HOURS AND WAGES

Evening Post, Volume CXVI, Issue 33, 8 August 1933, Page 8

HOURS AND WAGES

CHANGE OF POLICY

LABOUR PROPOSAL

BACK TO 1931 LEVEL"

REQUESTS TO CABINET

A proposal that the Government should immediately adopt a policy making for higher wages and shorter, hours was placed before the Minister of Labour (the Hon. A. Hamilton) today by a deputation representing the New Zealand Alliance of Labour. It was asked (1) that wage rates should be increased immediately to the 1931 level in aH industries; (2) that the weekly hours of work should be reduced to 35; (3) that the control of currency and credit should be taken over by the State; and (4) that the Government should embark on a vigorous public works policy at 1931 rates of pay. While agreeing to place the proposals of the deputation before his colleagues, the Minister said there were some points in the arguments submitted to him on which he would find it difficult to convince himself. It appeared to him that it might be difficult to put the proposals of the deputation into effect without some form of inflation, and the Government, while just as'anxious as the Alliance of Labour to set things right, had to be sure it was doing the right thing. The deputation was introduced byMr. B. McKeen, M.P.-for Wellington South. Tho only speaker on behalf of the Alliance of Labour was Mr. J. Boberts, who' said the alliance wanted to draw the Minister's attention to the failure of the policy which had been pursued fey his Government, and the urgent necessity of altering that policy so far as wages and hours were concerned. If the Government did not alter its •policy,.there was a distinct danger of unemployment becoming worse, of price levels being further lowered, and of New Zealand being landed into national ■bankruptcy. In 1931 when the Government reduced tho wages of civil servants by 10 per cent, and practically directed the Court of Arbitration to do the same thing to other sections of Workers, it was claimed that the wage reductions would lead to greater employment. On the other hand, the representatives of the employees claimed that wage reduction' would lead to greater ■unemployment, as the purchasing power of the workers would be immediately lowered. The Court of Arbitration reduced wages by 10 per cent, in June, 1931. At that time the registered unemployed numbered 25,000, but in two months the number jumped •to 50,000, and within a year to 70,000. Those, wero facts that could not be denied. DEFINITE INDICATION. •Mr. Roberts claimed that the facts he had related were a definite indication that the policy which had .been followed by the Government and by the employers was wrong, and that the only people it benefited were the financial institutions here and overseas. The local manufacturers and retailers were losers,- and thousands of men and women who could have been employed if the wage level of ' 1931 had been maintained were thrown out of work. The question would be raised: What of the producer, for the overseas markets and .the price levels for what we sell overseas? Tho trouble was that New Zealand had been accepting as a truism an economic fallacy preached by some economists in New Zealand, that tha national income of the Dominion depended solely on the prices obtained overseas for the commodities produced. Worse than that, New Zealand had tied its currency .to overseas price levels. For many years the exports from New Zealand and fue imports into New Zealand about balanced. If they included the money paid for debt services in Great Britain with the imports from that- country, it would be found that for many years the .imports from Great Britain had been greater tha» our exports to that country. The people of New Zealand, in the final analysis, paid for those imports. . . About twelve months ago they had been informed that the Ottawa Conference would alter things, and since then they had been led to pin their faith to the World Economic Conference. Had the Ottawa Conference improved the position in New Zealand? He would like to know how employment had improved or how business had improved. Certainly they had not heard anything about quotas until after Ottawa. Now they all knew that tho World Economic Conference had been the greatest failure in history. INSUFFICIENT CURRENCY. "I have referred previously to the policy of New Zealand tying its currency to overseas price levels," said Mr. Roberts, "and this has resulted, of course, in a shortage of circulation currency in New Zealand. In other words, we have not sufficient currency in this country to enable the workers to apply their labour .to the natural resources in order that they may produce the commodities necessary for their maintenance. We have allowed the banking institutions and currency to rule U3 to the extent that when the commodities "which we produce are being sold in tho overseas market at ruinous lowlevel prices, the'people of this country can't purchase them, and this economic paradox goes further, for it impliss that if the prices of the commodities rose to a high level overseas, then we could purchase them in New Zealand. This is' so absurd that further elaboration docs 'not seem to be necessary. . The New Zealand Alliance of Labour is of the opinion that the Government must of necessity control the eurreney of this country. The Government must control currency and credit, for under the modern complex social order the welfare of the people depends largely on these two great essentials. ■ Mr. Roberts declared that there was no necessity for the raising of an internal or an external loan. The Government could issue Treasury notes to the amount necessary to give purchasing or consuming power to tho whole of •the people of New Zealand. Unless that purchasing power were increased it was impossible either to raise price levels or restore prosperity. Whether the Government liked to admit it or not, the Government's deflationary policy had been a failure. Controlled inflation must take the placo of imposed deflation. EXCHANGE RISE A MISTAKE. The Alliance of Labour believed that a mistake had been made in increasing the exchange rate By 15 per cent. That was inflation to assist one section of the community.. Tor many years New Zealand butter was from 4s to 8s a, cwt

above Australian butter, but as soon as the exchange rate went up New Zealand and Australian butter reached the same level. TheTe was a better way of overcoming the farmers' problems than by manipulating the exchange. If the State controlled currency and credit in New Zealand the farmers could be guaranteed price levels for what they produced, but those price levels must always depend on the purchasing power of the great mass of people within tbe Dominion. It was. impossible to increase the price levels of commodities without first increasing wages and salaries. The low price • levels of the world today were due to two things— (1) a reduction in the general wage level of all workers, which assisted to create unemployment, and (2) the low consuming or purchasing power of the unemployed workers, which lessened the demand for the commodities when they wero produced. If that was so, then the remedy was easy. Theyinust first of all mako the currency available that would increase wages, which would in turn give more employmenff. If currency and credit wore available in New Zealand most of the workers would be absorbed info normal industrial occupations. In conclusion, Mr. Roberts submitted the following proposals to the Minister.— (1) To increase wage rates immediately to the 1931 level in all industries. (2) To reduce the weekly hours of work to. 35. (3) That tho control of currency j and credit bo taken over by tho State in order that tho money and credit to carry on this work shall bo available. (4) That tho Government embark on a policy by which employment will bo found for the unemployed workers at rates of pay equal to the award rates paid in 1931, these workers to bo employed on public works now held up and such other undertakings as the Government may determine. MINISTER'S REPLY. In commencing his reply, the Minister said it did not appear to him, that the deputation had asked him any specific questions. Mr. Koberts said that the deputation 'wanted the Minister to put tho matters raised before Cabinet. They felt that if the Minister did that ho would, have the co-operation of the people x>£ New Zealand. Tho Minister: I will be quite prepared to put your suggestions before Cabinet and discuss them with my colleagues. You have taken considerable time to prepare your caso and it will tako me some time to carefully read the notes of what you have said, so' it would not do for mo to start a debate with you at the present juncture. I noice that Mr. Koberts says such a policy as ho enunciates would secure the co-operation of the whble of the people of New Zealand. Well, if that is so, the job is done. But can you get that co-operation? Mr. Boberts: You got it during the war, because everybody was getting enough to live on. Mr. Hamilton: That was a time when patriotism was a big factor and price levels were rising. lod&y we are in the opposite position. ' Mr. Boberts: Very well, we will take thirty years ago. The people of New Zealand-wero getting, a living, -and, goodness, gracious, you got -wonderful co-operation then. They turned New Zealand from a jungle, into a fortilo country. DIFFICULT TO BELIEVE. The Minister said it was for the deputation to convince the people of New Zealand that their policy was tho right one."For myself," he said, "I have great difficulty in making myself believe that this country can control itself internally without being affected by conditions in the outside, world. I would also have great- difficulty in making myself believe that we can get back to the 1931 level. I admit that things have not been working out quite rightly those last few years. You might be able to say what the cause for that is, but what is the cure is not just so easily stated. I am bound to say that it appears to me that in some of your statements you are mixing up cause and effect." • Mr. Hamilton said he believed there was a gool/deal that could be said for the control of currency, and credit, but he was bound to say that it would be difficult not to associate tho deputation's policy with a policy of inflation. Mr. Boberts: It is controlled inflation; I admitted that. THE RIGHT THING. The Minister said he would bring the proposals before his colleagues, who were just as anxious to do the right j thing as anybody. They wanted to bo sure, however,, that what they did was the right thing. Mr. A. Cook: Do you admit that the I Government's present policy is wrong? The Minister: It would be pretty difficult to get a Minister to admit that. I am not saying that the Government's policy is wrong, but J. do say that the state of the world is not as happy as it might be. • Mr. li. Glover: Will you say that the policy of reducing wages has been a huge success? The Minister: I-won't admit it is the huge failure that you people say it is. Mr. Glover: You won't admit it is afailure. Tho Minister: No. . Mr. Glover: Then wo still have a long way to go. Tho deputation then withdrew.