THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, AUGUST 12, 1940 THE COURT'S AWARD

New Zealand Herald, Volume LXXVII, Issue 23732, 12 August 1940, Page 6

THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, AUGUST 12, 1940 THE COURT'S AWARD

In considering the general order of the Arbitration Court increasing rates of remuneration by 5 per cent, people would do well to remember that in fact the order is not general, but sectional. It applies only to those working under awards. They alone are being compensated for the increased cost of living. Other and very large classes must defray it as best they can, and also the costs now to be added to pay award workers an additional 5 per cent. Whether, on the sole consideration of living costs, the increase determined by Mr. Justice Tyndall is a correct measure, need not be ai'gued. Mr. A. L. Monteith for the workers thinks it should be 7i per cent and Mr. Cecil Prime for the employers argues that no more than 2i per cent can be justified. In making his decision, Mr. .Justice Tyndall says that, with the increase, wages have been fixed at a record figure and that, if living costs continue to rise, the effective wage index will still be almost identical with the average level in the past three or four years. He also says the war must be paid for and a reduction in the standard of living for the people as a whole is inevitable. What he has done, therefore, is to take care that award workers are protected against these consequences of war. The result must be, of course, that the unsheltered will have to bear their own share of war deprivations and that of award workers as well. This process used to be called exploitation by a privileged class; Mi*. Maynard Iveynes, often quoted by Labour leaders, stigmatises it as "group selfishness" and "hustling someone else out of the queue. Certainly it is not social justice, the ideal professed .by Labour. The general order increasing rates of remuneration does not apply, for instance, to producers. Farmers are not to be awarded 5 per cent more for their wool, butter, cheese and meat. They are pinned down to the old prices and to an artificial rate of exchange, and asked to work harder. Nor does the general order apply to the pay of public servants, to pensions, rates of interest or rents, or to profits. Those dependent on these sources of income must cope with the higher cost of living and war taxes as * best they can. In making his award, Mr. Justice Tyndall is influenced partly by the dependence of New Zealand on exports and by the fact that last production, season their value was a record, as was also the tiade balance. Mr. Prime did well to question the soundness of this basis in the present, on the ground that the war had caused an acceleration in export receipts and delays in the delivery of imports, and by showing that last season's excess balance was required - to. make up iarge deficits in the two previous seasons. As for the future,of production, his sober estimate would seem to be more prudent than the optimistic view taken by Mr. Justice Tyndall, a view inducing the latter to attempt to maintain the high standards of recent years, while paying in service and money for a most costly war. In placing the purchasing power of award workers at a recoi d level, the Judge cuts across the dictum of Mr. Nash in the Budget that "the necessary (war) sacrifice must be made by consuming less goods. The Court has seen to it that award workers shall not be pinched. But higher money wages will not increase the supply of goods. Actually the effect of the war is to decrease the supply. The increased workers demand for a dwindling supply must therefore force up prices and startthat inflationary process the Government desires above all things to avoid. Higher wages granted to meet higher prices will simply drive prices up again, causing a ur er application to the Court, and another chase up the vicious spiral. To that there can be no end, except in outright inflation and economic collapse—a collapse the more inevitable in a country dependent on exports that have to be sold in competitive world markets at prices catering for mass demand. In reaching its decision, the Court would have done well to remember that the war has to be paid for and that, as the Prime Minister has remarked, the present is not the time to increase wages and "stand pat on hours. It might then have been lec to the conclusion that a better way —a way avoiding the vicious spira would have been to increase both wages and hours by 10' per cent, thus realising the urgent requirement of increasing production without increasing costs. No hardship would have been imposed on any class of the community by adopting this solution; instead everyone would gain and the countrj s economy would be laterally strengthened against war stresses and strains.