The Dominion THURSDAY, JULY 28, 1921. WAGES AND WELFARE

Dominion, Volume 14, Issue 260, 28 July 1921, Page 4

The Dominion THURSDAY, JULY 28, 1921. WAGES AND WELFARE

A number of delegates at the Farmers’ Union Conference yesterday spoke very frankly of the necessity of reducing money wages as one important step towards getting back to normal economic .conditions. The way is by no means as clear as could be desired for dealing with this question on its merits. So far as minimum rates are concerned, money wages in this country are regulated for the most part by awards and agreements which are valid for stated periods; and now, as for some years past, tho decisions of the Arbitration Court are governed by the legislation which directs it, though not without leaving something to its discretion, to adjust wages in accordance with the cost of living statistics. In these circumstances many' people, no doubt, have refrained from speaking out on the subject of wages adjustment rather than run the risk of being misunderstood, but it is certainly' desirable that %hc question should be examined and discussed dispassionately in all its bearings. Where a contract exists—and money' wages in this country arc in large part settled by express contract —there can be no question of modifying it in the interests of a single contracting party. There is such a thing as modifying by common consent a contract which is found in' actual working to be operating to the detriment of .all whom it binds, but whether this can be regarded as having a practical bearing on the adjustment of money wages in the J)oniinion remains to be seen. No doubt there are many representatives of Labour in this country who would instantly' denounce as an attempt to break faith with the workers any proposal even to consider the readjustment of money wages on a lower level. Those who take up this attitude would find it very difficult, however, to demonstrate that they arc defending the real interests of wageearners. What wage-earners arc interested in obtaining is constant, employment and wages of the highest possible purchasing power. If high money wages arc of comparatively low purchasing power and at tho same t'imo tend to bring about unemployment, then wage-earners are more interested than anyone else in seeking a remedy for this state of affairs and particularly in considering whether it is not possible to exchange high money wages for more tangible Benefits. Much as tho issues are clouded by prejudice, misunderstanding, and adherence to a set routine, there is no doubt that this is the real problem by which the wage-earners of the Dominion are confronted to-day. Here, as elsewhere, high money

wages aro a serious impediment to the revival of trade and industry. Prices have fallen in some directions, chiefly because importers and other people have found themselves compelled to realise on unduly heavy stocks, but prices cannot fall freely or generally until wages fall. The reason of course, is that prices consist very largely of wages “passed on” to the consumer. The only way to revive trade is to lower working costs and prices, but very little can be accomplished in this direction urftil money wages —generally the chief item in working costs —are reduced. Because they connote high prices, high money wages assist in a definite degree to deepen the present depression of internal and external trade. They prevent a general fall in prices and because of the check thus offered to demand tend to occasion unemployment. It is, of course, true that many of the commodities consumed in this country are imported, and that the price of these commodities to the consumer is affected by the level of New Zealand money wages only in respect of handling, transport and distributing charges. Apart, however, from the fact that these charges often form a big part of the ultimate prices of goods to the consumer, any immunity thus gained from the normal economic effect of high money wages is much more than "offset by their bearing on export trade. With its exports, almost solely of primary produce, the Dominion pays for the whole, of its imports, besides meeting all its obligations in the shape of interest and other charges on external debt, shipping charges, etc. Obviously, the interests of all sections of the population demand thai the volume of exports should be as great as possible, but high money wages in the Dominion are one of several factors which tend to limit the volume of exports. They are helping to raise the costs and charges incurred by the farmer to such a level as would rob him of his incentive to grow and export produce. It is plain enough that'these conditions, as they develop, mean a loss not only to the farmer, but to the whole population. In this country so many obstacles are raised to tho impartial consideration oE the question of adjusting wages with a view to maximum purchasing power and the unimpeded development of industry that it is perhaps almost hopeless to appeal for anything of tho kind. In Britain, America, and elsewhere largo bodies of workers have agreed to reductions in their money wages, in some cases quite voluntarily, because they perceive that, as adjustment proceeds on these lines industry is relieved of a killing handicap. With tho reduction in money wages, working costs> are lowered and it becomes possible to set such a price on the output of industry as gives it much improved prospects of finding a market. At th'e same time, the purchasing power of wages is increased. According to a statement made recently by the British Minister of Labour (Dr.Macnanara) tho number of workers in the United Kingdom affected by wage restrictions up to the middle of May was 1,750,000, and in the case of every industry save one agreement was arrived at. This number has since been greatly increased, notably by the addition of the miners (a bo/Jv of about 1,200,000 men and boys) who accepted a reduction of wages in connection with their strike settlement. Wage-earners in this country who fairly examine tho facts of their own case and take, due account of vhat is happening abroad will bo bound to conclude that in such times as are now being experienced the maintenance of high money wages without regard to their effect in hindering the revival of trade and industry and preventing a general fall in local prices is a very dubious benefit. It is a disturbing fact with reference to the existing economic position in the Dominion that there are almost insuperable obstacles to the all-round adjustment of wages., working costs, and local prices, which would bring general benefit and relief. The Arbitration Court, when it last dealt with the cost of living bonus, far as its discretion would, permit in modifying a policy which can only be regarded as suicidal when account is taken of its ultimate effect on industry. If, however, there is to be any earlv escape from existing difficulties, there must be an awakening by wage-earners to the vital distinction between money wages and real wages, and the Court must be given broader powers of adjustment. The main facts to be grasped are that a reduction in working costs would stimulate industry and both internal and export trade; and that since wages constitute a groat nart of the price of everything we buy, a reduction in the level of money wages need entail no lowering of the standard of living.