INCREASED COSTS.

Auckland Star, Volume LXVII, Issue 171, 21 July 1936, Page 10

INCREASED COSTS.

EMPLOYERS' CASE.

PRICE LEVEL AND RETURN.

STATE PROTECTION ASKED.

Tho view that there would be serious results if employers could not rely upon higher prices to meet increased production costs was expressed in a statement issued last night by Mr. J. S. Dawes, president of the Auckland Employers' Association. He sought an assurance that the Government could stabilise prices at any level it fixed, so as to give a fair return to employers. If the Government were sincere in its expressed desire to obtain the assistance and co-operation of the employers, which was obviously essential to the success of any industrial reorganisation, Mr. Dawes added, it must be prepared to take them more fully into its confidence as to the practical steps by which their objective was to be attained. "There appears at present to be a determination to ignore the actual earning power of labour in fixing wage standards; to enforce in competitive industry conditions which are uneconomic, but which are possible, and no doubt politically expedient, State services which are ■either monopolistic or non-revenue producing; to start again the vicious circle of rising wages and rising prices which ended so disastrously in 1031. Points for Enlightenment. "The questions 011 which employers require enlightenment therefore are:—• "(1) Has the Government, in making its pronouncement that the workers must receive a more equitable share of the values tliey produce by their labour, ascertained what percentage they now receive? If they accept their own statistician's figures this was some 49 per cent in 1934, and public utility enforces over 57 per cent. As they contend this was inequitable, will they give the employers an indication of what percentage they consider 'equitable' ? '".(2) Does the Government realise, and is it prepared to admit, that conditions in State services and in competitive industry are so utterly dissimilar that no comparison can be drawn between them, as the wage fund in the latter case can only be drawn from the sale of products and must depend on the marketable value of such products, whereas the former can be raised by rates and taxation? "(3) Does the Government realise that if it takes the responsibility of arbitrarily raising costs of production it must also accept the responsibility of protecting the higher prices which must inevitably follow? Lesson of Slump Years. "If the present Government can convince employers that it can stabilise prices at any level it may fix, and is prepared to fix that level to afford an equitable return to employers after meeting increased costs, then it will have established a valid claim for assistance and co-operation. Without this assurance employers naturally fear that what happened in 1931 may happen a<rain, and the lesson they learned in those slump years is not one they are likely to forget.

"The manufacturers' section of this association wants to know what time will elapse after the increasing of costs before some adequate protective tariff is brought into operation. Not only manufacturers but others want to know what protection they will receive against those who employ little or no labour. A high basic.wage will almost immediately lead to further increases in unemployment, besides being cruelly unjust to young people wishing to get a start in industry. "Policy Must Be Practical." "Admitting that we have not yet had the Government's industrial policy in its entirety, and that we have been promised during the session now opening legislation which will directly encourage industry and enable it to employ more labour, we are nevertheless justified in issuing a warning that repercussions of a very serious nature must follow unless employers can rely on higher prices to meet the increased production costs for which the Government is responsible. If the Government persists in considering industry from only one side, that of the Labour unionists, its legislation may well defeat the objects at which it aims. "Economic facts cannot he ignored 011 the ground of political expediency, and to obtain the confidence of employers the Government must be prepared to show that its policy is a practical one. logically reasoned out from ascertained facts."