STABILISING WAGES.

New Zealand Herald, Volume LVIII, Issue 17782, 16 May 1921, Page 6

STABILISING WAGES.

* DECISION OF COURT. — v 'PRESENT RATES UNTIL APRIL. FURTHER RISE IMPOSSIBLE. LOWER COST OF LIVING EXPECTED. [BT ■TEUSQR.U'H.—PRESS ASSOCIATION.] WELLINGTON, Saturday. The Arbitration Court this morning delivered the followjpg pronouncement on the question of the cost-of-living bonus: — The Court has considered the question of the cost-of-living bonus for the period commencing May 1, 1921. As on fojmer occasions we have called on the Government Statistician to supply data in respect of movement in retail prices during the Biz-monthly period from October l,y 1920, to March 31, 1921. The Court, in dealing with the figures submitted, has n adhered to the principle adopted in the past of working on the six-monthly average. On this basis a sum of 3s per week is required to meet the increase shown in prices- To this has to be added a sum of 2s. which was ■ deducted from the amount of the last bonus to discharge past over-payment. The total additional bonus calculated in accordance with the system laid down by the Court, is, therefore, 5s per week. . Same System of Calculation. We desire to make it clear, in passing, <hat the figures supplied to us by the Government Statistician do not indicate with absolute accuracy the movement in the cost of living. The movement in retail prices is hot uniform; all commodities do not move at the sjimo rate or in the same direction, a circumstance which has a bearing on their relative rates of <-orisumption, though it doe 6 not neces--sarily affect the "standard of living." This matter is dealt with in greater detail by the Government statistician in a pre- , face to the monthly abstract of statistics for April, 19£1. The Court has decided, however, in view of the fact that three former bonuses have been calculated on - the basis of movement in retail prices, that' it would bo undesirable at this stage to introduce a modified system of calculating the increase in the cost of living. In any-event; wo have no reason to think that any, great difference ii\ the result would be shown for the period now under review. It is of interest to note the effect of recent movements in retail prices in the three food groups. In September, . - 1920, the last month of the previous sixV monthly base period, the increase for a month over prices for July. 1914, was 72.80 ,por cent. The percentage of . increase rose to 78.97 in December, but dropped ,'cach month thereafter until March, 1921, when the increase was only 69.16. per cent, or 3.64 per cent, less than -• v in September, f1920, and 9.81 per cent, less thaninpeccmber,l92o. When estimates'for (1 clothing and miscellaneous items are taken I , into"' account and combined with their mdjs Foper weighting,* with, figures for food, ;;.-. vent, .fuel, and light, which, by thV-oour-.. | ■''. j-tesy. of the Government Statistician, we' were enabled, to peruse, show, that, notf/ ". withstanding an inerase in the price of MS'v * 'bread and an high price ruling P ; temporarily for eggs, "a further reduction has taken, place- -"" J "5 ..'Dangers of Increase. '■■■ -r— ' V % " *." '■'' .' Wo."have now to consider the general financial*and economic position of indus-tries'rif-the. Dominion. iWedo.notthink.it is necessary to discuss this matter in. detail, ; \ , for the present financial stringency is of ' ■ so pronojinced a nature that its insults are apparent to everybody. The Court ' j has given very full and careful consideration to the question, whether in' view of the condition of trade and industry at the present time, it" should declare any bonus , at all. We are satisfied from information we have collected that it is no longer possible for the employers of the Dominion to "pay "increased wages, and that the "ranting of an increased bonus by' the Court' would bring about a marked inV" v crease in. unemployment, and , tend , to ,;: '. check the reduction in. the cost of .living. On the other hand, it'must not be overlooked that, while the cost of living wag if . increasing- the effect of, basing the Court's calculations on a six-monthly moving ayer* age "was, to delay for- several months in-creases--due mto worker, and the Court must how give, due weight to representations that they made in the past-on-this ■Aspect of the matter. To deny them any measure-of consideration at this time N would be inequitable. ''■■*/ mQ '.-■''*'-:. Interests;' of" AU._' The Court has approached the question* . with: the grayest. concern} has availed .Qs-. itself. ;!■$ jail the .information- obtainable. ; \ :"'. Ir has.,considered the matter-;fully attd at / lengtbs,.*ridi it has jcome to the conclusion ';" that from a national,.viewpoint/'' as,•• well as in the interests employers and-; workers- alike;, a system pf ffeßiusation,, of wages- ifc highly*,..desirable., at; -the. : present time; JTh.e-f.act that& drop in? prices in:the food'{groups since, January" ; has .been sufficiently.markeij fo; ■•bring-*thei; •.i figures for- April (the first-; month of the current, ahc monthly period) several points vi below the figures ton September, the last .. '.;' month'of the period in respect of wbicfi" the bonus was calculated, is an in- ■ dication. that "unless anything , tmfareseen occurs, the'.- six . monthly. moving average to.be ascertained "at the end of the. current' period will.represent decrease at least equal to, and probably than, the increases for the last two periods. The world's markets 'show a, reduction in prices of all clasfseiffyf clothing materials, and numerous items in the miscellaneous class are falling in price; Butter, which was largely responsible, for the. increase in the October figures,- cannot maintain ' its present pjzico for more than a'verv limited period. Tho fall in butter wiO. react on dairy produce generally* and '. very materially reduce the cost of living. In fact it will probably suffice in itself to equalise averages for tho periods. " Higher Purchasing Power. Those considerations have enabled the Court to decide «U> Introduce a scheme of stabilisation. Living is now cheaper than it was at the commencement of the last six/monthly period, and the market, which was then rising, is now falling "Workers, will fluxing tho current period, have more purchasing power for/the same money than they had during the last period, and as prices continue to fall their purchasing power will continue to increase „ The Court is of opinion that workers should not be deprived of the extra 6a per week which represents their loss of purchasing power for the past six months but considers that, instead of this sum being paid during the current six months, it should be set off against the inevitable! reduction that tho September figures will show. This will have the effect of wages until April 30, 1922, and' we believe; that both employers' and workers denfve more benefit from stabilisation on the basis of present rates than from an increase in May, followed bv a greater reduction in November. Under such a scheme workers, whose cost of giving has in .fact .been reduced, will benefit by havnrc their wages secured on a falMgmarket for 12 months instead of six,, and employers who cannot now pay hjiher-wagos-wul benefit by stabUisataon of .labours costs. ;■ Miniwising Unemployment. .' In"-dociding_ on this'course the* Court though.' working independently and oh different principles, has fixrived at a policy that docs not, differ-materially fronf that of the Government (the largest employer ■ *', pi labour m th^-Dominion) ia regard%

the public servants of the Dominion. The Government has indicated its intention of withholding, omd , its inability to pay furthef cost-of-living increases to salaries, out at the same time has stated that it will not reduce salaries or dismiss public servants so long a3 it is possible to carry on as at-present-. Thi. Imperial Parliament in 1918 passed special legislation for the purpose of stabilising wages over a period, and subsequently renewed the legislation. The Court cannot, of course, prevent unemployment, but, by stabilising wages on a basis of present rates, it hopes to minimise unemployment during the coming months. This pronouncement is of a general nature, and is issued for the information and guidance of the parties. It will not be subject to review until after April 30, 1922, except as hereinafter mentioned. It is not intended to take away the right of either party to an award or industrial agreement to make an application to the Court under existing legislation, but the Court will require proof of extraordinary circumstances before departing from the principles herein laid down unless the parties agree to a modification.