Evening Post. FRIDAY, MARCH 8, 1929. THE WAGE—AND THE WORK

Evening Post, Volume CVII, Issue 55, 8 March 1929, Page 8

Evening Post. FRIDAY, MARCH 8, 1929. THE WAGE—AND THE WORK

"Real or effective wages have risen in Australia and are now about 10 per cent, above pre-war rates, whereas in New Zealand they were in 1927 still 3 per cent, below pre-war rates." This statement by Professor Copland that wages—real wages — are well above pre-war level in Australia, and somewhat below prewar level in New Zealand, may come as something of a surprise. Most people knew there was a gap between the two countries, but hardly realised its dimensions, nor could many people have had any clear-cut idea as to where the spirit-level of prewar rates would cut across the rates now existing. The mathematical picture presented by the Professor of "10 per cent, above" on the other side of the Tasman, and "3 per cent, below" on this side, is therefore of much interest to the student of comparative statistics. How far it carries us as a test of economic stability, or of comparative economic advantage as between Australia and New Zealand, is another question. When that question is raised, enters at once the factor of productive value, and we find Professor Copland reporting that:— In Australia real wages have been higher in recent years than the index of productive activity published by the Commonwealth. Statistician would seem to justify. In New Zealand, on the other hand, movements in real wages have not moved far from movements in the index of productivity. In short, measured by the pre-war wage, the Australian real wage is 10 per cent, up, and the New Zealand real wage is (or was in 1927) 3 per cent, down; but while the New Zealand real wage is not far from the productivity factor, the Australian is not justified by that factor. In other words, approximately the New Zealand worker has been receiving in real wages what production earned. The Australian lias been receiving more. At this point Professor Copland links with the British Economic Mission, which, both through its official report and through the later public utterances of its chairman, Sir Arthur Duckham, has emphasised that Aus-" tralia must reduce her costs of production. Her costs are regarded as inflated, and part of the inflation is held to be in wages. But while the statistical evidence of Professor Copland is in line with the evidence on which the Mission bases its deflation advice, yet careful note should be taken of the following concluding sentence in Professor Copland's final article, published in our news columns to-day:— * It is probable that New Zealand has proceeded farther in her post-war wage adjustments than Australia, and that in this respect her industry has some advantage, but it has. yet to be seen whether Australia cannot permanently support her present high real wages. Herein the Professor holds out the hope that it may yet be possible for Australia to economically sustain real wages that are 10 per cent, higher than pre-war (while New Zealand's are somewhat lower) and which moreover are higher than "the index of productive activity published by the Commonwealth Statistician would seem to justify." One is forced to the conclusion that, unless the unfortunate statisticians are to be found at fault, Australia is being encouraged to hope for the accomplishing of a rather remarkable feat. If she succeeds in "permanently supporting" her high real wages, and provided she succeeds by bringing the productivity factor into line with the real wage-level, she will have achieved an economic accomplishment. But it will not be economic unless wage and production do come into line. The latter must go up or the former must come down. When the Professor hopes that the wage may remain high he surely postulates that productivity must in that case go higher. Only in that way could he and the Economic Mission finish on the same ultimate platform. Already in Australia the industrial war over deflating measures applied to the labour section of production costs has begun. If the beginning made by the employers—with the authority of the Arbitration Court, in the timber industry, and with or without such authority, in the coal industry—proceeds to its' logical conclusion,, wages must come down. But Australia is a peculiar country, both politically and economically; and the end of this fight at the crossroads is still not visible. Most of the Australian statistical data supports the inflation idea, and yet Professor Copland finds that, Australia's high tariff notwithstanding, "the recorded statistics of retail prices show that the cost of living has risen less than in New Zealand. Whatever the reason, there appears to be some advantage for the Australian worker." It is statistical results like this that cause 1 the' statistician-economist to hesitate to be didactic. But the New Zealand protectionist may have no such academic qualms. Professor Copland's finding may provide him with someueeded ammunition,