COST OF LIVING

Greymouth Evening Star, 6 April 1922, Page 5

COST OF LIVING

ARBITRATION COURT’S ESTIMATE EFFECT ON AV AGES. (Per Press Association.) , WANGANUI, April 5. The Arbitration Court has made a pronouncement on the cost of living for six months, ending March 31, as affecting the wages of workers under awards and industrial agreements, with the exception of a few industries, where there arc special circumstances.

The pronouncement is as follows:— The Court, in pursuance of the provisions of the Industrial Conciliation and Arbitration Amendment Act, 1921-22, has investigated the movement in the cost of living between the six-monthly period from April to September, 1920, and the sixmonthly period October, 1921, to March, 1922. The rate of wages at present payable under the awards of the Court are based on the ascertained cost of living for the half-year ended September, 1920. The accumulated bonus, then declared, represented an increase of 15s per week on the standard wage of March, 1919. The actual amount ordered to be paid was, however, 13/-, a, reduetion of 2/- having been made, to balance a past over payment. The Court has, on this occasion, as in the past, covered the whole field of the cost of living. AVe particularly mention this matter, as an impression appears to he current that the Court considers only the statistics relating to food, or to food, rent and fuel, and light groups. The Court adopts the official figures of the Government Statistician in respect of these groups, and it also obtains returns in respect of the price movements in clothing, and miscellaneous commodities, and services, for which no official statistics are available. These are combined, with their proper weighting, with the official figures for other groups, so as to give the. movement in the. cost of living as a. whole. It must be borne in mind that all the statistics with which we are dealing, relate to retail prices. They are an accurate index of the movement in the cost of living for so long as the average, family spends the same relative amount on each commodity listed. In normal times domestic budgets vary from year to year, and the tendency is accentuated in times of abnormal and irregular fluctuations in prices. Such changes in the distribution of family expenditure do not necessarily involve any alteration in the standard of living, but they have the effect of rendering retail prices statistics an approximate, instead of an exact measure of the movement of the cost of living.

WHERE MONEY GOES. As tho family expenditure budgets on which the present statistics are based were collected in 1912, they cannot now be regarded as entirely satisfactory. I'ood, rent, fuel, and light together account for nearlv 60 per cent, of the total expenditure of an average, family. Clothing, which includes personal clothing, household linen, drapery and boots and shoes, accounts for 13.89 per cent., and miscellaneous household requirements, medical, and other fees, train and tram fares, newspapers, and periodicals, and other items of a general nature make up the remaining 26.45 per cent.

As in the. past, the Court has had to base its information in regard to tho clothing group on the prices of a- skeleton schedule of articles, which was reasonably representative of the whole group, while the general prices were uniformly increasing. Latterlv. this information had to bo supplemented by estimates, owing to the unevenness of the movement in the prices of commodities within this group, which caused the schedule to lose its representative character. We may add, in passing, that rapid changes in fashions and qualities have always made it impossible to construct reliable statistics of clothing prices, but we have now adopted a schedule which is representative and well balanced, and is sufficiently complete to obviate the necessity for having recourse to estimates. It, covers thirteen items of men’s and boys’ overwear, six items of men’s and boys’ underwear, seven items of women’s and girls, overwear, five items of women’s and girls’ underwear, 15 items of household drapery, and nine items of footwear and repairs. Jn regard to the miscellaneous expenditure group, the Court has felt for some time past that 26.45 per cent of the total expenditure of the family was too large an item to be covered by an estimate. We have obtained accurate data in regard to price movements of household furnishing, household ironmongery, brushware, sundries (32 items), crockery, train and tram fares, and newspapers and periodicals, which, together, make up 13 per cent, of domestic expenditure, thus leaving only 13 45 per cent, for which no definite information is available. The items compHsiim this portion of the miscellaneous represent expenditure on insurance, medical, dental, and legal fees, subscriptions to-lodges, clubs, religious bodies, charity, etc., sport, and recreation and casual expenditure of various descriptions, that cannot be classified. We have assumed that the movement m respect ol the sub-group is the average of the groups covered.

PROPOSED REDUCTIONS. The adoption of improved methods for ascertaining the movements of prices in the clothing and miscellaneous groups, and the temporary tendency to steadying prices in certain lines, have caused the fall in the cost of living to. appear to be less than was generally anticipated. Tie new schedules have, however, enabled us to arrive at a reasonably accurate determination of the extent of the movement in the cost of living, in so far as, at all events, rental prices can be taken as an index of the cost of living. In comparing the two half-yeai y periods, April to September, 1920, and October, 1921, to March, 1922, we find the cost of living, measured in wages, has fallen to an extent that would reduce the accumulated bonus of 15/- per week to 8/week -that is, by 7/- per week As, however, 13/- was paid instead of 15/-, the actual reduction is 5/- per week. The Court has discriminated between adult males, adult females, and juniors in awarding past bonuses, and if the same principle is followed in reducing wages,

the amount of reduction will bo as under: Adult males 5/-, adult females 2/6, and juniors 1/6 per week. The Court, in computing the past bonuses alterations, has used the sixmonthly, figures for the purpose of comparison. Wo have made an alterative computation, based on monthly figures. If tho figures for March, 1922, are taken instead of the six-monthly moving average for the period October, 1921, to March, 1922, the reduction is greater by 2/- per week in the case of adult males, and 1/- per week in the case of adult females and juniors.

This pronouncement is in no sense a determination of whether or to what extent wages are to be reduced. It is simply a statement of what tho movement in th© cost of living represents in wages. The Court will sit at Wellington on April 26 to hear the representatives of the employers and workers, in regard to other considerations that should weigh with the Court in determining whether wages are to be reduced, and if so, by what amount. It is interesting to note, in connection with the Arbitration Court’s pronouncement, that the Act makes no distinction between bonuses and basic rates, so that any reduction will come olf tho total rate of remuneration in each case. The pronouncement now issued is only a determination on the ascertainment of tho movement in the cost of and has no legal effect in itself. . ■ Aliy general order made will not take effect until early in May: