HIGH WAGES AND UNEMPLOYMENT.

Press, Volume LXVI, Issue 20026, 6 September 1930, Page 17

HIGH WAGES AND UNEMPLOYMENT.

HHnUr 0 l ®s EDITOR OP TIIE PBKSS--generally speaking The Press mi wlied upon for sound economics. a contributor to your finance of the 3rd insfc. is guilty of Hhß™ ' digressfon from your usual ■ The writer in question obsessed with the idea that IHHHg?JU*d&rd vyages paid in New Zeaand that these '"high" RfflHggljmlft the chief factor in retarding return to prosperity. «B|l|iHyfa>r-' low | wages are • relative WKfflMh The question that concerns , is: How much goods s purchase ?. With the price of housiug, food and person would claim standard of wages is high, unemployment is caused, by under-consmnption of flH^HHp^ftastantly we read reports of HHHHKhßrotyccrs' . organ isutions atproduction so that may became more protitrather, less unprofitable, affairs gives rise to the B?wllifflmrn "high'* wages will cure iH 3 setting up an KHBB^Ssjy" accelerated demand for good sound reasoning

behind this argument. The flaw in it—it is a most' serious one—is that wo under a competitive commercial regime where labour is bought and sold subject to the same economic laws as any other commodity. That the worker's standard of living depends upon the price of "labouring power" is a fact which does not enter into the qtiestion of business economics, and is unfortunate for the wage-earner in times of poor demand for labour. However, the position is not quite hopeless. Unrestricted competition in the sale of goods whoso markets are suffering from "over-production" (producers' point of view) or "under-oon-sumption" (economic viewpoint) would bring down prices in sympathy with the price of raw materials. The fall in the latter is largely responsible for the present doleful position. A general fall in retail prices—one part of the cost of living—would have the same effect upon the wage-earner as an increase in wages if the present money rates of wages were maintained. After a series of adjustments of our ideas of values, economic conditions would improve steadily provided that the money factor, i.e., credit and currency organisation, were scientifically adjusted instead of the present mismanagement of finance which some people confuse with a return to the "gold standard." Be that as it may, the greatest enemies of our country at the present time are those people who attempt to retard the inevitable fall in the prices of goods. This fall in tho cost of living must precede any fall in money wage rates if a socially essential'standard of living is to be maintained by wageearners.—Yours, etc., J.S.R. September sth, 1930.