COST-OF-LIVING BONUS

New Zealand Herald, Volume LIX, Issue 18085, 9 May 1922, Page 9

COST-OF-LIVING BONUS

The decision of the Arbitration Court on the question of reduction of the cost-of-living bonus was delivered hist evening. It provides for a. reduction, as from Monday, May 15, of 5s per week in the wages

of male adult workers, of 2s 6d per week in the wages of female adult workers, and of l s 6d in the wages of juniors. The Court, reviews at length the economic and financial conditions affecting trade and

industry in New Zealand, and states that the fall in prices has been

felt, most severely by the farmers, while the manufacturers, merchants, and retailers are in turn affected by the position of the fanners. It would, the Court believes, be beneficial if wages were to drop 10s per week, but reduction of that amount would involve a reduction below the cost-of-living level, which, though it would probably be only temporary, would nevertheless press hardly on a considerable section of the workers. Mr. W. Scott, representative of the employers on the Court, dissented from the pronouncement on the ground that the amount of the reduction was inadequate.

The Court, in its pronouncement, enumerates the bonus increases granted by it since the passing of the War Legislation and Statute Law Amendment Act, 1918) The present rates of wages, it states, are reducible, on the assumption that the cost-of-living statistics alone are to be taken into account, by 5s a week. As explained in the pronouncement of April 5 last the Court had had some difficulty in the past in tracing the movement in prices in the clothing and miscellaneous groups and had had to rely, ta some extent, on estimates.

" We have now adopted more complete schedules, comprising representative commodities and services and have given the different sub-groups their proper weighting. Tho more accurate calculations that we are now enabled to make, together with a steadying market, have had the effect of making the decrease in the cost of living appear to be less than was generally anticipated and this has caused a suggestion to be made that the Court's stabilisation policy did not work out as well as had been expected. We explained at the hearing in Wellington and now repeat, that on checking our revised schedules against our former schedules and estimates, we found that on two occasions an over-estimate had been made and on one occasion an under-estimate had been made, with the result that, on the whole, the stabilisation scheme has been fair to both employers and workers. Owing to our basis of computation having been altered, we were unable to make a direct calculation of the movement in the cost of living as between the half-yearly period ended September 30, 1920, and the half- I yearly period ended March 31, 1921. We had to go back to our base period, the half-year ended March 51, 1919, and calculate the increase from that period to the period ended March 51, 1922, and then subtract this increase from that declared for the period ended September 30, 1920. The result was a decrease representing a reduction in wages of 7s per week on the amount declared to be due as on November 1, 1920, and 5s per •week on the amount ordered to be paid as from that date. "So far we have been dealing with labourers and artisans, who are generally paid at an hourly rate. Other workers ■under the jurisdiction of the Court are paid, as a rule, by the week. They have received increases corresponding generally to Chose received by the hourly workers. It has become customary in their case to include m the basic rates bonuses payable prior to January 1. 1920, so that in most cases these workers are now shown in the awards as receiving bonuses of 13s per week. In a number of instances, for reasons that do not affect the present issue, the whole remuneration is shown as a flat. rate. A Fallacious Reasoning. " Having laid this founriation, we are now in a position to deal with the arguments adduced by both parties as to the amount by which tho rates of remuneration ought to bo reduced on the basis of the cost-of-living figures. The employers, in asking for a reduction of 13s per week, had split the amount into three sums of ss. 2s, and 6s. The 5s is the amount str.ted by the Court to represent the fall in the 'cost of living. The 2s is the amount deducted in November, 1920, in respect of the past over-payment of 2s per week, which has previously been referred' to, ar d the employers contended ..- that this sum was included in the stabilisation scheme., and should not be restored, so that the 5s reduction, stated by the Court, should have been 7s. This reasoning is fallacious, as the following statement will show: — a. d. ' Bonus declared November. 1920 . . 15 0 Bonus declared March. 1922 .. .. P. 0 Difference 7 0 Bonus actually paid. November, 1020 13 0 Bonus declared March, 1322 .. .. 8 0 Diffcrcnco 5 ° "The actjual increase in the cost of living for the period ended March 31, 1922T is ascertained to be equivalent to 8s per week above: the rates for the period ended March 31. 1919. 'Hie difference between that hum and the sum now paid (13s) is ss, and no question of restoration or non-restoration of 2s is involved. Regarding the further 6s that the employers argue should be deducted, their claim is based on the action of the Court in May, 1920, when an additional lid per hour (6s per week) was granted tio the lowest paid workers, and corresponding • additional amounts to other workers, over and above the increases due in respect of the enhanced cost of living. These increases were, as the Court then stated, granted in view of the general shortage of labour, and. the fact that employers in several industries had, by agreement with their workers, undertaken to pay higher basic wages than those Uhen in force. This 6s per week, then, was granted because of the increased prosperity of the country. In a sense, however, it was partly a cost-of-living adjustment, for the Court in April, 1919, had stated that the new rates then granted did not wholly compensate tho workers for the increase in tho cost of living. Comparison With 1914 Standard. "It must, of course, be remembered that tho Court had no power until tho passing of tho Act of 1918, to vary the rates of wages freed by an award, and could grant increases only on the making of a new award. The Act of 1918, which Rave the Court power to vary tho rates during the currency of an award, did not specifically empower the Court, to grant increases based on a 1914 standard. - The new rates fixed bv the pronouncement of May, 1920, however, had the pffecb of bringing wages more nearly into line with the cost of living, but in mariy cases did not increase them up to or be-

REDUCED BY FIVE SHILLINGS

ARBITRATION COURT DECISION

TO OPERATE NEXT WEEK

EMPLOYERS' ASSESSOR DISSENTS

yond tho amount required to meet the I increased cost of living, measured from 1914. Hence tihe claim for a special further reduction of 6s per week cannot be supported by asserting that the granting of 6s per week in May, 1920, had brought the wiges of tho workers ahead of the cost! of living. "The cost of living for the six-monthly period ended March 31, 1922, as measured by the retail prices statistics covering all groups, averaged 67 per cent, above the pre-war figures and at the end of the period stood at about 62 per cent, above pre-war figures. The minimum-rate unskilled worker, whose award wage was Is to Is 2d per hour in 1914, has had an award wage of Is per hour (inclusive of bonus) since November, 1920, so that his present rate is now only 62j to 685 per cent, above the pro-war rate. During the earlier months of the period, the minimum rate was below the amount required to meet the increased cost of living, measured from 1914. In many cases, however, workers obtained larger increases in actual wages, as well as improvements in conditions of work. Objections by the Workers. ' The workers' representatives opposed any reduction of wages, even to the exlent indicated by the movement in the cost-of-living figures, on the ground that such a reduction would not enable the workers to maintain a fair standard of living, and on the further ground that during the period of rising prices wages' did not keep pace with the cost of living. The first ground of objection we shall deal with later, when we consider the matter of- a fair standard of living. The second ground, in our opinion, is not tenable, unless we are to confine our attention to the actual award rates of wages. Admitting that th« award rates did not in every case keep pace with the rising cost of living, there were manv factors beneficially affecting fh« real earnings of the workers. Employment was plentiful, and there was a'great diminution of casualness of employment. The award rates were true minima, and very many workers received substantially higher wages. Overtime was regularlyworked, and was paid for at higher relative rates than in pre-war times. In many occupations, young lads became self-supporting almost as soon as they left school, and so relieved their parents of the burden of their maintenance. Hours of work were shortened, and conditions of employment were improved. Unskilled and semi-skilled workers were often able to command skilled workers' rates of pay. "All these factors must be considered before we can affirm that wages did not, during the period of rising prices, keep pace with the increasing cost of Jiving. When we make proper allowance for these matters, we cannot say that the real earnings of the average worker did not keep pace fairly well with the increased cost of living during the period of rising prices, except, possibly, for a few months at the peak of prices. The volume of retail trade, the increased attendances at entertainments and race meetings, and the general appearance of prosperity all indicated that purchasing power was not diminished, but rather enhanced. Economic and Financial Conditions. " We find ourselves, therefore, unable to accept the view of either the employers or the workers in so far as tho relation of wages to the cost of living is concerned. In our opinion, during the period of rising prices, the actual conditions of employment were such as, on the whole, to compensate the workers for the increased cost of living; but the bare award rates, on the other hand, were not increased beyond the increase iri the cost of living to an extent that would justify a reduction of 8s per week beyond the amount disclosed by the present cost-of-living figures. " Up to the present we- have dealt with the cost of living in relation to wages. Wo now turn to the examination of tho economic and financial conditions affecting trade and industry in New Zealand. We have, during the past 18 months, been passing through a, period of deflation and depression. The process of deflation is always painful. A period of inflated currency and inflated prices brings with it a semblance of prosperity, and there is, unfortunately, a tendency to capitalise on the inflated values. Sooner or later the break must come, and we then experience a restriction of purchases and a general curtailment of capital expenditure. In our cost-of-living judgment of June, 1921, wo quoted Professor Kemmerer, of Princeton University, as saying that inflation, like alcohol taken in excess, produces a temporary exaltation, but is always followed by its ' morning after.' The experience of the past 12 months has justified our estimate of tho situation. Position ol Primary Producers. " The fall in prices, in New Zealand as in America and other countries, has been felt most severely by the farmer. Farm products dropped to prices that taking increased labour, freight, and handling costs into account, did not yield returns equal to those of 1914, while everything that the farmer had to buy still remained substantially above the 1914 price level. The outlook is now more hopeful, because the mal-adjustment of prices is now being corrected. Farm products are now rising, and the prices of manufactured articles are, on tho whole, falling. It is true that beef and the bulk of our wool have not yet reached the price-level of .1913-14, but butter, cheese, mutton, and lamb are showing satisfactory returns. " In regard to the position of tho primary producer, the employers relied principally on tho evidence of Mr. W. D. Hunt, who expressed the opinion that farm products generally would tend to fall again in price within a year or two. This probably is perfectly correct, but it must be borne in mind that other commodities and services are still falling while the farmers' prices are rising again, and that tho economic balance will in time adjust itself. If all prices had fallen evenly, the farmer, apart from inflated land values, would have suffered no more than the manufacturer or retailer. Un-

fortunately for him, his prices declined more rapidly than olher prices, l>nl tho present tendency to increasing prices for our farm products is an indication that the process of adjustment i s well under way. This does not imply, of course, that farm products will ever again h c likaiy to reach the price-levels of war time, but they will stabilise in time at tho 'evol at which other commodities become stabilised. Economic conditions will force this result." Tho Court then quotes from an article by an American economist which was referred to by His Honor Mr. President Brown, of South Australia, in a recent living-wage declaration. Tho Court states tho opinions expressed aro not irrelevant to conditions in New Zealand, and it quotes a passago in order to emphasise tho necessity for general producing costs, including labour costs, to come down to tho level at which the prices of farm products will stabilise, whether that level is higher or lower than tho present, level. Finances ol Farmers. " Beforo wo leave the subject of the position of tho fanner," tho Court states, " wo desire to touch on one or two other matters. The first is in regard to the question of wages of shearers, musterers, threshing-mill hands, butter and cheeso factory workers, and freezing works employees. These workers aro in a position that differs materially from that of the regular farm-hand, who is not governed by awards of this Court. The farm-hand is very often a single man, who receives board and lodgings from his employer, and is usually in regular employment. If ho is a married man ho is in many cases provided with a house or pays a nominal rent, and is given meat, milk, butter, eggs, vegetables, etc., or is able to obtain them cheaply. Tho other workors mentioned aro in casual employment, lose time through travelling and wet weather, and have in many casos to maintain their families under city or town conditions. Tho low rates of wages that may bo considered fair for ordinary farm labour cannot fairly be applied in their case. These workers do not cost relatively much to the average farmer, for what ho directly or indirectly pays to them does not bulk largely in his total expenditure. Their services aro utilised by him individually for only a short period of time in tho year. " The second matter is tho actual financial position of the average farmer to-day. Not all farmers have been affected by tho inflation of land values. Many, most indeed, of them occupy tho farms they owned in pre-war time's. They aro all, however, now affected by incresed taxation, and although they made considerable trains during the war owing to the enhanced prices of all their products, they had to pay increased prices for all their labour and other requirements in addition to the war taxation. Now they are receiving prices for their products that are still, notwithstanding recent increases, well below the level of tho prices of manufactured articles and other commodities and services. The averago New Zealand farmer is not a man in a large way of business, and we have no doubt that in many cases ho did not make much more out of tho war than would meet his own increased costs of production and cost of living, and provide to a small extent against the post-war fall in the prices of his products. Lower Production Coste Probable. " Turning from the farmer to the manufacturer, merchant and retailer, it must bo recognised that they aro all affected by the position of the farmer. Practically tho whole of our export trade is in the" products of the Boil, and to a very large extent, though not altogether, tho purchasing power of tho community depends upon that of the farmer. The farmers' prices are fixed by the worlds markets, and be is now relatively, and in many cases actually, worse off than he has been for many years. "Those manufacturers and merchants whose principal business it is to supply the farmer with his requirements naturally rind that they are directly affected by his diminished purchasing power. Other j manufacturers and merchants suffer, though not in the same degree, but they aro all affected more or less, for each is depen- ! dent on tho others. Retailers are per- ! haps less affected than other classes, be- ! cause the purchasing power of the I general body of their customers (has until recently been relatively high. Now we are faced again with increasing unemployment, and the retailer will be affected in his turn. The importer and retailer, too, were in the unfortunate position of having bought large stocks at the peak of the wholesale market, and had to realise at considerably reduced prices, though the relatively high-purchasing power of their customers prevented their losses from being greater, as would have been the case if that purchasing power had been lessened to such an extent as to compel a further cut in prices. . " All classes — fanners, business men, professional men — are affected bv high taxation. There is, however, an off-set to the present somewhat depressing trade outlook. The existence of a falling price-level, and the prospect of a further fall, have a restrictive effect on purchases. Everybody who can delav making a purchase does so, in the hope" of getting a better bargain; so that there is every probability that a reduction in production costs, followed immediately bv a drop in prices, will stimulate trade to a noticeable extent. Meeting Foreign Competition. "The general outlook for the manufacturing .and building trades is similarly complicated by the deliberate restriction of purchases how operating. A definite reduction of all production costs, including labour costs, will, on being reflected in prices, remove one cause of temporary restriction. In the case of manufactures, the matter of foreign competition is of considerable importance, for protective duties cannot bo indefinitely increased, and New Zealand manufacturers and their workers must face increasing competition from countries where production costs are. lower than in this country, and aro still falling The cost of production can bo reduced bv a reduction of wages, and increase of efficiency, or both. A s we in New Zealand have adjusted wages in accordance with increases in tho cost of living a reduction in accordance #ritfa tho fall in the cost of living is at least necessary If pre-war efficiency cannot be reached and maintained, a greater reduction in wages will bo required, in order to prevent foreign competition from overwhelming our local industries and ruining employers and workers alike. "In oar opinion, the need for improved efficiency in production is most to be stressed. On the part of the employer efficiency can be increased by improved methods of manufacturing and selling, by the adoption of up-to-date machinery and nlant the institution of proper costing systems, and the maintenance of cose supervision. On the part of the worker, improved efficiency can bo maintained by giving his whole attention and energy to the work in hand, by improving his knowledge and skill, and by the realisation that inefficiency, in these days of keen foreign competition, spells increased cost of production and, consequently, a diminished return for employer and worker aliko. Identical Interests. "The truth must be grasped that the interests of employer and worker aro identical in the matter of meeting competition, for not only is the employer s business at stako, but the workers, employment is also in jeopardy Inefficiency ,n production in one set of trades increases the cost of living to all workers in all trades, for the workers in each trade aro purchasers of the products of the other trades, and every worker who does not give his best to his work is holding back a reduction in his own cost of living and in that of other workers. "We know that there is a tendency among some classes of workers to say, 'Why should I exert myself when the employer gets the benefit?' There may be some excuse for such a mental attitudo in a country where wages are fixed by individual bargaining, but there can be no excuse for it in Now Zealand, where the wages aro fixed in accordance with tho nature of the work and bear some relation to the financial position of tho industry. If an industry is capable of paying the full rate of wages that the work performed by the workers engaged in it is i worth, it must pay those wages, and

must not in any event pay less than a living wage. We must all realise that our interests—of employers and workers alikr—are hound >"P with one another's." After quoting a passage from an article in the Round Table for January, 1916, on the subject of the relationship between Capital and Labour, the Court proceeds: "We have noticed (hat, in certain quarters, soundness of the policy of 'increased production and more efficient production' is questioned. This is no doubt due to its significance not having been rightly grasped. If the general purchasing power of a community has been reduced, it cannot buy the sajne quantity of goods at the old prices. Wo must produce more goods and produce them more cheaply, so as to enable our customers to buy more than before, and at a lower price, and we in our turn will benefit by the increased sales to a greater extent than we will suffer by the reduced price. The greater tho quantity of goods produced, the greater will bo the real wealth of a community, fo» wealth is not money, but the 'abundance of things.' ' Increase in Labour Hours. "We have had some startling figures submitted to us showing such increases in the labour hours occupied in the production of exactly similar articles, under exactly similar conditions, before, during, and since the war. In one case the work Was done on each occasion by the same staff. Wc know that this increase in labour costs is widespread, and we do not intend to attempt any apportionment of tho blame. Wo have no doubt that when tho whole community was prosperous, neither employers nor workers were particularly concerned with the matter of keeping down production costs, but now it is a matter of vital concern. "It may bo that fear of unemployment has had somo effect, during the past few months, in influencing workers to try to ' spin out ' jobs as long as possible. There is also a feeling that reduced efficiency may tend to reduce unemployment, by making more room for other workers. This fallacy can best be exposed by pointing out that tho principal cause of slackness of employment is that purchasers are not prepared to do business at the price quoted, and that as every increase in production costs must, in general, be added to the price, it follows that when the price is again increased the demand for the product is further lessened, and increased unemployment results." The Court states the position is summed up by Mr. H. E. Murphy in "Wages and Prices in Australia" (1917), and it quotes a passage on page 42 of the book. Improvement in Money Market. "The financial position, though hardly satisfactory, is now better than it was," the Court continues, "and may be regarded as healthy. The banking returns still show an excess of advances, but the excess has been substantially reduced during tho past few months. The fall in the English bank rate and the easier state of tho money market have enabled the Government and the local bodies to borrow money from England on satisfactory terms. This money, wo assume, will to a large extent be "expended in the Dominion, and will have the effect of reducing unemployment and stimulating trade. It is possible, too, that the strain on tho New Zealand banks will be lessoned by private firms taking advantage of the improved position in England, and arranging their finances there, and so hastening a reduction in the interest rate now ruling in Now Zealand. "At the same time, it must be borne in mind that the provision of loan money should not bo regarded by employers or workers as an excuse for extravagance, for provision must be made for interest charges and the repayment of principal; and if the expenditure of loan money is to bo remunerative it must be cautious. " On tho whole, we conclude that tho state of trade and industry generally is depressed, and that the existing depression, though mainly due to the reduced purchasing power of tho community, is partly due to the temporary ' holding off ' of purchasers in anticipation of a drop in prices. The position of the farmers is improving, and the balance between tho prices of farm products and tho prices of other commodities and services is nearing adjustment. This will benefit tho people of New Zealand as a _ community. In order to meet competition and stimulate trade a reduction in production costs is, however, essential. Imported raw materials used in New Zealand manufactures are falling in price, but so aro imported manufactured goods. Larger Reduction Not Justified. " It is necessary that local money wages should fall into line. It would, wc believe, be beneficial to trade and industry if wages were, to drop 10s per week, but a reduction of that amount would involve a reduction below tho cost-of-living level, which, though it would probably be temporary, would nevertheless press hardly on a considerable section of tho workers. The brightening outlook, and the indications of improving efficiency that we have noted, are in our opinion factors that we ought to regard as indicating that tho situation is not so serious as to justify us in reducing wages beyond the amount disclosed by the cost-of-living figures, more especially as the opportunities for obtaining substantially higher wages and better conditions than those provided by the awards of tho Court do not now exist. "There is a world-wide correlation of wages and prices, which ha s in recent yeans been maintained better in Australia and New Zealand than in other countries, thanks to the wage-fixing legislation in force in the Commonwealth States and the Dominion. The effect has been that the checks thereby placed on tho operation of individual bargaining and of the law of supply and demand in the labour market have prevented the violent rises in wages that took placo in somo trades in other parts of the world, and this fact makes a gradual reduction of money wages, in accordance with the movement in the cost of living, possiblo in New Zealand without inflicting hardship on either employers or workers. This statement is, of course, as w e have already mentioned, subject to an improved degree of efficiency being attained and maintained, and must not be regarded as being mado without qualification. Fair Standard of Living. " We now come to the question of a ' fair standard of living.' It may bo considered unnecessary for us to deal with this matter, since we have decided that the reduction of wages should not exceed tho amount indicated by tho reduction in the cost-of-living figures. Wo have assumed that the awards of the Court have provided for at least a fair standard of living, and that the reduction of wages below the level required to maintain a fair standard of living would induce inefficiency, listlessness, underfeeding, and other economic and social evils. The reduction of money wages in the same ratio as the fall in the cost of living means no reduction in real wages, that is, in purchasing power. ■ " " .We must, however, point, out that* the workers' ' representatives were mistaken in their assertion that the maintenance of the present rates of money wages would benefit trade. Purchasing power comos from production, and unless production can bo successfully carried on, purchasing power will fall, fewer people will be employed, and trade will suffer. A folly employed population engaged _ in useful and efficient production has a high spending power, irrespective of the rate of money wages. The prices for our exports are not fixed by the local market, but by the world's markets, and the bulk of our produce is not required for local consumption. The most that we can say is that the maintenance of the present local money wages could not benefit the primarv producer in this country to any noticeablo extent, but that it would restrict his purchasing power in regard to New Zealand manufactures. "We have been asked to define a fair standard of living, and wo think it desirable to give the matter some consideration, though, as already stated, it may seem unnecessary, in view of our decision on tho bonus issue, to go into the question. The expression used by most writers, in dealing with the subject of a minimum wage, is ' a living wage.' This tern,' originally conveyed the notion of a ' bare ' living wage, sufficient merely for providing the necessities of physical exist-

ence. The modern view.is more enlightened, and is based on a realisation of the dignity of the worker as a man, a citizen, and tho head of a family. It is this conception of a living wage that, to our mind, corresponds (with what is termed in our Act ' a fair standard of living.' " The Court quotes a number of definitions of what it takes to bo a fair standard of living, and says that possibly tho most thoughtful definition is that of Professor Ityan, of Washington, whose books "A Living Wago" and "Distributive Justice" had been widely circulated. Investigations in Australia. "The Australian Basic Wage Commission of 1920 set out to examine the question of what constituted a fair living wage," proceeds the Court. "The commission, which consisted of three persons nominated by the employers' organisations, and three nominated by the employees' organisations, with a chairman appointed by the members, was required to ascertain the actual cost of living at tho present time, according to reasonable standards of comfort, including all matters comprised in the ordinary expenditure of a household, for a man with a wife and three children under 14 years of age, and tho several items and amounts which make up that cost." It reported that the actual cost as at November 1, 1920, was £5 16s per week. The commission's finding was unanimous, and the reasonableness of /the amount was not questioned by tho employers in the different Australian Industrial Courts when applications by tho unions for its adoption were being heard. "Tho finding of the commission, with some adjustment of prices to those now ruling and some alteration of tho itoms covered to meet our own climatic and local conditions, wouki be fairly applicable to New Zealand. There arc. however, two fatal objections to its adoption either in Australia or here, and the objections have been frankly admitted by the chairman of tho commission, Mr. A. B. Piddington, K.C. In tho first placo, tho total income of tho country is not sufficient to pay £5 16s per week to every adult male worker, and in tho second place the number of children under 14 years of age in an average family is not three. In New Zealand the adult male population numbers 375,000, of whom 150,000 are single and 225,000 married. The total number of children undor 14 is' 353,000. It requires only a simple calculation to find that the averago number of children under 14 years is not three to every adult male, but less than one. Thus, if the wage reported by tho Australian Commission to be a fair wago for a man, wife, and three children could lH> adopted in New Zealand, it would involve the payment of maintenance for 150,000 non-oxistent wives and 672,000 non-existent children, which is an impossibility. Average New Zealand "framily. "The only way in which effect can be given to the finding of the Australian Basic Wage Commission, or of any similar commission, is based on the recognition of the fact that the average family in New Zealand comprises only 1.57 children under 14 yeai-s of age, and that the average number of children to each adult male worker is less than one (".94). We in New Zealand have reckoned only two children to tho average family, but that is over the mark. The claim of the unions for full wages for all adult males, irrespective of their obligations, is irreconcilable with the claim for an adequate wage for the married man with a family of three or more children. The fixing of the same basic wage for all adult males means that one section of workers gets more than a fair living wage, another section gets a fair living wage, while the remaining section gets less than a fair living wage. Thus in New Zealand tho adult male population is distributed as shown in the following table:— (a.) Unmarried 150,000 (b) Married, without children under 14 70,000 (c) Married, with 1 child under 14 . . 53,500 <d) Married. v;ith 2 children under 14 42,000 (e) Married, with 3 or more children under 14 59,500 Total 375,000 "We see, then, that groups (a), (b), and (c), numbering 273,500, wcruid receive more than their share; group (d), numbering 42,000, would receive about its share; and group (o), numbering 59,500, would receive less than its share. A Suggested Remedy. " The one remedy for the injustice of taking account only of the average family is that suggested by the chairman of the Australian Commission, and approved by Mr. Justice Powers, of New South Wales. Briefly, the remedy is to fix a basic wage for a man and wife, without children The single man, who has to spend more money outside his home than the married man, and who has to provide for tho contingency of marriage and possibly also for the support of a widowed mother, would receive the same rate as the childless married man. Each employer would bo required to pay weekly into a State fund a sum in respect of each adult male employee, slightly less than tho cost of tho maintenance of one child, and this sum would be distributed in the form of a children allowance to each parent according to tho number of his children. Thus the total amount paid in wages and children's allowance would not necessarily bo any greater than that at present paid as wages, but the distribution would bo according to responsibilities. " There would be, of course, difficulties of administration, and special legislation would be required, for without legislative authority such a scheme could not be established, and any other method of differential remuneration would result in the displacement of married men by single men wherever possible. We mention the matter, because the subject of the Australian basic wage report was discussed at the recent hearing in Wellington, and because it is a matter of social interest, and has, no doubt, an important bearing on the birth-rate. The matter of the Australian report is wortli mentioning in connection with the definitions of a fair-living wage that we have quoted, for it hue brought out the very important fact that justice to all cannot be attained by working on the basis of an averago family, and that the generally-accepted definitions require qualification before they can bo made the foundation of a new system of wages."

The Court says it is of interest to note that Professor Stephen Leacock. about the time the Australian Commission wa R doliberating, wroto in "The Unsolved Riddle of Social Justice " on the same subject of tho necessity for providing more suitably for tho children of the nation, and it quotes passages from the book. Conference With Australia. " Wo do not think it necessary to recommend the Government to set up a cost-of-living or basic wago or standard-of-living commission, as requested by the workers' advocates," continues the Court, " for we think that the Australian commission's finding, as well as a somewhat similar finding of an American Commission in 1919, could be easily adapted to fit Now Zealand conditions. It might be advisable to set up a joint conference of Australian and New Zealand representatives to consider the possibility of working out the details of legislation and administration that would be necessary if tho respected Governments thought it desirable to attempt to introduce such a schomo a s has been outlined, but the difficulties of initiating and operating such a system appear to us to be considerable, though not insuperable. " We have attempted to deal with the more important issues placed betoro us for consideration. We have had due regard to the economic and financial condition of trade and industry and other relevant considerations, and we have come to the conclusion that, owing to the operation of the various factors wo have mentioned, the wages now being paid approximate more nearly to tho actual award wages than thoy have done for some years past, and are not in many cases more than sufficient to compensate tho workers for tho increase in tho cost of living since 1914; and for those reasons we are satisfied that, whilo it is necessary that money wages, as well as other production costs, should be reduced, a reduction below the amount disclosed by the ■ cost-of-living statistics would trench upon the maintenance of a fair standard of living. " It has been said that tlie workors should not have ty> economise, but, as Mr. President Brown eaid, ' that economy

may bo regarded as a contribution towards making good the wastage of war. . . . In any ease, its existence is a fact, notwithstanding the extravagances which were possible in the case of individuals or clusses of individuals. The board, however, has not the power to remedy past injustice, supposing it to have existed, but has to declare a living wage for the future.' We have therefore decided to reduce the remueration of adult males by 5s per week, of adult females by 2s od per week, arid of juniors by Is 6d per week. A general order, to bo operative from May 15, 1922, will be prepared and fiied in terms of this pronouncement.

" This decision accords in principle with recent decisions of Australian Industrial Courts and wage-fixing tribunals. It represents the opinion of a majority of the Court. Mr. Scott dissents on' the grounds that in his opinion the Court has not given sufficient weight to the economic and financial position of trade and industry, as shown by the evidence adduced as to the heavy losses of employers, the short time worked in many trades, and the increaseing unemployment of workers. Ho is of the opinion that a reduction of 5.s per week in wages is quite inadequate to meet the circumstances, as it is too insignificant materially to affect prices, and tliat unless prices are immediately reduced a long time must elapse before thoro will bo any revival in trade or removal of the present depression. " Mr. Scott 13 further of the opinion that if the proposals of the employers had been given effect to, wholly or substantially, the reduction would have been immediately reflected in prices with a still further drop in the oost of living, that trade would have revived and unemployment become diminished; that in a veryshort space of time the purchasing power of the sovereign and of the community would have recovered and normality been reached, to the great gain of the workers and employers alike; and that the adoption of the employers' proposals, though seemingly drastic, would have been in the best interests of the community, and to a veiy large extent, if not wholly, would have saved New Zealand from such a severe dislocation of trade, with all its attendant evils of poverty and distress, such as is being experienced to-day in Great Britain and other countries."