PROFIT SHARINGBUT WHOSE PROFITS ?

Grey River Argus, 30 September 1949, Page 7

PROFIT SHARING—BUT WHOSE PROFITS ?

“I am very keen on profit-sharing”. So said Mr. Holland on 21.10.46. The Nationalists cloak their aims in highsounding phrases. Profit-sharing, cooperation, harmony and goodwill between employer and employee are the Nationalists’ new ideas. Really, the idea of profit-sharing is not new, except to the Nationalists in their bankruptcy of ideas. Legislative provision for profit-sharing through the issue of labour shares was introduced in 1924, but in 1926 there was only one firm of any size (the Waikato and King Country Press Ltd), which had taken advantage of this legislation and successfully operated a co-part-nership scheme for a lengthy period. (See p. 16S of ‘‘lndustrial Relations in New Zealand” by Dr. A. E. C. Hare, published on behalf of Victoria University College, Wellington.) So after 22 years, co-partnership and profit-sharing don’t seem to have made much progress. But Mr. Holland is a man with a mission and he's sticking to it.

Practice what you preach! Let’s return to what he said: ‘‘l am very keen on profit-sharing. I have tried it in my own affairs. We have a co-operative spirit in my own place which is a great success and I want to see it extended throughout New Zealand." That statement is rather intriguing. Dr. Hare, an expert observer, made careful enquiries, particularly in Christchurch, to find out how many profit-sharing schemes were in operation. Here’s what he says on p. 164 of his book on the results of his Christchurch enquiries—

“ Out of the 52 replies only one proved to be a true profit-sharing scheme, a scheme run by a wellknown overseas firm with branches all over the world. A number of other firms claimed to share profits with their employees, but none of these on investigation proved to be proper profit-sharing schemes. In Chapter Two profit-sharing was defined as involving an agreement, entered into by the employer in advance to set aside a certain proportion of the net profits of his firm as the workers’ share of the proceeds of the business. Most of the so-called profit sharing schemes in operation in New Zealand consist simply of the payment of a bonuq on wages at Christmas, the amount of the bonus depending upon the decision of the employer in each individual workman’s case. Such methods sacrifice the chief advantage of profit sharing, namely, that the worker is made a partner in the business and draws his share of the proceeds of it by right, without depending on the personal goodwill of the employer. It is therefore difficult to justify applying the name profit sharing to them. One small firm employing about a dozen workers which gives considerable publicity to its “profit-sharing” scheme proved on investigation to be running a group premium bonus system, by which the wages of the workers varied according to their rate of output, though not in exact proportion as is the case with ordinary piece work.’’ Now what becomes of Mr. Holland’s proud boast that he has tried profitsharing in his own business? The expert proves that his statement is inaccurate. Profits or Profit-sharing: There are two possiple explanations. One, we are loath to suggest, is that Mr. Holland doesn’t understand what is really meant by profit-sharing. The other is that Mr. Holland and his Tory friends are no! interested in profitsharing for its instrinsic advantages but only as a means to an end. What end? Listen to Mr. Holland on 21.10.46—‘‘Throughout my working life, as a worker and as an employer, working alongside and in cooperation with working people, I have tried to put into practice the things that I preach about when I do preach —profit-sharing, understanding, goodwill, and toleration amongst men. I have found that the average New Zealand worker is one who responds to that type of treatment and gives rich dividends in return.” Noble sentiments, but there’s a sting in the tail. The Nationalists, when they think of profit-sharing, are really thinking of increased dividends for themselves and those who finance them. Look at what their policy in 1946 said—“To stimulate increased production of goods extra earnings received by workers as a result of approved schemes of payment by results, profitsharing, etc., to be exempted from income tax for a period of three years. If the experiment proves successful. it will be continued.” Here you have payment by results and profit-sharing placed along-side each other. Payment by results is just a nice way of saying “piece rates” and every worker knows what’s in store when the employers start proposing the adoption of piece-rates. Piece-rates are the classical method for the exploitation of the workers. To the Nationalists piece-rates and profit-sharing are the same thing. Questions for the National Party. What is the exact difference between profit-sharing and piece, rates system ? Is Mr. Holland’s much-advertised profit-sharing scheme a real profitsharing scheme or merely a premium bonus system? Will the National Party’s profitsharing extend to the farm worker?