DIVIDENDS AND WAGES: A COMMON ERROR

Greymouth Evening Star, 14 November 1947, Page 8

DIVIDENDS AND WAGES: A COMMON ERROR

Reports of a high or satisfactory general rate of company profits were wrong, said the general manager of 'the Colonial Sugar Refining Company, Ltd. (Mr C. W. Rothe) in a statement accompanying the half-yearly dividend announcement. ‘•The error,” he said, “arises from making comparisons with past years merely in terms of money and neglecting to make allowance for the fact that today’s pound is not worth nearly as much as even a few years a According to the Commonwealth Bank’s statistical bulletin, even mbney profits, that was the numbei of pounds earned, of some of the most important Australian companies were less than pre-war and in purchasing power, the most important factor, were only two-thirds of pie-war level, said Mr Rothe. On the other hand, wage rates, which were now at a record high level, had risen more than 40 per cent, in terms of money | since before the war. The public had become accustomed to think of wages in terms of the cost ■of living; they made allowance for the reduced purchasing power of wages, said Mr Rothe. That, obviously, was the correct view to take and looked at in that light wages rates in Australia, generally, while materially higher than before the war, were certainly not 4'o per cent, higher. It became just as obvious that company earnings and dividends, in fact all income, must also be thought of in terms of purchasing power. Mr Rothe added that improvement was not begrudged employees, but the public, including wage-earners and those on fixed incomes, should know and understand that in general the wage-earner had improved his position materially but that the true position of the shareholder had deteriorated and now .he was overdue for a distinct improvement in his ieturn. Increased production could bring improvements to both wage-earners and ghareholders.