PROBLEMS OF INDUSTRY

New Zealand Herald, Volume LXXI, Issue 21938, 23 October 1934, Page 11

PROBLEMS OF INDUSTRY

EMPLOYERS' VIEWPOINT PUBLIC WORKS ADVOCATED RAISING OF MONEY LOCALLY The suggestion that the Government should undertake a programme of developmental public works is made in the report of the New Zealand Employers' Federation, to be presented to the annual meeting of the federation in Wellington to-morrow. In defending the Unemployment, Board, the report states the board has had a very difficult task and the devoted service of its members is worthy only of the highest praise. "Public opinion," it says, "would not allow the use of the unemployed to produce anything for sale in competition with regular producers paying standard wages, and public opinion also objects to the unemployed being used to do any works regarded as necessary. The only work, therefore, left to be done by the unemployed is work which would probably remain undone were it not for the unemployed difficulty. In other words, they are employed on unnecessary work. The Unemployment Board can only adopt palliative measures; it cannot start permanent industries. The best we can hope for is that conditions will arise which will enable the unemployed to be reabsorbed in industry. When this happens, the Unemployment Board will be no longer required. Internal Loans "We suggest that the time has arrived when the Government might embark upon a reasonable programme of public works of permanent value to the development- of the country, such work to be financed by internal loans. One lesson which New Zealand in common with other countries must have learned from the depression is the. wisdom of avoiding borrowing overseas. There is now, however, money available within the country at low interest rates, and we think the Government could assist the unemployment situation in this way, and in so doing would bring only benefit to the country. "The gradual restoration of building and public works industries and further development of our lands will slowly set the streams of industry going again. When this is done, the unemployment problem will be solved so far as that section of the unemployed which actually wants to work is concerned." Touching on the level of wages the federation sa,v3 it does not propose to criticise the action of local bodies or of the Government in- raising the wage rates of their own employees, but it must take cognisance of the fact that such action must intensify the pressure by organised labour upon the employers to raise wages in industries, and those who did not look beneath the .mere surface of things jumped to the conclusion that if the local bodies and the Government could afford wage increases it followed that industry also could afford them. The fallacy of that conclusion, however, clearly appeared on more careful consideration. The local bodies and the Government did not have to earn the income out of which they paid wages and salaries, but in the case of industries the only source of revenue was the sale of the product of industry, and the amount of the purchasing power of any industry depended upon the selling value of the products of that industry in relation to the selling value of the products of other industries. Road to Prosperity The only thing that would restore prosperity to New Zealand was to restore the effective purchasing power of the export industries, states the federation.

"Studying the whole position," continues the report, "one can reach only this conclusion —that, unfortunately, there is nothing in the economic situation of New Zealand to-day to justify a general increase of wage rates, and the assumption that a raising of wage rates would increase purchasing power and restore prosperity is a fallacy. In fact, insofar as the raising of wages has the effect of increasing internal costs and prices, the total purchasing power of the community would be decreased rather than increased. The federation has always enunciated as a policv that the wages in any industry should bo as high as that industry can afford to pay, and that is all that can be enunciated to-day." The federation records with pleasure that the period under review has not been productive of any serious interruption of work on account of industrial disputes. The most troublesome negotiations during the year have been those between the employers and workers engaged upon tho waterfront.