Court Reserves Decision On Wage Order Claim

Press, Volume CVI, Issue 31188, 12 October 1966, Page 3

Court Reserves Decision On Wage Order Claim

<Aew Zealand Press Association)

WELLINGTON, October 11. The Arbitration Court today reserved its decision on the application for a 9.5 per cent general wage order.

In his final submissions Mr T. E. Skinner, president of the Federation of Labour, said that if the claim was redrafted in the light of statistics and evidence that had become available since it was filed, the increase sought would be 15.5 per cent. The application filed on July 13 asked for a general increase of 8.8 per cent. But on August 10, after the consumers price index for the quarter ending June 30 was published, the application was amended to raise the percentage to 9.5.

The Court—Judge A. P. Blair, Mr W. N. Hewitt, employers’ member, and Mr A. B. Grant, workers’ member—resumed today after a three weeks’ adjournment.

Mr Skinner discounted the i employers’ claims on the I effect a general increase in i minimum rates might have on actual wage payments. These were affected mainly by economic circumstances. “There is a belief among economists that any increase in actual rates after wage orders are, in fact, compressions of wage increases which would occur in any case, as far as actual wage payments are concerned, but over a slightly longer period of time,” he said. “This belief appears to have a solid foundation, and it appears probable that the Court is being asked to take into account a pattern which has become out-dated, probably because there is now an actual economic ceiling to the market value of labour.” Purchasing Power Mr Skinner agreed that a general order, applied by employers to all wage rates, as appeared to be their policy, would increase purchasing power. It was, however, the function of the Government to deal with economic circumstances as they arose, and the maintenance of a depressed level of minimum wage rates was neither a proper nor an effective way of dealing with national economic difficulties. “It is contended by the Employers’ Federation that the injection of a large sum of money into the spending

power of the community should be avoided, but we consider that, like our present troubles, this is in the nature of trying to stifle a symptom rather than deal with a cause, and that the dominating factor is the preservation of the value of minimum wage rates. Export Prices “The most potent force behind inflationary movements in our economy in the last 20 years has been the tremendous increases in the prices received for primary products sold overseas,” said Mr Skinner. “The large additional sums received by the farmers and put into circulation in New Zealand had the result of encouraging greater consumer spending and giving a great stimulation to the demand for imports. “We have not heard, in the past, any suggestion that our primary producers should refuse these higher prices or should sell their goods in markets where the prices would be much lower. This would be foolish, and the workers would be the last to suggest that we should refuse to accept the higher overseas income.

“As a consequence of these high prices and increased income from exports, it has been necessary, down the years, for the Government to impose economic measures to meet the situation.

[justice and equity, to increase rates of wages, the circumstances are much the same, [and the responsibility for I over-all economic action lies with the Government. “The chairman of the Monetary and Economic Council (Mr E. D. Wilkinson) stated in the Court that the present was not propitious for a general wage increase, but he said he did not consider that workers should be denied justice on that account. “His outlook was much the same as that of economists who have appeared in the Court previously as witnesses and, like a former Secretary of the Treasury, admitted that there were, in fact, no economic circumstances in which they could recommend a general wage increase, although they had to admit the justice of claims for an adjustment to minimum wage rates.” Policy On Increases Rebutting the employers’ claim that overseas reserves were currently in a serious state, Mr Skinner said this was a result of Government policy, but the Minister of Finance had expressed the view that there was a tendency at times to maintain these at too high a level.

“When it is necessary, in

Replying to the claim that a new order would add to the country’s inflation problem. Mr Skinner said the workers’ member of the Court (Mr Grant) had quoted a visiting economist. Professor Kindelzerger, as saying that there was no inflation in New Zealand despite apparent contributing factors. “We are unable to see that wage and salary-earners are better off if they accept increases in retail prices and permit the value of their wages to depreciate accordingly.” he said. “Sir Arthur Tyndall made it plain that when dealing with the renewal of individual awards that the Court did not take into account changes in the cost of living, but followed a practice of leaving this for consideration at applications for general orders.

“Members of the business community deal with increases in costs by raising the prices of goods or services to the consumer. Increases in retail prices mean increases in a wage-earner’s cost of living, but he is unable to obtain any adjustment in his minimum wage rates without reference to the Court for a general wage increase.” Retail Prices Mr Skinner said the Government Statistician had told the Court that a general order could be expected to show itself in a rise in retail prices of about one-third of the percentage of the order. “This should dispose of the myth which is always propounded by the Employers’ Federation that the effect of a general wage increase is to increase a worker’s cost of living to a greater extent than the increase in his wages, and make him worse off as a result of the increase.”

Mr Skinner said that it was neither possible nor desirable to hold the economy in a static position, and it seemed quite impossible to move all incomes forward at the same rate. Limit Opposed “Wage and salary-earners have fallen behind most others in the community as a result of the increase in retail prices and this is the paramount consideration of the Court,” said Mr Skinner. “We have made it clear in our submissions that the intention of the application is to restore the living standards of workers, since this is all that is permitted by the regulations.

“We are not attempting to increase living standards by this application, but we would be very interested to know how living standards could be maintained or improved if effective wage rates are allowed to deteriorate as they have done in the past two years and no action is taken to rectify them.” Mr Skinner said the F.O.L. strongly opposed the employers’ suggestion that a monetary limit should be placed on any general order.