WORK AND WAGES

Dominion, Volume 15, Issue 181, 28 April 1922, Page 5

WORK AND WAGES

THE ADJUSTMENT CONTROVERSY COURT OF ARBITRATION HEARING LABOUR UNIONS’ CASE OPENED DEMAND FOR FURTHER STABILISATION i * The Court of Arbitration sat yesterday to con-tinue-the hearing of argument and evidence on the question of whether or not wages should be reduced in proportion to the. reduction, alleged to have taken place, in the cost of living. The evidence for the employers was concluded, and Mr. McCombs opened the case for the Labour unions.

On the Bench were the President of the Court (Mr. Justice Frazer), Mr. W. Scott (employers’ representative), and Mr. M. J. Reardon (workers’ representative). Mr. T. O. Bishop, with Messrs. F. Cooper (Christchurch)'; and W. A. W. Grenfell (Wellington) appeared for the New Zealand Employers’ Federation. The case for the labour unions was conducted by Mr. J. McCombs, M.P., with Mr. T. Bloodworth as his chief supporter. ‘ Several other union secretaries watched the proceedings. THE WANGANUI PRONOUNCEMENT. Immediately the Court sat. His Honour said: “Members of the Court think it is desirable that we should clear up one misunderstanding that appear, i to be existent in regard to the pronouncement of the Court at Wanganui a few weeks ago in connection with the movement in the cost of living. The impression appears to be current, and some of the newspapers appear to be under the impression, that the Court’s pronouncement is a suggestion or a proposal, or a tentative finding, that wages should be reduced by ss. per week. That is entirely a mistaken impression. I have here before me a copy of the Wanganui pronouncement. We were most careful not to deal with anything _at all in it except .the movement in the cost of living. Our statement was purely a statistical statement At that time the Court had no right under the Act to make any suggestion or proposal that there should be a reduction in wages, or, if. there should be a reduction, as to what tlie amount of the reduction should' be. . . .” EVIDENCE CONTINUED. Mr. Bishop resumed the calling of evidence in support of the employers’ application. Arthur Seed, secretary of the Dominion Federated Sawmillers’ Association, submitted a statement in some detail to show the state of the sawmilling industry. The figures indicated a considerable decline in the industry, a heavy reduction in output, a reduction in selling prices of from 10 to 13 per cent., and a reduction in sales. He stated that the proportion of the cost of production of timber to be accounted to labour varied a good deal according to the locality and the class of timber, but it ranged about 73 per cent.

To Mr. McCombs: In the past the reduction in the price of timber to th© public had boon rather more than the reduction at t-lie'-mill. If the mill price wa.s reduced 2s. the merchant reduced his prices generally by 3s. He was surprised to learn that in 1914 the price.of a certain much-used size of building timber was 13s. 3d. per 100 ft., while the same timber was now sold for 31s. 6d. per 100 ft. He did not profess knowledge of the retail timber business, but only with the business of millers selling at the mill or on rail. Mr. McCombs said that ho would suggest that not all this increase had gone in wages, and that capital charges and not wages ought to be reduced. To Mr. Reardon: M’itness said that the sawmillers had no arrangement with the merchants for the regulation of prices. To his knowledge no such arrangement had been ever discussed. The Sawmillers’- Association had discussed the fixing of prices at the mills in different districts. To Mr. Bloodworth: Tlie falling off in the export trade would not account for all the decline in the industry. Only certain districts, notably th© North of Auckland and tho M’est Coast, exported timber, and the decline was not confined to those districts. THE BOOT INDUSTRY. Beaumont Mappiebeck, boot manufacturer, of 'Wellington, spoke of the conditions of the boot and shoe industry in New Zealand. He said that from 1915 to 1918 the industry enjoyed unparalleled prosperity. From 1918 to 1920 the manufacturers were not able to cop© with trade offering, but about this tim© th© industry felt in increasing force competition from Australia. Some of the Australian goods had to be sold at much below landed cost owing to over-importation. The effect of this was disastrous to employers and employees in th© New Zealand boot industry. Some of the prices cabled from England in the past three months were not more than 20 por« cent, above 1914 prices. English goods were practically the only boots and shoes competing with the locally-made boots and shoes. In his own factory the cost of making up had risen from 3s. 4<l. per pair in 1914 to ss. 7d. per pair in 1921. These costs did not, of course, include the cost of leather, but English boot manufacturers bought English leather at. less than the prices charged in New Zealand for New Zealand tanned leather. M’ages had increased from Is. 2d. per hour in 1914 to 2s. Id., in 1922, an increase of 78 per cent. ' As to the price of boots, tho manufacturers’ price for a boot known as a “green-hide shooter,” a boot sold largely in this country, for country work, was 18s. 6d. in 1914, and to-day ranged from 275. to 28s. In England to-day th© wages of boot operatives were £2 13s. a week-. In New Zealand the wages were £4 Ils. Bd.. and in England tho operatives worked four more hours per week. The effect of the new tariff had not been to improve the position of the local manufacturers. Tn some respects they were in a wors? position. In order to quit stocks they had had to reduce prices below tho cost of production. His own firm had sold boots costing 345. 6d. to make for 18s. 6d. Such heaw reductions were necessary to meet tho competition of warehouses and others who were making heavy cuts in order to get rid of stocks. To Mr. Bloodworth: There wore 176 less persons employed in the trade nt the end of March, 1922, than at the end of March, 1914. There was a doin.inid still unsatisfied’ for /female machinists, but all other workers were in plentiful supply. To His Honour: Australian competi-

tion was eliminated by the present increased tariff. ‘To Mr. Bloodworth: He had seen a price quoted for a high-grade Aoot at 18s. in England. That would land here, at 265., and no New Zealand manufacturer could make such, a boot for less than 30s. The slackness in trade had had ths effect of crowding out the unskilled men who came into’ the trade during the war. In his firm only three out of 52 were receiving the minimum rate of pay, £4 Ils. ,Bd. The prices charged for New Zealand boots varied in different stores, and for different classes of goods. In some cases the retailers put on a profit of 50 per cent., in others 33 l-3rd. per cent., and on such boots as greenhide shooters, sold principally in country stores, these stores did not usually charge a profit of more than 15 per cent. To His Honour: Owing th keener competition, there was not now so mucli cause for complaint against retailers for charging high rates of profit. The rates of profit .on, standard lines weir© not unduly high; on fashion goods rates were necessarily high. This concluded tho evidence called by Mr. Bishop for the employers.

THE EMPLOYEES’ . CASE MR. McCOMBS IN REPLY Mr. McCombs opened the case for j the Labour unions? ’ 1 “I wish first of all,” he said, “to ] express my appreciation of the courte- ! ous waybill which Mr. Bishop present- | ed his case. His cliche of the engin- ; eering trade as the principal basis from ] which to fight his case was strategical, j But, after Ml, there are only 3000 I employed in the engineering works out ’ of a total of 78,853 in all industries, ] His avoidance of the woollen industry ; and other industries in New Zealand, which are paying handsomely, was another masterstroke. His witnesses in j the engineering trade, however, did . not make it clear that a reduction m | wages would get them out of their > difficulties, because reduction in the j rate of wages' would effect such a very small decrease in the price of the fin- | isbecj articles.<Tn the matter of meet- j ing foreign competition in the prices , of certain agricultural implements, one ] witness was frank enough to say that , no matter at what price the New Zea- ] land article was sold their American , competition would sell uist a little lower. It is clear, therefore, ffiat a reduction of wages in New Zealand would not protect against that class of competition. “Instead of advocating a reduction in business expenses by a reduction of bank rates from 7 psr cent, to 4 per cent., as in England. Mr. Bishop advocated an ‘ all-round reduction in wages, and actually suggested a per cent, reduction., In the wholesale and retail businesses we were that there had been a considerable reduction in the turnover. This is not surprising, seeing that wages have already been reduced in many instances to the Arbitration Court minimum, and Public servants have had their salaries reduced. Just exactly how the trader is going to be helped by further reducing the spending power of his cnsto'mers is difficult to understand. The reports of the pessimistic utterances of the comparatively tew j employers, who are pushing for this re-| duction in wages, are also not calculated to help trade, and. in its turn, help industry. Business flourishes best in an optimistic atmosphere. . “In regard to the cost-of-hving index numbers, Mr. Bishop was delightfully frank. He wanted the Court to adopt one method of calculation op the up grade and another method on the down grade on the principle oil heads I win; tails you lose—the workers to lose every time. ANhat I want the Court to realise is that on the up | grade in the first few years of th© I war there was no provision for in-J creasifig wages during the currency or | an award, and that from 1914 to 1919 not only did wage increases have to follow price increases in point of time, and sometimes a year and more be-, hind but wage increases were never commensurate with the increase in the cost of living. The legislation of last: session, while not going quite as f aH; as Mr. Bishop wants, nevertheless docs provide a different method on tlu# down grade from that which was proi, vided on the up grade, because under. ( the legislation just passed it is possible to reduce wages at six-monthly intervals in proportion ■to the cte-. crease in the cost of living, although, on the up grade increases were not s» granted. \ *' u “The onlv saving clause in the Actt of last session was the proviso for a ‘fair standard of living’; .but thi* depends upon tho Court’s interpretation.’\ ‘ FOR ONE YEAR MORE. Mr. McCombs went on to refer tod the decision of tho Court of twelve I months ago, by which wages were stabilised for one year. Ho statedi that the reductions in the. cost or; living had not been so rapid as th*j Court anticipated, and that for tins: reason wages should be further gtabiW ised at the present rates for one year*] He drew attention to the increases] shown since the judgment of a yearago in dairy produce, and to the fachj that in many .items there was no re-*] duetfon in price. > “We would further point out,” lia] said, "that the reduction revealed in] tlie published figures covering 60 P el !] cent, of the Budget, namely, a fall in the index numbers from 1660 to a drop of 126 points fronj March,] 1921, to -March, 1922, does t ßiot warrant a drop of 10s. a week on a mininium wage of £4 3s. fid-.’nlus the ss. ' bonus which was withheld. The fall; in the cost of living is slightly over*! per cent., whereas the proposed duction on the £4 3s. 6d. amounts to nearly 11 i per cent. Of course, then#!

is the other 40 per cent, of tho cost-of-Jlving budget for which we have Ho published figures. “It is difficult to see, therefore, how an average of 7 J per cent, for threefifths of the budget can be lifted into • lli P o !’ cent, average for the whole bv the influence of tho other twofiJths, more especially as in part of that two-fifths there is no price movement. Tho rate of decrease in the unpublished portion of the budget would have to be more than two and & half times the rate of decrease in the published portion which contains the food groups in which a considerable fall has taken place. _ But accepting the Court’s calculation as correct, because we have no means of '* checking the figures, the Court’s finding warrants an extension of the stabilisation of wages at present rates for a further period. "A FAIR STANDARD OF LIVING.” “Replying on the promise for a fair standard of living in the Act of last session which came into operation on February 11, we think that the Court cannot possibly reduce jthe present minimum rates of- wages. The pro* viso in clause 9 seems to override all other considerations, and reads as follows : —'Provided that the Court shall not reduce tho rate of remuneration of any workers to a lower wage than will in tho opinion of the Court enable such workers to maintain a fair standard of' living.’ We submit that the present minimum wage of £4 3s. 6d., including bonuses is totally inadequate to maintain a-fair standard of comfort for a family. Accepting tho Government’s Statistician’s classification and percentage of total «<•- penditure, the minimum wage of £4 3s. 6d. for unskilled workers only al-

"We understand 1 that the Court has divided the miscellaneous group into two sections, but the total would remain as above. How totally inadequate the present minimum wage is must be abundantly plain to every (householder in New Zealand.” Mr. McCombs discussed at some length the Australian method of computation. He argued that the cost of certain goods in Australia was less ■. than in New Zealand, that the statistician’s allowances for tousing. fuel, and light, and clothing were inadequate in the Dominion. He. showed that the average basio wage in Australia was £5 14s. sd. WAGES ALREADY REDUCED. “We would point out,” he continued, “that in addition to the reduction already effected! by withholding the ss. bonus, actual wages Eave also been reduced. In many instances employers who were paying considerably more than tho minimum provided, by the Court have reduced wages to mini■mum rates, thus affecting other traders and industries by reducing the spending power of the people. There is also the reduction which intermittent employment means. These reductions in .wages are affecting the retail traders’ ■ returns, and will affect industry in turn because they lower the general purchasing power of tho people. It ‘ must be remembered also that when prices were<on the up-grade the wqrkers were not granted increases equiva,,>leijt to the increases in the cost of living. Three principal decisions of the Arbitration Court operated to prevent the workers receiving increases in pay equaL'to the increases in the cost , of living. It was not until November, -■l9lB, that the Court was given definite power to revf&w existing awards and '' increase wages in pi<»portion to the i increase in the cost of living, and it was not till March, 1919, that tho -Court exercised the powers conferred .by the 1918 legislation. During all that from 1914 to March, 1919, wages were lagging far behind the increases in the cost of living. REAL WAGES REDUCED. “In giving judgment in March, 1919, Mr. Justice Stringer stated that ‘notwithstanding several increases granted by the Court during the war to workers in different industries, they are now in a worse position financially , than they were at the outbreak of the war, inasmuch as their real, as distinguished from their nominal, wages has been reduced.’ That position remains to-day because all increases granted since that pronouncement did not go :(s.back further than the six months ending March, 1919. In fact, the position stated by Mr. Justice Stringer regard- , *' ing the reduction of real wages has since been accentuated, firstly, by a method of computing bonuses, which the Government Statistician Xaid was not. satisfactory, but whijffi the Court insisted on, namely, the imputation s of all bonuses on the influenza epidemic price peak period as base, when ■food prices rose nearly 100 points in three mofiths. If, in tho first place, the workers had been given any allowance in wages to compensate for this abnormal price peak in December, 1918, there might have been some justification for the Court insisting that price increases should bo measured upwards commencing from the mean of this mountain peak of prices. The result was that the workers lost 6s. of the 9s. bonus which the Acting-Gov-ernment Statistician said was due, he having made his computation on lines which he considered fair and reasonable. That the Employers’ Association realised that a 9s. bonus was due even before the Court made its pro nouncement was evidenced by an interview given to the newspapers the day after the 9s. bonus was announced. “Lastly, there was the stabilisation pronouncement, which has not worked out exactly as the Court anticipated, although that matter can now be adjusted oy extending the period of stabilisation. . In view of all these circumstances it would be obviously unfair to reduce wages to the amount shown by the reduction in the cost of living because wages were not so increased . on the up-grade. To do so would multiply by two the disadvantages and hardships which the workers had to put up with during the war period and since. The net result of these various decisions and policies is that tho workers are not now receiving, with bonuses included, a rate of remuneration sufficient to ‘maintain a fair standard of living.’ BELOW SUBSISTENCE LEVEL. “The Cburt may not be aware of it, but so greatly has the workers’ standard of living been lowered in New Zealand since 1914 that this allowance of £1 Bs. 4d. for groceries, dairy produce, and meat, for a family of five, is less than that allowed by the. Hospital and Charitable Aid Board in its outdoor relief to provide for a ‘mere subsistence level,’ and to lower wages still further would be absolutely criminal. The Act requires the Court not to lower wages- below what is necessary ‘to maintain a fair standard of living.’ The wording of tho Act makes it perfectly plain that the maintenance of a fair standard of living overrides all other considerations, and that industry and commerce has to adapt itself accordingly.” Mr. McCombs went on to compare tho position of the workers in New Zealand with that of the workers in Britain and other countries. Ho agreed that wages had fallen in other countries, but that during the war wages actually rose more rapidly than the cost or living, while in New Zealand

the workers had been under a heavy hardship because wages did not at any time keep pace with the rise in the cost of living. . ' Passing to the consideration of other matters which the Court was required to consider, such as the effect on trade and industry and any other relevant considerations, Mr. McCombs pointed out that there was evidence of increasing prosperity for New Zealand. and proceeded to quote import and export figures. If reduction in wages of ss. a week were mado to apply to salaries as well as wages, it would only amount to 1 per cent, on the total value of the manufactured articles. A reduction of 1 per cent, would not be appreciable, and could hardly be passed on to the consumers. ■’What will it advantage a New Zealand manufacturer to reduce the cost of his finished products by 1 ppr cent, when an all-round reduction in wages will reduce by millions the spending power of his customers P NEW ZEALAND TRADERS. . “Now I come to the ordinary trader who has least to gain by an all-round reduction in wages. It might profit the individual trader if he could confine a reduction in wages to his own particular business, but his advantage even then would be very slight. In a grocery business, for instance, wages represents only 10 per cent, on the turnover. As ss. a week means a 6 per cent, reduction in wages it would only amount to three-fifths of bne per cent, of the turnover. Against this very slight advantage which might or might not be passed on to the public would be the enormous disadvantage which would come from an all-round deduction in the spending power of the people. It is tho trader’s last thousand pounds worth of business when rent and all overhead charges have been met which pays best. This is what the trader loses by an all-round reduction in the spending power of his customers. Better for him not to reduce his expenditure by three-fifths of one per cent, if it means a loss of 6 per cent, or more in his business, his rent and other capital charges will then have to be met out of the reduced total volume of business. The (reduction in wages which have already taken place by reducing wages to the Arbitration Court minimum- has affected trade and in its turn industry also. This lowering of wages by reducing the volume of business creates unemployment, and the unemployment thus created creates more unemployment. High wages—stabilised, if possible—and not low wages, creates employment. The suggestion that wages may come down creates unemployment by causing those who have building work, engineering work, or construction work, to do, to postpone the work to a future date, and the unemployment occasioned thereby creates other unemployment by reducing the spending power of the people. The knowledge that wages were not coming down any further, but might go up, would cause building, engineering, and construction work generally to be put in hand- at once, and this in its turn would give a fillip to trade and industry.

COST OF LIVING. “It is all nonsense for the New Zealand employers to talk about reducing the cost of living, because it is largely beyond their control, .and, anyhbw, very substantial reductions in prices should take place before wages are reduced. On the up-grade wages followed prices a, long way behind —getting further behind all the way—and until the distance between the increases in wages and prices has been overtaken wages should not come down. A» we have already pointed out, the question of wages is not a very big factor in regulating prices. In. the food groups, which is the biggest item, the prices of New Ze iland produce are fixed by their export value. The prices of dairy produce, for instance, are not affected by wages paid in New Zealand, but by its export parity. As regards imported articles, their prices to the consumer are icnly affected by the prices paid to shop assistants. Their landed cost is not affected at all by the wage® paid in New Zealand. Some items in the budget would .be affected to a greater extent, but the net result of a 10 per cent, reduction in. wages would not reduce the total cost of Evin°- by an appreciable amount. “‘But under the legislation of last session, all these questions are subsidiary to the “maintenance of a fair standard of living,’ and what the employers’ representative will have to do, to rightly succeed, will be to snow that a remuneration of £4 3s. 6a., including' bonuses, is more than sufficient to ‘maintain, a fair standard ot living,’ and should be reduced to to 18s. 6d., or lower. • “In conclusion, might I urge on the Court that if we succeed in proving that the present basic wage does not ■afford a fair standard of living, the Court will not only not reduce wages on this occasion, but will urge upon the Government the appointment of a commission to go mtq the question of what is a fair standard of living, or that the Court will constitute itself a commission and go into -he matter during the coming year in the various centres which it will be visiting. THE GUIDING PRINCIPLE. Mr. Bloodworth also addressed the Court, and he spoke first of, all of the “fair standard o. hvmg question with which Mr. McCombs had dealt. He urged that the Court was asked to consider what any «?6ußtry could bear. It was a well-establish-ed maxim that the real and ultimate test for wages in any industry must always be what the industry can bear. It was not possible to say in times of depression just how much ot the depression was due to the rate ot wages in an industry, and how much to other causes. There was no compulsion upon the Court to reduce wages because some reduction was alleged to have taken place in the cost of commodities. Mr. Bloodworth proceeded to relate how and when businesses were granted in different industries, and to refer to past judgments of the Court on war bonuses, stabilisation, and other matters. He expressed the opinion that much of the unemployment of the last two months was due to the fact that people were waiting foi the end of the stabilisation period, anticipating a drop in wages. He would suggest that reductions should be introduced with at least as much caution as were increases, and also that consideration should be given to the workers for tho fact that stabilisation did not result in those benefits to the workers which the Court confidently and in good faith expected. Further, he would not admit that qur 1914 standard as the ideal to bo aimed at. There had been a slow but continuous improvement in the standard of living for many years up till 1914, and there would seem to be no good reason why the standard of living which had so much increased for the wealthy classes since 1914 should be kept down to the 1914 level for the workers.” EFFECT OF STABILISATION. His Honour, replying to a further statement by Mr. Bloodworth that the stabilisation had not. worked out fairly for the workers owing to the cost of living not having fallen as expected by the Court, said that in the opinion of the Court this was not so. He explained that the Court had had to work on incomplete figures and on estimates, as good as available, but experience, and the collection of further more .accurate figures, showed that the stabilisation scheme had worked out as nearly as possible fairly’ to both workers and employers.

Mr. Bloodworth said he had a household weekly budget which he had used before the Court since 1917. He said that in July, 1917, the budget cost £3 15s. 6Jd.; in July, 1918, £4 Bs. 9d.; in March, 1920, £4 18s. 4Jd. ; in March, 1921, £5 18s. 9jd. ; in March, 1922, £5 10s. 7d. He insisted that the lot of the workers was made harder by the holding up of retail prices. The theory that goods should be sold only at their replacement value, which stood retailers in such good stead before the price investigation tribunals, seemed to have been entirely forgotten. WORKERS AND THE WAR YEARS. He protested against any proposal to fix wages to suit the lowest standard of management; rather the Court ought to fix wages having regard to what a well-managed, efficient business could bear. Many factories were not well managed, not well equipped, and not well arranged, and tho fact that they were not doing well should not be accounted to the workers’ wages. The workers were not now fighting to maintain a higher standard of living than that which ruled prior to the war; they had not yet reached a higher standard. They were merely trying to maintain tho standard of comfort of tho working class. Did the Court realise that since wages and salaries did not keep pace with prices, salary and wage earners lost heavily between 1915 and 1921 ; their standard of living went back to 1910 or further, while merchants, manufacturers, farmers, and speculators made remarkable profits during those years. He suggested that - .the merchants, farmers, and others should have still a large unexpended surplus, while the workers had no such accumulated surplus. To keep wages at thezpresent level would teach the speculator a lesson. It would also tend to weed out the inefficient employer, who, from a strictly economic point of view, tended to depress wages and increase prices, for prices depended upon the cost of production by the most inefficient producer in the epuntry. He would ask that the prescrit minimum rates of remuneration should continue for at least a further six months. Tho Court adjourned until this morning.

Iowa in follows: — Expenditure. Per cent. . 84 £ 1 s. 8 d. 4| Housing . 20 0 16 81 ••Fuel and light . 5 0 4 2 ' Clothing . 14 0 11 4 Miscellaneous ... .. 27 1 2 61 Total . 100 4 3 6