The Press Tuesday, December 14, 1920.

Press, Volume LVI, Issue 17017, 14 December 1920, Page 6

The Press Tuesday, December 14, 1920.

The Cost-of-Living Bonus. .TJio Arbitration Court's decision that t ho new bonus addition to the -basic wage shall be 3s a week will not surprise anybody who followed tho evidence heard by tho Court. The last igj tlireo bonuses, of whicll the latest was provisional, amoiinted altogether to 19s rt week, und it wa"# revealed in the evi-d-enco that if thero had been no misapplication of Iho Statistician's record of price movements, these bonuses ivoiild havo amounted to 15s, Seeing hhafc the two parly bonuses amounted to 10s, 03 should bo tho limit of the bonus lately under investigation. The two t.ny members of the Court differed widely Gs to what should bo paid, and the President solved tlic difficulty by taking a middle conrsc. Takjnrr into consideration tho fact that for many months tho workers have been receiving more than they were strictly entitled to, tho President fixed tho new bonus afc 3s. Those who have disapproved of tho proposal to pay so largo i bonus as Sa aro represented by the leaders of organised Labour as "enemies of the wage-earner, but it is not out of iiostility to tho wage-earners or through want of sympathy with them that most p.ople distrust tho policy of paying theao periodical bonuses. •'There- is a point beyond which the level of wages t:annot be raised. There aro other points below this one- beyond which it is dangerous to raiso wages—dangerous because of tho disturbing effect upon industry and tho creation of conditions from which the workers will be tho first to suffer. > There aro some industries which could easily pay the bonus of aven 9s, but, speaking generally, there aro few'industries which would not find the bonus a very serious handicap, if not a complete' obstacle to continued existence in a healthy state. The bonus actually ordered by the Court may prove serious enough in some cases. For it ought not to bo forgotten that this bonus comes at a time when farseeing people are realising that difficult times arc ahead for the whole country. ~'\Xo time could be more unsuited to the imposing of new burdens upon industry. In his remarks upon the general question tho President expressed his regret that when the Act of 1918 was passed no attempt was made to control increases in tho prices of goods restilting from increases in wages. He suggests that the Board of Trado might havo co-operated with the Arbitration Court in such a way that no increases in commodities as a result of increased wngos should havo hzen allowed unless tho Board of Trade was first satisfied that the profits of tho industry were not. already sufficient to meet the increaso in wages. In the absenco of this provision, the President says, most '•mployers have been' able to pass on, in the shapo of increased prices, tho increaso in their vrago bills, together with :i considerable profit on that increase. 'Jho result, his Honour says, lias been that whilo tho workers ■ were deprived to some extent of the benefit of increased wages, tho whole community has been forced to contribute to tho enhancement of employers* profits already ■iulßciently high. Many employers, we know, dissent very strongly from this view of the situation, but it is nevertheless a fact, and was indeed practically admitted before the Court, that if tho new uonus of 9s could havo been passed on by all the employers little fuss would have been made about it. It is ycacs since "The Press," like other papers, pointed out that the interests of the third party, which is

to say, the general public, were beginning to be overlooked in the actual working of the Arbitration Act. The public interest will continue to suffer if some new method of treating the problems of industry f\innoi> be devised. A few months henco the Government Statistician's tables will show either a rise or a fall in the cost of living. If a rise is recorded, .1 new bonus will bo awarded by the Arbitration Court, and the present difficulty will be aggravated. If a fall is recorded, tho Court will no doubt order a reduction of the existing bonus, and it is very doubtful whether organised labour will agree to accept lower wages without n. fight. The whole situation is a painful illustration of the fact that, except within certain small and simple limits, the State cannot in normal times interfere with cither wages or prices without doing more harm than good. The responsibility for the bonus difficulty rests with Parliament. When it was provided in the Act of 1918 that the Court should adjust wages to offset any rises in the cost of living, the underlying principle was that, regardless of all developments , in trade and prices, everybody should live at the same high standard as before the war. In almost every country in tha world the standard of living has for years bi'en far below that of thi3 country. Nobody has liked this, bufc outside New Zealand ifc hap been generally felt that th» war could hardly fail to affect the conditions of life. In this country, on the other hand, it appears to have been assumed that, war or no war, nobody should go without, or restrict his consumption, or economise in any way. It is not surprising that where such an idea is not only current, j bufc is embodied in an -Act of Parliament, trouble and discontent should ; come sooner or later. I