EMPLOYERS’ FEDERATION

Dominion, Volume 18, Issue 55, 29 November 1923, Page 13

EMPLOYERS’ FEDERATION

SURVEY OF INDUSTRIAL POSITION WAGES AND THE COST OP LIVING RESULT OF COMPETITION FROM OUTSIDE / —...— - The twenty-first annual meeting of the /New Zealand jEmployers’ Federation twhs field nt the head office of the j federation in 'Wellington yesterday,. Mr. T. Shailer 'Weston ' ((president)) "was in the chair., ;

A Difficult Year. The annual report stated that the Year 1922-23. while somewhat less fruitful of important events in the industrial world than some other recent years, had been a difficult and trying one for all engaged in secondary industries in the Dominion. to Great Britain. owing to the cessation of borrowino- since the war. and the equalisation, bv taxation, of the Government revenue and expenditure, deflation had been put into effect, with the result that whereas the cost of living at one time stood at 213 per cent, higher Uian in 1914. it had now fallen to only 65 higher, and wages had been reduced to a corresponding level. In New Zealand the cost of living at one time rose to 78 per cent, above the 1914 standard, and had now fallen to 42 per cent. Wages in England and New Zealand in a number of industries were then ouoted. and the report proceeded :— British Manufacturers’ Advantages. “The difference between British and New Zealand wages is alone sufficient to give the British manufacturer a i great advantage over his New Zealand competitor, and ho has the additional great advantage of specialisation and mass production which is impossible of attainment in New Zealand. Some of the trades ouoted in the fore-going , table are not entering into direct competition with New Zealand, but they are included because of the interdependence of all trades ,in any country, and with the obiect of showing a proper comparison between, the general standards of the two countries. If Now Zealand were self-contained and entirely independent of all other countries'in the matter of trade, it would not matter what money wages we paid so long as a proper relationship was maintained between our several classes of workers, but it must bo. obvious 1 that while we are not so independent, we can pav onlv such wages as will enable ns to carrv on our secondary industries in competition with those of other countries. “The problem is complicated in two wavs Our secondary industries might be given a sufficient tariff protection to enable them to withstand outside competition if we were able at will to increase the selling price of our primary products sufficiently to provide the additional national income that would bo required as a result of increased prices; and. on the other hand, the wages in those industries which are feeling competition most, might be reduced but for the fact that wages are high in the nurelv local industries that do not feel competition, and that these high wages are keeping the cost of living up for the whole community. If it were possible to bring about a reduction of all wages to a uniform standard about on a parity with that of Great Britain, the cost of living would fall, the workers although drawing less money wages would suffer through this fall.no less in real wages, and our industries would readily meet outside competition. This, however, cannot be accomplished, and the situation must bo faced at it is, and not as it might be. Still Keener Competition, “Present day competition is particularly keen, and there is every reason to believe that it will continue so unless there is some further disorganisation of British industry. An improved condition of international, commercial and political relations in Europe will probably bring competition frojn additional sources, in particular both Franco and Germany, and will certainly cheapen tho cost of British goods by providing wider markets, and stimulating mass production. The standard of living is certainly lower in Germany than even in Great Britain, and German competition, which is now beginning to eventuate certainly raises the Question of how it is to be met, andl, in this connection, the Government will probablv have to, reconsider the best means of preventing unfair competition from this source. “The existence of those manufacturing industries in New Zealand which are not so much tho natural result of tho development of tho country, is threatened, especially in those cases in which the entire elimination of competition,during the war brought about a large increase in the amount of capital invested in plant and machinery which is now lying idle. The Advisory Board has fully realised! the gravity of the situation and has endeavoured to keep the Government and also the public informed, but it is much to be regretted that some sections of employers, apparently do not fully realise their own responsibilities and continue to act in , industrial matters without consideration for any but what appear at the moment to bo their own immedliate interests. It cannot be emphasised too strongly that if, the naturally protected industries impose unduly high charges upon the community, nil other industries , that aro subject tp outside competition are threatened. Therefore those responsible for the conduct of such industries must avoid setting a standard of wages, and of cost, which the community canaot afford. and obviously it is to their own ultimate interest as well as that of the community that they should do so. Tariff Problems. “The tariff question requires careful thought. It is upsetting and in the . long run. impossible to have one standard of wagoj in the towns and another in the country. A higher tariff than at, present in order to safeguard those second'arv industries which have less or no natural protection would bear hardly upon tho primary industries. Manufacturing costs must therefore bo reduced in every way, and it is suggested that employers should in all oases consider (1) the wider adoption of piecework methods; (2) the most efficient methods of using, machinery and plant: (3) the creation of the greatest possible measure of co-opera-tion with their employees: and that ia all matters pertaining to industrial disputes thov should avail themselves of tho advice and services of the, officers of the Employers’ Associations and this federation. It is satisfactory to be able to renjnrt. as somewhat of a sot off to tho foregoing, that the primary producers have had bettor prices for all pro-

ducts than in the previous year, and that for the opening of the new season the outlook for prices is not unfavourable. The national income has therefore been increased and the effect of this has been marked in the very much lessened unemployment last winter as compared with the previous vear. Industrial Disputes. “Industrial disputes arising out of the exnirv of awards or agreements have in all cases during the year proved to be capable . of settlement by means of the machinery of the Indu»trial Conciliation and Arbitration Act, but unfortunately there have been six cases of a stoppage of work, although an award has been in force for tho industry affected. The seamen’s strike and the more recent trouble at the West Coast mines have been deliberate attempts to nullifv awards of the Court, and were apparently in accordance with the Alliance of Labour and the Miners’ Federation policy. Tho employers in each of these cases have maintained a firm attitude in support of tho arbitration system, and their action is heartily endorsed by tho Advisory Board. Cost of Living Legislation. “The legislation provision for the periodical adjustment of wages in accordance with cost of living figures ceases to have effect after December 31. and after that date awards will remain unaltered for their full terms unless all parties thereto consent to their being amended. There can be no doubt that the power to amend awards, given to the Court under the expiring legislation, has served a useful'purpose during an abnormal period, and there can be equally no doubt that it would have been still more useful if all employers had been able to take full advantage of it: but the necessity for any such power has now been very greatly minimised, if not entirely removed, and it is to be hoped l that it will not again arise. In industrial contracts as in all other business contracts, inviolability for the contract term is tho essence of the deal.

“From the employers’ point of view the two most important measures passed by Parliament during the last year wore the Land and Income Tax Bill and the Apprentice Bill. The weight of taxation imposed by the necessities of the war period and the three following years, was a very heavy burden for many of our industries to carry, and all will approve the action of the Government in removing some portion of the burden. The economies effected in Government administration are also to be commended as being a measure of much needed reform, and also on account of the example set the whole community. “Tho Minister of Labour has announced his intention of setting up a committee similar to that which dealt with the Apprentice Bill to consider tho subject of workers compensation, and any amendments of the law which may l>e needed. Empolyers should therefore prepare for tho sittings of this committee, carefully studying the subject of inquiry and arranging for suitable evidence to be submitted in support of their considered views.”

PRESIDENT’S ADDRESS

PROGRESS MADE DURING YEAR.

In his opening address, Mr. T. S. Weston said: “On the whole, New Zealand can congratulate itself on the progress made during the last year. Prices for primary products have been good—those farmers who were not hampered by their past mistakes have saved money and those who have made mistakes short of the irretrievable Tiave been able to hold their own once again, and in some cases make up in part thoir losses incurred in the previous two years. Probably throughout New Zealand not more than ten per cent, of the farmers were beyond recovery, and, given fair prices for the next two years, 90 .per cent, of tho agricultural and pastoral industries should again find itself on a firm basis, and any individual who does not look for extravagant profits should be content with his returns. “The outlook for some of the secondary industries is not so good. In some ‘branches—notably engineering—there has been over-development, and expensive plant and machinery has been installed to manufacture articles for which there is not a sufficiently large local market. In others, e.g., freezing works, there are too many competitors. “In general business also, one might venture to say New Zealand is. _ if anything over-engined. Competition is ‘a good thing, but too many firms means an average turnover too limited ns compared with overhead expenses, and hence is an obstacle to the general reduction of prices which would give relief to everyone. Moreover. many largo concerns have been heavily hit by fho post-war ' slump, business profts are now too small to allow of replacement of lost capital and, consequently, before stability can lie attained, reconstruction will have to bo faced. The misfortunes of the few arc always mote apparent than tho rood fortunes of the many, and the plight of these few obscures a fair survey of tho state of business in this Dominion an a whole. The income tax returns aro evidence that, there must be in New Zealand a fair volume of safe and solid business. Reconstruction Problems. “At tho same time thero is no good disguising the fact that this country hns yet a long path to travel before all post-war problems of reconstruction and readjustment are left behind. Although the Government has reduced its expenses of administration, thero is tho ever-present tendency towards renewed extravagance immediately tho pressure of hard times lessens in the slightest degree. There is also a steady and astonishing growth in locol bodies’ borrowing. Government loans, although admittedly for works more or loss reproductive, continue to be heavy, and taxation lias not yet been reduced to a limit which shows a reserve avnil.ablo to increase tho national revenue

in the face of any sudden emergency. There is a real danger if our Government is tempted to take advantage of easy interest terms and borrow heavily for extensive new public works that labour, which would bo more safely employed in private undertakings, will be diverted to public works. The proportion of our population dependent upon the continuance of these for a living will be increased. "Works which are not an immediate necessity will be undertaken and when the time comes, and inevitably it will come, when borrowing has to taper off, it will be more difficult to redistribute the population living upon public works expenditure into natural and normal avenues of employment. “It is quite clear that in the next few years the close competition between England, the United States, Germany and France will reduce the prices of manufactured articles materially—the reductions in English wages rates mentioned in the annual report show what England, already has been forced to undergo in order to sell her goods. Trade reports throughout the world show a thoroughgoing effort on the part of all rural communities to increase their production. The present high prices in dairy produce must inevitably mean bigger outputs. The best market for these is London. Now Zealand farmers, must, therefore, expect to meet greater competition, and hence lower prices. Extravagance at the present time either by the Government, local bodies, or private individuals, is much to be deprecated. Any public work, unless a necessity and "certain to pay interest upon capital in tho near future, should be avoided. Railways have been built to give districts access to markets and shipping ports. No sooner are they built and running than the districts desire to borrow "heavily in order to construct harbours. They say this is the sole business of each locality—that tho locality will have to repay the Iqan if the works are a failure. This, however, is a fallacy. No one district can be prosperous or depressed without effecting the rest of the Dominion.' The railways are now not paying interest upon their cost of construction. Why, therefore, build railways if you intend to rob them of their traffic by making expensive artificial harbours, or by permitting heavy motor traffic on adjoining roads without charging such traffic with the cost of the repairs it renders necessary to tho road. Attitude of Labour. “Labour on tho whole has assisted the country’s progress towards recovery during the year by abstaining from strikes and stoppages and by continuing to furnish steady and continous work. The longer headed of the labour leaders must have realised what the reports from all countries, except the United States, show that labour in New Zealand has suffered a less proportionate reduction in money wages than anywhere else. The tendency of money wages in New Zealand is now towards stabilisation. If the present rates of money wages can be maintained, this, taken with the drop in prices of manufactured articles and food products which seems inevitable in the future, will mean a substantial advance in real wages and a permanent rise in the standard of living in this Dominion. Rents, too, should tend to fall in,tho. future once the present activity in new bulk's*;’: begins to overtake arrears. This hnfr4>y result is, however, absolutely dependent upon two factors. Conditions of Progress. “First, employers will have to give full attention to the adoption of the most improved processes of manufacture and methods, of production and distribution practicable m tho circumstances of this country, and secondly, labour will have to furnish steady, honest and loyal effort, free from strikes and,‘f»o-s!ow’ Given these two factors progress can be mode and will be made, small at first but increasing as it goes on. One trouble is that the effective remedies aie so often slow working. Suggest such a joint effort to Labour leaders and they so often reply: ‘Well, give our men a rise in wages straight away as an earnest of good faith on your part, forgetting that you cannot eat your fruit before you grow it. Another, difficulty to face in this scheme of things is that a change of mood among either employers or men must come from within. Employers, either themselves or through the influence of their leaders, must determine to make their effort—so with the men. With labour leaders, however, the difficulty is to induce their followers to discard old prejudices and passions fostered often bv leaders as a means to their own advancement. Even if the Labour leader has the knowledge, pluck and honesty required to ask his followers not to smash their heads against a brick wall or to advise them that their employers’ tails have been already screwed to the danger point, that a further turn must inevitably mean a k’ck back —what is so often the result? The men turn their backs upon their advisors, and listen greedily to a new hot-headed'extremist who has not vet learnt sufficient to keep himself ’and his followers out of trouh o. “The great growth of population throughout the world during the last hundred 1 years has onlv been possible tbroimh the ever-increasing subdivision of industry. History shows clearly that the subdivision has enabled more months to he fed and to he fed better at that. The greater the subdivision the closer and more loyal the co-operation between the various parts must be.. The intricate inter-dependenco of the different branches of modern industry makes it very vulnerable. A strike or ‘go-slow’ in one initial industry brings lack of employment to tho workers in many others, and want to the consuming public. The likelihood 1 of such events nlono is one .of the greatest obstacles to decreased costs.. It is at this weakness in the organiation. of civilisation that", Communits and Bolshevists are continually hitting. Signs and Portents.

“Tho New Zealander, like the Australian. has grown up in what were, but a short time ago. remote stretches of eountry. He has enjoyed the most perfect freedom and security both internally and externally a man could hope for. Ho. has a new world to spread himself 'over. Consequently he cannot eve n faintly, visualise what calamities internal disorder, civil war or invasion by foreign enemies may cause. Yet there are signs here and in Australia to which every decent man who belioves in law and 1 order, in tho sanctity of tho home, in the safety of his wife and children, in honesty towards others, should nay earnest heed. The recent outbreak Melbourne shows, a minority, it is time, but too largje to contemplate with equanimity, ready to indulge in robbery and violence. Closer nt hand there is a- growth of class feeling displayed between employers and men in some of tho more militant unions, but there is the growing feeling of hostility between town and country. Our recent troubles have not bound us together. Each man’s troubles, if ho only looks close, enougly aro generally of his own making. There is no comfort. however, in blaming oneself, and it is so easy to blame the other follow. Instead cf getting together, seeking out remedies for our troubles together. endfeavouring to look at matters from the other follow’s standpoint before criticising his action, not adopting a new remedy before we aro assured that the diagnosis of a situation is accurate and comprehensive, and the remedy likely to lie practicable and useful, tho leaders of our class-conscious groups now springing up, place more reliance upon showy

catch-words, ill-considered and personal abuse. If over the a time when close and accura serration is required, thorough logical study of the past, and an entire absence of hasty and ill-consi adoption of untried remedies. « the present. , . ‘“Natural laws are working ha d remedy tho present cvite-they. u k quicker and more effectively 1 long run than man-made ones, wmcii may be the creation of a bare maj ity. Nations and individuals dim « the five years since the Armistice h. certainly not worked' as hard to as thov worked during the four and half years of war to destroy. ll»t there is much yet to be done b■ pre-war prosperity can Ibe attainea should not astonish anyone. Label and capital and country and town might well hesitate to follow leaders whose policy will widen tfie P 1 ? 8 ? lines of cleavage. During the,last live years our Legislature has done more successfully solve the problem m . dier repatriation than any other Le„ - lature on the globe.- It has .inaug ated a policy of liberal loans to meet; tho scarcity of housing, it has lessened public expenditure, and reduce taxation." and above all it has mai - tained law and order.■ Are not tlias, , after all. the main objects of Governments in times like the present and may we not. if different bodies and interests in our community concentraw their attention solely on their own immediate interests and personal gne' - ances. live to regard with anvy the present-day conditions so many now criticise, and for which every candid visitor to our country expresses bis whole-hearted admiration.”

British Delegation’s Visit. After referring to the subject of Imperial preference (as reported under a separate heading), Mr. Meston went on to say:— f “During the. year the members or the English Emigration Commission .paid us a visit. It was refreshing to. learn from tho lips of the Right Hon. Mr Wevnall that . self-interest, in .spite of what tho Communists preach, is still the dominating motive m human nature and that Whitley Council will take us but a little farther because there can bond conciliation when one side is determined to concede nothing. These are truths tvhioh can well be taken to heart by all of us. 'Their visit has brought home Ahe fact that probably the most important problem awaiting solution at the present time is the redistribution throughout the Empire of the British face. In New Zealand there is little sqope except north of Auckland and! in Otago and Southland for any sudden and extensive immigration land settlement. In Australia (notably Western Australia) .in Canada, and East Africa there may bo many avenues readily available. One of its dangers, however, is the development of big agricultural or pastoral industries without first discovering an adequate market for their products. This trap the Australian Government‘appears to have fallen, into by their encouragement of fruit' growing by soldcers settlements. Fruit has become the ding on the market there that sheep were in New Zealand before the freezing industry was inaugurated. The normal growth of an industry through individual initiative is tested step by step. New members test. tho market one by one, and if their judgment as to its potentialities is wrong they pay tho penalty themselves and lose their eapt--tai. With Government State-aided emigration schemes the progress forward is immensely more rapid—will human prescience bo able to accurately forecast the demand sufficient to meet the increased supply? The real test, of business acumen is the co-ordination of your supply to your market. It is so often easier to produce than to sell. “On behalf of the Advisory Board I have to express our very hearty thanks to our secretary, Mr. T. 0. Bishop, xo Mr. B. L Hamnißid. and the other members of tho federation staff for the extremely good work done by them during tho year. Not tho least important of the work done by Mr. Bishop was his co-operation with Labour’s representatives on the joint committee which was responsible for tho Apprentices Act. It was a constructive effort and represents a step forward. and one on which Capital anrt Labour were agreed. It is to be hoped employers will assist in making the Act a success and in providing this country with sufficient supplies or well-trained, skilled workmen. There never was a time in Now Zealand when there was more room at the, top for good men than now. and tile young man who is honest and sober and prepared to thoroughly master tho details of his craft, trade, or profession will have a clear road to ultimate success. Tho Advisory Board is also much indebted to the presidents, councils, and secretaries of local associations for their very cordial support. Tho federation is but the child of these associations ,and without them could not exist. Hence their continued appreciation is much valued.” Mr. Weston concluded! by moving the adoption of the report. Mr. Mitchhll, in seconding the motion. congratulated the president on his resume of tho world’s industrial affairs.

Mr. W. J. Hopkirk congratulated the president on his very valuable address, which was broad .and logical. They were apt to think of the present, but without vision and purview they would perish. If they were going to lie successful either in their primary or secondary industries this was absolutely necessary. They could be sure they were doing right in giving such a grand man as Mr. Weston the position ho so long and so well occupied. Mr. A. .Spencer (Auckland) also congratulated the president on his address.

Mr. Hayward (Canterbury) expressed the hope that Mr. Weston would be long spared to give such excellent reports.

The report was adopted. The remainder of the business was taken in committee.