MONEY WAGES

Dominion, Volume 24, Issue 51, 24 November 1930, Page 12

MONEY WAGES

Labour View Stated SAVING AND SPENDING Reply to Mr. Weston Taking him to task for his reference to the value of the citizen who saves his money compared with the prodigal, the national executive of the New Zealand Labour Party has issued a reply to the Hon. T. Shailer Weston’s address as president of the Employers’ Federation. “The miser who saves is at any time a more useful citizen that the prodigal who spends his money (even if he has plenty) on luxuries, amusements, and other unproductive expenditure,” says Mr. Weston, the president of the Employers’ Federation. He then holds up the light so that we may see the citizens of France, prosperous and miserly. Miserly and prosperous. Forgetting that a short time previous he had quoted the fact that wages had declined in France, in spite of its miserliness and presumed prosperity. Would he have ue emulate the French in stabilising their currency at 124.21 francs to the £l, as against 25.20 in 1914? Would he have our currency so organised as to stabilise the £1 at 4/-? That is what France did in June, 1928. It was a direct loss in property and income sustained by the entire rentier class —the owners of Government and other bonds, and the owners of mortgages, originally payable as to principal and interest in the old currencies, were forced to accept payment in the new currencies. It was a confiscation of property on a huge scale, and produced a profound disorganisation in the national life of France. Labour’s Solution. The Labour Party does not think that inflation is either necessary or advisable. It believes that the present difficulties can be solved by a more even and just distribution of the wealth produced. Accepting the progress in production of the past decade, the standard of living in New Zealand can not only be maintained in spite of reduced export prices, but given the goodwill of the wealthier section it can be lifted. Mr. Weston emphasises that a reduction in money wages is not a reduction in real wages, and then says that every effort must be made to prevent the reduced monev wage having a less purchasing power—and then reducio ad absurdum urges everybody to purchase less, because that is the only way to prosperity. His statements with regard to war-wages will not bear examination. He- says: “When money wages were raised during the war those rises were the logical result of the rise in prices of primary products.” The inference is that wages were increased in proportion to the cost of living figures. This is not correct. Not in any single year from 1914 to 1928 did the workers’ wage equal in purchasing power the amount received prior to the war. The actual index figures, taken from the 1930 Year Book, page 851, are as follows; — Index Numbers of Retail Prices, and of Nominal and Effective Male Wage Rates, 1914 and 1919-28.

time since 1914 showed any advantage to the workers, and this amounts to a fraction over 4fd. for each pound; the figures for 1929 show 7jd. in the £. The average wage of the worker in employment to-day does not exceed £4 per week. If Mr. Weston’s proposals are introduced this amount will be further reduced. Mr. Weston asserts that there is no desire to in any way reduce the standard of living, because the Employers’ Federation has realised “the advantage of the workers being well paid and contented. ’ The first step to take is for Mr. Weston to define what he considers a. reasonable standard of living. Will he also say what is a reasonable feturn on capital, and reasonable wages of supervision? With this information it would be possible to determine the best road to follow to ensure prosperity for all. The whole of the address reveals the fact that Mr. Weston is apparently ■of opinion that the workers are producing machines, and their wage payments should be measured by the commodities necessary to maintain them at the most efficient point for production, and that when commodities are in such surplus as to affect the price, the workers’ share should be reduced until the cost again balances with price. This might be effective in a nation of misers; but it does seem absurd to edeavour to solve the problem of over-production by reducing wages and purchasing power. With regard to Mr. Weston’s statement re the capital of companies it is only necessary to point out that the paid-up capital of one Insurance company is shown as £1,031.640, whereas the actual cash invested is £67,686 only. The dividend last year was 2/7 per share, or £133,254, just on 200 per cent, on the cash invested in the company. The capital of another company in the freezing industry is shown as £460,000, whereas the actual cash paid up bv the shareholders is £46,000. The dividend paid bv this company last year amounted to £51,750. A mining company is paying dividends on a capital of £lOO,OOO, of which less than one half has been invested by shareholders. The profits last year exceeded the total capital invested. “Toll of Profits.” The toll taken by these abnormal profits, dividends, rents, etc., is shown by the figures from the last return of incomes when comparing 1921-2 with 19289. Incomes from investments have increased from £4,177,203 in 1921-2 to £11,631,227 in 1925-9. If sacrifice is essential it should first be made where it hurts most, and in this connection it is worth mentioning that in 1928-9, according to the income tax returns, 6387 individual persons divided £11,449,281 between them. Mr. Weston is an advocate of discipline. He believes that disclipline pushed to harshness results in the least suffering. Would it be correct to say that in no country in the world during the past five years have the workers co-operated with the employers to a greater extent than in New Zealand? Mr. Weston’s response to this co-opera-tion is to advocate reduced wages. The worker must not dispute in future. He must practise self-denial, and accept what the employers will give him. If there is need for care in expenditure; if there is need for deprivation; if it is essential to cut out all unproductive expenditure, even though it closes all shops and distributing agencies other than those selling food and clothing, then it is hardly wise to come to the workers and attack their wages. They always have to be careful in expenditure—they are always short of some of the necessities — they have already cut out the maximum of unproductive expenditure (but some of them- —shame, says Mr. Weston —still go once a week to the pictures). If there is need for miserliness, then let’s have it all round. Find out what everyone requires —the essentials —let these be first assured to all willing to work if able—-and then if there is any surplus—well. Mr. Weston and his friends may have it. If Mr. Weston and the other members of his federation will set the standard they desire the citizens to follow, and will pledge themselves not to exceed that standard —measuring their income and needs with that of all others, then the Labour Party will urge the workers to emulate them, but while they have cake ami two suits, they shouldn’t ask mother to watch the butter and put a patch on the hole in Harry’s pants. Mr. Weston may be left with his admiration for the miser, and all the misery and miserableness associated with the word. “The miser, poor fool, not only starves his body, but his own soul.”

Retail Nominal Effective Year. prices. wages. wages. 1914 ... 1000 .. . 1000 .. . 1000 1919 ... 1507 .. . 1304 .. . 832 1920 ... 1770 .. . 1454 .. . 819 1921 ... 1774 ., . 1503 .. . 881 1922 ... 1597 .. . 1535 .. . 901 1923 ... 1580 .. . 1512 .. . 957 1924 ... 1004 .. . 1533 .. . 950 1925 ... 1022 .. . 1550 .. . 959 192G ... 1028 .. . 1579 .. . 970 1927 ... ■ 1015 .. . 1004 .. . 993 1928 ... 1018 .. . 1051 .. . 1020 Iii 1928 effective wages for the first