WAGES.

Bay of Plenty Times, Volume LX, Issue 11086, 8 April 1933, Page 2

WAGES.

(To the Editor.)

Sir,- —Of ail the problems now prominently before the public, the rate of wages is the moat important, the most discussed, and the least understood, Folks look upon the frenzy of the war and the squandering of thousands of millions as the normal slate of affairs, which ought to have continued indefinitely. The national income, we say. may be half what it wag a few years ago, but 140 millions were distributed amongst us then, and 140 millions must be distributed amongst us now, or we will tear the Government limb from limb. Some countries are richly endowed with mines, forests, fisheries, a fertile soil, a genial climate. With others, nature has been more niggardly. Perhaps the soil is poor, the climate harsh. There is just as striking a difference in the artificial or manmade advantages. In one country industry is highly organised, lavishly supplied with capital, factories and machinery. In the next, labour struggles on unaided, producing small quantities with great difficulty. Let ns consider India, a country where the conditions are primitive. Suppose the entire year’s production gathered on one spot, and then distributed in equal shares to the inhabitants. Go through the same process in the United States of America, where industry is probably more highly organised than elsewhere. The amount received by the average American would be ten times—perhaps fifty times —as great as the amount received by the average Hindu. This is the origin of the tremendous difference in wages, one country compared with the nextJjlKn other words, the total national income determines the size of the income of the individual. But where is the practical side of our argument? What rate of wages ought, to be paid in New Zealand? A few years ago, when the national income was £140,000,000, unskilled labour received 14s a day. Skilled and professional workers, and also business men, received incomes approximately in proportion to the 14s. The national income is now quoted as £70,000,000. Our problem then is the distribution of the national dividend. It is evident that the average citizen will receive half what he did before. If any man's income is not reduced, some other man must suffer a double reduction to make the average good. In all these arguments we must remember that rates of wages are determined, not by sentiment, but by universal, invincible economic la.w. It is of no use to talk a lot of tosh about what we should like to receive, or what we have received in the past. It is equally useless to demand standards of living which industry cannot possibly maintain at the present time. There is the £70,000,000, that and no more. And that and no more will be distributed amongst us with our consent or without it. Perhaps a few comparisons may throw' a little light on the subject. If a given number of New' Zealanders produce more goods than the same number of Englishmen, then the wages should be higher here than there, but not otherwise. Or compare New' Zealand in 1914 and in 1933. If the national income has not increased since 1914, there is no warrant for wages above the 1914 level. Take one more test. Production is the result of the partnership of capital and labour. All that is produced is divided between the two. What one does not get, the other does. If wages are unduly low, w'ould-be employers rush in to secure the rich rew'ards obtainable. Factories double in size and double in number. Every worker is eagerly snapped up. If wages are unduly high, industry is unprofitable. Employers rush out instead of in. Capital is placed in the banks for safe keeping. The country is filled with unemployed.

Why don’t we face the position? All wages and prices went up together, and all wages and prices must come down together. We have got to cut the garment according to the cloth. We have got to fix the income of the individual in proportion to the income of the nation. We have got to re-adjust wages and prices in such manner that there is a margin between the selling price of an article and the cost of producing it, or there won’t be any industry and there won’t be any wages.—l am, etc.,

“RADIX.” Te Puna, April 2nd, 1933.