SOARING COSTS.

Auckland Star, Volume LXVII, Issue 183, 4 August 1936, Page 3

SOARING COSTS.

HIGHER WAGES BILL. NEW LEGISLATION RESULTS. MANUFACTURERS' CONCERN. (By Telegraph.—Press Association.) DUNK DIN, this day. Tlie general public has 110 doubt already realised that the new legislation which is being placed on the Statute Book is going to increase the price of many commodities, but maybe it lias as yet only a hazy idea of what these' increases may be. As a matter of fact there can hardly be any definite information 011 this important feature of the economic life of the community until the position becomes more settled. It is interesting, nevertheless, to read what the manager of a leading local company manufacturing clothing, partially and wholly completed, has to say regarding the increased costs to be incurred by his business. With the restoration of wages to the 1931 level, the ell'ezts of the amendments to the Factories Act and the introduction of the 40-hour week on September 1 next, the New Zealand manufacturer, ho said, was faced with increased costs to an extent unprecedented by any one rise in previous costs of manufacturing. The rise in costs in his company, due to the increase in direct wages in the factory, represented an increase of 14.02 per cent. In June last 48.73 per cent of the company's factory expenses had been wages, but with the above increase that percentage would rise to 55.28. Its September factoiy wages would represent an increase of 30 per cent over the same number of employees in June last.

Not all the products of the company are manufactured into clothing, only half being in the form of finished garments. The other half is sold to the trade, which in turn expends a considerable amount in wages in completing the products into a saleable condition for use by the public. It will be seen that if this company completely manufactured all its products into garments tlie increase in factory costs would greatly cxceed 14.02 per cent. Tll addition, the extra costs of purchasing local raw materials, together with the rise in marketing costs, will add further to the selling price of this clothing.

"The industry concerned," said the manager, "does not view its future prospects sanguinely, as 011 account of overseas competition it is unable to raise prices sufficiently to fully reimburse itself to the extent of its additional costs. Should the A nbitration Court raise the basic wage and increase the provisions under the award our industry fears the possibility of further increasing its selling prices, and as a result greater trading difficulties will be created."