WAGES AND COST OF LIVING

Manawatu Standard, Volume LX, Issue 227, 23 August 1940, Page 3

WAGES AND COST OF LIVING

(Contributed by the N.Z. Welfare League.) Tlie recent decision of the Arbitration Court granting 5 per cent rise in wages to offset a rise in the cost of living, if; repeated in six months timewill bring us further along the road of inflation—unless 'it is accompanied by a: corresponding increase in production. The Minister for Finance warned us in the Budget speech that the increase in purchasing power to buy the smallei volume of goods offering “involves progressive inflation,” and in the same speech ho names the remedy namely, “The (war) sacrifice must ho made by consuming less goods.” MORE PRODUCTION. Seeing that we have to rely more and-more upon locally produced goods it stands to reason that an increase in wages, or purchasing power, while the output or-production of goods and services remains ,the same, will introduce the very danger which the Minister desires to avoid—inflation. If on the other’ hand the increase in wages was accompanied by a, similar increase in hours worked, the extra production of goods and services would largely offset the extra purchasing power. This seems so obvious that it is difficult to believe that trade union leaders do not themselves realise the danger of these demands—it should not be difficult to instill the truth into the minds of the rank and file for their own benefit. The decision of the Court only applies to workers under awards, thus it places other workers and sections of the community at a disadvantage. The award workers get 5 per. cent extra to meet the inevitable increase, in prices, while all others have, to stand tlie whole loss. The only alternative would be to increase everyone’s income by the same amount, which would be a Gilbertian remedy; indeed tho very absurdity of such an alternative proves the weakness of the advance to only one. section of the community. THE ONLY SOLUTION.

The war calls for huge unproductive expenditure; it lias caused a shortage of goods, therefore there seems to he only one remedy—namely less consumption (as the Minister says) otherwise we shall have increasing inflation from which the poorer sections of the community suffer more than any other. Under war conditions it is impossible to maintain the same standard of living as we are accustomed to in times of peace and prosperity. There must be some sacrifice made by everyone, yet the argument put forward in the Arbitration Court claims the right for one section of the people to maintain its peace-time standard even though it must result in more sacrifice for those outside that section. We applaud Mr Fraser’s assertion in Parliament that it is “difficult to have any patience with people who talk of hours, wages, profits, and dividends” under present conditions.