RATES OF WAGES DEPENDENT ON EXPORT VALUES

Evening Star, Issue 26154, 16 July 1947, Page 6

RATES OF WAGES DEPENDENT ON EXPORT VALUES

(P.A.) WELLINGTON, July 16. , Submissions to the Arbitration Court on behalf of the employers were continued this morning by Mr W. E. Anderson, employers’ representative, who said a general wage increase ' unaccompanied by a corersponding increase in production cluld be of little or no value to the worker, because it was cancelled out by increased prices. This fact was being accepted by a growing number of workers. He had heard it argued that an. increase in wages made the worker more contented and encouraged him to produce more. This might be true in isolated cases, but unfortunately could not be accepted as a general rule. In fact,’in many industries it seemed that wage increases were followed by a reduced output. Where work was not altogether pleasant, the inclination was to do no more than necessary to provide the amount of money required, and if this could be earned in an average of four days the worker would not work five. ANOTHER REMEDY. Mr Anderson said the purpose of the present inquiry was “ the correction of anomalies ” in wage rates caused by the “ granting of sectional increases ” in certain industries. The remedy proposed by the Federation of Labour and approved by the Government, according to the original announcement by the Minister of Labour, was a new general order increasing wages. It did not appear to have occurred to either the Federation of Labour, or the Government that the disparity might be corrected by forbidding increases “ agreed upon between employers and employees.” They had apparently been introduced in spite of the Stabilisation Regulations. > In past years it had been generally agreed that the level of - internal prosperity had been regulated by variations in markets fpr the country’s exports. High prices for the country s surplus produce had been reflected in a large volume of itn-r ports, and the consequent commercial and industrial activity, all contributing to the maintenance of a high standard of living, There was the extraordinary situation to-day that the Dominion, had, through the British bulk purchase agreements, assured markets for its staple exports, but could not convert the proceeds into goods required. Sterling funds were consequently accumulating to the credit of New Zealand, and recent events in Britain had further postponed, the prospect of converting them into goods. Payment for exports was being made to producers by issuing New' Zealand currency on the security of sterling funds, and the pressure of the con-stantly-expanding volume of money in New Zealand was aggravating the inflation caused by war eonditions. SECONDARY INDUSTRIES. It might be argued there was a substantial measure of-compensation for this situation in the development of manufacturing industries in New Zealand) They were certainly ,an important factor in the present situation, but they were by no means a complete protection against the impact. upon New Zealand of tlie economic disturbance that had occurred in Britain. v To a very large extent the Dominion’s secondary industries were dependent upon imported materials, the supply of which was both erratic and inadequate. New Zealand had become doubly dependent upon the state of overseas markets for the disposal of its surplus primary produce and for the acquisition of materials essential for its secondary industries.

In the final analysis, the Dominion’s requirements in raw materials and manufactures must be paid for by the sale of surplus • primary produce, so that wage rates must not only be kept in proper relation among themselves, but the general wage structure must be kept in equilibrium with prices for primary produce. If wage rates were raised too high the cost of New Zealand-made goods, added to imports and charges for services’, would be beyond the means of thosfe engaged in primary production. Impelled by the lowering of their standard of living, .they would seek urban employment. There would be a- decline in the volume of exports and a shrinkage of the funds available to pay for imports, with consequent reactions upon secondary industries. (Mr Anderson’s earlier submissions on page 8.)