Higher Wage Hearing

Evening Star, Issue 26154, 16 July 1947, Page 8

Higher Wage Hearing

INDUSTRY GOULD NOT MEET INCREASE FROM PROFITS, SAYS PRICE TRIBUNAL OFFICER

(P.A.) WELLINGTON, July 15. Except in some 'isolated instances, industry could not meet the cost of any substantial increase in wages out of profits, said Mr H. L. Wise, a member of the Price Tribunal, when he appeared . on subpoena of the Federated Farmers of New Zealand before the Arbitration Court hearing the application for a general pronouncement on wages rates. Mr Wise was asked by Mr Justice Tyndall what amount he would term “ a substantial increase.” He replied .that he would be' reluctant to commit himself to that extent. “ Would you say it would be anything in excess of 2s fid a week?” asked His Honour. •, 1 “ I imagine so,” said Mr Wise, who, was called by Mr A. P. O’Shea, advocate for the farmers’ organisation. Mr Wise said he did not wish to take sides on the issue, nor did the Price Tribunal. Any opinions he might express were his own and not necessarily the tribunal’s.

Asked what effect the increase claimed would have on industries if no increase in. prices were allowed, Mr Wise said he would prefer to deal with the question as it would apply to different sections of industry. Manufacturing industries could be divided into four categories. In the first of these there were those industries producing essential lines and having high labour content—woollen mills, footwear and clothing factories, and timber factories. Woollen mills had little, if any, capacity to' absorb an increase in wages. His Honour said he presumed 'witness was thinking about a £1 a week, increase, but he should remember that another claim of the federation was for an increase in women’s rates of £2 4s. Mr Wise said that would make the position more serious. If the woollen mills were asked to carry a £1 a week wage increase they would show a loss. Mr Wise said tne same result would be experienced by footwear factories and men’s clothing factories.. Mr W'se said the second industrial category was that section which produced essential goods, yet had a lower labour content. This also had little, if any, capacity to meet an increase. Biscuit, paint, paper, and starch factories were in this group. The third category included those factories producing less essential goods, and this, too, was in the same position as the others. EFFECT ON FARMING. Farming was tlie fourth section of 1 the country’s industry that would be affected by a wage increase, Mr Wise said. As the tribunal had nothing to do with meat, wool, or dairy produce, his comments would have to be confined to such farms as those producing tobacco, hops, and small fruit. He did not think such farms could , meet an increase. Distributive trades might have a little more capacity to absorb an increase. This was not because the Price Tribunal had been easier on them, but their increased turnover might have given them an added margin. Essential services, such as gas, electricity supplies, and .' rail and tram transport, would find the increase pretty hard. “An unfortunate, business is that it. is the essential industries that would have difficulty in absorbing the increases,” sad Mr Wise to a question from His Honour.

DUTY OF TRIBUNAL.

Asked by Mr O’Shea if the tribunal’s main job was to try and maintain a comparable relationship in the prices that existed in 1939, Mr Wise said the primary duty of his organisation was to look after the consumer. This necessarily . meant, however, that other parties had to be treated fairly. The tribunal took an average of any increases of costs for an industry. Firms were run with varying degrees of efficiency, and this meant that the more efficient of them were in a better position than the average allowed for. This meant that they got more profit. If the tribunal fixed costs on a. basis of those of the most efficient unit in aft industrial group, many other firms not so well run would go out of business, and unemployment would result. There was a qualification to this average cost principle. During and since the war it had been considered imperative to maintain essential production. Therefore, if a firm engaged in such production had costs higher than the average, allowance would be made for this in order to keep it in business, even though it might be inefficient. Mr K. McL. Baxter asked witness whether stabilisation had been fairly effective. Mr Wise: Yes.

Mr Baxter: Is it true' that once the man-power regulations were removed the principal prop of stabilisation was removed ?—Yes, definitely. Mr Baxter: Had they remained, then people would have been kept in essential industries.—Yes.

“ In order to provide a proper relationship under stabilisation for a big section of the workers who had not received increases since March, 1945, should not their remuneration he

brought in line with those who had received increases ? ?’ asked Mr Baxter. Mr Wise: I agree, but Ido not know who is to bear the cost. > His Honour pointed out that those who had got increases since March, 1945, had signed documents to say the increases were necessary to bring the workers applying for an increase in line with other workers.