FLAX WORKERS

Hawke's Bay Tribune, Volume XXI, Issue 14, 30 December 1930, Page 6

FLAX WORKERS

THE 33 1-3 PER CENT. CUT A COMPLICATED POSITION. SHANNON MEN STAND OUT. The order of the Arbitration Court that the flaxmills employees award be amended to provide that all time-wages and piecework rates prescribed in it shall be reduced by 33 1-3 per cent, was considered by a meeting of 80 flax workers at Shannon yesterday afternoon and after discussion it was unanimously decided not to accept work at so considerably a reduced rate of pay. It should be noted that the Court, in making the order, stated that it was satisfied that all parties to the award then existing consented to the matter being dealt with by the Court. The decision now arrived at by the workers at Shannon not to accept the Court’s order creates a deadlock from which it is difficult to see a way out. In order that our readers may be conversant with Mr. Justice Frazer’s reasons for amending the award so drastically as has been done we publish hereunder the following extracts from the lengthy memorandum which he attached to the order:—

In the memorandum Mr. Frazer said that evidence had been adduced by the mill-owners to prove that flaxmilling, in view of the low prices ruling for fibre, could not be carried on at the present wages rates, or even at the reduced rates asked for, except at a loss. The mills were not working at present, and had been idle for a-considerable time. The millowners were desirous of reopening the mills even though production must for the time being be carried on at a loss, and the present application was made in order that production might be resumed. They were desiious of retaining their foreign markets, which were in danger of being lost, with tho consequent loss to the Dominion of a valuable export trade. PRODUCTION COSTS. “I am satisfied,” Mr. Justice Frazer continued, "that the cost of production of fibre, on the basis of the existing award rates of wages, is somewhere between £23 and £25 a ton. The present market price of fibre is between £lB and £l9 a ton. While it is undoubtedly true that a number of flaxmilling undertakings were greatly over-capitalised when the industry was at the height of its prosperity, the production cos’s mentioned above are calculated on the basis of a capitalisation on bare present-day values. Fibre, owing to the competition of sisal, and other factors, has dropped below the general price-level of commodities, and stands now at a figure considerably lower than that of 1914. “It is unlikely that any considerable recovery in the price of fibre will take place in the near future: and the position must be accepted that, while the general level of prices for New Zealand products has fal'en to a level approximating to that of 1914, and in some cases below it. fibre l:as fallen well below the 1914 level, and appears to have a smaller ->rosvcct of a partial recovery than our utlnr products.

MUST COME TO ECONOMIC LEVEL. "Surplus capital invested in tae industry has been lost, as well, as surplus profits from past years, which had been put back into the industry, and, even on tho basis of a capitalisation written down drastic-al-ly to meet the conditions now provailing, flaxmilling cannot show a profit unless the market improv: n considerably. The mills >havo been ruu at a loss for the last two years, even with prices of fibre ruling nt figures well above the present level, and the mill-owners have at last been compelled to close down. "I have come to the conclusion that if the mills are to reopen, wages, in common with royalties and other costs of production, must come down to an economic level.

“If the mills remain closed, some hundreds of workers, whose homes are ' in tho Manawatu flax district, must remain unemployed at a time when unemployment is widespread. It is undesirable that they should remain unemployed if work can bo made available for them near their homes, and it must bo obvious that only u limited number of them could find other work if they left the district. The only questions to which the court can address itself m such circumstances are (1) the percentage rate of reduction (2) whether a sliding scale should be prescribed and (3) the term for which any reduction should operate. REDUCTION MUST BE SUBSTANTIAL. "In view of the evidence tendered to the court it is clear that the immediate reduction must bo substantial. A reduction of 33 1-3 per cent, in the avjard rates means bringing down the wages of minimum grade workers from 15s a day to 10s a day. The latter rate is below the court’s present standard rate for unskilled workers in casual employment, but the evidence is clear and definite that, while there is every prospect of the mills being reopened if a minimum rate of 10s per day is prescribed, there is absolutely no prospect of their Being reopened if a higher rate is prescribed and that even at a rate of 10s a day the mills will run at a loss. "I am, therefore, forced to the conclusion that the 33 1-3 per cent, reduction applied for is necessary. Anything in the nature of a compromise is clearly futile.” After explaining his theory of the sliding scale correlating wnges with prices, reported under a separate heading, His Honour went on *o say that, in this particular case, ho dm not think it would be cither wise or just to encourage hopes that were unlikely to be fulfilled. “The original term cf t'o Pwai .,, has expired,” he said, ‘uml it scein,

to mo that the sounder course is to decide on a definite reduction of 33 1-3 per cent, for a limited period, and to apply for a review after the expiration of that period, when it may bo possible to estimate future conditions more accurately than it is at present. l‘l propose therefore to amend the existing award by reducing all time and piecework rates by 33 1-3 )>er cent, as from January 1, 1931. The term of the existing award having expired, it is open to either party to make application for a new award at any time, but if the parties agree to allow tho existing award to continue m force for an indefinite period, the court will hear a joint application for a review of the present order at the expiration ot six months.”

An opinion generally in agreement with Mr Justice Frazer’s view was subjoined to the order by Mr Prime, the employers’ representative, but Mr A. L. Monteith, the employees’ representative, dissented.

WORKERS' REPRESENTATIVE REGISTERS DISSENTING VIEW Stating that the court’s order provides “the greatest cut in wages ever effected in New Zealand, ” Mr. A. L. Monteith, workers’ representative, maintains that the flax industry has had very prosperous times, and has made large profits. To suggest that all these profits have been put back into the industry and lost, he says, is imaginary. “Exceptionally handsome profits have been taken out of this industry,” he proceeds. . “The industry since the middle of 1929 has had to meet a bad market and the workers are now asked to face a decrease of 33 1-3 per cent. When fibre rose by the same amount per ton as it has now fallen the workers never received 33 1-3 per cent, increase. Their wages base was the cost of living. Now, in hard times, they are asked to face a wage which will give them £3 a week fulltime, but as this industry is seasonal and in some cases the men are affected by wet weather and floods, and in view of the returns submitted in previous cases of earnings in this industry, it appears certain that the yearly return to the worker on the minimum rate will be about £125 per year, or 50/- per week.

“The union proposed a sliding scale. Generally speaking, I am not in favour of such a method of fixing wages, but when workers suffer when the price of the products falls, as they have in this case, it is only reasonable that they should have the chance of benefit when prices rise, otherwise justice is not done. In this case the workers did not benefit in comparison with the decrease they now suffer. The pieceworkers, who also receive this 33 1-3 per cent, reduction, will get less, generally, than operated in 1907. “It cannot be suggested that these workers ever received anything in keeping with increased prices, and to-day they are in a worse position than in 1907, with an increased cost of living of 56 per cent, over 1914, not to mention the cost of living between 1907 and 1914. Before such drastic reductions should have been given effect to, a very full investigation should have been undertaken. The information as to the cost of production is all in possession of one party, and when wages are reduced to a level as low as in this case, 40 per cent, below ordinary standards, a very full investigation is warranted.”