The Dominion TUESDAY, DECEMBER 2, 1930. WAGES ON RELIEF WORKS

Dominion, Volume 24, Issue 58, 2 December 1930, Page 10

The Dominion TUESDAY, DECEMBER 2, 1930. WAGES ON RELIEF WORKS

Already attention is being directed to th e Unenipioyment Board’s decision to base its subsidy on a wage of 14/-ai day. Al hough the decision may have been safeguarded by the condition that t was not to be considered as a precedent, it is almost inevitable that it should be so regarded. It is therefore important, as was remarked yesterday that the Board should settle this policy matter as soon l4- a day is too much or too little.to pay on relief works continues to be the subject of pronouncements by various bodies From rural interests have come condemnations of the rate as too high and as likely to divert labour from the farm to relief works. On the other hand the secretary of the General Labourers Federation, Mr. Butler, contends that the rate is too low and will tend to depress wages generally. . . . . To arrive at the truth as between these two viewpoints, it is necessary to consider for a moment the purpose and effect of relief works. They are started to make work for men who otherwise would be out of employment and therefore a drug on the labour market. Thus their effect is not to depress wages but to take some of the weight off a glutted market. In fact relief works constitute an artificial interference with the law of supply and demand by reducing the over-supply of labour and lessening the downward pressure on wages. . , , , Private organisations, local bodies , and the Government, by instituting relief works, are at the same time granting supernumerary moneys to swell the national wages fund. It is as if they weit holding some of the labour supply in a pool off the market so that the remainder could command higher prices or wages. To argue, therefore, that relief works at 14/- a day will tend to reduce the general wage level is nonsense. It is the outside support thus given to the market that prevents a collapse and immediate readjustment on a lower level. , Now the resources of the Unemployment Board are limited by the Act to the receipts from the levy plus the Government subsidy of equal amount. Let it be supposed that, after providing for its more constructive activities, the Board possesses 500,000 for wages on relief works. If it pays 14/- a day it will be able to provide about 700,000 days of work but if the rate is reduced to 9/- for single and 12/- for married men there is money for about 950,000 working days. The spread is increased by over 33 1-3 pet cent, and the strain put upon ordinary channels of employment is reduced correspondingly. Besides making the money go further, payment at a lower scale on relief works has other practical advantages that should appeal to the business instincts of the Board. For instance, there is the farmers’ argument that the rate should not be fixed so high as to attract men from private employ. If it is fixed above a certain level it not only adds to the Board’s burdens numerically by attracting workers but it also lengthens the time men will stay on relief works because there is no inducement to seek jobs elsewhere. Meanwhile private employers, and particularly farmers, may be prejudiced because they cannot hire labour at wages they can afford to pay. This result in the long run would seriously affect the primary industries on which we are all, not excluding relief workers, almost wholly dependent. In brief, there are common-sense reasons why wages should be made less attractive on relief works than in private employ. The limited funds available would go further thus giving the maximum support to a flooded market; men would not be attracted from other jobs and, when compelled by necessity to go on relief works, they would make their stay as short as possible. In fact, relief works should remain true to name, representing not permanent Jobs for workers but a stop-gap until something better can be obtained.