WAGE INCREASE

Grey River Argus, 20 December 1941, Page 5

WAGE INCREASE

“NOT JUSTIFIED”

, s Says Arbitration Court

[Per Press Association]

WELLINGTON. December 19. “We are of the opinion that the present economic and financial conditions affecting trade and industry, and immediate outlook tor the future of trade and industry in this country, are such that a further general order increasing rates of remuneration of workers is not justified. Tne application is therefore declined, concludes the judgment of the Arbitration Court, on the recent application for a general ord'er increasing wages. . , . Mr Monteith (Unions’ representative) was not in agreement with the majority of the Court, and delivered a dissenting opinion. The judgment states: When tne last general order wa's made, we adopted the retail prices index as al measure of the increase in the cost, of living, and we propose on this occasion to do th e same. The last decision to increase the rates of remuneration by five per cent, took into account not only the increase in living, prior to July, 1940, but also the probable increase in the cost of living for the six months following the date of the order. It was assumed that during the latter period, retail prices index would progressively increase in a manner comparable with the increase during the six months preceding the date of the order. The increase in retail prices index between the date of the general order and October, 1941, amounted to 53 points, 19 points of which were taken into account in the five per cent, increase in rates of remuneration. Thus, it will be seen that the proportion of the increase in retail prices index, which had not yet been taken into account, amounts to 34 points. This figure represents 3.31 per cent, of the index number at the date of the general order.. As the Government statistician’s index number of weekly wage rates 1 has increased by more than 5 per cent, since August, 1940, due to increases in rates of wages granted other than by the general order,, it is interesting to compare the weekly wage rates and retail prices since the outbreak of war. In September, 1939, the wiage index for both the year 1939 and at September 30, 1939, was 1100. The present figure is 1164, an increase of 5.81 per cent. The retail prices index as previously mentioned has in the same period risen by 8.54 per cent. Since the outbreak therefore, the wages index has lagged behind the retail prices index to the extent of 2.73 per cent. only. So far as effective wage rates are’ concerned, workers in New Zealand, since the outbreak of the war, appear to have fared better relatively than workers in England. The judgment continues: Application for a'n increase in wages for one large section of the community is m effect that a quantity of goods and services which are available on the average to individual members of that section, immediately before the outbreak of the war. should remain constant, except insofar as their purchasing power is affected by special war taxation. The total quantity of goods available for consumption has fallen more than the reduction in purchasing power of the workers by special war taxation, consequently, if the application for a general increase in wages is granted, the present proportional distribution or available goods and services between different sections of the community, must be varied and the share of tfi’e workers must be increased. This means inevitably that the share of other sections of the community would require to bp reduced, including the share of pensioners and other individuals with fixed incomes.

To sum up the position, concludes the judgment, it appears probable that our exports and imports will both drop further. If 'exports drop relatively more than imports, our tilade balance will .be less, yet the cost of our overseas war effort is almost certain to be greater. The drop in imports will result in less goods available for local consumption, and also is likely to affect the supply of raw materials for local factory production. Imports lor war purposes will probably be greater thus further affecting th'e volume of imported consumable goods available for civilian consumption. It . appears likely that as time goes on. more locally manufactured goods will be sent overseas, thus leaving less of such goods for local consumption. The new and more imminent danger to our country must mean greater expenditure locally on detence measures, and corresponding diversion of still more' manpower from industry. Everything points at the moment to a further decrease in the volume of goods available, and able to be consumed in New Zealand. Mr Monteith, in a dissenting judgment, states he knows of no economic conditions which could require the Court to force wage-earners to bear the burden of increasing prices. As far as he is aware, there are no facts or figures available “to justify such conclusion. On the contrary, he expresses the belief that it would be in' the national interest that the increase in wages should be granted. t;c> enable workers to maintain approximately their standard of living. Official figures prove' that workers have given generous, service to the community, and they face now further trials and further calls for increased production and longer hours of work. They have proved, states Mr Monteith, that they can answer this‘ call, but it has been shown in many countries that they can do so. only if they are enabled to manitain. their health and working ’efficiency. For these reasons and bearing in mind that the increase in prices bears heaviest on the wage-earner on a small wage; he thinks a general increase of not less than five per cent, should have b'een awarded, and as a result he strongly dissents from the decision of the Court.