THE OTAGO DAILY TIMES THURSDAY, AUGUST 11, 1921. AWARDS AND PRICES.

Otago Daily Times, Issue 18321, 11 August 1921, Page 4

THE OTAGO DAILY TIMES THURSDAY, AUGUST 11, 1921 . AWARDS AND PRICES.

At least two important points have engaged the attention of the Arbitration Court during its sittings at Christchurch. In the course of a discussion of a proposed weekly employment clause tiic employers’ representative suggested that such a clause in actual operation caused unemployment because it did not enable employers to engage workers for a short period. He pointed out that in one industry where such a provision existed the employers were faced with the necessity of dismissing their staffs or getting them to agree among thornselves to default for two or three days a week in order to retain their positions. Dir Justice Frazer said that such a method savoured of evasion, and the hotter way was to apply to the court for an amendment of the award. Though amendments of awards are not easily secured, the view expressed by his Honor merits approval, for the reason

that evasion of the provisions of awards in one direction may encourage or excuse evasions in other directions. In the very clear exposition of the law governing amendments of awards, which Mr Justice Frazer delivered last Saturday, it is made perfectly plain that unless an application rests absolutely on a variation in the cost of living or is assented to by the parties, an amendment cannot be made. The position, therefore, is that the court holds that the decision of Mr Justice Cooper, now many years old, still governs the matter, except in so far as the War Legislation and Statute Law Amendment Act of 1918 extends the powers of the court. This enactment conferred additional power on the cdurt to amend the provisions of awards relating to wages and hours of employment, the conditions under which an amendment might bo made being generally an alteration in the conditions affecting the industry or an increase in the cost of living. These two considerations and “all other relevant' considerations” limit the power of the court to amend awards, and Mr Justice Frazer has definitely laid it down that a variation in the cost of living is the indispensable foundation of an application for an amendment. It is clear, therefore, that if employers and workers are to preserve themselves from a charge of collusion, such as has in fact been admitted in a case in Christchurch, where the desirability of mitigating the evil of unemployment was recogifised on both sides, they must combine in an application to amend the award. In view of the importance generally attached by the trade unions to weekly employment, such an agreement does Hot appear to he possible of wide application.

The fall in prices, as indicated by the index figures published in the July issue of tha. Abstract of Statistics, again illustrates the unsouudness of attempting to regulate wages on the basis of ,index numbers. “The fall of 35 points in the dairy produce group,” says the Abstract, “is wholly attributable to' the decline in the price of eggs, a decrease of approximately 7d per dozen being general.” When this computation was made, however, the retail price of eggs ranged from 4s Hd per dozen in Rotorua to 2s £|d in Dunedin. At the present time the price of eggs in Dunedin is 2s per dozen. In 1914, when the standard of measure was fixed, on frhich the index figures are built up, the local price of eggs was not more than Is 6d per dozen. At that time, consequently, eggs formed a substantial part of the weekly regimen of most households. The unsuitability of a method of gauging the cost of living which permits of a computation allowing for the use of the same quantity of eggs as when the price is 3s or more per dozen as when the price is Is 6d or even less must he apparent to all who really comprehend the position. No thrifty person dreams of purchasing eggs at 3s to the same extent as she does when they are at Is 6d. It is, indeed, not At all unlikely that a great many householders refrain from buying eggs at all when they reach the maximum price and so it is with other commodities. The Government Statistician has himself pointed out that the index figures are designed solely for the purpose of measuring prices and not for measuring movements in the cost of living “if by that term is meant variations in the actual household expenditure on food, rent, clothing, etc.” Moreover, increasing attention is being focussed on the application of the principle of regulating wages on the cost of living. Experiments in economics are never fully tested during a period of prosperity, either seeming or real. Nothing but a complete cycle furnishes a complete trial and admits of a final judgment, and it is not now surprising that confidence is evaporating in what was regarded in some quarters as an ideally easy method of adjusting wages. In the course of an exhaustive treatise on “Currency and Prices in Australia,” which has just been published, Professor D. B. Copland, of the University of Tasmania, says: “The weakness of adopting the cost of living as a guide for the rate of wages is now becoming apparent. The rate of wages is dependent upon no such artificial standard, but upon the productivity of industry. It should have been noted more carefully that wholesale prices were rising much higher than retail prices, and that the cost of living -as a means of regulating wages in a time of rising prices was to the advantage of the producer. Not so when prices begin to fall, for wholesale prices will first feel the shock and fall more rapidly than the cost of living. Labour costs will then bo reduced at a much slower rate than prices. Consequently producers will be inconvenienced both by a stringent money market and by a relatively inelastic labour cost.” This, Professor Copland declares, is what is happening now, and the results promise to be serious. His conclusion is that “the adjustment of wages according to the cost of living is a painful process at best, and in tiroes of transition from rising to falling prices it may be injurious to industrial stability.” Speculation is encouraged, especially in land values, in a time of rising prices, and trade cycles are intensified. The other evils which Professor Copland believes are associated with rising prices are the promotion of social unrest, leading to grave disorder, together with strikes and lessened output. To remedy this state of things he urges, a stabilising of prices. The immediate value of his contribution consists, however, in its condemnation of a principle which our own Legislature endorsed in a hurry and from which the populace is suffering at leisure. As we have previously suggested, it is desirable that Parliament should again review the position in the light of recent development and remove every obstacle to a complete return to normal conditions.