WAGE AND PRICE FORTY YEARS AGO

Evening Post, Volume CXXVIII, Issue 46, 23 August 1939, Page 10

WAGE AND PRICE FORTY YEARS AGO

Prices forty years ago and prices today were compared by a correspondent in an interesting letter in Saturday's issue. Forty years ago there were no motor-cars, no radio, no moving pictures; the breadwinner's lesser income was then expended on a lesser number of things —or, at any rate, on a lesser number of high-cost things or of frequently ! bought things. Today the bread-j winner and his family have a much wider range of spending; they have more things to buy than they could buy forty years ago, and some of those things (but probably not all) that were on sale forty years ago appear to have greatly increased in price. How, then, do the breadwinner and his family manage it? To attempt an answer to that question, a survey would have to be made giving a. comparison of all costs forty years ago and now. Allowance would have to be made for those things that scientific production —including mass production—have cheapened. Very many of these things might be found to- be imports. An increased wage-rate, without increased production, must defeat itself by r,ise in prices, but if bigger and more scientific production by industries oversea.1 is made available to the New Zealand purchaser, to j that extent the price-rise is modified,! and to that extent the New Zealander's purchasing power is supported. This alleviating influence is, of course, discounted by import restrictions. j Loss of purchasing power through ' price-rises overtaking wage-rises cannot be prevented unless the inci'ease of production is substantial. For many years the breakins-in of new farm land, and the Seddonian breaking-up of large estates, maintained an upward trend in farm production within our own country; ai'icli the farms thus supported purchasiv.fr power, both by means of money expended on them within New Zealand and by means of providing sterling funds, some portion of which at ar ; y

rate was expended on worth-while imports which helped to reduce the cost of the ever-rising standard of living. But this generation has seen a limit to two things—a limit (foreseen) to the remaining available supply of virgin first-class and secondclass land, and a limit (which should have been foreseen but was not) to the amount of farm produce that oversea markets will take from this country. A generation with no new land to produce from, and with a lessening sterling surplus from which to buy really needed imports, is a generation not well circumstanced to secure the increased production that would be a brake upon prices' relentless pursuit of wages; and such a generation does not improve its pur-chasing-power outlook by awarding itself a forty-hour week. One result, is that prices are hard on the heels of wages: and that costs are on !he way, as Sir William Hunt says, to force a readjustment by the economic route if not by the political route. The answer to the question "How can the bread-winner manage to cope with continuous pricerise?" may be put in two words. He can't.