WORKERS' WAGES

Evening Star, Issue 19044, 12 September 1925, Page 3

WORKERS' WAGES

COURT REVIEWS POSITION , \ REPLY TO ALLIANCE OF LABOR RECASTING OF STANDARD RATES Recently a deputation from the Alliance of Labor waited upon the Prime Minister with a request that a Commission should be set up to investigate and report upon the cost of living and the basic wage. Mr Coates then slated that he would submit the question to the members of the Arbitration Court for their observation and report. This report has been received by the Government, and has been made available for publication. Mr Coates has informed the alliance that the Government cannot see its way to agree to the request to set up the Commission proposed. In its report, the court states that its members have considered the representations made to the Prime Minister, and desire to make the following comments thereon: — The deputation asked that a Royal Commission should be set up to investigate and report on the cost of living and the basic wage. The spokesman of the deputation (Mr Roberts) commeuced by saying that he did not intend to quote index figures to prove that the present basic wage was insufficient to maintain a worker and his dependents, This seems to imply that the official index figures are not to be regarded ns reliable. The index figures compiled by the Government Statistician are, however, obtained from the most reliable sources, and are subject to constant checking. They have been submitted from time to time to the closest scrutiny, and it is due to the Census and Statistics Office to say that the court is satisfied that the work of that office, for comprehensiveness, accuracy, and attention to detail, compares more than iavorably with the work of the statistical offices of most other countries. In sofar as the statistics relating to prices of clothing and footwear, and or the commodities and services listed under the heading “ Miscellaneous ” are concerned, the Government Statistician first undertook this branch of investigation after consultation with the court, and under its directions, and representatives of employers and workers were given an opportunity of checking both the items listed and'the prices sot against them before the schedules were adopted by the court. The court is satisfied that, in so far as retail price statistics can afford an index of the movement of the cost of living, the figures compiled by the Government Statistician serve the purpose admirably.

INDEX FIGURES. The movement of the cost of living is ascertained from the retail prices index figures, used in combination with the average working-class family budget of expenditure. This budget was compiled from account books submitted by housewives, and shows the distribution of the average family income under the headings of food, rent, fuel and light, clothing and footwear, and miscellaneous. The percentage of increase or reduction in the price level of each of these groups is given a value bearing a direct ratio to the percentage of expenditure on that group as shown bv the average family budget, and by this means the movement of the cost of living ns a whole is arrived at. The average family may, of course, from time to time vary its consumption of items in one group or another, but this docs not imply an alteration in the standard of living. While it would doubtless be advantageous to have the average family budget brought up to date at regular intervals, it has been found impossible to obtain a sufficient response from the workers to enable this to be done. The members of the court think it desirable that this brief reference should be made to the matter of the index figures, for it is often suggested, though it has never been proved, that they are unreliable. Fuller information on the subject is contained in the different cost of living pronouncements of the court recorded in the Book of Awards. THE AVERAGE FAMILY.

“Mr -Roberts contends that the (Court bus fixed its basic wage tor an average family of 1.57. This is incorrect. '.File court made the matter perfectly clear in its pronouncement of May S, 1922, in which it said that it allowed for two children under fourteen years of ago to the average family, though the interim census figures for 1921 worked out at only 1.57 children under 14 years of ago to each married man, and less than one child ((1.95) to each adult male. The complete returns of the 1921 census arc rmw available, and show that the number of children under 16 (instead of 14) to each married man and widower is only 1.52, and the number of chil-< iron under 16 to each adult male is .1.12. The number of children under’ 1.4 to each adult male is 0.99. Mr lloberts objects to married men without children being included in the computation, but it must be remembered—though he has ignored it—that these men, as well as the single men. ncecssarily receive at least the basic; wage for a man, his wife, and two dependent children. The 1921 census statistics show the conjugal distribution of the adult male population to be as follows:

Married ... 228,031 Unmarried 114,804 Widowers 17,626 Divorced 1,265 Not stated 2,318 364,044 “ On the present basis of each adult male being paid a wage calculated on the requirements of a man, his wife, and two dependent children under 14, more children are being allowed for than the census returns show to exist. If, however, we adopt Mr Roberts’s contention that three children should be reckoned to the average wageearner, the fair living wage for which he asks would involve the payment of maintenance for 136,013 non-existent wives and 732,540 non-existent < children under 14, or 686,764 non-existent children under 16. This is a manifest absurdity. “ Two other statements made by Mr Roberts in regard to the size of families require comment. One is that workers’ families are larger than those of non-wage-earners. This is not borne out bv the census returns for 1921 published by the Government Statistician, which show that the size of the average family of men of different occuaptions does not display any such preponderance in favor of the working classes. The 1921 census showed the average number of dependent children for married men and wfdowers in the group set out below to be as follows Employer ... ... ... 1.78 Own account ... ... ... 1.69 Wage-earner ..1.55 Moreover, the census returns showed .that in the urban areas, in which are found the greater number of the workers affected by awards of this court, the average number of dependent children to a marriage was only 1.32, as against the dominion average of 1.52. Mr Roberts also stated that his organisation had recently _ prepared family statistics for waterside workers which

showed that the average was three children to a family. It is evident either that Mr Roberts’s statistics must be inaccurate or that the water* iside workers must have filled in their official 1921 census papers incorrectly, for the Government Statistician’s census return for the different trades and occupations shows that the average number of dependent children to each married waterside worker was only 1.68, which is considerably less than three. The official return, which Mr Roberts cannot have seen, is published in part XII, of the 1921 census returns. It may be mentioned that, for the purposes of the census, all children under 16 were treated as dependent, whether they were, in fact, dependent or not. RENT AND THE BASIC WAGE,

“It is unnecessary to deal in detail with Mr Roberts’s figures regarding food, rent, and other items. The court has on several occasions gone fully into these matters in its cost-of-living pronouncements. __ On the subject of rents, however, wo must once more refute the statement that the court allows a sum of 16s 8d a week for rent in computing the basic wage. The statement is untrue. It will be sufficient for the purpose to quote two paragraphs from tiie court’s pronouncement of January 11, 1924. as follow: “‘Rent statistics have proved a source of difficulty and misunderstanding in other countries as well as in New Zealand. Shortly after wo issued our last pronouncement we received a copy of the report of the South Australian Board of Trade on its last cost-of-living investigation, in which it was stated that the board was satisfied, after full consideration, that the only evidence on which it could safely rely in computing the movement of rents was that of the Government Statistician’s figures. The board compared rent, in relation to general domestic expenditure, to a bulky and incompressible package that had to be fitted into a portmanteau. Other items could be squeezed and adapted, but the bulky package had to bo given its full quota of space. “ ‘ The comparison is not inapt, for rent is the largest single item of expenditure in the domestic budget, and must always bo provided for in full. Though rent has increased to a less extent than any other of the groups (except food) that make up the cost of living, the increase in rent is more noticeable, because of the largeness of the single payment. All the cost-of-living statistics are based on averages, and rent shows a greater range of extremes than any other item. Some rentpayers pay little or no more than they did in 1914, wffiile others pay greatly-increased rents; but no system of averages can avoid being satisfactory to those at one end of the scale and unsatisfactory to those at the other end.’

“We deem it necessary to refer to a statement frequently made in court, and as frequently refuted—namely, that the court allows for a standard rent of 15s 3d per week. The court does nothing of the kind. The statement in question is another instance of misunderstanding statistics. A collection of domestic budgets made in 1911 showed that the average amount expended on rent was 20.31 per cent, of the total domestic expenditure. This percentage has been taken by the court as a basis. It is, however, only an average. The laborer in 1911 probably spent more than 20.31 per cent, of his earnings on rent—perhaps 25 or 30 per cent.—and the tradesman probably spent less than 20.31 per cent, on rent. The so-called standard rent of 15s 3d per week has evidently been arrived at by taking 20 per cent, of a laborer’s wage of £3 16s Id. This is an altogether unjustifiable misuse of statistics, on two grounds. First, 20 per cent, of the minimum grade laborer’s wage cannot by any stretch of imagination be regarded as a standard rent for all workers; and, secondly, as already mentioned, _ the minimum grade laborer’s expenditure on rent was probably 25 or 30 per cent, of bis earnings in 1911 and in 1923, Yet, if we depart from the average in the case of the laborer we would have to reduce rather than increase bis wages, for a larger percentage allotted to rent would have the effect of reducing the total expenditure necessary to maintain the 1914 standard of living, because rent has increased by less than 50 per cent., while the general cost of living stands at 57.5 per cent, above that of 1914. Every increase shown in the rent index returns has been applied, half-year by half-year, with strict mathematical accuracy, to the average percentage of tho domestic expenditure allotted to housing cost, and the method of computation lias frequently been explained. AVo hope that this further explanation will settle the matter.

“ The references mnde by Hie deputation <o a basic wage of £3 17s per week are misleading. The basic wage for the minimum grade unskilled worker is Is Sid per hour, which works out al £3 17s for a forty-four-hour week. A very large number of awards, however, provide for a forty-six or forty-eight hours week, so that the minimum wage works out at £4 Os 6d to £4 4s per week for the workers affected by those awards. Furthermore, in nearly all awards, whether tiie workers are unskilled, semi-skilled, or skilled men, additional payments are provided for work that requires any special knowledge or that involves working under unpleasant conditions, or that is performed in overtime hours. It is, of course, true that broken time, and unemployment at tim*s cause loss of earning power, but the court cannot provide against unemployment, though it fixes a higher rate of remuneration for occupations that are notoriously casual.

RECENT INCREASES. “The statement that the court has confined its attention to making adjustments in awards according to variations in the cost of living, as .determined by the Government Statistician’s figures, is also untrue. Tor the last three years, the cost of living has averaged within a few points of 60 per cent, above the level of July, 1914, yet within recent years large classes of workers, such as shop assistants, grocers’ assistants, butchers, seamen, drivers, chemical manure workers, and freezing works employees, have received increases bringing their rates well over CO per cent, over the 1914 level, while smaller increases have been granted to nearly every other class of worker, and the conditions of work in nearly all trades and occupations have been overhauled. It must be remembered, too, that the function of the court is to fix a minimum wage for each class of workers. The minimum for each class of semi-skilled and skilled worker is, of course, higher than that for the unskilled worker. The minimum is not regarded generally as a standard, except in certain occupations where greater continuity of employment gives a suitable recompense to the better worker, or where a definite grading of workers has been provided for in the award. In the great majority of cases wo find that the minimum wage is regarded as a true minimum, and most workers are paid more than the minimum,_ according to their efficiency. The continued circulation of statements intended to impress the general public with the notion that the average worker in New Zealand receives a wage of £3 17s a week, or less, is calculated to mislead, and the statements are inaccurate. “A SOCIAL WAGE.”

“Dealing generally with the matter of the setting up of a Royal Oomnw'ssion to investigate and report upon the cost of living and the basic wage; we desire to point out that the prevailing conception of the basis of wages has altered of late years. Instead of a man being paid according to the current market value of his work, he is to bo paid not less than a wage that is regarded as sufficient to maintain' himself, a wife, and two children. He is regarded as a social unit rather than as an economic unit. .When a trade is

prospering the worker can still obtain, and does obtain, tlio current market value of his work, but he must not, in times of trade depression, be paid less than the wage which is regarded for the time being as sufficient for the maintenance of himself, a wife, and two children, pins an additional payment based on his skill, and certain other factors. This conception of a basic wage as a social wage at once involves an inquiry as to tiro manner in which the payment of largely increased wages is to be made.

FATAL OBJECTIONS. “It is manifestly absurd to suggest that the report of a Royal Commission that found that £6 per week was a fair basic wage for a man, his wife, and two or tliree children, could be put into effect by the- simple process of enacting that no adult male worker should receive less than £6 per week. The Australian Basic Wage Commission of 1920 reported that the actual cost of living ns at November 1, 1920, according to reasonable standards of comfort, including all matters comprised in the ordinary expenditure of a household, for a man with a wife •and three children under 14 years of age, was £5 1.6 s per week. The Australian Industrial Courts did not question the finding of tbo _ Commission, but were unable to carry it into effect. The finding of the Australian Commission, with some adjustment of prices to those now ruling, and some alteration of the items covered, to meet our own climatic and local conditions, would be fairly applicable to New Zealand, and we are not prepared to say that the finding is unreasonable. The fatal objections to the fixing of a minimum wage of £5 10s or £0 per week are (a) that the total income of the country is insufficient to pay such a wage, and (b) that the average number of children under 14 to each adult male is 'not three, but slightly under; one.

THE WORKER’S SOCIAL RESPONSIBILITIES, “The only moans by which a 'social wage ’ of £6 per week could ho brought into operation necessarily involves tho recognition of the_ fact that if such a wage is to ho paid on tho basis of the worker’s social responsibilities, instead of the value of the work lie performs, the claims of the single man and of the married man without children to receive the same wagons a married man with children must bo disregarded. The claim for full wages for all adult males, irrespective of their obligations, is inconsistent with the claim for an adequate wago for a married man with a family of three or more children. The fixing of the same basic wago for all adiilt males means that one section of workers gets more than a fair living wage, another section gets a fair living Wage. while the remaining section gets less than a fair living wage. Tims, in New Zealand, the adult male < population is distributed, as shown in the following table: —

(a) Unmarried 114,804 (b) Married, without children under 16 83,640 (c) Widowers, without children under 16 13,423 (d) Married, with one child under 16 ... 4"j307 (e) Widowers, with one chdd under 16 1,734 (f) Married, with two children under 16 38,159 (") Widowers, with two children under 16 1,086 (h) Married, with three or more children under 16 58,459 (i) Widowers, with three or more children under 16 ... 1,376

Total 359,988 “This tabic omits 4,056 men who failed to state their domestic veponsibilities when filling up the.ir 1921 census papers, but the omission is of no importance. We see, then, that groups (a), (h), (c), (d), and (e), numbering 260,908, would receive more than their proper'share ; (f) and (g), numbering 39,245 would receive about their proper shave; and groups (h) and (i), numbering 59,835, would receive less than their proper share. AUSTRALIAN COMMISSION'S SUGGESTION. “ In this connection, we quote a paragraph from the court’s cost-of-living pronouncement of May 8, 1922: “The one remedy for the injustice of taking account only of the average family is that suggested by the chairman of the Australian Commission, and approved by Mr Justice Powers, of the Commonwealth Court of Arbitration. Briefly, the remedy is to fix a basic wage for a man and wife without children. The single man, who_ has to spend more money outside his homo than the married man, and who has to provide for the contingency of marriage and possibly also lor the support of a widowed mother, would receive the same as the childless married ma.u. “ Each employer would be required to pav weekly into a State fund a sum in respect of each adult male employee, slightly less than the cost of the maintenance of one child, and this sum would he distributed in the form of a children allowance to each parent according to the number of his children. Tims the total amount paid in wages and children’s allowance would not necessarily ho any greater than that_ at present paid as wages, but the distribution wonld lie according to responsibilities. There would be, of course, difficulties of administration, and special legislation would be required, for without legislative authority _ such a scheme could not be established, and any other method o) differential remuneration would result in the displacement of married men by single men wherever possible. Wo mention the matter because the subject of the Australian basic wage report was discussed at the recent hearing in Wellington, and because it is a matter of social interest, and has, no doubt, an important bearing on the birthrate. The matter of the Australian report is worth mentioning in connection with the definitions of a fair living wage that we have quoted, for it has brought out the very important fact that justice to all cannot be attained by working on the basis of an average family, and thattlie generally-accepted definitions require qualification before they can he made the foundation of a new wage system of wages. GREATER EFFICIENCY.

“The only means by which a minimum wage of £6 per week, or anything approaching that figure, can bo fixocf for all workers, irrespective oi their domestic obligations, consists in increasing the efficiency of workers, management, and plants by the adoption of the most modern methods pt production and manufacture, the elimination of waste in every department, and the intelligent and wholehearted co-operation of the workers. We constantly hear evidence that the average worker is less efficient and produces less in a given time than he did in 1914, and we hear complaints from the unions that their employers do not adopt efficient methods of production and management. As to whether either or both of these views is correct we need not now express any opinion, but it is obvious that as the prices to be obtained in the open market are the only source from which the earnings of labor, management, and capital alike are derived, any substantial increase in the total net earnings, and consequently any substantial increase in the earnings of the workers, must be obtained by increasing efficiency, and so being .d le to sell more goods, and to sell them more cheaply. Wo quote here two paragraphs from the court’s pronouncement of May 8, 1922. The first is taken from

tli© ‘'Round Talita ’ for Juno, 1916 1 ‘“The most, fundamental primage to remember in all industrial pcblems is that the remuneration of capital, labor, and enterprise all come horn one source alone, the product of their joint activities. However they may dine/ over the shares which each gets out of their partnership, they have all to be paid from output; theie is no other source. If inefficiency <>l managemen.., restriction of output, wa it of enterprise, extravagance, and mutual hostility diminish it, increase its cost, or retard its growth, there is so much less to go round, and either one party or all will suffer. “ ‘ We have noticed that in certain quarters the soundness of the policy oi “increased production and more elhcient production ” is questioned. This is no doubt due to its significance not having boon rightly grasped. If the general purchasing power of a community has been reduced it cannot buy the same quantity of good at the old prices. We must produce more goods and produce them more cheaply, so as to enable our customers to buy more than before, and at a lower price, and we in turn will benefit by the increased sales to a greater extent than we will suffer by the reduced price. The greater the quantity of goods produced, the greater will bo the real wealth of a community, for wealth is not money, but the abundance of things.” ’ COMMISSION NOT RECOMMENDED “ For the reasons we have outlined we do not think it necessary to recommend the setting up of a Royal Commission to Investigate and report on the cost of living and the basic wage. Such a commission would be ineffective, for it would be impossible to give effect to any recommendation it might make.

RENTS SHU INCREASING. “ We desire, however, to add that the matter of housing appears to demand the consideration of the Government. There is undoubtedly still a serious housing shortage, and when there is a great demand for houses there is a widespread impression all persons connected with the builufng trades and the supply of materials for those trades put up their prices accordingly and neglect efficiency, and, to, quote an American writer (Garrett) on the housing question in England, ‘ charge _as much as the traffic will bear. 1 This impression may not bo justified in New Zealand, but the cost of building a small house is very high iu this country as compared with the cost in oilier countries. Attention rniglit also be given, wo suggest, to now methods of construction adopted in England and the United States of America in order to cheapen and speed up the erection of dwellings for the people. We specially mention this matter, because the average rent is still increasing, owing partly to the continued housing shortage, and the range of extremes in rents tends to become greater. This aspect of the rent problem is of special importance to a worker who is compelled to move from a house in which he has been living for some years, and who endeavors to obtain another at a similar rent, but very often has to pay a rout approaching the higher extremes. Increases of wages intended to meet high rents due to a housing shortage do not assist the workers at all, or only to a limited extent; for, apart fromthe operation of rent restricting legislation (which is admittedly oufy a partial and temporary expedient) these increases are nullified by corresponding increases in rents. The only satisfactory solution of the housing problem consists in building a sufficient number of dwellings for the requirements of the community, with duo consideration for economy and quality.

A MINORITY REPORT. “The foregoing is the opinion of a majority of me members oi the court. Mr Hunter has submitted the following minority opinion:— “ ‘ I am in favor of the setting up of a Royal Commission to investigate and report on the cost of living and the basic wage, as requested by the New Zealand Alliance of Labor, because I am absolutely convinced that the present minimum wago of Is i!d per hour for a casual worker is wholly inadequate to provide a married man, wife, and two children with the standard of living to which they are entitled.

“ ‘ How such ;i worker can provide and maintain a home on an average of loss than £3 i7s (id per week passes my comprehension; and he cannot average the sum named, because a certain amount of time must be lost through wet weather and holidays, even if none is lost through unemployment. “‘lt is in the interests of the whole community that industrial peace should prevail, and one cannot conceive nt industrial peace unless the employee has secured to him wages sufficient for the essential of a fair standard of living. “‘lt is futile to expect the rank and file of the workers to supply the data required for the purpose of determining what is a fair standard of living, judging by past experience, and the personnel of the Commission should include qualified accountants competent from experience to know what procedure to adopt to acquire the necessary information for the purposes of the Commission.’

STANDARD RATES TO BE RECAST, “In conclusion, we desire to inform yon that, previously to tlio matter of a Royal Commission being brought np, we bad bad under consideration the question of recasting what is known as the Gisborne pronouncement, by which standard minimum rates of wages were set out for different classes of workers. The necessity for this lias arisen because of increased rates having been conceded by the employers or granted by the court to tho workers in certain occupations. This has to some extent disturbed the balance between the rates for somewhat similar classes of workers, and it has become necessary to make a readjustment, which will involve an increase in the rates to he paid under future awards to workers in certain occupations, more particularly the unskilled workers on the basic wage. In view of the possibility of a Royal Commission being set up, we decided to bold over the making of n pronouncement on that subject until it was learned whether or not the suggested Royal Commission was to bo set up.—(Signed) F. V. Frazer, judge.”