BASIC WAGE

Grey River Argus, 22 October 1936, Page 5

BASIC WAGE

THE EMPLOYERS’ CASE For Cheap Labour (Per Press Association). WELLINGTON, October 21. At the basic wage hearing, at the Arbitration Court, to-day, Professor A. H. Tocker, professor of Economics at Canterbury Collego, submitted a lengthy statement regarding the economic and financial conditions of New Zealand from 1924 'to 1-936. He said that the people of New Zealand were dependent on overseas markets for an exceptionally large pan of their aggregate income. Since prices for exports, especially wool, in overseas markets varied more widely than internal prices, receipts from exports were the most variable part of the country’s income. New Zealand’s Income and spending power had been increased in the . past by heavy public borrowing from overseas sources to fin 1 nice developments in the Dominion. Variations in New Zealand’s production had been recorded and analysed for the period since 1900. Tn every ease these variations in production and in income derived from production had been duo in the first place to changes in the amount of income received from abroad from exports, or from new loans raised there. Increases might bo due to higher prices for exports or to increased export production. Decreases were due in almost every case to reduced prices for exports. A survey of the figures left no room for doubt that the chief cause of the depression in New Zealand was the fall of income from abroad, which occurred about a year is advance of other internal changes. The real difficulty of the depression which was most acute in 1932 lay in the disparity between movements .of various groups of prices. The improvement recorded since 1932-3,>. ha . been substantial, but in view of the present shackling of international trade in primary products by means of tariffs. quotas, etc., the difficulty of extending present markets, and the possibility of restrictions being imposed upon goods entering those markets, it would be very unwise for New Zealand to rely unduly on the hope of receiving in the near future an export income higher than the pre sent time. The employers’ advocate, Air T. OBishop, in his statement said he did not propose to suggest any sum as a basic wage, but nather to submit what he regarded as essential factors to be considered. Tn the light of a judgment aiven bv Mr Justice Fraser, on November 12th, 1925. which provided for a full minimum wage of £2 10s fid a week to workers over 22 years of age. he submitted that it was open to the Court, in making any new award to include therein a scale of wages which would determine in each case at what age the basic wage should apply. There had been clear recognition lof the principle that the age at which a full minimum' wage should be payable must vpiw with the class of work to be done and the prospects of further advancement. If an arbitary definition of an “adult” were to be adopted, as, for instance, one who was 21 years of 'age, this principle would be entirely destroyed. Tn illustration of this point, Mr Bishop said' that boys who entered upon professional careers remained, at school longe r than those -who entered a trade or took up manual work. It was not reasonable or defensible that a boy who rema ned at school until he was 18 and then entered the office of a public accountant, with a view to qualifvin.g in the profession, should attain to the basic wv.ge at the same as the tradesman or manual worker. Boys of IS and over could not qualifv'themselves in the short space of two and •a-half or three years to earn the basic wage, and 1 hence employers would engage younger, boys. Mr Bishop contended that it was competent for a conciliation council or the Court to prescribe in any award a scnle of wages leading up to the basic rate, and the age at which the basic rate should apply. The word “adult” had no clear and definite meaning which mux be accepted in law. though there was a popular assumption that an adult was a person of 21 years. It was open to the Court to adopt its own definition. According to the Arbitration Act. the Court must first take into consideration the economic and financial cond-tions affecting trade and industry, and, second. the cost of living. The Court was required to fix as a basic wage n sum' which would enable a family of five to be kept in such a reasonable standard of comfort as the economic and financial circumstances affecting trad' 1 in New Zealand would permit. He called attention to the fact that the hypothetical familj- of five was not a true average familj’ of New Zealand’s male wage-earners. It assumed the existence of 97.069 non-existent wives and approximate!}’ 500,090 non-exist-ent children. Another point was the necessity for a declamtion of the basic wage on a daily and hourly, as well as a weekly basis, as the weekly basis was not applicable to the case of a very large numbe r of workers whoso employment was casual. Mr Bishop futher contended that the full effect of the recent industrial legislation had not yet been reflected ’n retail prices, and the effect would not fail to be a widening of the gap between external prices ami internal costs Wage increases could not fail to increase the costs of production, and in many cases such increases were cumulative. The Court was faced with the necessity of finding a formula which would not only give a correct result for the present, but also be cap able of use in the half-yearly adjustments which are provided for. He suggested that a base period should be adopted, and a wage for that period calculated on the value of production a head of population for that period, 'pnd adjusted periodically to changes in the value of production a head. The base period’ might bo .1924-25, when there was full employment, or 1924-29 when there, was some unemployment.

Professor Tocker DOES NOT KNOW WHAT BASIC WAGE IS! WELLINGTON, October 21. Cross-examined by Mr J. Roberts as to what he thought the basic wage

should be, Professor Tocker said that he had not opinions. For one thing, he said, he did not know what the term a detailed study of the costs of living meant. He had not been able to make for different circumstances. To define the basic wage would entail a long and careful study of many factors which he had not had a chance to make. The Court adjourned until to-mor-row.