MISLEADING FIGURES

New Zealand Herald, Volume LXXIII, Issue 22404, 28 April 1936, Page 10

MISLEADING FIGURES

A serious miscalculation, upsetting the statistical basis on which the Minister of Labour -sought to justify the institution of the 40-hour week, has been brought to notice by the president of the Auckland Employers' Association, Mr. J. S. Dawes, in a statement published this morning. Mr. Armstrong informed the House of Representatives that wages in New Zealand factories amounted to only 18 per cent of the value of the goods produced and argued that the increase of wages could not possibly increase the cost by more than 1.8 per cent. Apparently he assumed that the shorter working week was equivalent to a wage increment of 10 per cent, although the percentage may be higher. If however, the low figure be accepted, his account of the position is still much in error. As Mr. Dawes points out, the cost of the factories' raw material has been ignored or, rather, added to the total value of the output. The result is to depress the proportion of labour costs in factory production, so that Mr. Armstrong is able to place them at the ridiculously low figure of 18 per cent. Actually they are nearer 50 per cent, or more than 2$ times Mr. Armstrong's figure, when compared with the value added in the factory. Hence the Minister's argument that the shorter working week would only add a trifle to costs and to prices was utterly misleading. No doubt Mr. Armstrong had no intention of deceiving Parliament and the general public as to the effect of his policy. No doubt he quoted the figures in good faith. Nevertheless he has misstated the whole position and, along with the rest, has himself reached a wrong conclusion. That is really the worst feature. A policy is adopted and publicly recommended on mistaken premises. Its basis is unsound. A responsible Minister should see that the effect of his proposals is correctly stated ; otherwise he is committing industry and the consumers of its products to more than his figures show and more, perhaps, than they can pay without embarrassment.