Employers’ Arguments Against Wage Claim

Press, Volume CI, Issue 29782, 27 March 1962, Page 14

Employers’ Arguments Against Wage Claim

(New Zealand Press Association) WELLINGTON, March 26.

The Federation of Labour’s case in support of the application for a general order increasing award wages by 10.4 per cent, had failed entirely to prove the need for a new general order, said Mr P. J. Luxford, on behalf of the employers, in the Arbitration Court today.

The employers were confident that they could convince the Court that no order should be made, he said. The applicant’s case fell to the ground on all issues, and the Court had ample justification, after taking into account the matters it was obliged to consider, to inform the wage and salary earners, through its decision, that another general order would not be in their interests or the interests of the country.

The application came before the Court early this month. After hearing the president of the Federation of Labou., Mr F P Walsh, make submissions and lead evidence, the Court adjourned till today to give those opposing the application time to prepare their case.

He then pointed out the position of primary industries as affected by a decline in overseas prices.

dairy farmers’ incomes. To be consistent, the declining earnings of dairy farmers should be taken into con sideration and the same would apply to meat producers. Comparisons up to December 31, 1961, showed that minimum wage rates had practically matched increases in the coinsumers price index. said Mr Luxford. Mr Walsh had stressed that the application for any increase was made for the benefit of those on minimum award rates, but he had failed to show that there was any number of such workers. It could be that some workers were on the rates set out in their awards, but the employers submitted that the Court should consider actual or ruling wage rates.

He said Mr Walsh had admitted that lamb prices had declined in the last few months “to an unsatisfactory low level.” although sales were being maintained.

Mr Luxford said the employers did not quarrel with the general principle that the workers were entitled to their share of increased productivity, but it should be acknowledged that increases in productivity could be expected over a long term with improvements in technology and managerial skill. ‘There is grave doubt whether the present methods of productivity measurement even roughly estimate the actual long-term rate of improvement, and in a number of quarters it is believed that the methods which have been used substantially exaggerate the true rate of increase." Mr Luxford said. Income Gains "The great gams in real per capita income over the years have come, it is generally believed, primarily from more investment per worker in tools and equipment, from improved technology. from more mechanical power per worker, from improved plant lay-out and material flows and from managerial skills. As productivity gains are recorded, they are reflected in higher above-award wages, lower prices or higher profits, or a combination of these.

Wool Prices Wool prices were notoriously fickle, and the table of total production and value showed wide fluctuations over the last decade. This season's sales indicated a drop on last season and a fall of Id a pound would mean a loss of nearly £2% million in overseas income.

“At th® present time there if no real evidence to expect woo’ prices to increase to any great extent,” said Mi Lux ford, “and the possibility of further price reductions cannot be overlooked.

“The available statistics are not an exact indication of the extent to which actual wage rates have increased, nor do they give precise information concerning earnings,” said Mr Luxford "However, there is no doubt at all, that wage and salary earners are now being paid rates which have advanced to a much greater extent than have prices and productivity.” Margins Mr Luxford produced a table showing margins above award rates being paid. “Between February, 1958 and September, 1961, the weighted award rate for the combined trade occupations has increased from 6s 2548 d to 6s 10 288 d, that, is, by 7 740 d an hour, £1 5s 9.6 d a week, or 10.4 per cent, and the ruling rate has increased from 6s 10.960 d to 8s 0 617 d; which represents an increase of Is 1.657 d an hour, £2 5s 6.3 d a week or 16.4 per cent.," he said.

“The growing wage bill is one of the most serious obstacles which restricts manufacturers's ability to compete overseas with the products of other countries where lower labour cos’* apply. ‘While all of us are pleased that the over-all picture of primary and secondary production indicates that volume will in a number of cases, be maintained or increased, there are a number of strong indi cations that the value of this production, particularly in the primary industries, will be difficult to maintain and some important decreases could occur

“It should be realised, too that workers in a high-wage costs country, such as New Zealand, have to be more productive than those in low wage countries ” said Mi Luxford

"Just to maintain average output per man-hour at present levels requires heavy investments for modernisation and replacement of equipment to back up the numbers joining the labour force. On top of this comes the need for expansion. “If we attempt to measure our future productivity gains, we can only guess how much individuals will prefer greater leisure to increased real income and living standards, and in this connexion the Court already knows that, on the acknowledgement of the Federation of Labour witness. Mr McDonald, increased leisure is one of the objectives of this application " Productivity Mr Luxford quoted at length from authorities on the growth of productivity, and submitted that the measurement of productivity gains was not conclusively proved by any available statistical data.

Since the last wage order, all wage rates, minimum or actual, as well as the earnings of wage and salary earners, had risen substan tially. but some other sections of the community had not fared so well, said Mr Lux ford. Future Awards

“In the nearest comparable period, March, 1958. to September, 1961, nominal weekly wage rates, as reflected in the index increased from £l2 2s 7d a week to £l3 3s 9d, an increase of 87 per cent.

“From April. 1958, to October, 1961, average weekly earnings at ordinary time rates increased by 13.7 per .cent.

It should also be remembered that important awards would come up for review m the near future, with probable further increases in wage rates. On the other hand there was a likelihood that the guaranteed price to dairy farmers would be reduced, although many dairy farmers held that, because of increased costs, rt should be increased.

“A comparison between the weighted award rate for tradesmen and the nominal weekly wage index should also take into account the increased margins for skill now being awarded to tradesmen." Mr Luxford said the rates for females had increased at a faster rate than those for men. Since 1946 the male index had increased by 1646 per cent., the female index by 123.2 per cent.

In the past the F.O.L. had based its claims largely on the increases occurring in