COST OF LIVING.

Otago Daily Times, Issue 18999, 23 October 1923, Page 13

COST OF LIVING.

Alim TP. ATION COURT’S PIIOXUUXCEMEXT. WAGES UNAFFECTED. The pronouncement of the Arbitration Court on the cost of living for the sixmonthly period (April to September) lias Just been tiled, and reads as follows: — The court has investigated the movement in the cost of living for the six-monthly period April-Soptcmber, 1923. As on former occasions, it has worked on the principle of the six-monthly moving average, and has based its calculations on the “ all-groups ” statistics, covering the whole field of the cost, of living. The figures for clothing, footwear, fuel, and light, and the miscellaneous group all show decreases, hut the food figures disclose a small increase, and the rent figures an increase of 5 per rent, for the half-year. The combined figures for all groups, with their proper weighting, show an increase of 1.3 per cent, for (he period. The following table indicates the movement of the allgroups figures, based on the six-monthly moving average, during each half-yearly period since March, 1922: — Percentage increase Half-year ended over Jnlv, 1914. March, 1922 67.0 September, 1922 59.6 March, 1523 £6.2 September, 1923 57.5 Measured in wages, the increased cost of living for the half-year is equivalent to an inci'easo of id per hour, or Is per week, in the male adult wage. The statistical investigation for the half-yearly period ended March 31, 1923, disclosed a fail in the cost of living that represented a reduction of id per hour, or 2s per week, in the male adult wage; hut the court on that occasion, with the concurrence of the employers of the dominion, decided, in view of the rising tendency observable in rents and a tendency to hardening prices in some of the other groups, not to make a general order reducing wages in accordance with the ascertained fall in the cost of living. The increase of Is per week now recorded reduces the fall of 2s per week lo Is per week. The court believes it to ho desirable, in the interests of trade and industry, that wages should not fluctuate at short intervals more than is necessary, and, as rents have, again increased, it has decided not to alter the existing minimum rates. The effect of (his decision is that the workers will still have Is per week in hand, to offset any possible further increase in the cost of living . This is the last pronouncement of the court under the cost oh living legislation, which expires on December* 31, 1923. The present bonuses and other cost-of-living additions to wages will, however, continue in force during the currency of all existing awards and industrial agreements. When new* awards and industrial agreements are to he made, the rates of remuneration will be fixed in accordance with the conditions of trade and industry and other relevant circumstances then prevailing, and will not he subject to variation in sympathy with any movement in the cost of living during their currency. Tl is, in the opinion of the court, dealt able to make some comments on the statistical results that have been ascertained. The food groups have remained almost stationary for the past 18 months. dhcre have beer, seasonal fluctuations in the commodities generally sub-ioct to such fluctuations, and there 'has been an increase in meal, prices during the past few months, which may or may not bo maintained. On the who'e, however, food prices have tended to slahMsc during the period mentioned. Fuel and light have fallen slowly ..ut steadily during the period, while clothing and footwear have fallen very and are still falling. The miscellaneous group, which comprises household furnishings, crockery, and glass ware, domestic ironmongery and hardware) newspapers, rail and train fares, and numerous (her sipnll items, has very nearly paralleled the clothing and footwear group in the fad, that has been recorded. Rents, on the other hand, have shown a steady ncrcasc since 1914, and now stand at 49.8 per cent, above the 1914 level. Since March, 1922, when the calculations on which the first downward adjustment of wages was oased wore made, the effect, of the increase in rents (12 per cent.) has been to decrease the amount of the reductions justified by the cost-of-living statistics by 6s per week. To put it in another way, if the court had ignored the rent figures since March, 1922, the reductions authorised to the present date would have been 14s per week instead of 8s per week. We desire to deal in detail with the rent figures, because there appears to bo considerable misapprehension as to the method by which they are ascertained. An application was recently made to the court on behalf of the Wellington Trades and Labour Council, to afford an opportunity ol reopening the matter of rent statistics, and to hear evidence in regard to rents actually paid. Wo do not think it reasonable to reopen the matter at this late date, and we cannot see how any further evidence could add usefully lo the information in the possession of the court on the subject. Wo think it desirable, however, to remove any misconception by stating how the rent figures are obtained, and by giving some additional particulars with which the Government Statistician has furnished us. To begin with, the term “rent,’ ’in the narrow meaning of the weekly or annual sum paid for the use of a dwelling, is a misnomer. The court deals rather with the average cost of housing, and the term rent is accordingly to he given a wider meaning, covering not only rent in the narrow sense, hut also interest on capital invested and on unpaid purchase money, and other outgoings, in cases where the owner of the house is himself the occupier. The rent statistics, on ’ which the court has to work in the absence of any statistics dealing with the cost of housing in the wider sense, are compiled from returns collected by the Government statistician at half-yearly from all land agents carrying on business in 25 principal towns, and from ns many private persons collecting rents as the Census and Statistics Office is able to get in touch with. These returns give the actual rents obtained trom houses, 4,5, 6, and 7 roonis. The total number of houses covered is 6039. It is freely admitted that, owing to _ the abnormal housing conditions prevailing, even so largo a number of houses as 6039 may not bo fully representative, and that the average rents received for those houses may bo less than the average rents received for all rented houses. On (he other hand, the weight to bo allocated to rant in compiling the cost-of-living index numbers (20.31 per ’cent, of tho total cost of living) was ascertained in 1911, before the present abnormal housing conditions were existent, and a record has boon kept of all increases since that date. It is, wo think, safe to assume that, although the rents of tho 6039 houses in respect of which returns are obtained may be below the general average, they have increased in much the same ratio as tho general average, and it is the percentage increases and decreases with which tho court is concerned in adjusting wages to tho cost of living, iturther. according to the census of 1921. only 40.95 per cent, of all houses are rented, and the cost of housing in tho case of owner-occupiers is usually less than it usually less than it would he if they were paying rent, for interest, insurance, and rates have not increased to the same extent as rents. The 1921 census return? in respect of dwelling houses occupied by salary and wage-earners are not yet complete, but if the increase, in owner-occupiers in this class between 1916 and 1921 is in (he same ratio as in the case of all occupied dwellings, tho percentage of rented houses is slightly over 50. It was 59.30 in 1916. On the whole, then, wo feel justified in concluding that the increase of 49.8 per cent, above the 1914 level disclosed by the rent statistics is a fair index of tho increase in (he cost c.f housing, in the wider sense, since 1914. While we recognise that, there are many cases in which high rents arc lining paid for houses, wo have also to take into consideration many cases in which houses are held on long leases at moderate rents, and many cases in which no increase in rent, or only a small increase, has been demanded. We earned base our calculations on either extreme, nor can wo overlook the advantage possessed by many owner-occu-piora over rent-payers when wo consider tho broader question of the cost of housing. To sum up, our use of tho rent statistics in order to arrive at tho movement of the average cost of housing is justified on four grounds--(1) that if we discarded tho rent statistics, we should have to resort to the opinions or estimates of exports, which from the nature of tho case would 1*) most unsatisfactory; (2) that, though not fully representative, the statistics available arc accurate as far as they go; (3) that there is every reason to believe that they indicate with reasonable correctness tho percentage movement in rents generally ; and (4) that, oven if they understate the increase in rents in the narrow sense, this is at least balanced by their being used as on index of (bo movement in the average cost of housing in tho wider sense.

The decision of tlio court not lo timlcc a general order reducing' wages by Is per week (the balance of the 2s per week carried forward from our last half-yearly investigation) does not, of course, operate so as to prevent, the employers bound by any award or industrial agreement from making application to the conrt, on special grounds, for a variation of the rate of remuneration fixed by that award or industrial agreement. Such an application may bo made to the court in tho ordinary way, and will bo considered on its merits.