DEFLATION AND WAGES

Evening Post, Volume CIII, Issue 13, 17 January 1922, Page 6

DEFLATION AND WAGES

The Arbitration Bill, perhaps the most important piece of policy that the Government has introduced this session, sets a course of action to be followed by the Arbitration Court during the *deflation period. The Bill brings the existing tentative arrangements for re-muneration-fixing to a conclusion by the end of April, and it provides that the standard period by which the movement of the cost of living shall be measured thereafter is the six-monthly period that ended on 30th September, 1920. The clause laying down this basis of procedure reads as follows:

The Court of Arbitration may, as Boon as conveniently may be after Ist May, 19212, and as soon as conveniently may bo after ( lst November, 1922, proceed to ascertain $he rate of increase or decrease in the cost of living as on 31st March, 1922, and as on 30th September, 1922, respectively, as compared with the average cost of living for the six months ended on 30th September, 1920, and may by general order increase or reduce the rates of remuneration pay: able under the provisions of any award or industrial agreement as it consider just and equitable. Taking as a base the average cost of living fpr the six months ended on 30th September, 1920, the Court" may " ascertain how much the cost of living is rising or falling, and "may,'"' by a general order, lift up or down the rates of remuneration in the various awards. The quotations are put in to emphasise the permissive character of the proceeding. It is important to note that the clause does not-say that the rates of remuneration shall be moved in exact proportion as the ascertained cost of living moves. The Court, having informed itself as to the cost of living movement, may alter the rates "as it considers just and equitable." In other words, the Court has full discretion, and is not a mere registering machine by which movements in the statistically estimated cost of living are automatically reflected in rates of remuneration.

What is the cost of living and how is it to be measured? "We have not before us a copy of the Bill, \but, so far. as published summaries go, it does not appear to prescribe how the cost of living shall be' estimated. ..But the Bill ordains thai " references to the f cost of living shall be deemed to import a reference to a fair 'standard of living for the workers affected by any award or industrial agreement or by any order of the Court made under this section." This generalisation does not encourage any hope fnat the" Government seeks to place measurement of cost of living on the plane of-exact science. As "the expression ' rates of remuneration ' includes basic rates of wages and bonuses," the new readjusting powers of the Court evidently extend from base to pinnacle of the wage-structure. It is shown in the foregoing paragraph that, the Court " may " ascertain the cost of living movement and " may" in-, crease or reduce rates as it thinks equitable j but it " shall," in making any general order as prescribed, consider the economic condition of industries and trade. Here is the clause governing that part oil the consideration:

The Court; in making such order, shall have regard to the economic and financial conditions affecting the trade and industry in New Zealand and all other relevant considerations, and may make such increase or reduction as it thinks just and equitable, having regard to a fair standard of living.

This discriminative use of the verbal auxiliaries apparently meansl that the Court may f6TIow the statistician's index figure, but must not ignore outstanding signals of economic distress. The phrase " fair standard of living " is also' .used to qualify a clause under which the Court may amend a general order in particular directions.

A good deal of interest will be taken in the Government's attempt to deal with the anomaly that, under the present' coni&itu-

tion o:E the Court of Arbitration, big unions that ignore the Court, or do not appear before it, have sufficient voting power to control or to dominate the election of, the workers' representative on. the Court. The principal Act is amended to provide that in the selection of a nominated member to sit on the Court no union shall have more than three votes. The old law gave a union one vote for each fifty members. AnotEer clause provides that the Amalgamated Society of Railway Servants (which does not come under the Court) shall hot have power to vote for the appointment of a member of the Court. In drafting this portion of the Bill, the Government had the choice between (1) shutting the door of the polling booth to unions that do ntfS'appear before the Court, and (2) admitting them on a limited instead of a numerical franchise. The Government may have had reasons for preferring the latter plan to the former. Insurgent unions might defeat an exclusionist enactment by making some technical use of the Court, but there would seem to be no possibility of their evading the limitation of voting power. It is true that a union Is not morally entitled to vote for a representative on a tribunal that it purposely avoids; but such a union may, in time, change its anti-Arbitration Court policy, and it; may be argued that such a change in mind is more likely to be consummated, if no barrier is placed between insurgent unions and the Court. Anyway, for better or worse, the Government has chosen the plan of allowing no additional votes (above a limit of three) on account of membership.

Should one of the representatives on. the Court resign, the Bill provides that the Governor-Gen-eral may replace him with his elected deputy. It is not' quitie clear how far this clause goes, and whether it enables the Government to deal satisfactorily with the position that would arise if an elected representative were to " strike on the job." We have left ouraelves insufficient space-to deal wi(;h one of the thorniest parts of the Bill, in which penalty is provided against anyone " who dissuades or attempts to dissuade " two or more' workers, or an employer, from working under an award. To take power to fine a person £10 or more, for persuading somebody else not to work or not to employ, appears to be' saping close to the wind in the matter of individual liberty. This part of the Bill will require a great deal of thinking over.