BASIC RATES OF WAGES

Evening Post, Volume CXXII, Issue 18, 19 October 1936, Page 10

BASIC RATES OF WAGES

ARBITRATION COURT'S TASK

CASE FOR WORKERS TAKEN FIRST

The important task of fixing the basic rales of wages for adult male and adult female workers employed in any industry to which > any award or industrial agreement relates faced the Court of Arbitration when the Wellington sitting of the Court opened today. It ' had been generally anticipated that the hearing of the submissions and evidence tendered on behalf of the employers and workers of New Zealand would take from a week to ten days, but according to the intimations made to the Court by the representatives of the ' respective parties the proceedings will not be unduly protracted. , The basic wages asked for by the employees were £6 10s 3d a ' week for males and £3 10s a week for females.

LHis Honour Mr. Justice Page presided; and associated with him were Messrs. W. Cecil Prime and A. L. Monteith.

v Mr. J. Robinson, Dunedin, and Mr. J. Roberts, Wellington, appeared for the workers, and Mr. T. O. Bishop, secretary of the New Zealand Employers' Federation, for the employers. Mr. A. Wi'Nisbet was present to watch proceedings on behalf of the Wellington Manufacturers' Association.

.' Hts: Honour dsked Mr. Robinson if he cpuld give the Court an idea of how I6ng-the inquiry should take because the .Court had a number of fixtures to Wake for the ordinary list of cases. His Honour said he desired to ascertain as nearly as practicable how long the Court -would be likely to be engaged oyer this matter. ■

i'Mr. Robinson said his prepared statement.would take about an hour to read and Mr. Roberts's about an hour and a;half." The workers proposed calling one. witness, Mr.E.. Warner, but he would not be available .until tomorrow morning. Their suggestion was that tlte Court might adjourn in order that the members of the Court would have the" .opportunity of considering the statements ■ before, the evidence was taken.' "With the calling of Mr.1 Warner fhe' workers' case would be finished slid how long the inquiry would last after that remained with Mr. Bishop. " Mr.-Bishop said'he should imagine that thewhole of'the employers' case, including : the taking' of evidence, tyou'ld not last-more than two days. vMr.'Nisbet 'saioV he did hot propose td submit any evidence. He was only present to- watch the proceedings. "In reply to another question Mr. Kobinson; said that Mr. Warner's evidence would occupy about an hour. ; INTENTION OF LEGISLATION. .'ln opening the case for fhe employees, Mr. .Robinson outlined the provisions of .the Industrial Conciliation and Arbitration Amendment Act, 1936. He said that the new legislation empowered—nay, commanded—the Court to provide a basic wage sufficiently high to provide a fair and reasonable standard of comfort for a family of five persons. It was submitted that in-fixing that wage the Court must consider the duty of providing a fair and reasonable standard of, comfort for a family of five persons as one of1 "overriding" consideration. The word "overriding" had been taken item ■the" memorandum of the Court attached to. the general- order of 1931 reducing minimum rates of wages prescribed in awards," industrial agreenlents, arid apprenticeship orders. In his judgment in that case, the Judge h^d explained how the Finance .Act of 1931 had'omitted all direct reference to the cost, of living and a living wage and had directed the Court to take into account' the economic and financial: conditions affecting trade and industry- ; in- New Zealand, and. all other considerations which it deemed necessary. The Judge had interpreted the v Act as ■ making the economic and financial conditions affecting trade and irMustfy the paramount consideration, arid while such considerations as the cost-of living and. a living wage were relevant considerations, they were not1 "overriding" considerations,, as had been the. case under ,the expired legislation. It was submitted, therefore, that under the present legislation the "overriding" factor for the Court to consider was not the economic and financial conditions affecting trade and industry; but a basic wage sufficient to enable an adult male worker to provide a fair and reasonable standard of comfort for a wife- and three children. , -"It is submitted that the first matter Jor the Court to consider is what should constitute a fair and reasonable standard of comfortr-what commodities, other -than the bare necessities of life, •what services, and what luxuries should Tbfe obtainable by the basic wage," said Mr. Robinson. "It is submitted that it is the intention of the Legislature to! ensure that industry shall be required to provide each worker with a wage sufficient to enable him to carry tout his functions as a citizen, to discharge in a proper manner his duties as the father of a family, and to induce those who have not yet undertaken family responsibilities—those •wlio have been discouraged by penury, or fear of penury,. from, undertaking such responsiblities—to undertake them, and thus play their part in the plan of life. Previously, the legislation ■which was enacted to deal with these things made the worker the servant of industry, as if industry were something that was superior and apart from roan, something that merely tolerated the workers engaged in it out of the charity of its soul, something that was operated for some profound and • mysterious purpose remote from supplying human needs and human comforts. The legislation before us today, however, • places human happiness, human comfort, and human rights before every other consideration, asserting the astounding fact that industry, is to serve man, not man to serve industry! "FAIR STANDARD OF LIVING." . -Mr. Robinson .said that the Arbitration Court in 1921 had expressed the opinion that the most thoughtful definition of "a fair standard of living" had been given by Professor Ryan, of Washington, who had held that a man was entitled to a fair and reasonable standard of comfort because he was a man, because he was the father of a family for whom he had to provide, because by his birth he was sent on to the earth from which he had to procure all things needful to enable him to live, to enable him to discharge his duties to his family, to the community of ;which he was a member, and to the State which represented the community. . , . After the Australian Arbitration Court had fixed the basic wage in 1920 at £5 16s a week, the New Zealand Court had declined to apply that standard to New Zealand on the ground that the'national income could not support that standard and that the average family did not consist of five persons, but only 3.57 persons.The latter reason no longer applied. NEW.COMPUTATIONS WANTED. "We wish to make it.quite clear that we do, not believe in the method of wages fixation which up to the present time has .been employed in New Zealand," said Mr. Roberts. "The method employed was to take what was approximately the rate of wages payable to unskilled workers in 1914, and from time to time add to that rate the percentage increase in the cost of living as disclosed by the Statistics supplied toy- the Government. Statistic!an. Now,

this was tantamount to a declaration that the rates of wages payable in 1914 were a proper standard upon which to fix wages for all subsequent years." He added that in 1914 the cost of living had been an acute one for the workers and the general dissatisfaction, of employees had been mirrored in general industrial unheavals which had shaken the industrial world to its foundations. The workers had shelved their disputes on the outbreak of the war, and since then they had had rio adequate redress. Before the war the Arbitration Court had to deal with wage rates which had hitherto been fixed by expediency, and did little more than create uniformity in wages, and impose a certain composure on industry. It had 'not time to introduce wise and far-reaching reforms by the time the world was thrown into the chaos of 1914 and after. From the outbreak of the war until the present day the Court had not attempted to examine the wages problem very closely for the purpose of finding a new standard suitable to the times and conditions. The workers did not know how the commodity requirements of a family were grouped by the Government Statistician, but they did know that a slight alteration in the grouping would furnish a great difference in answers. It might have been a coincidence, that the fall in statistics was taking place at a time when the legislature was taking steps to reduce wages. In spite of the statistical reduction, the people generally knew that they were paying as much, if not more, to live as they had been when the statistics were at the peak. THE HUMAN MACHINE. In 1925, the Court fixed the minimum rate of wages on an hourly basis, and stated that this hourly rate of. Is lOd should be for a week of 44 hours. However, if a man was able to secure work on an average of only 24 hours in the week, his weekly earnings would be reduced to £2 ss. Who, then, was to supply him and his dependants with maintenance equivalent to the remaining £1 15s 8d? A man was not like a motor-car which could be parked when not in use—his needs and those of his dependants were continuous. The responsibility of maintaining his dependants rested in the first instance on the man himself, but that was conditional upon his ability to exercise his natural right to work. Casual labour was as much part of the equipment of industry as the machines, and it would be a serious thing for employers if this labour were not available when required. As the workers' expenditure must be calculated on a weekly basis, their earnings should be calculated on a weekly basis, and as the Court was to fix a rate of wages that would enable the worker to provide a fair and reasonable standard of comfort for a wife and three children, it was suggested that it would be impossible for the Court to fix on an hourly rate which would, fulfil the requirements of the statute. The minimum wage fixed by the Court had never kept abreast with the '■ rise in' the cost *of living, and it was to be hoped that in fixing the new basic wage the Court would depart from the old percentage method, and fix the wage upon the reasonable standard of a family of five persons. TEE FAMILY BUDGET. "In this connection we desire xp submit for the Court's approval a schedule of such requirements," said Mr. Robinson. "In this schedule we have ■ included in reasonable proportion the commodities which such a family would require. We admit that it is not an easy matter to compile a satisfactory schedule because of the great difference in human tastes, but we have included the articles which must be used" in a greater or lesser proportion by the families to which the Court's basic wage will apply. The schedule is in two parts.; One part supplies the details of the ■ expenditure which must be met from day to day or from week to week, and the other the details of expenditure that must be met throughout the year. The first part contains the items of weekly expenditure, and .is as follows:— A—WEEKLY OUTGOINGS. . £ s. d. Hent 1 5 0 Meat (181b at 6d per lb) .... 0 9 0 Bread (6.loaves at lOd a loaf) 0 5; 0 Butter (41b at Is 5d per lb) .. 0 5 8 Oatmeal (31b at 3d) 0 0 9 Cereals (rice, sago, tapioca) .000 Sugar (61b at 3d per lb) .... 0- V 6 Condiments J > « Bacon (21b at Is Id per lb) .. 0 2 2 Eggs (2 doz. at Is Cd) 0 3 0 Milk (12 quarts at sd) 0 5 0 Tea (lib at2s6d) 0 2 6 Flour (41b at 3d) Sin Fish (41b at 6d) » 2 Coffee and cocoa v " ° Raisins & currants (lib at sd) 0 0 5 Vegetables and fruit 0 7 0 Fuel and light 0 10 0 Daily paper • 0 « » Weekly literature & transport 0 4 0 Tobacco ...' 0 2 b Schoo! books ." i ." Amusements v a v Union dues and unemployment tax 2 1 n Sundries ° 4 v Total £5 1 8 The next part of the schedule contains the necessary yearly expenditure, items which are not purchased every week, but items which must be purchased.during the year. This part is as follows:— B— YEARLY EXPENDITURE. £ s. d. Man's working boots 2 0 0 Man's dress boots 1 0 0 Working trousers 1 10 v Overalls ..........••■•, ° 12 0 Socks (6 pairs at 2s 6d) 0 15 0 Working shirts ° 10 ° Shirts (best) 0 10 0 Undervest- and singlets ..... . OIS v Underpants ° 10 0 Collars • ° 3 ° Handkerchiefs (6 at Is) 0 6 0 Pyjamas (2 pairs at 7s 6d) .. 015 0 Overcoat (at £2 per year) .. 2 0 0 Boot repairs • ° 13 ° Cardigan (1 for two years) .. 0 10 0 Women's clothes 17 0 0 Children's clothes (£8 each child) .............24 0 0 Renewal of kitchen utensils . 310 0 Household linen, bedding, bedclothes 7 10 0 Renewal of furniture 2 0 0 Insurance 0 10 0 Doctors and medicine ........ 5 0 0 Dentists *.... 2 10 0 Total -...,;., ....„ £74 00

"The two schedules (A and B) added together would give a weekly wage of £6 10s 3d, and though the amount may appear high when compared with the standards hitherto existing, we do not think that anyone could say that the schedules contain anything that could reasonably be deleted or reduced. It must not be forgotten either that the average worker receives only 49 pays per annum. The worker on hourly rates loses three weeks' pay per annum by way of holidays—two weeks at Christmas and New Year, and six other holidays spread over the year. During these periods of unemployment his weekly expenditure would not be reduced, but his average weekly earnings, however, would be reduced to £6 2s 9d. We have not included £1 per annum for unemployment levy, and we are making no allowance for periods during which the worker may lose work through sickness or wet weather, but as we have stated before the human machine is the only unit in production that does not draw wages for the time he does not work. FEMALE WORKERS. Mr. Robinson then turned to the question of a basic "age for female workers, and said that in the past, unfortunately, the minimum rate fixed for women had been such that the positions to which thei rates applied could be taken only by females who had homes in the vicinity. It was submitted that industry should provide the female worker with sufficient remuneration to enable her to support herself without forcing her to rely for assistance on other people, parents, or relatives. The legislation authorised the Court to fix a basic wage for adult female workers, and, they took it, that that meant a wage which would enable them to support themselves independently. "An examination of the awards applying to female workers from 1925 to 1931 will show that throughout those years the average weekly wage payable to female workers was £2 5s 6d," said Mr. Robinson, "and it is submitted that an adult female worker cannot reasonably be expected to support herself independently on a weekly wage of less than £3 10s, or £182 per annum, to permit -of ■■ the following expenditure:— ' ■ £ s. d. Clothing ...'. ■>- ° 0 Board and lodging (£1 10s .weekly) IS « Union dues at 9d weekly 1 13 0 Tram fares at 6s,weekly 15 12 0 JUterature, newspapers, library 2 13 . 0 Amusements 10 0 0 Toilet requisites 3 0 0 Medical expenses ; » v 0 Miscellaneous •.. ■• 1117 0 ;' £ 182 0 0 "NOT EXTRAVAGANT." "These annual earnings would provide a weekly wage of £3 10s, and it is submitted that the above schedule is not an extravagant one. It is an expenditure that has to be met; and is met, by or on behalf of female employees -bound by awards at the present time. The difficulty has been, however, that it is not provided by the industries in which such female workers are employed. It is supplied in part by their parents, a fact which means that the minimum wage of the parent is reduced because no provision is made for the support of any children over the age of fourteen years. It is admitted that certain industries do pay their female employees a weekly wage near the sum we are asking. I refer to the female workers employed in licensed and private hotels. Up to 1932 the' lowest-paid female worker in licensed and private hotels received £ 1 12s 6d per week money wages plus an allowance of £1 10s per week for board and lodging, a total of £3 2s 6d per week. The awards provided that they should receive a week's holiday per annum on full wages, and full wages was defined as cash wages plus £1 10s per week for board and lodging." CAPACITY TO PAY. « Mr. Robinson said that they hoped to be able to demonstrate that New Zealand industry was well able to pay the wages asked for. Labour costs, unlike other costs, were not a deduct^ ible charge on industry, the payment of which reduced the surplus or left industry poorer, for labour was the source of wealth in the sense that wealth could, be created only when labour was applied to the raw material supplied by Nature itself. Under the system, of production • for profit wages were not a share in the commodities produced by the labourer. The employer had to- replace wages out of the price for which he sold the product made by the workers, and after that replacement there remained to him, as a rule, a surplus above the cost of production which was the employer's profit. Experience had shown (and they could show it was so in New Zealand at present) that the surplus left for the owners of industry was almost equal to the total amount of wages paid. "Figures published by the Government Statistician in connection with unemployment taxation show that for the years 1934-35 the workers received in.wages the sum of £65,000,000 and that the owners of industry, after allowing for depreciation and other charges, had an income of £34,500,000," said Mr. Robinson. "An important point to remember is that the owners of industry, are only a comparatively small number of the population. Statistics show that less than 5 per cent, of the population pay income tax, and under the legislation passed by previous . Governments the amount of income on which income tax was payable was reduced so that many wage-earners were required to pay income tax. Therefore, if the total number of people required to pay income, tax was. less than 5 per cent, of the population, it is clear that the number, of people who paid income tax on income other than wages would not be more than 4 per cent, of the population. It will be seen, therefore, that'in'the years 1934-35 the owners of industry, with their income of £34,^00,000, fared much better than did the workers with their total wages income. of £65,000,000. INCOME RETURNS. "The years 1934-35, it may be said, were years of recovery, but statistics show that conditions similar to those existing in 1934-35 also existed in the very worst years of. the depression. The-folio wing, table will show the net income upon which income tax was payable from 1929 to 1932:— 1020 Tax paid on net Income of 29.00^.000 1030 Tax paid on net Income of 32.000.000 1931 Tax paid on net income of 32.800,000 1032 Tax paid on net income of 31,400,000 "These figures indicate clearly that while the income-tax payers suffered a certain reductiA of income during those years they yet remained in a very healthy financial condition, and that [they did not suffer the hardship that was imposed upon the wage earners. COMMODITY VALUES AND WAGES. Mr. Robinson said that it should not be' forgotten that during the years 1931-35 the average number of unemployed was never less than 50,000. but although these workers, had been placed on relief production had not fallen, and a comparison of the added value of commodities and the wages paid showed that in the years 1931-34 the added value was about, twice the amount paid in wages. For example, in 1934 the added value was £24,800,000 and the wages £12,100,000. A significant feature of New Zealand industry was the exceedingly small amount of loan capital employed during the depression. There had been no increase in loan capital from 1931 to 1934. which showed that even in the worst .years

of the depression New Zealand industry was able to stand on its feet and was almost independent of the moneylender. In these years 80 per cent, of the capital employed to carry on industry was the result. of saving—in other words, profits accruing from the sale of commodities.

The wage reductions during the depression had aggravated the unemployment problem, and the new Legislature realised that "the wealth of a nation can be measured only by what it consumes." The Legislature did not intend the Court to adopt the 1931 standard for the basic wage. If that had been the intention, there would be no need to fix a basic wage at all. "The claim which we make today." said Mr. Robinson, "is in harmony with the wishes of the Legislature. If granted it will introduce a new era of prosperity in New Zealand; it will make life worth while for thousands of people, and it will enable the children of the people to become the responsible citizens'of tomorrow."