The Press MONDAY, FEBRUARY 23, 1976. “Econmic and social justice”?

Press, Volume CXVI, Issue 34084, 23 February 1976, Page 12

The Press MONDAY, FEBRUARY 23, 1976. “Econmic and social justice”?

The half-page advertisement inserted in Saturday’s issue of “The Press” by the Canterbury Trades Council should have brought some amusement to any advertiser who has ever been accused by trade unions or consumer organisations of misleading advertising. The advertisement, beaded: “ A case for economic

and social justice ”, condemns the “ Cost of living order that ignores the cost of living". Interspersed through the text and the tables in the advertisement are three panels of bold type which appear to sum up the council’s argument:—

In 1931 wages were cut by 10 per cent. A weak trade union movement faltered and as a result many families suffered.

In 1968 a nil wage order cut real wages by about 5 per cent. A strong trade union movement mobilised its members and a new order restored living standards. In 1976 a wage order of 3 per cent has cut effective wages by about 6 per cent. What are we going to do now?

Wages were, indeed, reduced by an arbitrary 10 per cent in 1931, and great hardship resulted. No post-war Government in New Zealand or in any other modern Western country would contemplate a reduction in actual wage rates to end a slump or to c'ounter a sudden reversal in the country’s balance of payments. But nor should any responsible government allow money wages to rise faster than ever when the country’s balance of payments is deteriorating alarmingly. That is what the 1972-75 Labour Government allowed: and it was an awareness of this, and its consequences, surely which persuaded many voters last November that the Labour Government had not earned a further term of office.

The trades council’s advertisement deplores the decline in “ effective wage rates ” —“ nominal ” wage rates adjusted for increases in the consumer price index—since September 30, 1974. The tabulated figures, however, show the trend only since that date, and ignore earlier figures. A perusal of these figures in the Abstract of Statistics shows that effective wage rates reached a record level in September, 1974: that the latest figures (December, 1975) in the series are about on a par with those of three years earlier, and consistently above those of years earlier than 1972. No great economic or statistical skill is needed to understand that the payment of record wages, in real terms, and over a period when the terms of trade were swinging violently against New Zealand, could not be sustained for much longer.

The advertisement nowhere makes any acknowledgement of the alarming decline in fanning fortunes over the last three years, and pretends that prices and profits have continued “to soar unchecked The facts are that the Labour Government tried to devise a workable scheme to contain prices, but failed; and that business firms, by and large, earned smaller profits—certainly in real terms —in spite of higher prices. The modest wage order recently announced by the Government will not cover the increased living costs of most wage-earners’ households. That is conceded by the Government—and accented by any voter who decided lasf November that a fools’ paradise could not be sustained for another three years. The answer to the question in the advertisement—“ What are we going to do now' —can only be: “ Tighten our belts until we get the economy back on an even keel ”.