Wage order too much for some, but not enough for others

Press, 5 July 1978, Page 1

Wage order too much for some, but not enough for others

No-one, it seems, is entirely satisfied with the 7 per cent general wage order issued by the Arbitration Court yesterday.

For workers it is not enough, while the Prime Minister (Mr Muldoon) has criticised the way the Court has limited the order. Every wage and salary earner will get a rise of 7 per cent of the first SIOO of income. For those earning SIOO a week or more the payout will be $7 a week before tax; those earning less than SIOO will get an extra 7 per cent. The increase will apply to ail awards and collective agreements from July 17. In percentage terms, there wil be a 7 per cent rise for a weekly income of $100; 5.26 per cent for $133;4.66 per cent for $150; 4.19 per cent for $167: 3.5 per cent for $200; and 2.8 per cent for $250, reports the Press Association from Wellington. The cost to the country is estimated to be about the cost of an unrestricted order of 4 per cent. There will be no legal compulsion on an employer to add the increase to over-rate wages, according to the Court. The decision was a majority one of the president of the Court, judge Jamieson, and the workers’ assessor, Mr W. C. McDonnell. The employers’ assessor. Mr J. B. Walton, issued a dissenting opinion. The order built further •‘inequities and distortions” into the wage structure, Mr Muldoon said last evening. The reasoning behind the majority Court decision was in error on two counts, he said. “It gave an excessive increase in order to assist low income earners, but the cut-off point of SIOO a week compares with an average wage at the present time of about $l3O a week. “This means that a very small fraction of the total

workforce will get the full amount of 7 per cent of their present wage. At the average wage the increase is a little over 5 per cent,’’ he said. He also criticised the decision on the grounds that the Court did not take account of “the very great tax reductions in this year’s Budget.’’ “It is quite illogical that a wage-fixing authority can publicly disregard budgetary movements in the tax field,” he said. “It may be that some amendment to the law is necessary.” The Government originally asked the Court to make an order for a 2 per cent wage increase, compared with the Federation of Labour’s application for a 14 per cent rise. Mr Muldoon said he would have preferred a 4 to 5 per cent across-the-board wage order and noted that “it may be significant that the decision was split.” The employers’ representative (Mr Walton) in his dissenting opinion, said the Court had erred on the generous side in a “mistaken but genuine and honest endeavour” to assist the lower-paid workers relative to the “high fliers” in some key industries. “New Zealanders exhibit champagne tastes but fail to recognise that we have only a beer income," he said. The Employers’ Federation’s executive director (Mr J. W. Rowe) said the order compressed pay margins for skill and responsibility and warned that “some employers will undoubtedly be wondering where to find the money for this wage rise.” “By way of two general wage orders, tax relief and an annual bargaining round, wages will on average have risen by more

than 30 per cent in the 18 months to this October.” The president of the Federation of Labour (Sir Thomas Skinner) said the wage order was “disappointing.” The F.O.L. was at a loss to understand how the Court had arrived at the 7 per cent figure. He criticised the “cutoff” point of $lOO a week and said $135. the average ' weekly wage, would have been more realistic. Sir Thomas said the Court had recognised the main thrust of the Federation’s claims to help the lower-paid worker, but the increase would destroy some margins which was “a very bad thing.” The F.O.L. would be “filing again fairly quickly” to obtain a general wage order to cover the movement that had resulted from the Budget. The secretary of the Combined State Service Organisations (Mr W. E. B. Tucker) said he was also disappointed the order was not more substantial. But the cut-off system recognised the “plight of the lower-paid.” “Much of the difficulty in making more substantial correctrive wage adjustments can be laid at the door of the misguided economic strategy that the Government is following, which has a limited range of genuine options that the country can choose from,” he said. Mr P. A. Wooding, a senior lecturer in economics at Otago University, said the order was about the size he had expected. He felt the inflationary impact it would have was not excessive “given that the tax reduction in the Budget does not come into force until October.” The Leader of the Opposition (Mr Rowling) said there was little in the general wage order for workers to get excited about. He appreciated the cost-of-living adjustment relative to lower incomes, but said a general wage order should maintain margins for skill because of the need to ensure trade training and development in the professional and executive fields. “The order would have been sufficient if the Government had been more equitable and more generous in its tax concessions in the last Budget,” Mr Rowling said. Mr M. R. Good, president of the Canterbury Chamber of Commerce, said he was disappointed

that an anomaly had been created by the $lOO limit. “I’m inclined to agree with Mr Muldoon that the $lOO clause will create a problem as regards skilled and unskilled labour,” he said. He did not feel very strongly about the figure of 7 per cent, although a lower, unrestricted percentage increase would have been preferable. Mr W. R. Cameron, president of the Canterbury Trades Council, was also dissatisfied with the wage order, but for different reasons. Although he was pleased that recognition had been made of the need for an increase, he was disappointed by the small amount granted. “While I realise that perhaps 14 per cent was not probable. I thought it would have been a bit more than seven.”