desired to work in nonfarm sector, the increase in nonfarm employment was divided by the farm employment in 1940 and a ratio was thus derived. This ratio was called the "alternative employment opportunities available to farmers" or briefly, "alternative employment opportunities." The alternative employment Opportunities avail- able to farmers should be considered an index showing ver crudely the relative employment Opportunities available to. farmers in different regions. The limitations of this data are great. First, the census weeks of 1940 and 1950 are different and the data are, strictly Speaking, not compar- able. 1940 census was based on a fixed week for all per— sons, March 24 to 50, 1940, while 1950 census did not have a fixed week. Employment of persons enumerated in 1950 was based on.the week preceding the enumerator's visit. Thus, scmua persons were enumerated in different weeks. Second, theiwa‘were minor changes in definitions and questionnaires between 1940 and 1950 censuses. Third, people migrated ix>inichigan, and those residing in the nonfarm sector com- pete vwith farmers for the new jobs Open in nonfarm sectors. Besirhas, some jobs created by industry might need skills oao~o>uv mo xcsu ecu you .oNH .a «0 muocu00m use .ucws .N¢H .d .ouocuoom use ems: Show madam mwsuo>s mo anon one mom .0 L.n tonnage .ccmaeusx .NN spam .HH .ao> .na~-eaa .aa .aeaa soon saga .osaaoo wo possum one mouoaaoo mo usuauusaoa .m.: on» acnw vouanaoo one: some oema one .u Nn.o moauwasuuonmo newshoAnao o>fiuocumuau new own? Show Adamo newsman u aN.o moauqanuuonao newshoHnao o>uuscuouas use unoaaon>ov newsman a Nm.N omm.m~N N¢¢.nNo n¢o.nnN.N MON.moc.a Auuou madam H mo.a omm.N¢ mNm.mmm mNo.HN¢.H Noc.Nmo.H N N m uoHuumuo e mo.~ oaa.oe amo.as naa.aa~ mae.ama e N a suspense N NN.N «mo.qm eom.NN omm.omN onn.mna N N N nowuuuwo conmm chunk uoaoa m so.a maa.om ma~.am nnm.n¢a sn~.~a N m s suspense so n.m no.0 wmm.HN N¢©.¢H mmm.n< mdN.mN o m n nowuuoun %. m om.~ mon.o~ mo~.m~ coo.nn No¢.on o n e nowuuuac .1 cosmos essay when“: n.» so.o aos.o non.s maa.- caN.sa m.m n.» n “newsman N NN.o omw.N~ mo~.¢ oHN.mm Hem.eN m.m n.m N auguuawa :onom ouqna node: a oo.a «he.aa mne.aa eo~.mm ana.aa o a a suspense «Hamcficom Home: xcmm ouumm onm~-ocma unmanosmd acme museum mom ucomNMMasm oweonocH ommH oema owns Such uno~o>on aw mannaus>< aeguwcouuonno sum uaosonnsm auuwcoz Agape mm¢uo>< «o no. em unmazofloam o>uumcuou~< m mo scum xcmm onafi . oema Z< «NHHHZDHMOmmo HZMEVOAmzm m>HHov mo amen emu non .o .n sandy Nuance .o unom .H .No> .nmuflmmmm_.anunoo Henauaaonnw<_¢noa Ionw mouseaoo one: dude «man sea .A .AN no N anon v H manna huasoo .o unem .H .~o> .numnnofix .oaocoo Nonsuusownm¢ meme Ionm vouneaoo one: dude anon eau .s “ nouoz ‘ i’u’llll ID... -.‘Il"| ‘L in)! I ".II ‘I’ i enaanmnma .z¢UHmuHx 2H mac! ma mwon wo anon cassava n n~m.¢a m.N~ «.mn nON.¢n NNa.mnH m.HN NmN.mn NNN.HwN Neuou ousum Nmo.~ N m.¢~ m.¢¢ naH.N~ omn.NN o.aN oao.ag amN.Nn N a nuanuenn Nnm.¢ N o.ON m.wn NN¢.ON NmN.oN n.wa oao.o onn.nn N w uunnuewn sec.n n N.cN m.N¢ Nmo.oN me.NN m.NN ~¢¢.o N¢N.NN N N uownuunn sodwoa enuna 93o; Nom.N. e N.mN o.Nn nmc.o noo.ma m.n~ na~.n Nmo.NN n o nonnuona mno.N H m.NN m.Nn amo.n ¢N¢.ma o.¢~ om¢.N ~n¢.NH n n uonnunna man n m.Nn «.ne omN.« emN.o n.m~ «an.u man.a m e sonnuona census sunny oases: on w n.NN ¢.nn enm.a onN.n m.ON mmm.~ eco.N m.m N nonnuana non o ~.NN o.on oqo.n mam.N m.nN wm¢.N Nnm.HH n.» N nonnuuum nonmox vnNAH noun: ma~.~- a m.n m.Nm «No.n emN.m m.~n NNN.¢ mon.n~ N a uonnuoun ads-nanom none: emon-mman seam Hm one: no a one: no when «nag- mama. onoz no one: no exec cod one: no anus com wanna ono: when can «an: cod «no wanes wmo shun can «no need who manage: to when can nan-n umo aspen umo -uunoao «ensue: «snug «no -unnuao -o>oa acumen «nousnoeo anew umo meuxnoz wcaxnoz unannoz anew unausn unannoa Inch No No noaasz anon-none enouanuno enousnono Nanak mo unoao mo enousnonc deuce mo any an anew «o N emu no N no names: nonasz unoonom no names: neeasz scam OO‘OHUGH flu fluauuaH é n m H 1 m n a 182 gain of 14,913, while the number of farm operators decreased by 42,865, nearly one fourth of the total number in 1940. In absolute numbers, the gain of the number worked off farms 100 days or more was highest in District 8 followed by District 7 and District 5. In terms of the percentage of farmers worked off farms 100 days or more, the rate of increase was highest in District 5 followed by District 8 and District 7. An exceptional case was found in District 1 where the number of farm Operators worked off farms 100 days or more had decreased during our study period. This will-be treated further in the subsequent section. A hypothesis was advanced that the rate of increase of Operators worked off farms 100 days or more is higher in the develOped regions than in the less develOped regions. A rank correlation was computed between the rank of develop- ment and the rank of the increase Of percentage of farm Operators worked off farms 100 days or more during the period 1940 to 1954. (The coefficient of correlation was 0.55, insignificant at five per cent level. The interpreta- tion is that although every district showed an increase in the percentage of farm Operators worked off farms 100 days or more during 1940 to 1954, the rate of increase was not in the order that the develOped regions had a relatively large increase than less developed regions. This is because part time farming is affected by the closeness to the urban areas, type Of farming, the type of employment available 183 in the cities, the geographical pattern of the distribution of plants in a region, and the percentage of part time farmers existed before the study period. For example, the percentage of part time farming in District 9 where Detroit exists was already at a high percentage in the first year of our study period. Since farm people who were seeking urban employment already had their jobs, the increase in the number of the percentage of part time farming would not have been very high even the "pull" from the urban sector was strong. Aside from this fact, it appears that the develOpment in nonfarm sector tends to increase part-time farming. The Upper PeninsulaL the problem area. The economic structure of the Upper Ieninsula is distinctly different from the other areas of Michigan. As to the effect Of economic develOpment and the force of "pull", a few words need to be added on this area. It will be remembered from Chapter III that the Upper Peninsula was primarily developed as a mining and lumbering region. The unfavorable physical conditions and the distance from the consumption centers did not offer Opportunities for this area to develOp its agriculture as an independent industry. Agriculture depends heavily on the local market and the prosperity of local industries. Many farmers of the Upper Peninsula were lumbermen in winter 134 N I and larners in summer. Many miners als kept a fa m for addi ional inco.e. ghsza consequence, the percentage of‘ wart time farming in the Upper leninsr.lz was the highest in this state before our study period (Table 22). gccording to the 1348 Census of Population, farm ope r tors worked Off farms one day or more ranged as ig 1 as 49.9 per cent, I 1 ‘ L 7. ‘ 1‘ I" —\ f *' "t . " . "a “ r "7 ‘1 a“ " x 7 arm: LJU f‘nmm Opezxitols anorked.<111 lermns lee KLA;S 01‘:ns e, ;' ‘ A ' ' " ‘ ‘0 ‘ s I " ' ' '9 re . lne Upper reninsula has been null-ring Iron serious ~ w. . j f\ r. ‘ . . "r‘ , , 9" -‘ ' ‘ . m1 ,. ‘1. ,‘ ‘ iremplsynent since DAG turn or the century. lne unemploy- .‘ ., A m " ’. _. m /. ‘-.-‘ .. ment was die to tae ”forest and Minan \industiies) which '3‘:va ’ , “\ _' ‘ ‘,-3‘ . r’ ‘1 'r’ rs ',' . . p. . ‘- r‘x ‘3 I ’t ./ . "N ‘l t" . . s “4. ‘ A ' "' " ‘ ‘ ‘ ‘ is explicitly T3113CCCJ in its static ,o ulatio since '. ' “ I ': ' ’\ r v' 3 (v - A O ‘u y .3 Y. A " y I 'I l‘ s "\ . ’ l‘ . :cllne in the ’ctnu" ire“ lyée to 19,0 Kaleb) in 1cate , a " 'y as \A'. ‘ 1'15: ‘3 £33310le r f H k) w o’) O r O ('0‘ J C O 5:: 'J ,_) C 1 (C ‘5 b C.) *fi *4 C \JJ C ; d- O )3 .J C“ '0 g... C) ment. As a consecuence, labor force in Upper :eninsula lS age . "In scenomic Area 1 (western section), in which mining and lumbering p-ed “mlluut, 71A of the eve; lacle male laocr Wu” over 36 years of age. in Jti‘te Leonomic area a (fastern "4 section), Ego;nn3 ever 36. $ f I "I 3. ' E u r - AA '. o ‘4‘ -. LIA. L;—.)|'.,-'»-l .LJLI Uri SBASCU servic;, Inc., michigan's Upper Peninsula cud.c .Level cunment Lknmiissicai, 1953,.39,1Q2, ibid., pp. 102. afgsclall; the table on page 10). 185 "The Michigan Employment Security Commission reported that on May 25, 1952, it had a total of 5,382 applications for employment in the Upper Peninsula offices. Of these applicants, 4,644 were men and 738 were women. Estimates of unemployment for the month of May, 1952, in the Upper Peninsula were 7,500 men and 1,400 women, for a total of 8,900 persons."1 The number of farm operators in the Upper Peninsula was 8,234 in the year of 1954. The number of unemployed people in 1952 was almost equal to the number of the total farm Operators at that time. From this fact it is not difficult to see how serious was the unemployment situation in the Upper Peninsula. This explains why there has been a decrease in the number of farmers worked off 100 days or more in the Upper Peninsula by 1,198, nearly a fourth of the number of 1940, during our study period (Table 22). This, however, does not mean there has been no increase in nonfarm employment Opportunities in the Upper Peninsula. As shown in Table 21, nonfarm employment increased by 11,433 from 1940 to 1954. In view of the decrease in the number of farmers working off farms 100 days or more in spite of the increase in nonfarm employment during 1940 to 1994, it can be strongly suspected that the develOpment of tourist industries or manufacturing industries in the Upper Ibid., p. 105. 186 Peninsula have not been rapid enough to offset the unem- ployment pressure resulting from the mechanization and the decline of forestry and mining industries. MigrationLgthegphenomenon of adjustment. We have seen that mechanization and alternative employment opportunities are the major factors modifying the supply of labor. Mechanization and p0pu1ation increase ‘push farm peOple out of agriculture, while higher wage levels, alternative employment opportunities and other non-monetary factors pull farm peOple to urban areas. The adjustment in response to "push and pull" manifests itself as migration. Migration is an important force reducing the geographical wage differentials. If migration were perfect, there would have been no wage differentials between regions. in reality where economic adjustment does not take place at an instant of time, migration would logically lag some- what behind changes in wage differentials, but the reverse could be true if expectations of future wages were upper- most in the minds of migrants. In a static economy, migra- tion would tend to equalize wage differentials, but in a dynamic economic system with different rates of technologi- cal prOgress between regions or industries, wage levels might diverge even with continued migration. Ordinarily one would expect migration to take place from areas of high unemployment to areas of low 187 unemployment so that the rate of unemployment between regions would be equalized. Thus immigration and unem- ployment would be inversely related. However, migration based on imperfect knowledge can cause unemployment as the result of excessive immigration to a region, so that ‘ both the direction of causality and the nature 0 F4) 4—‘7 all (0 relationship would be the reverse. in the case of michigan, however, our problem is much simpler. since it is known from the preceding analysis that the level of employment and wage rates were higher in develOped regions than in less developed regions, that agriculture has rapidly mechanized in every region, and that the Upper Ieninsula has been under serious unem— ployment pressure, we can advance a hypothesis that there n an out—migration from depressed regions and in- ('0 has be migration to develbped regions. In other words, there should be p0pu1ation flow from depressed regions to more developed regions in response to the "push and pull" forces examined above. Our hypothesis appears correct. as shown in Table 23, there has been outmigration in Districts 1, 2, 3, 5 and 6, and inmigration in Districts 4, 7, 8 and 9 during the decade of 1940 to 1950. District 1 lost the largest number of people, reflecting the serious unemploy— ment, follo~ed by Districts 2 and 3. To test our hypothesis 1883 .Hou:u~=UNuu<.uuwuno«x .Omoanoeaa flown-u a: can»: Nouns cu ouaououom Aug: a «nod: ca 0 saga wean-yon .me.ne.aa .Annaa .uaaouuov .maa.aug 0..» .Nan auuuaaan acaooam no anew u: acuwrmmmwm .aovuna .h .H van cam-on adad< .H_aouw vaungloo on: acuuuuwua onaanocma can .9 .Na-» .mm .~ canny .Aanaa sunscon .auaauo>aa= «aqua unease”: .eoauuoaeu maaaaauaoo .uoua>uum van ucoano~o>on huaaalloo now ouauwuoau “ unmwnowx .mauuaua unuuv a “no“: a« annuaouom can nucoa sunouo acquaaa om .aovusa .h .n loam vaunAloo no: acquuumwa smmducnma any .0 " cuuoz «N.o «N.o acuuuumwl van own: Sham haunt coutuon u nu.o nw.o newudumfia van usuaaoHo>ov noo3uon u H.w m~m.-m+ n.o doo.a~n. aqua“ «aqua a n.-+ wN¢.HN¢¢ a o.o~+ mon.mcn+ N N a uouuu-«n m ~.~ + Hon.me. n n.o . nn~.hn+ e N a young-«a N n.o~+ Hee.n~. N o.~ * amo.oe+ N N a uoauunaa acumen thunk were; n ¢.N + Nen.m . n N.~ n mwN.n . N m c uowuuoua N m.~ u ao¢.N . N n.n u ano.n . o n n unauu-«a c o.N + noe.n + e a.m + n¢N.N + o n c guano-«a aoamgu cause once“: 0 ~.o + «ca ¢ o a.N n mNn.N - m.» n.» n uuauuoua m m.m u nsm.Na w . o.n a w~¢.o . n.m n.» N uuuuu-Nn acumen awash noun: a ~.o~- e~w.on- a o.o~- e-.nm- o a a uuauuuaa cannaqaom noun: nm [in seas o a: ummm. anus - ones ones - seas cues sauna -ao~u>on gonna. coauauuax “no no nu .u>¢.uo gene we sans 'il’lll III! whoa u o¢m~ .mZOHomm qummmmHn 2H zH .No> .cmmN u uncauosn mo nuance on» noun vuuaaaou an: away» odd-odes: .N .uowuuuuuum nou< .ouuua nude-m .HH .No> .cnaN u «oceans: mo nausea 0:» Hana vaunnlou on: «aqua Nanuou .N 20C) .enaa non .< a canon Ana.N oNo.n ooQ.N a¢Q.N onN.n own: van . madden unquo>< N¢N.on «~n.s~ no¢.NN~ onu.nn N¢¢.mu <¢m.o anN.o¢ «mo.na nmN.NNN eno.o< Nance z z z z z z z 2 23.3. new; .3532: «9.33: oom.NN oma.h* oON.Nm nNN.NN$ «an.n~ nmN.e Nem.wN nNo.m nn~.o¢ coo.ma acupunsvan unquauouuscqz Noo.N noN.N NN¢.n sen.a «do.a nnm nNN.N «No.~ nno.¢ oN¢.N avian ¢0N>uom ¢N¢.¢ ON¢.N ncN.N mno.a oNN.N Nno NNN.¢ can.a N¢N.N NeN.N «vans odd-omen: non.c~ anN.o NNm.mN Naa.n edu.a N¢H.¢ NNm.N~ nNn.n noo.¢N cn¢.NH ovqua gunned «noN cum Noo.N Ono Nam Nco.u and: can madden omnuo>¢ c¢¢.N Nae.» NnN.NN www.cN nmw.¢ mnm.¢ NNo.m Non.m owo.nn oNN.Nm Nuuoa : a a 3 c8 N3 3 3 3...: «a; .3332: :35: o¢~.n ma~.n§ mom.o~ mem.¢N§ nea.~ ona.~* Nam.n NnN.¢* mmN.oN on¢.o~ coauuuavnm uauunuuuusaqx oon «Ne Noe sac and «ad NNN won ooh nNo.N ocean ooN>uom moo N¢0.N omc.u Non noN QnN mnw «en non.N NNN.N «aqua «NdaoNonz one.” e¢m.n NNN.¢ sno.¢ mne.~ Nno.N ocN.n mwo.m ¢¢M.N coo.» ovnua nudged . Quad Nadia aw? gafm 1 load a NNouaam ochodmaa Nuouhom vomoaalm naoumum ouaoNalfi naouham oohoanla Naouham echoNaafl n nor—amen: .. a. ”.....on nun... _ n ”.3313 N 321.3 N 3233 , @nou u «mag ZdUHmDszzH wuHmHmDDZH Adubhnbunmodzaz mead: 2H uuxu03.dum fixaqu H Nmazmmmd mo ova: .m yuan .mnaa «can. #233 .93." " umocqaam mo msocuo 93 30.5 voyage-cu an: oven“. :3...“ ..— « ease you .m .NNaqu cNuoaaan .nn «a «x. nouuuunv: annuaaz no asuaoo enaa any scum vouamloo an: aha-avaq danced: .n .uuquuwuuum nou<_.HHH .No> .en N nousuonuaaqx «a cauaoo on» scum vounaeoo an: huuusch mnwusuocusauz .¢ .uuNuoNunum doud .ouu>uom vouuouom .H> .No> .enma u among-an mo cannon onu Baum vousaaou an: ovuuu oou>uou vouuoaum .n .oouuuwuqum «and «aqua omo.n wNN.¢ NON.n , «No.n mmo.n owns and . . . muuaqw owuuo>< onw.oaN.n n¢¢.NNn.N nNo.mNN.n NNo.Nmm m¢~.o¢¢ «ao.ONH onn.¢¢n mNo.on~ ##0.NNN mn~.wn Huuoa n¢¢.on am¢.na nNN.n Nwmfl can «nafi mea nn§ «ON we nowuuasvaa Nauonuz noa.ooo.n§ o~n.mom* nma.dwn.N NNN New oNa.NNn NNN NN nm¢.¢nm NNe.Na NoN.¢¢H mm .¢n nouuuusvnm . unauauocuna-x amn.~oN nma.Na nnm.noN Nam.no aao.oa nna.N «on.nN moc.o~ moN.N nad.n ovens oua>uom NNN.mNe& nau.mm con.o¢n nmm.N@ NmN.nn nn¢.w nmo.an mdo.NN omo.~N NNN.n ovuua «decodes: mma.mso ewe.¢~ ¢m¢.Nan New.mON Hun.nm onN.Nm nmm.No NoN.mn Nou.on mwN.nN canny Nudge: . enad nan.~ n¢m.~ wNN.N NNH.N ou~.~ «we: can hufiqm umauu>< onm.Nno.a ono.¢nn onn.nhh wen.Non NnN.No mon.mn cN¢.No no¢.ow wNn.N¢ cca.¢n Noyes Non.wafi smN.nN noN.N Nam nan NeN . smN nNN Nno.N aNN ouguuuavnu Nauoaw: oNo.mwnfi NdN.NNm* Noo.N¢n Nan.wan§ coN.en nom.NN& «ma.no n»n.nn mmo.oN No¢.aN nowuuosvuu . . mauusuouuncux nNN.H¢ mn~.wn ¢n¢.Nm o~¢.NN nun.N com.N nqh.n noo.¢ Asa fine.” ovens «cabana moa.mm NmN.Nn aNN.¢o Noo.¢n mon.n owo.¢ on.w anc.o NNe.¢ mmu.n avian cadooaonz oNo.¢0N m~o.wma Nam.¢nN Naw.NNN o~¢.o~ nan.ou emn.NN N¢N.NN enw.m cao.m «viva gunned mno~ no...8_1a 1% Soil... an 804: a o8 q]; «Nouham oohoHala Ndouhnm duhoNAlfl Nuduh-m unheanlfl «Nausea cascanlfl Naoundm educaalu a ”.333: 31.. m ”.333: N yoga-3. o £5.33: vanawuaoo u H Nunzumm< 202 .auewoouoouv oNnu oouoowvaw swam : t : .ououo ouona onu mo Nouou onu Aug: oouwo you unwaa ouuwuuoNv “do no «ouou onu .auaooo Nosvu>wvca you «not no moNvNoAAuws any on maaso .oanoaao>o ouov on oouoo«u:« : z : .oowuouono n.8an Nosvu>uvca one no enamofiumNo uao>oum ou noouan mamaou osu ha odonsuwz ouoa «you onu uonu mouooavoq : 3 : .m . .ooqaofiao I soon oououavoa :w«..: o : .uoquuaav quu now oNHouhoa owouo>o mo :oNuounaaou onu ca vovoaoxo ouoa huaaoo uddu nu uooahoamao uo nonasa oAu .omoo u noon on .oagouhoa no uncoou one uaonuaw ass woolhoaaao mo hogan: onu vouuoaou onooou .oOooo tow a aH .u .o>oao voaauoo ouoxuoa one o» aqua ououuoucoaaoo dad ouot «mad vac mama 6H nowuuaavou Nouoawa mo uNNouhom .n .o>ono vocauov ouoxuoa on» on vaoo :oNuooaoaaoo Nao ouoa coma one mama ca oouauoomnoqa mo oNNouhom .N .oouaoounan oououomuoocaa: mo ouoauuoo you no ouououuoouo .uou oowuooooaeoo ovsaonu uoa van u« as: .oo>«u=oouo coo ouoowumo cu vNoa «unsold vovsuoow uN .acoNu .duoauou Mom .enad mo nouuouaqaoo on» ow voosaoaq on: non «mad «0 nouuouoaaoo onu aw vooaaoxo no: uafix «a uaoahoo any .ooomoaaao ago a» pooh onu wouuav wean A.oou:oon van acouooalloo .oomoa .ooNuoNoo v aouuoacoaaoo mo oauou NH. cooNuAIoo «nod van Gama cu oovouu ooN>uoo coo oNoooNogi .Nuouou mo wagons-m .N “ wagons-m .a .ouonlol EC woo .ouOuouuaoua .ooomodoio coauoaoa .ouoouoo own: no noglau on» one: «nag vac mnoa ow nouuuaavou douocqa sq ooohoNAIo «o uonlso ona .n .uonao>oz can .uunwo¢_.>oz .Aouox now nouowwu unoahoaoao nunoavwa mo omouo>o on» ouos «mag a« yoga mafia: .uoom onwuno onu.uow omouo>o any one: mama 3N boohodoao mo nonaso onh .vovsaouo ouch No>oN colouom mnuxuoa on» o>ono noohoaalo huooupuoaam .coaouom moanuo: wnuvaaooa ouaoaa woauauoawsooa ow ouoauoo.owoa uo hopes: on» ouoa «nod van anmu ow nouauoousnol nu noohodqlo mo hogan: any .N .na nonao>oz unouooo «cause xoorxuo3 on» wouunv 034» had «Nouhoa onu so ouos on: .mo>«u:uoxo woo ouooNumo voNuoH-u wauvsauau .uoomoaoao and mo nonsso on» one: onod aN uqnu onus: .uoom onu now oomouo>o oovuusooxo van .ooowuouoauoo uo ououwwuo coauoaou .olosoHalo ouoa olau-uuoa van oafiuuaaow mo Hogans osu ouoa ovouu ooN>uoo van oNoooNoan .Hwouou ca ammu cu ooomoaaao mo gonna: oaa .N " oooaoNQIo no nonaaz .o .o «N u uoNuuasuau Nouoaax mo noon onuilouu vousmloo ouo: oouuuoovoq Non-cam. .n .HHH .No> .mnmN “ oououoomsooz mo usaooo one noun vouoaaoo ouoa ooNuuoav:N mawuouoousoox. .o .ZH is .33 2: 8.6 uses-8 :5 «33 «3.52». .n .HH .~o> . ovens oNoooNon: oeaa “ oooawonm mo noncoo on» noun vousaaoo no: ooouu oaooodon: .N .ooNuNo van oouucooo .ououm .oou<.ha noooaosn veauaummm u H Nunzummd .m.a~.loum n.¢a unauOOuuonao an vo>Nuuo on: o.na .o .u noun—38 .3333: .NN uuom .oo«uoaanom no ooNuoNuouoouonu .HH .No> .mmmuoasnom no cannon anon scum wou:AIoo one: «and Oman oAH.A .NemN ” xoon «an: Nuimmm .osoooo mo soousn .oouolloo mo uooauuoaoa .m.=_aoum vou:AIoo ouoa dado o¢a~ oaa.o “ nouoz o~m.u~ MNNan 00¢.en Nn¢.o omN.NN- Nouoa oemaoonaa o.eN oNo.nn m.c~ n~o.mc N.wa Nn¢.N¢ m.~a «Na.ma o.n Nwo.N . Ifiouaoz aooauon o.¢~n ooN.oN- w.o~. oeo.o- N.mdu o¢o.wa o.-- 09¢.nau o.n- «oN.aNu luau oooouommNn Nnn.NoN mom.qm~ Nm¢.nNN aw¢.nn~ mnN.Non annoy ¢.No Non.nNN o.Nm ch.NnH «.0N nNn.¢m N.HN no¢.oa N.mm oNa.mnN nfiouuoz mo Nouoa 25:. 8%; 93.2 $8.3 «3&3 €33.38 3&5 Nun.No oaw.¢m cmo.NN mnN.m¢ w¢¢.ooN .luouooz Nona: o.Nn oo~.eo «.mu moN.Nn o.nN NNo.oN m.mN “No.an m.¢~ Nmn.n¢ aowuoasaom luau 3 0mm.— 0 2 NNo.No~ nNN.NnN o¢0.mm Ano.mNN <¢m.nNn Noyce 93 39: «2: 398.. min 3%: 9% .393 N .0» wooJoN gouge: mo N38. NoN.mn noa.¢n mnn.NN NNm.a¢ onN.NnN acquoaaoom don»: onn.mn nNN.¢n an.cn NNo.¢n NNN.noN anomcoz Nouns Nan 3%.; «.3 3a.? a: «2.3 hoe “3.2 OS 23.2 8332.... .5.— oqaa ~33 non-52 N33 ou ouuou ou oNuoa ou oNuod ,ou oauud oa oNuou _ m uoauuowm o uowuuon . n guano-Na N uouuuowm N uowuuowa 14‘; Ono." I °¢GA ogHm—UHZ 2H ZOHHEQOQ adgcl a: 3h ho ”0230 HH.anzumm< 204- ooo.m~«.~ n.m ONH.AQN.N n.nu 00¢.nwuu ach.unn.o H.aw «No.5No.n «mo.non.¢ oom.nha.a a.od N¢N.¢oo ecu.onu.m o.nm dom.nan.e nom.¢n¢.n sno.dem ¢.o~ Noa.oon , -.s OH 9“qu 338 «.0a wen m.no H.@ 19 a» canon. ... lam. wow. max-mm noa.mch www.cum awo.nno asa.oah.n o.n o.nc unh.nhm.n n.cc QNN.ONN.n «an.no¢ NN¢.N¢H c~o.-a.~ N.ma oae.ac~.~ N.NN can.ac¢.w nua.o¢n nan.hsa nomad, ; «.mm N. as oauou- ane.n- neN.nnH N347 «an.omo oao.o¢n Noo.aNn cao.ona www.cnu dea.eon nNN.o~e oea.sNN hum.wnu mon.¢na I‘I‘ N.nw 0.0A o.nn o.nN .N . on 13.8. o 90¢.qu «Illa ; .IIN. .....Jlo mafia. ...... omn.mm nac.oua ooo.a~u o¢0.no@ m~n.u~n o-.n~¢ no~.¢n~ NoN.oN~ 000.com _¢ae.~n¢ Nn¢.mon noN.@¢d oom.onu Amummmqmmu - HH unnzumme «.ca «.osm o.¢N ¢.nN 0¢N.o¢ nnm.~o nu~.u~u eom.nmn noo.¢c~ won.oha no¢.na dcm.mo «ho.n~n son.~oN see.on~ coo.¢o oom.-~ ..38. 3.: -32 E3333 «:3 on .luofi oooououuqa gauge Iguana: no deuce noon-Hanan «new: nuuuaoz sauna noun-annom nuns anon Hagan luouaoz mo douoa coauaasnom guano lfiouaoz Nouns aoNuoasnom Inch oeau .vovaauxo as: avaonoaaon ma nuisance on~o> «nu .:o«u¢u:gaoo any an .au.« adauuanOo mo nouuunamov any :« hoauauuuuqv nun «a condoms «mad «0 aqua nu«3.oHn-u¢gsoo mauouuuu no: on: «mad ca luau non vac. oaan> eau .co-dou ounu you .nluuu ”canons: can uluuu aquuauvwnou .nlunm aluu-uuna «canaonu canaoo unusuaaoaum4.¢ma~,ca album nonuo 0:9 .uauuu annouulaoo.o¢.nauum eau mo noon on» vau_uluum nonuo cu vouovunaoo any: Gnu» nIAu «nod vounvoun onus? sud: claim «nu .oeaa aH :.nludm henna: van :anauucllou: mo noun-oqwuuuuao Iaauunaloo any awuuuoo uoa noon «50:00 adusugauuucho¢mu any .v . .uuauuuav 50.0 cu onad aw nauuw undue an vac: onuu> «nu ma um.uo>¢ any scum vouuluuao nu: noun: nauuw nunuo ha vaoo asap» «nu nah-u Add A: can. oaad> unu scum ma« auuquunaa an uaunoo Hausudaouuw<.¢nm~ scum vousmaoo an: «mod cw «luau adaoquBOu an vfloa and-s any .0 .n man-H huanou .aaunoo acuauanuauu<.¢naa scum voyagloo .ua «mod n« naudw auaouuaaou mo hogan: any .n .o v5 fl .oz :8 xx .28. .358 :62 :8 .25" «3:. 5.58 m? E.- m£ .3 son .HH>N oanua huaaoo .H .~o> .naoaou duuauaaouumdvo¢ad noun vounnlou ad! mama you «one any .1 «U; 3302 2 .53 R?» 08..” 83‘ «28 En... no." $825 nnu.a na~.¢ amm.n . «an.¢ ann.n «shah aauuuualoo no nonaaz mafiomfig “86%.: 3563.2 Saints 02.8%: .5: H5335". 3 38 31> . «mod «8; 8a a: 3m «mm a: you 3392 n¢o.¢~ hmm.w ¢~o.o Nnm.w Hm~.a manna finfiuuuaaou mo nonaaz mum.anm.md ~w~.mcs.o o~o.~mm.¢ qqm.som.n non.aam.o manna aduuugaaoo ma u~ow.oa~¢> . onma w m w w w n uoauuuan e unauuoua n uouuuaun N uouuunaa a uouuuaaa «mad I mnad .z¢UH:UH2 zH m2m4 oo~.am mo~.u~ ann‘ow «~H.e~ «on.n~ nauam daauuau-oo mo ungasz -¢.o~o.onn n¢~.an~.m- o~a.moo.nd~ cn~.ann.oc~ oo~.oo~.hw nauum duuuuu-loo up udom on~u> . «nag nan.“ m~¢.~ eon.~ ¢m~.~ ~¢¢.~ Inna uum .mnuo»< o~o.~¢~ ao~.- o¢n.- «na.- ~n~.o~ gauum ”cache-loo «a hog-:2 moa.noo.n- ano.n~n.o¢ doa.«mo.nn mam.han.u~ o~n.-n.a~ nan.» dugouunuao an udom o=~u> mna~ Ill..." . w w a % er ouqum a going-fin o uuauuuwn h undue-«a o unauuuan i VOQQHUBOO I HHH nsmhd BIBLIOGRAPHY Ahearn, Daniel J., Jr., The Wages 2; Farm and Factory Labor- ers, New York; Columbia University Press, 1945. Allen, G. R., Relative Real Wages in Swedish Agriculture and Industry, 1930-I950, Bulletin of the Institute of Statistics, London; Oxford University, 1953. Altschul, Eugen and Frederick Strauss, Technical Progress and Agriculture Depression, National Bureau of Economic Research Bulletin No. 67, New York (No- vember, 1937). Anderson, W. A., A Study of the Values in Rural Living, Cornell University AgriculturEI Experiment Sta- tion, Rural Sociology Publication 34, Ithaca (October, I952). Bachmura, Frank T., "Migration and Factor Adjustment in Lower Mississippi Valley Agriculture, 1940—1950", Journal of Farm Economics, Vol. XXXVIII, No. 4 Men 1956) Bachmura, Frank T., "Crop Alternatives to Cotton in the Arkansas-Mississippi 'Delta': A Prognosis", Journal of Farm Economics, Vol. XXXIX, No. 4 TFEFEEBer,‘1§b7). Back, W. B., "Perpetuation of Low Income Areas", Farm Policy Forum, Vol. 8, No. 4 (Spring, 1956). Bakke, E. Wight and others, Labor Mobility and Economic Oppprtunity, New York; John Wiley & Sons, Inc., 1954. Bates, Frederick L. and Herbert A. Aurback, Beginning An Experimental Educational and Research Project for Part- -Time Farm Families, Transylvania County, North Carolina, 1954, North Carolina State College Agricultural Extension Service, Extension Evalua- tion Studies No. 2, Raleigh (June, 1957). Bean, Louis B., "International Industrialization and Per Capita Income", Studies in Income and Wealth, Vol. 8, New York: National Bureau of Economic Research, 1946. Beegle, J. Allan, "Characteristics of Michigan's Fringe Population", Rural Sociology, Vol. 12, No. 3 (September, 1947). 207 208 Beegle, J. Allan, Social Organization.ig the Northern Lansing Fringe, Michigan Agricultural Experiment Station Technical Bulletin 251, East Lansing (September, 1955 . Beegle, J. Allan, Michigan Population, Composition and Change, Michigan Agricultural Experiment Station S ecial Bulletin 342, East Lansing (November, 1947 . Beegle, J. Allan, Differential Birthrates in Michigan, Michigan Agricultural Experiment Station S ecial Bulletin 346, East Lansing (February, 1948 . Beegle, J. Allan and Donald Halstead, Michigan's Changing Population, Michigan Agricultural Experiment Station Special Bulletin 415, East Lansing (June, 1957 . Beegle, J. Allan and J. F. Thaden, Population Change in Michigan with Special Reference to Rural-Urban Migration, 1940-1950, Michigan AgricuItural Ex- periment Station Special Bulletin 387, East Lan— sing (October, 1953). ‘ Bellerby, J. B., Agriculture and Industry, Relative Income, London: Macmillan & Co., Ltd., 1956. .Beyon, Erdman, "The Southern White Laborer Migrates to Michigan", American Sociological Review, Vol. III, No. 3 (June, 1938). LBird, Ronald, Frank Miller and Samuel C. Turner, Resources and Levels of Income of Farm and Rural Nonfarm Households in Eastern Ozarks of Missouri, Univer- sity of Missouri Agricultural Experiment Station Research Bulletin 661, Columbia (March, 1958). Iiishop, C. E., "The Labor Market and Employment Service", Agricultural Adjustment_Problems ig'g Growing Economy, Ames: Iowa State College Press, 1956. Bijflflop Charles E., "Public Policy and Low Income Problem", Farm Policy Forum, Vol. 8, No. 4 (Spring, 1956). .Bisuiop, Charles E., "Economic DevelOpment and Adjustments of Southern Lower Income Agriculture", Journal of Farm Economics, Vol. XXXVI, No. 5 (December, 1954}. 209 Bishop, Charles E., "Underemployment of Labor in Southeastern Agriculture," Journal of Farm Economics, Vol. XXXVI, No. 2 (May, 19517. Black, John D., ”Agricultural dage Relationships: Histori- cal Changes", The Review of the Economic Statis- tics, Vol. XVIII, No. 1 (February, 1936). Black, J. D., "Factors Conditioning Innovations in Agricul- ture”, Mechanical Engineering, Vol. 67, No. 3 (march, 1945). Bloom, G. F. and H. R. Northrup, Economics of Labor Rela— tions, Illinois: Ricnard D. Irwin, Inc., 1938. Bogue, Donald J. and Dorothy L. Harris, Comparative Popula— tion and Urban Research Via Multiple Regression and Covariance Analysis, Ohio: Scripps Founda- tion, Miami University, 1954. Bogue, Donald J., A Methodological Study of Migration and Labor Mobility, Onio: Scripps Foundation, Miami University, 1952. Bogue, Donald J. and Calvin J. Beale, Economic Subregions of the United States, Series Census - BAE No. 19, Washington: Government Printing Office (June, 1953). .Bolton, Bill, The Low Farm Income Problem in Louisiana, Louisiana Agricultural Experiment Station D.A.E. Circular No. 204, Baton Rouge (may, 1957). .Soulding, kenneth E., Economic Analysis, Third Edition, New York: Harper & Brothers, 1955. Phowles, K. Gladys and others, The Hired Farm Working Force 1948 and 1949, U. S. Department of Agriculture, Bureau of Agricultural Economics, Washington, D. C. (November, 1950). Iireimer, Harold E., "Some Comments on Factors Influencing Differences Between State Per Capita Incomes", Southern Economics Journal, Vol. XVII, No. 2 (October, 1950). .waownlee, O. M. and D. G. Johnson, "Reducing Price Vari- ability Confronting Primary Producers", Journal of Farm Economics, Vol. XAAII, No. 2 (May, 1950). 210 Burch, Thomas A. and Charles P. Butler, Physical and Boo— nomic Characteristics that Limit Adjustments on Full- Time Medium- Sized Farms in the Piedmont Area of South Carolina, Clemson Agricultural‘College, South Carolina Agricultural Experiment Station, Bulletin 453, Clemson (March, 1958). Bucnanan, J. M. , "Note on the D1fferential Controversy", Southern Economic Journa1,VoI. XVII, No. 1 (July, 1950) Buchanan, Norman S. and Howard S. Ellis, Approaches 33 Economic Development, New York: Twentieth Cen- tury Fund, 1959. Catlin, George B., Historic Michigan, Land of the Great Lakes, Vol. III, Dayton, Ohio: National Historic Associations, Inc. Chang, Pei—kang, Agriculture and Industrialization, Massa- chusetts: ‘Harvard University Press, 1949. Chase, Lew Allen, Rural Michigan, New York: The MacMillan Company, 1922. Chamberlain, Edward Hastings, The Theory of Monopolistic Competition, Seventh Edition, Massachusetts: Harvard‘University Press, 1956. ‘ (Ilark, J. B., The Distribution.g£ Wealth, New York: MacMil- lan & Co., 1899. (Ilark, Colin, The Conditions of Economic Progress, Third Edition,'London: Macmillan & Co., Ltd., 1957. Chochrane, W. W., "The Nature of Race Between Farm Output and Food Supply", Journal of Farm Economics, v01. xxxv, No. 2 (MEET—T3557. Ccnnmittee for EConomic Development, the Research and Policy Committee, How to Raise Real Wa es, A Statement on National“ Policy, New York Jm me, 1950). . Committee for Economic Development, The Research and Policy Committee, Economic Growth in the United States — Its Past and Future, A Statement on National Policy, New York (February, 1958). Creamer, David, Behavior of Wage Rates During Business Cycle, New York: National Bureau of Economic Research, 1950. 211 Croxton, F. E. and D. J. Cowden, Applied General Statistics, 2nd Edition, New Jersey: Prentice-Hall, Inc., 1955. Davis, Joseph, "Agriculture and the New Population Outlook", Contemporarx Readings in Agricultural Economics, Editor, Harold G. Halcrow, New York: Prentice— dall, Inc., 1955. Dewey, John, Intelligence in the Modern World, John Dewey' 3 Philosophy, Editor Joseph Ratner, New York: Random House, Inc. , 1939 Dewey, John, Human Nature and Conduct, New York: Random House, Inc., 1950. Dick1ns, Dorothy, The Rural Family and Its Resource of Income, Mississippi State College Agricultural Experiment Station Bulletin 481, State College (march, 1951). Dixon, J. Wilfred a Frank J. massey, Jr., Introduction to Statistical Analysis, New York: mcGraw-Hill Book Company, Inc., 1951. .Dixon, R. A. and E. hingman, Economics and Cultural Changg, New York: McGraw-Hill Book Co., 1938. .Dobb, E., Wages, London: Nisbet & Co., Ltd., 1928. .Douglas, P. H., The Theory 9; Wages, New York: Macmillan Co., 1934. .Douglas, P. E., Real Wages in the United States, 1890-1926, Boston and New York: Houghton Mifflin, 1930. lhicoff, Louis J., Wa*es of Agricultural Labor in the United States, U. S. Department of Agriculture, Technical Bulletin No. 895, Washington: U. S. Government Printing uffice (July, 1945). lhinbor, Willis Frederick, Michigan Through the Centuries, Vol. 1-11, New York: Lewis Historical Publishing Company, Inc., 1955. LthlOp, John T. and others, Theory g; Wage Determination, New York: St. Martin's Press, 1957. rwabxioant, Solomon, Economic Progress and Economic Change, 34th Annual Report, National Bureau of Economic Research, New York (May, 1954). 212 Fellner, william and Bernard b‘. Haley, headings in the Theogy Lf Income Distribution, Philadelphia. The Black- ton, 1951. Folsom, Josiah C., Perquisites and Wages Lf Hired Farm Laborers, U. S. Department of Agricultural Eco- nomics, Technical Bulletin No. 213, washington, D. C. (January, 1931). Eoote, B. J. and Karl A. box, Seasonal Variation: Methods Lf Measurement and Pests Lf Significance, U. S. Department of Agriculture, _Agricultural Handbook No. 48 (september, 1952). Ford, hicnard G. , Agriculture and its nelationship to Other Segments Lf the nconomy, a paper given at“ a semi— nar on Agr1011tura1 nesource Adjustments organized by the Division of Agricultural Economics Programs of the Federal Dxtension service, U. S. Department of Agriculture, ADP-80 (June, 1958). Euller, George N., Michigan, A Centennial History Lf the btate and its reople, Vol. I- V, Chicago: _The Lewis Publishing Company, 1939. .Fuller, George N., Historic Michigan, Land Lf the Great Lakes, Vol. I-Il, Dayton, Ohio: National His- torical Association, Inc. .Fulmezy John L., "Factors Influencing btate Per Capita Income Differentials," Southern noonomic Journal, Vol. AVl, No. 3 (January, 1950). rmnhner, John L., "Reply to Brymer on State Der Capita Income Differences", Southern Economic Journal, Vol. AVIl, No. 4 (April, 19b17} ‘ Gajxhwell, Morris G., "Ihe Adjustment of Migrant Families in an Urban Environment", Social Forces, Vol. xv1, No. 3 (193a). Gallxmflay, hobert E. and Howard W. Beers, Utilization 9£ hural manpower Lg Eastern hentucky, hentucky Agricultural Experiment Station hS—B, Lexington (January, 1953). Callxwway, hobert E., Part-1ime r‘arming in Eastern kentucky, University of hentucky Agricultural Experiment station Bulletin 646, Lexington (June, 1956). 213 Gibson, D. L., Socio-Economic Evaluation Lg g Timbered Area Ln Northern Michigan, lichigan State University Agricultural DXperiment station Technical Bulletin 193, Last Lansing (June, 1944). Good, William J. and Paul K. hatt, Methods Ln social Research, New York: mcGraw-dill Book Company, 1nc., 1952. Goodrich, Carter and others, Nib ration and Economic Oppor— tunity, Bhiladelphia: University of 1ennsy1vania frees, 1936. Gravett, Darle B., Labor Used for r‘ruits and Tree Nuts, U. s. Department of Agriculture, Agricultural nesearch service statistical Bulletin No. 232, washington: U. s. Government Printing Office (June, 1998). nagood, margaret Jarman and D. O. Trice, statistics for Sociologists, New York: neynal and Hitchcock, 1nc., 1941. dagood, margaret Jarman and Emmit F. Sharp, Rural-Urban migration Lg Wisconsin, 1940—1950, University of Wisconsin Agricultural BXperiment Station nesearch Bulletin 176, madison (August, 1951). Hacho.v, narold G., Editor, Contemporary headings Ln Agri- cultural Economics, New York:rrentice—da11, 1nc., 1955. .Halcrwyw, Harold G., "Increasing Off Farm Bmployment", Farm Bolicy Forum, Vol. 9, No. 3 (Winter, 1937). thathaway, Dale B., Some ugys Ln which a rederal Program Might Most 1ncrease the hate _LfiDconomic Growth Ln Northern Michigan. A summary statement given before the subcommittee on stabilization and Bro- duction of the United states Senate, Detroit, michi gan (march 2,1959). Haiiuiway, Dale B., "Agriculture and Business Cycle", Boli- cies for Commercial ggriculture: 1ts helation to Dconomic Growth and stability, washington: Government Brinting Office, 1957. Haikuiway, Dale D. and Lawrence W. Witt, Some Iroblems and rossibilities 9; Area DevelOpment lg Northern Michigan. A statement given before the subcom— mittee on stabilization and Production of the United States senate, Detroit, Michigan (March 2, 1959 . 214 Hawley, Amos B., Intrastate Migration Lg Michigan: 1955- 1940, University of Michigan, Michigan Govern- mental Studies No. 25, Ann Arbor, Michigan: Uni- versity of Michigan Press (1953). Hawley, Amos H., The Population Lf Michigan, 1840 to 1960: An Analysis Lf Growth, Distribution, and ComTosi- tion, University of'Michigan, Michigan Govern: mental Studies No. 19, Ann Arbor, Michigan: University of Michigan (1949). Heady, Earl 0., Economics Lf Agricultural Production, New York: Prentice-Ha11,1nc., 1952. Heady, B. 0. "Progress in Adjusting Agriculture to Economic Change", Journal Lf Farm Economics, Vol. XXXIX, No. 5 (December, 1957). Hecht, neuben W., Labor Used for Livestock, U. S. Depart- ment of Agriculture, Agricultural hesearch Statis— tical Bulletin No. 161, washington: Government Printing Office (May, 1955). Hecht, heuben N. and Keith R. Vice, Labor Used for Field Crops, U. S. Department of Agriculture, Agricul— tural nesearch Service Statistical Bulletin No. 144, washin ton: Government Printing Office (June, 1954 Hecht, A. heuben and Glen T. Barton, Gains Ln Productivity Lf Farm Labor, U. S. Department of Agriculture, Bureau of Agricultural Economics Technical Bulle- tin No. 1020, Washington: U. S. Government Print- ing Office (December, 1950). Hecht, w. heuben, n‘arm Labor hgguirements Ln the United States, 1959 and 1944, U. S. Department of Agri- culture, Bureau of Agricultural Economics, FM 59, Washington, D. 0. (April, 1947). Henderson, John P., Michigan Statistical Abstract, lst ed., Bureau of Business Research, College of Business and Public Service, Michigan State University, East Lansing, 1955. Hendrdjc, W. B., "Size and Distribution of the Income of Farm People in Relation to the Low Income Problem" Journal of Farm Lconomics, Vol. XXXVI, No. 5 (December, 1954) 215 Hendrix, W. E. and B. B. Glasgow, "Low Income Areas in American Agriculture", Farm Policy Forum, Vol.8, No. 4 (Spring, 1956). Hicks, J. B., Theory 2; Wages, New York: P. Smith, 1948. Hicks, J. R., Value and Capital, 2nd Edition, Oxford: The Clarendon Press, 1957. Higgins, Benjamin, Economic DevelOpment, New York: W. w. Norton and Co., Inc., 1959. Hill, Elton B. and hussell G. Mawby, Types of Farming in Michigan, Michigan State University Agricultural Experiment Station Special Bulletin 206 (Second Revision), East Lansing (September, 1954). doffer, Charles B., Scoial Action hesulting from Industrial Development, Michigan State University Agricul- tural Experiment Station, Special Bulletin 401, East Lansing (September, 1955). Hoffman, Marvin, Michigan Statistical Abstract, 2nd ed., Bureau of Business hesearch, College of Business and Bublic Service, Michigan State University, Bast Lansing, 1958. Bolmaas, Arthur J., Agricultural 'wage Stabilization in World fiar Il, U. S. Department of‘Agriculture, Bureau of Agricultural Economics, Agriculture Monograph No. 1, Washington: U. S. Government Brinting Office (1950). Houser, Paul m. and J. Allan Beegle, Mortality Differentials in Michigan, Michigan Agricultural Experiment Station Special Bulletin 367, East Lansing (Feb- ruary, 1951). .dughes, J. B., "Solutions to the Problem of Low income in the South: Industrializationf, Journal of Farm Economics, Vol. XXIII, No. 5 (December, 1957). .Humes, Hellen and Bruno Schiro, "The Bent Index; Part 1 - Concept and Measurement", Monthly Labor Review, Vol. 69, No. 12 (December, 1948). Jaffe, H. J., Manpower Resources and Utilization, New York: John Wiley and'Sons, 1951. akmnes, S. F. and I. F. Pearch, "The Factor Equalization Myth", heview of Economic Studies, Vol. XIX, No. 4 (1951- 1952) 216 Jelik, Paul J. and hay B. Wakeley, Rural-Urban Migration lg Iowa, 1940-1950, Iowa State College Agricul- tural Experiment Station hesearch Bulletin 407, Ames (April, 1954). Jensen, Clarence N., The Effects Lf Urbanization Ln Agri- cultural Land Use in Lower Michigan, Ih. D. Thesis, Michigan State University, East Lansing, 1958. Johnson, D. Gale, "Comparability of Farm and Nonfarm Incomes", Farm Policy Forum, Vol. 8, No. 4 (Spring, 1956). Johnson, D. Gale, "Some Effects of hegion, Community Size, Color and Occupation on Family and Individual Income", Studies in Income and Wealth, Vol. XV, New York: National Bureau of Economics nesearch, 1952. Johnson, D. Gale, "Functioning of the Labor market", Journal Lf Farm Lconomics, Vol. XXXIII, No. 1 (February, 1951) Johnson, D. Gale, "The Supply Function for Agricultural Adjustments", The American Economic Review, Vol. XL, No. 4 (September, 1950). Johnson, D. Gale, "Allocation of Agricultural Income", Journal of b‘arm Economics, Vol. XXX, No. 4 (No— vember, 19467— Johnson, D. Gale, "Policies and Procedures to Facilitate Desirable Shifts of Manpower", Journal g; Farm Sconomics, Vol. XXXIII, No. 4, Part 2 (November, 1954? Johnson, D. Gale, "Comparability of Labor Capacities of Farm and Nonfarm Labor", American Bconomic Review, Vol. XVIII, No. 3(June, 1953). Jtfinason, Glen L., "Supply Function - Some Facts and Notions", Agricultural gdlustment Problems in a Growing Sconom Ames, Iowa: The Iowa State College Press, 1958. Johnson, Sherman E., "A Mid-Century Look at Agriculture in the United States", Journal of Farmb Economics, Vol. XXXIII, No. 4, Part 2 (November, 1951). Iun1ffman, Harold, Rural Families with Low Incomes: Problems Lf Adjustment, Mississippi State Agricultural Experiment Station, Sociology and Rural Life Series No. 9, State College (February, 1957). 217 Kendall, M. G., Rank Correlation Method, London: Charles Griffin & Co., 1955. Killcain, Lewis, Southern White Migration on Chicago' 8 West Side, Unpublished Ph. D. Thesis, Department of Sociology, University of Chicago, 1949. Klarman, Herbert E., "A Statistical Study of Income Dif- ferences Among Communities", Studies in Income and wealth, Vol. 6 (New York: National Bureau of Economic Research, 1943). Kline, Ralph G., and others, Farm Size and Output Research: A Study $3 Research Method, Oklahoma State Uni- versity Agricultural Experiment Station Southern Cooperative Series Bulletin No. 56, Stillwater (June, 1958). Knight, Frank B., Risk; Uncertainty and Profit, Boston: Houghton Rifflin Company, I921. Koffsky, Nathan, "Farm and Urban Purchasing Power", and comments by Reid, Johnson and Grove, Studies Ln Income and Wealth, Vol. XI, New York: National Bureau of Lconomic Research, 1949. Kuhn, Alfred, Labor, Institutions and Economics, New York: Rinehart & Co., Inc., 1955 Lester, R. A., "Shortcomings of Marginal Analysis of Wage Employment Problems", American Lconomic Review, Vol. XXXVI, No. 1 (March, 1946). Lewis, W. Arthur, The Theory of Economic Growth, Illinois: Richard D. Irwin, Inc., 1955. Leybourne, Grace 0., "Urban Adjustments of Migrants from the Southern Appalachian Plateaus", Social Forces, Vol. XVI, No. 2 (I937). Lively, C. R. and C. Taeuber, Rural Migration Ln the United States, W. I. A. Division of Social Research, Re- search monograph XIX, Washington, D. C., 1939. .Long ,lhven J., Rehabilitation of Dgpressed Rural Areas, University of Tennessee, Farm Lconomics Bulletin No. 8, Knoxville (January, 1956). lflachlup, Fritz, "Marginal Analysis and Empirical Research", American Economic Review, Vol. XXXVI, No. 4, Part l‘(September, 19455.“ 218 Maitland, Sheridan 1. and Dorothy Anne Fisher, Area Varia- tions Ln the A’ages Lf Agricultural Labor Ln the United States, U. S. “Department of Agriculture Technical Bulletin No. 1177, Washington, D. 0., Government Printing Office (March, 1958). Maitland, Sheridan T. and George L.w11ber, A Study Lf Plant Workers, Industrialization Ln Chickasaw County, Mississippi, Mississippi State University Agri- cultural Experiment Station, Bulletin 566, State College (September, 1958). Maitland, Sheridan T. and James Cowhing, Studies Lf the Effects Lf Industrialization Ln Aural Areas: Some Preliminarprindings, a paper presented at a meeting of the Rural Sociological Society held in Pullman, dashington, on August 23, 1958. Malthus, T. B., Principles Lf Political Economy, 2nd edi- tion, London: William Prikering, 1836, London School of Economics Aeprint,1936. Markham, Jesse N., "Some Comments Upon the North-South Differential", Southern Economic Journal, Vol. XVI, No. 3 (January, 1950). Markham, Jesse W., "Some Comments Upon the North—Side Dif— ferential", Southern Economic Journal, Vol. XVI, No. 3 (January, 1950). Markham, Jesse A., "The North—South Differential - Reply”, Southern Economic Journal, Vol. XVII, No. 3 (Jan- uary, 19517. Marshall, Alfred, Principles of Economics, London: MacMil- lan & Co., Ltd., 1935. ' .Martin, Joe A., Problems Lf Low Income, University of Ten— nessee Agricultural Experiment Station, Farm Economics Bulletin No. 9, Knoxville (January, l9)6) .Mason, Marie and C. Paul Marsh, Migration within Kentucky, 1935-1940, University of Kentucky, Kentucky Agri- cultural Experiment Station Bulletin 620, Lex- ington (October, 19b4). .Mehl, Paul,lndustria1 Employment and Other Factors Ln Selecting Ln Area for Aural Development. U. S. Department of Agriculture, Agricultural Market- ing Service Miscellaneous Publications No. 760 (April, 1958). 219 Mehl, Laul, Maior Manufacturing Industries as Potential Metzler, Metzler, Michigan Michigan Micnicjan Michigan Michigan Michigan Michigan Michigan Sources 9: Employment Lg Low-Income Farm Areas, U. S. Department of Agriculture, Agricultural Marketing Service, AMS 176 (1957). William H. and J. L. Charlton, Employment and Unemployment o; Aural People g3 Egg Ozark Area, University of Arkansas Agricultural Experiment Station, Bulletin 604, Fayetteville (November, 1958 . ' William H. and Ward F. Porter, Employment and Under-Employment 2; Rural People in the Upper Monongahela Valley, West Virginia, West Virginia University, Agricultural Experiment Station Bul— letin 404, Morgantown (June, 1957). Department of Agriculture, Bureau of Agricultural Industry, Michigan Crog Aeport, Lansing (1913- 1949). Department of Agriculture, Division of Agricultural Industries, Michigan Agricultural Statistics, Lansing (1950—1958)} Department of Labor, Michigan Labor and Industry: Monthl , Vol. I, No. l - XXVI, No. 12, Lansing (November, 1941 - December, 1958). Economic Development Commission, Michigan's Upper Peninsula, An Engineering Study by EBASCO Ser- vices, Inc., Lansing, Michigan, 1953. Employment Security Commission, Farm Labor Report, 1955, 1957, 1958 issues, Detroit: Employment Service Division, Michigan Employment Security Commission. Employment Security Commission, Michigan's Labor Market, Vol. 1 - Vol. 13, Detroit (1946—1958). Employment Security Commission, Michigan's Man- power, Area and Industry Statistics Since 1942, Aevised Edition, Detroit (February, 1953). Historical Commission, Michigan fiistory, Vol. 1-42, published by the Michigan Historicel Com- mission (1917-1958). 220 Michigan State Department of Labor and Industry, Michigan Labor and Industry: Quarterly, Vol. I, No. l - Vol. 11, Lansing (1950-1941). Michigan State Agricultural Stabilization and Conservation Committee, Michigan Annual Report: 1957, Lan- sing (August, 1957). Michigan State University, Bureau of Business and Economic Aesearch, The Michigan Economic Record, Monthly, Vol. 1, No. 1 - No. 7, East Lansing (January, 1959 e July, 1959). Michigan State University, Bureau of Business and Economic Aesearch, Business Topics, Bi-monthly, East Lan- sing. Mill, John Stuart, Principles pg Political Economy, editor, W. J. Ashley, London: Longmans, Roberts, and Green, 1929. Miller, Herman P. and Edwin D. Goldfield, "Some Effects of Aegion, Community Size, Color, and Occupation on Family and Individual Income: Comments", Studies Ln Income and Wealth, Vol. 15, New York: National Bureau of Economic Aesearch, 1952. More, Howard E. and Raleigh Barlowe, Effects Lf Suburbani- zation Upon Rural Land Egg, Michigan State Uni- versity Agricultural Experiment Station Technical Bulletin 253, East Lansing (September, 1955). Morin, Alexander, The Organizability Lf Farm Labor la the United States, Massachusetts. Harvard University Press, 1952. . National Historical Association, Inc., Historic Michigan, Land Lf the Great Lakes, Edited by George N. Fuller, Vol. I- II, dedicated to the Michigan Pioneer and Historical Society. National Manpower Council, Womanpower, New York: Columbia University Press, 1957. Nicholls, William E., "A Aesearch Project on Southern Eco- nomic DevelOpment with Particular Aeference to Agriculture", Economic Development and Cultural Change, Vol. I (1955). 221 Nicholls, William E., "Human Resources and Industrial De- velOpment in the Upper East Tennessee Valley, 1900- 1950", ouarterly Journal Lf Economics, Vol. 71, NO. 2 (may, 1957)._ Nicholls, William B., "Relative Economic DevelOpment of the Upper East Tennessee Valley, 1900—1950", Economic Development and Cultural Changg, Vol. 51 (1957)- Nicholls, William H., "Some Foundations of Economic Develop- ment in the Upper Tennessee Valley, 1850-1900", Journal of Political Economy, Vol. 64, No. 5 (October, 1956)- Nicholls, William E., "The Effects of Industrial Develop- ment on Tennessee Valley Agriculture, 1900-50", Journal of Farm Economics, Vol. XXXVIII, No. 5 ITMEEEBer, 1956). Nicholls, William H., "The South's Low-Income Problem", Farm Policy Forum, Vol. 8, No. 4 (Spring, 1956). Nosow, Sigmund, "Toward a Theory of the Labor Market", Social Forces, Vol. 33, No. 5 (March, 1955). Olds, E. G., "The 5% significance levels for sums of squares of rank differences and a correction", Annals Lf Mathematical Statistics, Vol. 20 (1949). Oliver, Henry M., Jr., "Income, Region, Community Size, and Color", Quarterly Journal Lf Economics, Vol. LX (August, 1946). Barnes, Herbert S., Research Ln Labor Mobility, Social Science Research Council Bulletin 65, New York: Social Science Mesearch Council, 1954. Pearson, Frank A. and Kenneth M. Bennett, Statistical Method, New York: John Wiley & Sons, Inc., I942. Parsons, Howard L., The Impact Lf Fluctuations Ln National Income Ln Agricultural Wages and Employment, Massachusetts. Harvard University Press, 1952. renn, haymond J., Needed Institutional Adaptations to Im- plement Economic Development, a paper given at Association of South Agricultural worker' 5 Meet- ing, Louisville, Kentucky, February, 1955. 222 Price, Paul B., The Effects Lf Industrialization Ln hural Louisiana, Louisiana Agricultural Experiment Station Progress deport, Baton Rouge (January, 1958). , Borter, w. E. and W. H. Metzler, Availability Lf Employment Lf hural People in the Upper Monongahela Vangy, west Virginia, West Virginia University Agricul- tural EXperiment Station Bulletin 331, Morgantown (June, 1956). rugh, C. E. and C. E. BishOp, Effects Lf Industrialization Ln Incomes Lf Farm and Non-F arm Households, North- ern Piedmont area, North Carolina, Department of agricultural Economics, North Carolina State College A. E. Information series No. 46, Raleigh (Beptember, 1955). quaife, M. M. and Sidney Glazer, Michi gan, B‘rom Primitive Wilderness to Industrial Coxlmonwealth, New York: lrentice-Hall, Inc., 1948. Ramsey, Charles E. and nobert A. Banley, Some Effects Lf the Fringe Migration Ln Channels Lf Communication, Cornell University Agricultural Experiment Sta- tion, Department of hural sociology Bulletin No. 51, Ithaca, New York (April, 1957). na smussen, Wayne B., A History Lf the Emergenoy Farm Labor supply Program, 1943-1947, U. S. Department of Agriculture, Bureau of Agricultural Economics, Agriculture Monograph No. 13, Washington: U. 8. Government Printing Office (September, 1951). neynolds, Lloyd G., lhe Structure Li“ Labor Markets, New York: Harper & Brothers, 1951. nicardo, David, The Principle Lf Iolitical Economy and Taxation, Everyman' 8 Library Edition, New York: E. P. Button & Co., Inc., 1937. nobinson, Joan, The Economics Lf Imperfect Competition, London: Macmillan &— Co., Ltd., 1954. noshelley, E. welling, Impact Lf Urbanization in Davis County Utah, Utah State Agricultural College Agricultural Experiment Station Bulletin 369, Logan (August, 1954). -_., _- ...,r.r__.—r___.__.—r --—.———.- fig-— 223 Rothschild, K. W., The Theory Lf Wages, Oxford, England: Basil Blackwell & Mott, Limited, 1956. hoyal Institute of International Affairs, The Middle East: 5 Political and Economic Survey, London: Oxford University Press, 1950. nuttan,'Vernon E., "The Impact of Urban Industrial Develop- ment on Agriculture in the Tennessee Valley and the Southeast", Journal Lf Farm Economics, Vol. XXXVII, No. 1 (February, 1955). Samuelson, Paul B., "International Factor - Price Equaliza— tion Once Again", Economic Journal, Vol. LIX, No. 234 (June, 1949). Samuelson, Paul A., "International Trade and Equalization of Factor Prices," Economic Journal, Vol. LVIII, No. 230 (June, 19487. Samuelson, Paul A., Economics, An Introductory Analysis, 2nd Edition, New York: McGraw Hill Book Co., Inc., 1951- Sanders, Irwin T. and Robert E. Galloway, Rural Families - Ln the Purchase Area o; Western Kentucky (A Study Lf Economic Area I), University ofkentucky Agri- cultural Experiment Station Bulletin 647, Lexing- ton (June, 1956). Semi-Centennial Commission, Early History Lf Michigan, Lansing, Michigan: Thorp & Godfrey, State Print- ers and Binders, 1888. Shoemaker, Karl Opportunities and Limitations for Employ- ment o£ Farm People Within and Outside o; Farming, A paper given at a seminar on Agricultural Besource Adjustments organized by the Division of Agricul— tural Economics Programs of the Federal Exten- sion Services, U. S. Department of Agriculture, A. E. P. 89 (June, 1958). ShuItz, T. W., "A Framework for Land Economics - The Long View", Journal of Farm Economics, Vol. XXXIII, No. 1 (May, 19517. Shultz, T. w., Agriculture Ln Unstable Economy, New York: McGraw—Hill Book Company, Inc., 1945. 224 Shultz, T. d., "Homesteads in Reverse", Farm Policy Forum, Vol. 8, No. 5 (Summer, 1956). Shultz, T. J., Production and Welfare Lf Agriculture, New York: 1he Macmillan Co., 1949. Shultz, T. w., "Reflections on Poverty Within Agriculture", Journal of Political Economy, Vol. LVIII, No. 1 (February7'1950). Shultz, T. w., The Economic Organization Lf Agriculture, New York: McGraw—Hill Book Company, Inc., 1953. Shultz, T. fl., "The United States Farm Problems in Relation ‘to the Growth and Development of the United States Economy", Policy for Commercial Agriculture, 1ts Relation to Economic Growth and Stability, Wash— ington, D. 0.: Government Printing Office, 1957. Shwartz, Harry, Seasonal Farm Labor $3 the United States, New York: Columbia University Press, 1945. Sinclair, Lewis S., "Urbanization and the Income of Farm and Non- Farm Families in the South", Journal Lf Farm Economics, Vol. XXXIX, No. 2 (May, 1957). Smith, Eldon D., Migration and Adjustment Experiences Lf hural Migrant Workers Ln Indianapolis, unpublished Ph. D. Thesis, University of Wisconsin, 1953. Smith, Eldon D., Urban Employment for Rural People: The Problems and Possibilities Lf Long Distance—Mi? gration, Unpublished Monov Draph, Department of Agricultural Economics, University of Wisconsin, 195 . Stanton, Janet M. and Robert R. Mount, Levels Lf Living Lf U. S. Farm Families, Selected Annotated Refer- ences 1940-1955, U. S. Department of Agriculture, Agricultural Marketing Service, Miscellaneous Publications No. 746, Washington, D. C. (Novem- ber. 1957). Steinmuler, Milton Homar, An Exploration Ln Egg Use of the Retardation Hypothesis as an Explanation _Lf—a_ Low-Income Area Ln Northern Michigan, In. D. Thesis, Michiganm State University, East Lansing (1958). 225 Stigler, George, Production and Distribution Theories, The Formative Period, New York: (Macmillan Co., 1941. Stigler, George, The Theory 2; Price, New York: Macmillan Co., 1954. Stigler, George, Trends Ln Employment Ln Service Industries,. frinceton: Irinoeton University Press, 1956. Strassmann, n.1au1 The Urban Economies Lf Southern Michi- gan, Institute for Community Development and Ser— vices, Continuinr Education Service, General Bulletin No. 5, East Lansing (1958). Strassman, W. Paul, Economic Growth Ln Northern Michigan, Institute for Community DevelOpment and Services, Continuinr Education Service, General Bulletin No. 2 (1958). Sufrin, S. C., A. d. Swinyard and E. M. Stephenson, "The North—South Differential - A Different View", Southern Economic Journal, Vol. XV, No. 2 (Octo— ber, 19487} Taeuber, Conrad and Irene B. Taeuber, "ficild Iopulation Trends", Journal of Farm Economics, Vol. XXXI, No. 1 (bebruary, 1949). Tang, Anthony M., Economic Development Ln the Southern Piedmont, 1860-1950, Its Impact Ln Agriculture, Chapel Hill, N. C.: The University of North Carolina Press, 1958. Tang, Anthony M., "Farm Income Differentials in the South- ern Piedmont, 1860—1940", Southern Economic Jour- nal, Vol. 25, No. 1 (July, 1956). Tang, Anthony M., "Industrial-Urban DevelOpment and Agri- cultura1 Adjustment in the South Eastern Piedmont Area, 1940-1950", Journal Lf Farm Economics, Vol. XXXIX, No. 5(August, 1957). Tarner, James D., Stud y Lf Rural Manpower Ln Southeastern Oklahoma, Oklahoma A & M College Agricultural Experiment Station, Technical Bulletin No. T~56, Stillwater (September, 1955). Thaden, J. E., Egpulation Trends Ln Michigan, Michigan Aincultural EXperiment Station Special Bulletin 256, East Lansing (June, 1955). 226 Thaden, J. E., EOpulation Growth Components and Potential Lg Michigan, Institute of Community Development and Services, Continuing Education, Michigan State University, East Lansing (January, 1959). Thole, H. C., Shortages 2: Skilled Manpower - Implications for Kalamazoo Businessmen, Kalamazoo, Michigan: w. E. Upjohn 1nstitute for Community nesearoh, 1958. Thompson, Warren S., Migration Within Ohio, 1935-40, 0x— ford, Ohio: Scripps Foundation, Miami Univer- sity, 1951. Ulrey, O. and K. T. Wright, The Hevised Farm Price Index for Michigan, 1910-1954, Unpublished monograph, Department of Agricultural Economics, Michigan State University, A. E. 622, East Lansing (he- vised in January, 1956). United Nations, Department of Economics and Social Affairs, Processes and Broblems g: Industrialization lg Underdeveloped Countries, New York: United Na- tions, 1954. University of Michigan, Scnool of Business Administration, Michigan Business Heview, Monthly, Ann Arbor, Michigan. U. S. Congress. Joint Committee, Policy for Commercial Agriculture, 1ts helation 39 Economic Growth and Stability. 85th Congress, lst Session 1957. U. S. Congress. Joint Committee on Economic heport, Hear- ings, January 1955 Economic heport g: the Presi- dent. 84th Congress, lst Session, 1955. U. S. Congress. Joint Committee on the Economic neport, Subcommittee on Low-Income Families, Hearings, Low-Income Eamilies. Slst Congress, lst Session, 1949. U. S. Congress. Joint Committee on Economic Report, Sub- committee on Low-Income Families, Hearings, Low- lncome Families, 84th Congress, lst Session, 1955. U. S. Congress, Subcommittee on Equipment, Supplies and Manpower of the House Committee on Agriculture, Hearings, Farm Labor 2Q Problems 2; the Southwest. 85th Congress, 2nd Session, 1958. J 227 Department of Agriculture, Agricultural Marketing Service, Farm Pepulation, Annual Estimates p1 States, Maipr Geographic Divisions, and Regions, 1920-50, Washington, D. C. (November, 1955). Department of Agriculture, Agricultural Marketing Service, Farm Population, Migration to and from Farms, 1920- ~1954, AMS—lO, uashington, D. C. (De- cember, 1954): Department of Agriculture, Agricultural Research Service, Changes 1p Farm Production and Efficiency, A Summary Report, and Supplement I—III, U.S.D.A. Statistical Bulletin No. 233, Washington: U. 8. Government Trinting Office (August, 1958). Department of Agriculture, Agricultural Statistics, 1940—1957, washington: Government Printing Of- fice, 1940—1997. Department of Agriculture, 1875 Annual nepprt Lf the Commission Lf Agriculture, Washington: U.* Department of Agriculture. Department of Agriculture, 1878 Annual hepor Commission Lf Agriculture, Washington: Department of Agriculture. Cd Cu Department of Agriculture, 1880 Annual Eppor Commission Lf Agriculture, dashington: Department of Agriculture. Cd 5" Department of Agriculture, Bureau of Agricultural Economics and U. S. Department of Labor, Bureau of Employment Security, Unemployment and Partial Employment Lf Hired Farm workers Ln hour Areas, washington, D. C. (April, 1955). Department of Agriculture, Bureau of Agricultural Economics, The Hired Farm Working Force Lf 1952 with Special Information on Migratory w'orkers, Washington, D. C. (October, 1955). Department of Agriculture, Development 2; Agriculture's Human hesources, A report on problems of low- income farmers prepared in the U. S. Department of Agriculture and transmitted to the President of the United States, dashington: U. S. Govern- ment Printing Office (April, 1955). Utley, 228 Department of Agriculture, Office of Domestic Com- merce, Area DevelOpment Division, Basic Industrial Location Factors - Guide for Evaluating an Area's hesources for Industrial Development, Industrial Series No. 74, nevised (June, 1947). Department of Commerce, _945 Census Lf Agriculture, Michigan, Statistics for Counties, Vol.1, Part 6, Bureau of the Census, uashington, D. C. Department of Commerce, 1954 Census o; Agriculture, Michigan, Counties and State Economic Areas, Vol. 1, Part 6, Bureau of the Census, Washington, D. C. Department of Commerce, 1950 U. S. Census Lf lopula- tion Michigan, General Characteristics, Bureau of the Census, Washington, D. C. Department of Commerce, 1950 County and City Data Book, Bureau of the Census, washington, D. C. Depart: ent of Commerce, County Data Book, Bureau of the Census, dashington, D. C. (1947). Department of Commerce, 1952 County and City Data Book, BuIeau of the Census, washington, D. C. Department 01 Commerce, Bureau of the Census and Ag11011tu1a1 marke ting Service, Earm Population, heplaeement hatio and :nates fOI hural males, 1940— 50 and 1950- 60, erie s Census - AMS (T- 27), No. 22, washington: Gov rnment Irinting Office (August, 1956). Department 01 Commerce and U. S. Department of Health, Education and welfaIe, County Business Patterns, First Quarter 1955, Jashington: Government Print— ing Office. . ’Department of Cozxmerce U. S. Census Lf Housing, Genera; Che racte ristics, Michigan, Bulletin H— A22, Bureau of Census, washington, D. C. Department of Labor, Bureau of Labor Statistics, Monthly Labor neviev, Vol. 62, No. 1 (January, 1941)- Henry M. and Byron M. Cutcheon, Michigan, A Province, Territory and State, Ehe Twentnyixth Member Lf the Federal Union, New York: American Tress, 1906. 229 Viner, J., lnternaticnal Erade rnd Sconomie Development, Aford: The Clarendon 1ress, 1955. weatherford, «11118 D. Jr., Ceosraenic Dif: ere gr1311tura1 Cages in the United Sta chusetts: Harvard University rress, «illiamson, Harold E. and John A. Duttrick, Sconomic De— velOpnent, Drineiples and fatterns, ne.v JersC ey: frentice—Hall, 1nc., 954. mitt, 'awrence N., There is no Simple Solution to Unemplo Ment ig_Nortncrn Micnigan. A summer” stCtelCA given before the Subcommittee on froduction and Stabilization, Sezate Banki1g and Currency Con nittee, at the no 1ri 's on Area he- develOpment Le3is1ation, Detroit, Micnigan (March 2, 1959). Aolfson, nobert J., "An Scone metric Investigation of he— gional '11fC1enC1u1 in America: Agricultural ”3733", ...:CCW AOL‘CtIiCCI, ‘V'Olo 2‘), NO 02 (AXLJIJ.1, 135S). doytinskgg .1. S. and 1M ;J. no tinskj, .Jynld repulation.a d Production, New Yo k: Twentieth Century fund, (jL3r). mom USE om wwm m -I‘ ~ '; .... r W“ a ‘