BASIC WAGES

Evening Post, Volume CXXII, Issue 99, 23 October 1936, Page 14

BASIC WAGES

EMPLOYERS' CASE

REQUEST FOR LOW RATE

AGE OF APPLICATION

The employers' case in the basic wages inquiry was continued yesterday afternoon in the Arbitration Court when evidence was given by Mr. W. Machin, of Christchurch, and Mr. Leslie C. Gibbins, secretary of the Council of the New Zealand Fire and Accident Underwriters' Association. Mr. Justice Page presided, and associated with him were Messrs. W. Cecil Prime and A. L. Monteith. The case for the employers is being conducted by Mr. T. O. Bishop, and Messrs. J. Robinson, Dunedin, and J. Roberts, Wellington, are appearing for the workers. Before the Court rose Mr. Roberts asked for an adjournment until Tuesday next to enable the workers' representatives to prepare their final submissions. He understood that Mr. Bishop' proposed calling some other evidence, but that it would be short. Mr- Bishop said that such an arrangement would be suitable to him. The Court granted the adjournment, and the inquiry will be resumed at 10 a.m, on Tuesday next. In reply to Mr. Roberts, Mr. Machin slated that the export industries maintained the structure of the other industries. ■ ' Mr. Roberts: I suppose your Chamber of Commerce is guided by Professor Tocker. Mr. Machin: He has given us useful and valuable assistance. Mr. Roberts: You generally go by what he says; you don't question what he tells you? Mr. Machin: . I wouldn t say that. When it is a matter of opinion we generally come to a common agreement Mr. Roberts: You say that 44 per cent, of the national production is exported? Mr. Machin: Yes. Mr. Roberts: That leaves 56per cent, which is purchased in New Zealand? -Mr. Machin: Yes. / Mr. Roberts: Yet you say that-the 44 per cent, decides everything? Mr. Machin said that in ; the main the price which was received for exports governed the internal price structure. ■ ■■ ■ ■ . Mr. Roberts: Suppose the percentage of exports in relation to total, production fell by 4 per cent, because of greater internal consumptions would that not be better for New Zealand? , Mr. Machin: Yes, as long as the produce could be purchased. Mr. Roberts: Let us assume that the 30,000 unemployed were put into employment and paid £5 a week and that they would consume/that 4 per cent. Mr. Machin: They would have to sell their products. They must sell their broducts before'they can buy primary produce. SUGGESTED BASIS. Mr. Machin declared that he was not asking for lower wages. Mr. Roberts: You want the basic wage to be fixed on the overseas prices?—Oh, no. If you ask me what I want the basic wage fixed on, .1 would fix the basic wage on the level of the most incompetent, least willing, and least industrious worker so as to leave room "on top of the basic wage on which I might build to reward the most industrious, most willing, and most competent worker.. , Will you sell your butler, cheese, and wool at the highest market?—We do that constantly. . Won't you buy at the lowest market?— All other things being equal. Isn't it reasonable that when a man is engaging- labour that he will also try to get it at the lowest possible price he can get it?— And I say most emphatically no. Is that the reason why employers in all industries—whether paying pro-, positions or not—reduced wages when* the Court of Arbitration reduced wages by 10 per cent.—some went up to 50 per cent? Mr. Machin said that the reason wages were reduced was that there was not a sufficient return from what was being produced to enable employers to pay higher kvages. ■ In the absence of Mr. J. Robinson, one of the workers' representatives, Mr. P. E. Warner put a number of questions to the witness. RATE OF INTEREST. Mr. Monteith suggested to Mr. Machin that his company, the New Zealand Farmers' Co-operative Association, having lent money on stock and farm -land, was naturally concerned from the point of view of drawing'the interest as to what wages the farmers, to whom the money had been, lent had to pay. "No, I don't think that enters into my argument," replied Mr. Machin. In 1930, he added, he had made a public pronouncement, and had got into trouble for it, .that interest, and Government interest, rates would have to come down. He felt that interest and wages should be in fair • equation: In reply to Mr. Monteith, Mr. Machin said that his firm had placed a numbers of farmers on a budgetary system. -- Mr. Monteith: In view of the fact that you have placed the farmers on a budget, are you not vitally interested in the basic wage, because it might reduce the amount of interest to be paid to your directors. .Mr. Machin: I don't think my directors would object to the matter, of wages for the purpose of increasing their interest. Interest is a competitive thing, and we have to fall into line. Mr. Monteith: Might you have made a bad, investment? Mr. Machin: When a business makes a bad investment, it generally writes it off. .That is my method of dealing with it. ';' PAYMENT FOR EFFICIENCY. To Mr. Monteith, Mr. Machin said that he did not think that the basic

wage should depend on production. <llt is a social benefit. The fixing of a basic wage is doing something pleasant in a social sense—it is a gratuity and has no economic Basis. That is why I want to fix it at a reasonably low rate. I want the efficient worker to be paid an amount commensurate with his ability, but if the basic wage is fixed at a high level, the efficient man will be penalised because businesses will not be able to afford to pay him as much as they would like to. I believe in paying *a good man as much as he earns. Mr. Monteith: Wouldn't the amount to be paid to the efficient man be controlled by the employer? Mr. Machin replied that the employers had to contend with competition for efficient workers. If the demand exceeded the supply, then employers had to bid for good men. That was the case in the clothing trade, and his firm was paying hands above the Arbitration Court rate in order to retain them. Mr. Monteith: Surely it is at the discretion of the employer. Mr. Machin: Yes, an employer can either pay a man or do without him. In answer to a further question, he expressed the opinion that wages in 1930-31 had been higher than the economic circumstances of the country justified. Mr. Monteith: Assuming that two firms are equally efficient, would not the firm which paid the lower wages gain a competitive advantage? Mr. Machin said that in (practice no two firms were equal in efficiency, and a business which paid lower rates would soon lose its efficient workers to the firm which was prepared to pay a higher rate. CLERKS IN INSURANCE OFFICES. Leslie C. Gibbins, secretary of the Council of the New Zealand Fire and Accident Underwriters' Association, said that the executive council had considered the question of the application of the basic wage to clerical workers. Members of the council were unanimously agreed that, should a basic wage sufficient to satisfy the needs of a man, wife, and three children become payable to all clerical workers at the age of 21, it would not only unduly increase the costs of all employers of clerical workers but would, without any doubt, operate against the best interests of the workers themselves. If. such a provision should become law, said Mrt Gibbins,' the insurance offices would'•be compelled, when engaging junior workers, to give preference in all cases to boys of not more than 16 years of age. Boys of 18 and upwards leaving the secondary schools would be seriously prejudiced in obtaining employment because, in the ■short space of two and a half to three years they would be quite unable to qualify themselves to earn the basic wage. The council, therefore, was strongly of the opinion tliat, in the case of clerical workers, the basic wage should apply at an age o£ not,less than 24. A resolution in these terms, said Mr. Gibbins, had been passed by the executive.'. THE WORK OF SEVEN MEN. In answer to Mr. Roberts,' Mr. Gibbins said that seven men had met and had passed the resolution as an expression of the opinion of the New Zealand insurance companies that were members of the council. Mr. Roberts asked witness if the insurance companies had restored nvages yet to the 1931 level. Mr. Gibbins said he was unable <4> say in general. He 'should say "Yes," but that of course was a domestic matter and not a council matter. The council did not have control over the domestic affairs of the companies. Mr. Roberts: You cannot tell the Court what wages are being paid at the present, time by the different insurance companies?—No, I don't know. You have a fair idea of the profits of insurance companies?—l have not studied that out to express before the Court. Insurance' companies do pay decent profits? Mr. Gibbins said he was not prepared to say that insurance companies paid decent profits. They had no account of the individual offices. Mr. Roberts, addressing the witness, said he came along without evidence of 'the profits and expected the Court to accept the resolution as a sensible one. That was the council's considered opinion as expressed in the resolution, said Mr. Gibbins. , Mr. Roberts asked Mr. Gibbins whether he thought the Court would listen to him if he (Mr. Roberts) called a meeting of 20 men and said they desired the basic wage to operate at the age of 21. - . "That is for the Court to decide," replied Mr. Gibbins. ; In reply to another question, the witness said he would be surprised to know that some of the insurance companies paid a starting wage as low as 10s a week to a junior typist during the depression. To Mr. Monteith witness said there was a scale of wages. A boy starting at the age of 16 would receive £50 or £65 a year. WHOSE VOICE? Referring to the opinion expressed in the resolution that the payment of the basic wage at the age of 21 would operate against the best interests of the workers themselves, Mr. Monteith asked whether the seven men. had any qualifications: whatsoever to talk in the interests of the workers. Mr. Gibbins: Only that they are men with business experience, each controlling staffs. , Mr. Monteith: Were they talking in the voice of the workers' interests or the voice of the companies' interests?— Talking in the general welfare of the individuals as well as themselves. The resolution went on to say, said Mr. Monteith, that the insurance offices would be compelled to give preference to boys of not more than 16 years of age. Why? So as to get them cheaper? Mr. Gibbins: To get the service before the basic wage operates. Mr. Monteith suggested that the matter was one of financial interest to the seven men. Mr. Gibbins said he would not say that. Mr. Monteith said he would tell Mr. Gibbins candidly what he thought about the whole tiling. It was nothing else but an attempt to get cheap labour.