Money Wages and Real Wages

Hawke's Bay Tribune, Volume XXVI, Issue 118, 2 May 1936, Page 6

Money Wages and Real Wages

(To the Editor.) Sir, —Wages are not paid from some lurid outside the community, but by one part of the community to another part. Statistics show that some 65 per cent, of the total cost of production is due to wages paid, thus wages are a very material factor in the cost of any article. In addition to wages there is the remuneration for other services rendered in production and distribution which represents the income of those who run the various activities. If the price of any article remains the same then a rise in wages increases the receipts of those who receive this rise, but decreases tho income of those who pay, that is the general community. It transfers part of the total purchasing power from one section to another without increasing that purchasing power as a whole. To readjust the balance the general effect of increased cost in production is an increase in prices, unless the increased cost IS accompanied by greater production in which case higher wages can be paid without affecting cost at all High wages are very desirable, but it fixed by law at a figure which production and consumption do not warrant, the innevitable result is increased cost, which often mnre than ofi-sets the rise in the wage rate. This is a matter for careful consideration. The money rate of wages is not so important as what can be. purchased with tho earnings.—Yours etc., N.Z. WELFARE LEAGUE. Wellington, April 39, 1936.