THE COST OF LIVING.

Auckland Star, Volume LVI, Issue 215, 11 September 1925, Page 5

THE COST OF LIVING.

. I WORKERS' AVERAGE WAGE. ! • i ALLIANCE OF LABOUR'S CASE. ARBITRATION COURT'S REPLY. • ROYAL COMMISSION UNNECESSARY ! For some time past labour organisa- , tions throughout the Dominion have j complained that the average wage of j the worker, or to be more correct, the ; minimum wage of £3 17/6, which it is ! claimed is the award of the Arbitration Court, has been inadequate to meet the present cost of living and recently a deputation from the Alliance of Labour waited upon the Prime Minister, and requested that a commission be set up to inquire into and report upon the cost . of living and the basic wage. The j Trime Minister informed the deputation that the matter would be referred to the members of the Arbitration Court for a report. The report is now available and deals comprehensively with every aspect which affect the cost of living. Index Figures. The report first deals with the index figures, which it says are compelled by the Government Statistician, and obtained from the most reliable sources, and the court is satisfied, in so far as retail price statistics can afford an index of the movement of the cost of living, the figures compiled by the Government Statistician serve the purpose admirably. It had often been suggested, though never proved, that the figures were unreliable, j 'The Average Family. "Mr. Roberts contends that the court has fixed its basic wage for an average family of 1.57. This is incorrect. The court made the matter perfectly clear in its pronouncement of Sth May, 1922, in which it said that it allowed for two children under 14 years of age to the average family, though the interim census figures for 1921 worked out at only 1.57 children under 14 years of age to each married man, and less than one child (0.94) to each adult male. < The complete returns of the 1921 census are now available, and show that the number of children under 16 (instead of 14) to each married man and widower is only 1.52, and the number of children under 1G to each adult male is 1.12. The number of children under 14 to each adult male is 0.99. Mr. Roberts objects to married men without children being included in the computation, but it must be remembered—though he has ignored it—that these men, as well as the single men, necessarily receive at least the basic wage for a man, his wife and two dependent children. If, however, we adopt Mr. Roberts' contention that three children should be reckoned to the averago wage-earner, the fair living wage for which he asks would involve the payment of maintenance for 136,013 nonexistent wives and 732,540 non-existent children under 14, or 656.764 non-exis-tent children under IG. This is a manifest absurdity. Rent and the Basic Wage. "It is unnecessary to deal in detail with Mr. Roberts' figures regarding food, rent, and other items. The Court has on several occasions gone fully into these matters in its cost-of-living pronouncements. On the subject of rents, however, we must once more refute the statement that the Court allows a sum of 15/3 a week for rent in computing the basic wage. The statement is untrue. It will be sufficient for the purpose to quote two paragraphs from the Court's pronouncement of llth January, 1924, as follows:— " 'Rent statistics have proved a source of difficulty and misunderstanding in other countries as well as' iv New Zealand. Rent is the largest single item of expenditure in the domestic budget, and must always be provided for in full. Though rent has increased to a less extent than any other of the groups (except food) that make up the cost of living, the increase of rent is more noticeable because of the largeness of the single payment. All the cost-of-living statistics are based on averages, and rent shows a greater range of extremes than any other item. Some rentpayers pay little or no more than they did in 1914, while others pay greatly increased rents; but no system of averages can avoid being satisfactory to those at one end of the scale and unsatisfactory to those at the other end. "We deem it necessary to refer to a statement frequently made in Court, and as frequently refuted—namely, that the Court allows for a standard rent of 15/3 per week. The Court does nothing of the kind. The statement in question is another instance of misunderstanding statistics. A collection of domestic budgets made in 1911 showed that the average amount expended on rent was 20.31 per cent of the total domestic expenditure. This percentage has been taken by the Court as a basis. It is, however, only an average. The labourer in 1911 probably spent more than 20.31 per cent of his earnings on rent—perhaps 25 or 30 per cent—and the tradesman probably spent less than 20.31 per cent on rent. The so-called standard rent of 15/3 per week has evidently been arrived at by taking 20 per cent of a labourer's wage of £3 16/1. This is; an altogether unjustifiable misuse of i statistics, on two grounds; first 20 per cent of the minimum grade labourer's wage cannot by any stretch of imagination be regarded as a standard rent for all workers: and, secondly, as already mentioned. the minimum grade labourer's expenditure on rent was probably 25 or 30 per cent of his earnings in 1911 and in 1923. Yet, if we depart from the average in the case of the labourer we

j would have to reduce rather than inj crease his wages, for a larger percentage ; allotted to rent would have the effect of {reducing the total expenditure necessary fto maintain the 1914 standard of living, [because rent has increased by less than . 1 50 per cent, while the general cost of Jiving stands at 57.5 per cent above that of 1914. "The references made by the deputation to a basic wage of £3 17/ per week are misleading. The basic wage for the minimum grade unskilled worker is 1/9 per hour, which works out at £3 17/ for a 44-hours week. A very large number of awards, however, provide for a 40 or 4S-hours week, so that the minimum wage works out at £4 0/6 to £4 4/ per week for the workers affected by those awards. Furthermore, in nearly all j awards, whether the workers are unskilled, semi-skilled, or skilled men. additional payments are provided for work that requires any special knowledge or that involves working under unpleasant conditions, or that is performed in overtime hours. It is, of course, true that broken time and unemployment at times cause loos of earning power, but the Court cannot provide against unemployment, though it fixes a higher rate of remuneration for occupations that are notoriously casual. Recent Increases. "The statement that the Court has confined its attention to making adjustments in awards according to variation j in the cost of living, as determined by the Government Statistician's figures, is also untrue. It must be remembered j too that the function of the Court is to ;fix a minimum wage for each class of workers. The minimum for each class of semi-skilled and skilled worker is, of course, higher than that for the unskilled worker. In the great majority of cases we find that the minimum wage is regarded as a true minimum, and most . workers are paid move than the minimum, according to their efficiency. Fatal Objections. "It is manifestly absurd to euggjst that the report of a Royal Commission that found that £6 per week was a fair basic wage for a man, his wife, and two or three children, could be put into effect by the simple process of enacting that no adult male worker should receive less than £6 per week. The fatal objectione to the fixing of a minimum wage of £5 16/ or £6 per week are (a) that the total income of the country is insufficient to pay such a wage, and (b) that the average number of children under 14 to each adult male is not three, but slightly under one. Greater Efficiency. "The only means by which a minimum wage of £6 per week, or ' anything approaching that figure, can be fixed for all workers, irrespective of their domestic obligations, consists in increasing the efficiency of workers, management, and plants, by the adoption of the most modern methods of production and manufacture, the elimination of waste in every department, and the intelligent and whole-hearted co-operation of the workers. Commission Not Recommended. "For the reasons we have outlined, we do not think it necessary to recommend the setting up of a Royal Commission to investigate and report on the cost of living and the basic wage. Such a commission would be ineffective, for it would be impossible to give effect to any recommendation it might make. Rents Still Increasing. "We desire, however, to add that the matter of housing appears to demand the consideration of the Government, There is undoubtedly still a serious housing shortage, and when there is a great demand for houses there is a widespread impression that all persons connected with the building trades and the supply of materials for those trades put up their prices accordingly and neglect efficiency, and, t.o quote an American writer (Garrett), on the housing question in England, 'charge as mucn as the traffic will bear.' This impression may not he justified in New Zealand, but the cost of building a small house is very high in this country as compared with the cost in other coun- '. tries. The only satisfactory solution of the housing problem consists in building a sufficient number of dwellings for the requirements of the community, with due consideration for economy and : quality. ( A Minority Report. "The foregoing is the opinion of a ' majority of the members of tha court. ' Mr. Hunter has submitted the following ' minority opinion -. — " 'I am in favour of the setting up of a Royal Commission to investigate and report on the cost of living and the basic wage, as requested by the NewZealand Alliance of Labour, because I am absolutely convinced that the present minimum wage of 1/9 per hour ( for a casual worker is wholly inadequate * to provide a married man, wife and two children with the standard of living ' to which they are entitled. f " 'How such a worker can provide and i maintain a home on an average of less than £3 17/6 per week passes my com- ■ prehension; and he cannot average the sum named because a certain amount -. of time must be lost through wet < wenther and holidays, even if none is \ lost through unemployment. " Tt is in the interests of the whole J community that industrial jvace should prevail, and one cannot conceive of in- ! j dustrial peace unless the employee has' j secured to him wages sufficient for the' , i essential of a fair standard of living. < " Tt is futile to expect the rank and ] file of the workers to supply the data . required for the purpose of determining i what is a fair standard of living, judg- ; ing by past experience, and the person- < nel of the commission should include j qualified accountants competent from , experience to know what procedure to ( [ adopt to acquire the necessary informa- \ tion for the purposes of the commission.' j

Standard Rates to be Recast. 'Tn conclusion, we desire to inform you that, previously to the matter of a Royal Commission being brought xip, we had had under consideration the question of recasting what is known as the Gisborne pronouncement, by which standard minimum rates of wages were set out for different classes of workers. The necessity for this has arisen because of increased rates having been conceded by the employers or granted by the court to the workers in certain occupations. This has to some extent disturbed the balance between the rates for somewhat similar classes of workers, and it has become necessary to make a readjustment, which will involve an increase in the rates to be paid under future awards to workers in certain occupations, more particularly the unskilled workers on the basic wage. In view of the possibility of a Royal Commission being set up, we decided to hold over the making of a pronouncement on that subject until it w-as learned whether or not the suggested Royal Commission was to be set up. "(Signed) F. V. FRAZER, "Judge."