WORK AND WAGES

Dominion, Volume 15, Issue 183, 1 May 1922, Page 5

WORK AND WAGES

COURT OF ARBITRATION INQUIRY ADDRESS BY EMPLOYERS’ ADVOCATE INFLUENCES GOVERNING ffAGES A FRIENDLY ARGUMENT The Court of Arbitration concluded the hearing on Saturday of the case which is virtually an inquiry as to whether the rates of wages awarded by the Court ought to be reduced in proportion to the drop, shown by statistics, in the cost of living. It was stated at the close that the Court would probably give its judgment in about a week.

On the bench were His Honour Mr. Justice Frazer, with him Messrs. W. Scott and M. J. Reardon. Mr. T. O. Bishop, advocate for tho Employers’ Federation, replied to the Labour Union? case, and this concluded the inquiry. “May I first,” said Mr. Bishop, “just express my thanks to Mr. McCombs for his kindly reference to myself, and also assure him through Your Honour that the employers’ representatives in turn appreciate the spirit in which the whole case has been handled. The conduct of such an investigation as this cannot but do good so long as both sides approach it with an earnest desire to be fair to each other, and to find a mutually satisfactory way out of their mutual difficulties. “Now, to deal briefly with Mr. McCombs’s address. In his reply to myself, he says first that the woollen industry is paying handsomely to-day, and I admit that the woollen industry is not yet affected to the same extent as the majority of other trades, but I want to state the reason, which is, I am sure, obvious to Your Honour, viz., that the competition of imported woollens has not yet become keen because the war created shortage in. Europe continues, and has not been made up. When that happens, then there is no doubt at all that we shall have the same severe competition as we had before the war. “In 1911 the total wages paid out in the woollen mills of Iflew Zealand for male and female workers amounted to £137,161. Total cost of materials, £248,187; total cost, £385,348. The total price received for production was £377,713; total loss, £7635. PrOsumably Mr. McCombs would nqt like that condition to return, but yet he advocates a high, wage cost in every stage of production to enable us to compete with countries -where wage cost is lower, and scale of production greater than our own. “My choice of the engineering trade was made because it is such a good barometer from which to gauge the condition of other trades. If shipping is busy, if development wojffi is going on extensively, if the farmers are doing well, then all engineering firms are busy also. A slump in the engineering trades can be, brought about only by depressed conditions in other trades. BANK RATES.

> “Mr. McCombs says that if bank 6 rates were reduced. from 7 per cent. • to 4 per cent, there would be no need C for reduction of wages. This may have been a joke /on his part. It could . hardly have been serious. How are we t going to obtain money from the banks at 4 per cent, when in our very best I and most prosperous times money for ' r good securities was worth 5J per cent. , In this connection may I say that Mr. McCombs, no doubt unintentionally, , but nevertheless quite improperly, 1 misrepresented me by saying that I j suggested an all-round reduction of [ wages by 25 per cent. My address j made it quite clear that one employer , in the iron trade said that “he conj sidered a 25 per cent, reduction war- ; ranted to ensure a return to normal.’ My own suggestion was something entirely different. In fact, on looking through Mr. McCombs’s address, I have been very much surprised at the number of inaccuracies and misquotations it contains. I have, I fear, been doing Mr. McCombs an injustice, 'but Mr. Bloodworth called him’ a statistician, and therefore I may be excused for doing so. There is in his address abundant proof that ho is nothing so dreadful as that, because no man with a mind trained to mathematical ■ accuracy could have been guilty of the following list of errors unless he had deliberately set out to mislead this Court, and that is a thing which I am 1 quite sure Mr. McCombs would never do lam sure he will pardon my 1 calling attention to his errors; any man mav make a mistake now and taen. (1) I wonder where lie found the figures that appear on page 3 of his_address—Bs per cent, increase m cost or living over 1914 ns a peak, and well over 70 per cent, to-day. (2) The figures 43 and 83 on page 1 of his principal address are not mathematically correct. (3) On page 2 Mr. McCombs sai s this Court made a promise a year ago but I have been quite unable to find a promise in the stabilisation pronouncement. and I presume he is referring to that. (4) Mr. McCombs, in using the Fiddington Commission’s recommendation as to a basic wage entirely omitted to say that the recommendation had had to lie scrapped because of tho impossibility of paying the wage recommended- Your Honour has all the facts, and T need therefore say no more about it. (5) Under the heading Real Wages ’ Mr. McCombs quotes a portion of’Mr. Justice Stringers remarks, but not all, and thereby conveys, quite innocently, of course, a wrong impression of the meaning; had he quoted a little further he would havo added ‘the Court has acted upon tins view in the cases under consideration, and has therefore granted increases in wages, making them approximately equal in purchasing power to tho existing wages at the time the latter wore granted.’ It does make quite a difference. „ . (6) He also makes it appear that tho Government Statistician stated the use of the six monthly moving average figure for the period ending March, 1919, was unsatisfactory, but I cannot find any record of Mr. Fraser ever having said so. (7) Nor is there anr evidence that Mr. Butcher ever said he considered the actual monthly average figure a fair and reasonable basis of computation of tho bonus for that period. The records show merely that in ignorance of what had been adopted as the method he, in his chief’s absence, used another method. (8) As for Mr. Cooper’s prophecy—ho is present; and I think would like at- this stage to explain that. ■WAGES IN OTHER COUNTRIES. (9) Air. McCombs says:—‘ln England. in America, and in the neutral countries on the Continent, wages increased in a greater ratio than the increase in the cost of living, .and con-

sequenily when prices fell, etc.’ Th* facts are shown so far as England and America are concerned in the following table: — In New Zealand unskilled workers wages rose 62 points, whilst food rose 78 points in January, 1921. . 1 Skilled workers’ wages rose 68 points - —highest food point 78. Unskilled wages eomiuer-ced at £2 165., rose to £4 11s. Skilled wages commenced at £3 65., rose to £5 Ils. In Great Britain unskilled workers’ wages rose 209 points, whilst food rose 191 points. Skilled workers’ wages rose 129 points, whilst food rose 191 points. Unskilled wages £l. 2s. lOd. at commencement- —rose to £3 10s. Bd. Skilled wages £1 18s. lid. at commencement—rose to £4 9s. 2d. In United States: Wages of all workers lumped* rose 91 points. Food rose 115 points. In Canada: Wages of labourers, in factories rose 114 points. . Building trades—seven classes, SC points. Metal trades —five classes, 109 noints. Whilst food rose 128 points. It all goes to show that in»calling Mr. McCombs a statistician we have not done him justice. EXPORTS AND PROSPERITY. (10) Mr. McCombs says that onr exports for last fourteen months, ending February exceeded 53 millions sterling, while our imports were 48J millions. He does not add that of the exports, over 5 millions sterling came out of the Imperial Supply. Stores, and cannot be. taken as. indicating prosperity during the period mentioned. In my statement. I took the average of the years 1915 to 1921, ‘thus obtaining a more reliable figure. (11) He also says that our exports for three years 1919, 1920, 1921 exceeded our exports for the best seven pre-war years, but forgets entirely that our expenditure increased in far greater ratio. (12) Mr. McCombs quotes one isolated sentence from a speech of Sir. Lloyd George, but does not tell Hie Court that the text of the speech was increased production and economy. (13) Now as to Mr. McCombs’s pet economic institution—the Harvard Service—and its prophecy I can only say that I think any business man in New Zealand would prefer to act on the opinion of Air. Hunt as regards prospective prices than' on that of a theoretical school of economists. (14) Just one more reference to Air. , AlcCqmhs’s figures—he gave a table showing total value of manufactures or products, total cost of materials operated upon and salaries and wages and the gross surplus for the years 1916 to 1921, and I think he expressed his horror at the fact that the gross surplus in 1921 was £12,326.000 while in 1916 it was £7,481,000. Alay I just point out that his own figures show that whereas the gross profit in 1916 was 18.7 per cent., in 1921 it was only 17.57 per cent. The production statistics show that the employers between 1916 and 1920 added ' to their fixed assets in the shape of plant and machinery over 11 millions etc., and had to endeavour to pay interest on this and greatly, increased taxation as well, out of a reduced gross profit. In his final remarks on Friday afternoon Air. AfcCombs quoted one paraK’apn from my address leaving out all the context, and by this means mparted a meaning which no reasonable person could possibly attach to the remarks as they were addressed to your Honour. the other speeches. llke , - 1o congratulate Air. Bloodworth on his very carefullv-nre-pared and well-reasoned" address. "With very many of his arguments everyone must agree but I cannot help think! i g that the remedy ho suggests is not so much the result of his own well-considered thoughts on the subject, as it is an expression of the wishes of those whom ho represents. 1 deal nn y further separately with his remarks, but after making reference to tho speeches of one or two other representatives on the- other side, will briefly discuss the whole of the case they have presented. “Mr. Mack was very fluent, and made use of a large number of words m the time at his disposal, but did not raise many points that require to be further considered. First of all, he stated that tho theme of my address was that to reduce wages will rehabilitate the country, that the employers will hand on to the community the benefit from any reduction of wages, or, so Mr. Mack says, by the ruin of our customers we propose to improve our business. This is such an absolutely absurd construction to put upon my words that I do not require to discuss it seriously. It is sufficient. I think, to call •ittentior to it. He then explains at some length that money in itself dcea not mean prosperity. I really expected him to go on and to give us the illustration that if a man on a desert island has his pockets full of gold lie would still be likely to starve, to death in tho absence of food. I would only say that in using the word ‘money,’ I gave Air. Alack credit for sufficient judgment to know that I used it in the ordinary sense, and that I meant by the use of the term just what people usually do mean when they speajc of money, namely, not the tokens or coins themselves, but the amount of purchasing power in goods or commodities which those tokens represent. A HARD ALTERNATIVE. “Talking of consideration, I feel that I must call attention to Air. Afack’s definite statement that if an industry cannot pay a certain standard of wages, - and presumably by that he moans a standard which he himself, semewhat arbitrarily, considers to be a proper standard, then that industry • should cease to operate. In btlier words, ■ Mr. Mack ” sAVs'iteFar that men should be put ‘out of em- “ plovnieiit altogether than that they should be free to accept wages proportionate to the incoind of the industry in which they are engaged if necessity makes it impossible for these wages to conform to what Mr. Mack con-

siders a proper standard. I don’t think any employer in New Zealand has ever evinced such a cold-blooded carelessness for the welfare of his employees as Mr. Mack has indicated by his remarks. Mr. Mack: I did not say that. Sir ' Francis Bell said that, and I quoted j I hi" l - ~ , . His Honour: I don’t think you have caught the effect of Sir Francis Bell s remarks in your interpretation, Mr. Bishop admitted his mistake and withdrew that argument. WHAT THE* COURT SHOULD CONSIDER. It is very noticeable, Sir, added Jlr. Bishop, that wYieroas on behalf or tne employers I have erected the structure of my case upon a foundation ot the economic conditions affecting trade and x industry in New Zealand to-day, the representatives . of the workers have ! ''erected theirs upon a foundation of • the cost of living, and their ownconception of what is a fair standard of living. There is this difference between our methods, that while 1 have pointed opt that the Court, in deciding the matter before it is bound by the legislation to takeinto.consideration three factors, and while I have admitted all the way through, and I have that a fair Bta " da s d of livifig is to bo maintained to the worker m so far as this may bo possible, my friends on the other side : have expressed the view that the worker is to have the standard of liv- ■ ing which they consider to bo a proper standard, and some, at any rate, of their speakers have said quite defin- !■ ' itely that no other factor can be 1 taken into consideration. said that the standard of h™* 1914 was not an equitable or fair,stand- ! fl rd, and they have maintained that the present-day standard equal to that 0f'1914. With both of these contentions I find myself compelled to disagree, because by my own experience I am able to say that both in 1914 and at the present time work-ing-class families in New Zealand have enjoyed a fair measure of comfort and have not been deprived of the plea sures which are needed to supplomen one’s ordinary life. • „• “There is, however, one disquieting I fact which lias been brought home to employers over and over again in the last few years, viz., that no leaders of organised Labour have ever preach- ■ \ ed a doctrine of greater efficiency or given any assistance by way of C °-°P®J' ativo erfdeavour to bring about greater production, and thereby create a larger fund from which wages can be paid. THE CHARGE OF INEFFICI ENT , management. “I have to submit to Your E°nour that with the exception of Mr. • McCombs’s last remarks on Friday, in reference to the IJd. per hour awarded in tiro Gisborne pronouncement, the representatives of. the workers have . not in any particular attempted to show my case to bo unsound and even in this attempt they have entirely failed. ’ It is true they have raised the point that I did not specifically deal with all industries, but Your Honour will remember I explained my reason for not doing so, and it will be remembored, also, that th® industries I did select Were representative of New Zea ihnd conditions generally. I * have called evidence to show that ot ' the Union Steam Ship Company s fleet of seventy-two ships, twenty-two are at present laid up for want of e m P lo yr ment, and on this account nearly 1400 men are out of work; but it was un- ■ necessary to call such evidence b - cause I pointed out that there was a very great falling off in the Dominion’s trade as a whole,’ and it naturally followed that the shipping business must be going through a period of difficulty It is also true that they ac- , cused the employers of. inefficient management, but in reply to this I would call Your Honour’s attention to the fact that Mr. A. C. Mitchell said in I his evidence that during the period in i which had occurred the greatly increased cost of operation which he de sent); ed. his firm had installed the most modern and efficient machinery which money could buy. I had proposed to call Mr. Pascoe again to reiute tne ' charge of inefficient management so far- as Messrs. Anderson’s, Ltd., is concerned, but unfortunately he had to return to Christchurch. However, before leaving, he left me the following statement, and he is prepared to put in an affidavit to the same effect if the Court cares to have it: From 1914 until the present date, our wages increased 68 per cent., pig-iron 400 per cent., steel 300 per cent.; but the price of our standard oil-engines m- : creased only 50 per cent. By improved methods of management and modem machinery, we were able to mini- , wise the great increases in cost ot manufacturing, and also the public obtained the benefit of our efficiency in this direction. . Our machinery -is identifically the same as the most modern in use in England and America, and our methods of management and cost keeping are the same.

COUNTRY'S ABILITY TO PAY. “No attempt was made by the other i side to disprove the evidence of any of my witnesses, and I therefore submit that my statement of the econoI mic conditions of the country is an ‘ accurate one. Now as regards the ’ case put up on behalf of the workers. It rests entirely, as I said before, on I « what is a fair standard of living, and I submit, Sir, that nothing in their evidence is likely to help the Couit to a knowledge of this question greater than it possessed already. 1 1 submit, Sir, that what the Court is called unon to do is'to provide for the workers as good a standard of living as is possible under the prei sent'’conditions, holding the scales of ■ ' justice fairly between the two parties, and if your Honour agrees with my contention that a reduction in wages is calculated rather to increase than to decrease the total volume of i the purchasing power of those employed in industry, then the law requires that such a reduction bo put into effect. COURT’S RESPONSIBILITY. “In conclusion, I desire to call the attention of Your Honour and you other gentlemen of. the Court to the very grave responsibility which rests upon your shoulders to-day. You are called upon by Parliament to maintain a fair standard of living for the ! workers of this community, and I submit to you with all due respect, but in all seriousness, that with the whole community waiting anxiously for your decision, that you cannot compromise in this matter. You cannot in justice to the whole community pronounce a reduction of only ss. per week, and thereby maintain a high standard for 40 per cent, of tho workers at tho expense of the other 60 per cent., for that is what, this proposal means. It must be realised, Sir, that the reduction must be general and universal, and it must be ‘sufficient to be capable of'reflection in prices. , “I have shown your Honour and gentlemen how urgent the necessity is which arises out of the . economic situation, and' that in addition to the amount of reduction now indicated by the cost of living figures a further sum of IJd. per hour should be deducted on account of the change in the situatjon which caused it to be jfiV'en , 'in the' first' place.’’ A FRIENDLY ARGUMENT. Hr. Cooper, for tho employers, and Mr. McCombs and Mr. Bloodworth, for the unions, thanked opponents for tho manner in which either side had conducted the case, and thanked the

Court for extreme patience and utmost courtesy shown. His Honour said that he had greatly appreciated the manner in winch the representatives of the contending parties had conducted tho case. There had been an entire absence of acrimony in the argument, and this, he thought was a very hopeful sign. There seemed to be a deal of agreement behind ail tho points of disagreement. It was admitted on all sides now that there was need tor efficiency It was not necessary to blame any side for inefficiency m the past. In the war years, there had been slackness, no doubt on both sides, and this was not surprising in the circumstances. The Court would consider the case and probably would give judgment in about a week.