PRICES AND WAGES.

Auckland Star, Volume LXI, Issue 187, 9 August 1930, Page 8

PRICES AND WAGES.

THE FACTOR OF THE FARMER,

(To the Editor.)

With reference to "Worker's" contention that higher wages will relieve unemployment he seems to ignore the fact that the present position is due to the farmer getting lower wages for his output. As by this means at least two-fifths of consumers are compels to reduce their expenditure, it reacts on town labour by a lessened market fpr their product. It is out of our 'power to raise the wages- of producers of raw material; the only method is to bring down the cost of manufactures to a' corresponding basis. _ High wages and high taxes prevent a drop in raw materials from correspondingly reducing finished products, and automatically cause unemployment by leaving goods at a level raw material producers are unable to pay. This is recognised in Europe, where wages are being forced down to a price commensurate with products. Both are now below 1914 in Germany. Raw materials here are now below 1914 levels, but wages are hot. The example of Henry Ford payjn« high wages is also cited, but Ford's success is due to his turning out the cheapest, article for many years, and to his paying the highest wages. If wages can be maintained and prices reduced, as is the case with Ford products, fte difficulty will be solved, but to establish' lower prices here lower wages seem necessary'and inevitable. LIBERAL.