INCREASEP COSTS

Evening Post, Issue 30, 4 August 1936, Page 10

INCREASEP COSTS

EFFECTS OF NEW LEGISLATION

BURDEN ON PUBLIC

(By Telegraph.—Press Association.)

DUNEDIN, August 3.

The general public has no doubt already realised that the new legislation ! which is being placed on the Statute Book is going" to increase the price of many commodities, but perhaps it has as yet only a hazy idea of what these increases may be. As a matter of fact there can hardly be any definite information on this important feature of the economic life of the community until the position becomes more settled. It is interesting nevertheless to read what the manager of a leading local company manufacturing clothing, partially, and wholly completed,, has to say regarding the increased costs to be incurred by his business with the restoration of wages to the 1931 level, the effects of. amendments to the Factories Act, and the introduction of the 40-hour week on September 1 next.

The New Zealand manufacturer was, he said, faced with increased costs to an extent unprecedented by any one rise in, the previous costs of manufacturing. The rise in costs in his company due to the increase in direct wages in ; the factory represented an increase of 14.62 per cent. In June last 48.75 per cent, of this company's factory expenses were wages, but with the above increase . this percentage would rise to 55.28 d. Its September tactory wages would represent an increase of 30 per cent, over the same number of employees as in June last. Not all the products of this company were manufactured into clothing, only half being in the form Of finished garments. The other half was sold to the trade, which in turn expended a considerable amount in wages in completing the products into saleable condition for use by the public.

"It will be seen that if this company completely manufactured. all its products into'garments, the increase in factory costs would greatly exceed the 14.62 per cent. In addition th 3 extra costs of purchasing local raw materials, together with the rise in . marketing costs, will add further to the selling price of this clothing," said the manager. "The industry concerned does not view its future prospects sanguinely as on account of overseas competition it is unable to raise prices sufficiently to reimburse itself fully to the extent of its additional costs. Should the Arbitration Court raise the basic wage and increase the provisions under the award our industry fears the possibility of further increasing its selling prices, and as a result greater trading difficulties will be created." . ,