INCREASES IN WAGES

Evening Post, Volume CXVIII, Issue 8, 10 July 1934, Page 8

INCREASES IN WAGES

EMPLOYEES' POLICY

EXPORT PRICES TOO LOW

THE FACTOR OF COSTS

On the ground that costs would be unduly increased, that unemployment would be accentuated, and that the position of those in employment would be improved without any benefit to those out of work, the New Zealand Employers' Federation opposes increasing wages at the present time. In an interview today the secretary of the Employers 3 Federation, Mr. T. O. Bishop, said the general question of wage rates had been given very careful consideration within the last few weeks. The Advisoiy Board had consulted the several branches of the federation and affiliated bodies, and thr definite and considered opinion of the federation on the wages question could bo given. "In 1931 the federation submitted a case to the Court of Arbitration," said Mr. Bishop, "in support of an application for a general order reducing -wage rates. That case was based wholly upon the fall in the prices of our exportable commodities and the great disparity between.our export price levels and our internal prico levels. "It was shown that wo export 97 per cent, of our wool, 77 per cent, of our butter, 91 per cent, of our cheese, 51 per cent, of our mutton, 93 per cent, of our lamb, and 23 per cent, of our other meat, beef, pork, etc. "The sudden fall in the prices of those exports had resulted in the purchasing power of exports in New Zealand being reduced to 58 per cent, of what it had been in 1914. In other words, our local market for goods and services other than exports had been lost to that extent. "In consideration of the position disclosed his Honour Mr. Justice Frazer said in his judgment: 'I am convinced it is economically impossible to maintain money wages at their present level.' "If the circumstances of 1931 still prevail substantially today the time has not arrived when it is economically possible to restore. wage rates to the level ruling prior to May of 1931. Unfortunately that is the case. The Monthly Abstract of Statistics for May sets out the index numbers for wages, retail prices', and export prices as follows:— Base, 1914 3000 Wages, May, 1934 1362 Retail prices, May, 1934 .... 1288 Export prices; May, 1934 .. 948 "While there has been an improvement in the relative value of exports since 1931, the disparity disclosed by these figures is still too great, and until it is removed trading conditions must remain unsatisfactory. FEDERATION'S POLICY. 'The following resolution has been adopted by tho federation ana expresses the present policy:— In view of the following facts— (a) That the cost of living rate lias fallen since tho commencement of tho slump to a greater extent than wage rates with the result that thoso in permanent work are better off than they were. (b) That the unemployment figures are still very serious. (c) That tho export price level is still far below the cost of production—an increase of wage rates would result in • (1) improving the position of those in employment without benefiting the unemployed; (2) increasing unemployment; (3) further depressing our export and other industries by increasing their costs. In the opinion of the federation the statement so frequently heard at present that raising wage rates would rostoro tho country to prosperity is a fallacy. '.'The wages of all those members of the community who depend upon our export industries are determined by overseas prices and are entirely outside our control. If the Vages "of all others in the community woro raised the cost of their production would rise also and there would follow a_ decrease in consumption by one section of tho community sufficient to offset any increased consumption by those drawing the higher rates and the disparity between the price levels above mentioned would be increased rather than diminished. NOT A LOW-WAOE POLICY. "Tho policy of the federation is not a low-wage policy. It is recognised that wages should be as high as is economically possible, but under present circumstances the need is to get costs into lino with prices, and that- could not be done in conjunction with wage' increases."