Evening Post. MONDAY, APRIL 18, 1921. UNECONOMIC WAGES

Evening Post, Volume CI, Issue 91, 18 April 1921, Page 6

Evening Post. MONDAY, APRIL 18, 1921. UNECONOMIC WAGES

Industries have been producing at a price which the consumers are. no longer able, or no longer willing, to pay, and the world is faced with the problem' of how to lower the cost of production. To secure this result, industries need cheaper raw material, cheaper fuel or power, and cheaper labour. The cheapening of raw material is secured mostly by the operation of the law of supply and demand, provided that such operation is not disturbed by the action of capitalist combines or rings—a development which Governments seek to curb by anti-profiteering laws. The cheapening of labour is also secured ultimately by the operation of the law of supply and demand, provided that such operation is not disturbed by the action of labour combines or unions—a development which Governments sometimes seek to control by arbitration or conciliation machinery, anArwhich, in any case, they watch vigilantly. Sometimes the cheapening of raw material and other commodities is handicapped not only by combined action on the part of holders thereof, but also by restrictive action on the part of the workers engaged in its production. So it will be seen that the cheapening of material-cost anS labour-cost in industry, against the will of the capitalists and workers whose profit or whose wage come out of that cost,^ is necessarily attended with f~" tionf The British woollen manufacturer, for instance, is faced with the problem of producing, for the striking consumer, a lower-priced article. The means of reducing the price he must find either in his own profits (current or accumulated), or in paying less for his labour, or in paying less for the farmer's wool. Of course, the woolgrower and the worker object, and no manufacturer likes to dive into his own •profits. Hence arises the effort of the wool-grower to hold his wool until he gets his own price; also the effort of the holder of dearly-produced woollen wear to hang on until he also receives the price he. wants. The 'woollen manufacturing interest assumes the attitude of a "bear" to the wool-grower, and a "bull" to the consumer. And the consumer, 'noting this and similar inconsistencies! undermines the whole "bull" fabric by restricting his buying.

It follows, from what, has been said above, that the interlocking of industries is such that a high labour-cost in one industry, producing for a secondary industry, may mean that no margin is left for a high wage in the latter industry ; and if the workers in both industries have their way, tho result may be the Joes of consumption, with its, corollary of short time or unemployment. (And, of course, the game disaster might follow the artificial up-holding- of mate-ial-cost also;) In this industrial chain of cause and'effect; wool is not so important as coal. The lowering of cost of production—essential in the manufacturing world—must start with coal, the great fuel and power, the basis of industry and transport. Unfortunately, in coal, unlik« hydro-electricity, the kb-our-cost of production is proportionately high, the labour employed is excessively militant. Nothing is more oertain than that tho price of coal, and the cost of producing coal, including tho labour portion of that' cost, must be reduced. But how can tha amount of reduction be fixed without calamitous strikes? Some mines are rich, some poor. If the employers and employees of each mine were to meet and were to consider what pice the coal can iconomically bring in open competition, and what would be a fair wage or piece-rate based on that price, a business agreement might easily be arrived at. But the British miners demand a pooling as between the poor mines and the rich ones. It is at this point that, in %r. Lloyd George's view, they step out of business and into politics. There would appear to be at lea ß t three courses open: (1)- to fix the miner's wage or piece-rate on the basis of the economic gelling price of each mino or each group of mines under one ownership—i.c;, the business way; (2) to try to arbitrarily fix a, national selling price—which appears to be impossible and a national wage or piece-rate, and to let the mines that cannot fulfil these terms be abandoned; (3) to fix a national wage by means of pooling the financial affairs of the mines, so that the poorer may travel on the shoulders of the richer. An adoption of the pool idea as a temporary or wartime measure, with tho State behind it, establishes no precedent whatever for the industry as a permanent peatfe-time concern, privately owned and unsubsidiaed. In fighting for the pool the miners are fighting for something that is inconsistent with unfettered private enterprise, and that is consistent only with a single ownership' by the State; therefore Mi 1. Lloyd George spoke merely the candid truth when he said that the object of tho miners' fight -was political and that it was an attempt to employ direct action to enforce a species of nationalisation. The allies of jthe miners;—that is, the transporters and railwayman—have boon much divided as to whether they should join in a fight for n pool as a step towards eliminating the employer and continuing a wage that some mines ■ are' economically unable to pay. This division of opinion was given a chance to bliow itself when the miners' secretary, Mt. Hodges, proposed to divorce the vag«s questioi from the pool queiition, and to hold a conference of the parties "to discuss the question of wages separately and immediately." Mr. Hodges's step"-over from politics to business was hailnd by the leaders of the transporters and railwaymen as an escape - from a dilemma. By .the miners' executive it was regarded as a surrender, and was repudiated. Thereupon the leaders of the transporters and railwaymen withdrew their strike ordors. Mr. Hodges had, consciously or unconsciously, applied the acid test. With tlio Triple Alliances the pool is dead.

•V wage thai is higher than is warranted by the economic value of the coauaodi^ «cbduc«d i* •» unaemwrnio

wage. Its natural tendency is to destroy sale and therefore production; its action is suicidal. It might be buttress" eel by a pool, but, in the absence of agreement among owners, only a State pool is practicable; and at best a Stato pool is a gamble, and not one to be enforced by unionistic warfare. Anyone who has studied political management, State ownership, State subsidies, etc., would hardly recommend the British Government to take over the coal mines at this juncture. In resisting an industrial warfare, carried on with that objective, the Government is doing its duty, and the leaders'of the transportera and railwaymen have done well to dissociate themselves from such warfare. The way is still open to negotiate for fair piece rates.