COSTS PROBLEM

New Zealand Herald, Volume LXXV, Issue 23015, 18 April 1938, Page 6

COSTS PROBLEM

EFFECT ON INDUSTRY SHORTER WORKING WEEK TIMIDITY OF CAPITAL i SHADOW'OF INTERFERENCE No. vn. BY SIB HABRY GULLETT, M.H.R. New Zealanders like Australian manufactures. I did not hear a single complaint as to price or quality. On the contrary shopkeepers of many kinds and householders -with whom I raised the subject were all high in their praise of the products of our manufacturers. The range of secondary exports to New Zealand is now a wide one, and as they compete there not only against tho products of the United Kingdom, but also with those of the United States and many other foreign countries, the tribute was a notable one. The Government has developed a disastrous mania for interference. I met many manufacturers and the best said of the 40-hour change was by the representative of one firm of inter-Empire repute for efficiency. His factory had previously worked 42} hours and he said that if it were certain that the Government would not further interfere with industry, they could carry on satisfactorily with 40 hours. But nothing is less certain. The Government's heroic march to economic paradise is at almost every step raising living and industrial costs, creating instability and eating by increased taxation into profits. And looming above all that are many major steps taken by the Government toward the socialisation of industry, distribution and exchange. Friendless Manufacturers It might ,be thought that political considerations would move a Labour Government to show some special concern for tho manufacturers and their employees. But the fact is that secondary industries have few friends in New Zealand. Labour already wins well over the cities and their industrial suburbs. The Opposition forces, dependent as they are for a return to power upon winning back the rural vote, are equally lukewarm toward higher protection. / One manufacturer of men's shirts, pyjamas and the like, carrying on under a duty of 20 per cent, told me he had not increased his hands by the enforcement of the 40 hours. Ho had first disclosed his position fully to his hands and appealed for as much production under the shorter week as had been given under the 44 hours. He then devised a scheme within the law to stimulate still further production by paving a contract rate on top of wages. In another non-industrial concern, with about 100 hands, there had been no increase in the number engaged. The staff had undertaken to continue to cover the job with the aid of overtime, the cost of which had increased the total wages bill by approximately £6OOO a year. . . A group representative of manufacturing and in one of the four cities°placed the increase in the total cost of wages as follows: —Clothing, 9 to 10 per cent; woollens, 10 per cent; footwear, 9.1 per cent; engineering, 10 per cent. The increase was paid as overtime. There had been "practically no increase in the number of hands employed as tho result of the 40 hours.

Flight of Capital It would be rash to attempt even a near estimate of the amount of capital which has been frightened out of New Zealand industry and general invest-, xnent by the Savage Government and invested abroad. The total would amount to many millions and Australia has been the main beneficiary. Most banks operating in New Zealand operate also in Australia, and their business is so that a book entry transfer of credit has presented no difficulty. . A reliable instance of capital transfer directly due/to the Labour Government came to me from one of ige principals of the' firm concerned. Prior to the depression this enterprise had its full capital of £600,000 engaged m two or three branches of manufacture and in general merchandising. In 19-3-3 the position, as a result of the depression .was that £360,000 was engaged[mthe old undertakings and £ *r 4^>oo^J^ s transferred to New Zealand day £322,000 is engaged m New Sealand undertakings and £-78,000 in vested in Australian bonds. .The last charge to 'Australian investment was put down 6olely to the activities of i«e new Government and to fears for tno can, however, be said with confidence, that the so-called of capital has been arrested and iNew Zealanders with a financial interest in their country now appear content—or resigned—to leave it there _ at least until after the general elections. Tourists and Service In New Zealand as in Canada the tourist from overseas is a heavy contributor to the national wealth. Here the 40-hour week adds no extra attraction to the visitor, although by way of compensation it provides him with an interesting "close-up" of the new boon in operation. Employees who began in time to serve morning tea at 7 o'clock are still to be seen on duty up until about p m but' over this spread they must not actually work more_ than hours during five days in the week. Over a total duty period of some 13 hours a day, employees are allowed, inclusive of time for meals, five hours free of work. Upon two consecutive davs they are free, but if they go far afield they miss their meals in the hotel, and now they are agitating for meal money when off duty. Employers make moan about "seven days' keep for five days' work."

Speeding Up As a set-off to the reduced hours, members of the staffs of both innumerable hotels and lodging houses which live in the main by the tourist traffic are being hustled as never before. In one hotel of excellent class, chamber maids were actually covering twice as many rooms and bathrooms in the eight hours as they were previously in the longer working day. One maid, when asked what they did with their two days' holiday, replied: "As a rule we spend the first day or most of it in bed recovering from the bustle of the five working days." Bub that must not bo taken to suggest that they do not like the 40 hours change. Mention it and they are all smiles. The manager of a first-class hotel supplied me with the following audi- ~~ tor's figures for his increased weekly costs over the same six months of four years:— Year Wages Victuals Sundries Total 1634-35 £9O £67 £9O C°47 1935-36 , 100 73 132 305 <-■, 1936-37 150 01 159 400 1937-38 160 101 166 427 This may be taken as a rough index cost of living gener-