WAGE ANALYSIS

Evening Star, Issue 22952, 9 May 1938, Page 16

WAGE ANALYSIS

PURCHASING POWER FACTOR STATEMENT BY ASSOCIATED CHAMBERS “The Minister of Industries and Commerce has made a statement in answer to our analysis of wage rates, living costs, and purchasing power, but he makes no adequate reply ” says a statement by the Associated Chambers of Commerce of New Zealand. “Twitting us with having concern for the position of the worker, tabulating implications which he chooses to read into our article, and introducing a variety of new issues, is only avoiding the principal point we raised, namely, the effective value of increased wages (after allowing for the increased cost of living), as shown by the Government’s own officially published index figures on that precise subject, with farm workers excluded. “The Minister says of us that by a clever selection of statistics and some calculations which they admit are only approximately correct, they endeavour to show that, in the case of industrial workers, prices have risen nearly as much as wages have been raised, so that the “ effective wages ’’ of such workers are only very little improved.’ We selected no statistics other than the identical ones (wage rate, retail price, and effective wage indexes) used by the Minister himself in a statement he made in the press on March 29, 1037, on the relationship between increased prices and increased money wages. The Minister made out a case at that time to show that increased purchasing power was 11.9 per cent, greater than increased living costs, and he based his case on the index figures already referred to. ‘ln New Zealand,’ he said, ‘the increase in retail prices has been small as compared with the increase in wage rates and increase in purchasing power. This statement is based on absolute fact as disclosed by a study of the latest figures supplied to me by the Government Statistician.’ The Minister then quoted the official index figures, and said: ‘lt will thus be seen that the effective wage rates have been advanced by nearly 12 per cent, during that period (from the year 1935 to December, 1936), and this definitely answers the criticism that the increased purchasing power has been cancelled out by increased prices.’ The Minister even went on to quote comparative index figures for the United Kingdom and Australia, adding that ‘ these are official figures that tell their own story in the light of hard facts.’ FORMER FIGURES ABANDONED. “These quotations show how firmly the Minister, a .year ago, relied on the official index figures to decide the question,” the statement continues. “Why does the Minister now surprisingly abandon these figures, describing them as ‘narrow’ and ‘restricted,’ and make quotations to show that, after all, they do not tell the hard facts? Is it because we have shown that, when farm workers are excluded, the index figures establish that those remaining industrial male workers of the country who are in fulltime employment at award rates of pay have an effective wage advantage over 1935 of only approximately .6 per cent. —increasd living costs having all but cancelled out their increased wages? “The Minister says that we ‘admitted that our calculations (in regard to the index figures) were only approximately correct,’ but we did more than that; we took pains to explain that our calculations as to effective wages produced only approximate results, and we suggested that the Government publish an authoritative table to establish the true figure for the 13 industrial groups with which we dealt. The Minister does not take up this suggestion, and so does not show our calculations to be wrong. We assume, therefore, that our table becomes authoritative—unless the fact is that the effective wage position is worse even, than we stated. If that is the case,(the figures should be published. “ However, the Minister, before. repudiating official index figuers as being any index, finds them useful to use again in his reply, but this time for the purpose of introducing new periods of time —back to the year 1914—t0 establish comparisons of price, wage and purchasing power movements with the latest recorded period. Where does the Minister stand? ” the statement asks. “Is he prepared to determine the question of purchasing power on the basis of the index figures only when it suits his argument? If they apply to one period they must apply to another. Either the Minister must declare as his attitude that official wage and price indexes establish the hard facts about purchasing power (as he previously claimed they did) or he must now deny that they do anything of the kind. The Minister merely shifts his ground to other issues and invites us to follow him. We could do so, to some effect, but we decline to be so drawn until the Minister has defined his attitude on this point, and shown where our calculations on his own index figures are wrong—if they are wrong. FURTHER QUESTIONS ASKED. “We have no desire to score off the Minister, but the whole purpose of our original statement was to bring out the full facts of the case by a dispassionate analysis of the official indexes used last year bv the Minister himself, and we resent his suggestion that we were inspired and partisan, and that we misrepresented the official statistics. We did not advocate a reduction in wages from present levels, as he would have us say. We pointed out that the policy of going on increasing wages (with its consequent loading of indusr try) had not given the great majority of industrial workers any effective advantage other than a passing one, owing to the more rapid increase in living costs. With this, we linked high taxation oh companies, which we said was largely written into higher costs of living, and on that note we concluded. Will the Minister take up that point, and will he say that taxation is not reducing-the purchasing power of money wages, and that a reduction in taxes on business concerns would not reduce the cost of living and would not give a greater purchasing power to existing wages? ”