THE OTAGO DAILY TIMES SATURDAY, JANUARY 21, 1931. WAGE ADJUSTMENTS.

Otago Daily Times, Issue 21242, 24 January 1931, Page 10

THE OTAGO DAILY TIMES SATURDAY, JANUARY 21, 1931. WAGE ADJUSTMENTS.

After a protracted hearing of the application—which first came before it in August last at the instance of the Railway Commissioners of Victoria, New South Wales, South Australia and Tasmania—for variation of the principle upon which the basic wage is fixed, the Federal Arbitration Court has come to a decision. It has ordered a 10 per cent, reduction in the wages of members of all unions. The court has declined to make any alteration in the method of calculating the basic wage, but its finding generally concedes to the employers what they sought in respect of wage reduction. The decision is one of great importance to industry in the Commonwealth and to the Australian people, and will, of course, be strongly resented by trade unionists. Already the organisation of a general strike is threatened, and it seems most likely that, unless calmer counsels prevail, there will be a certain amount of industrial trouble. On the other hand, the probability that a reduction in wages will permit of. the employment in industry of a great many additional hands is a consideration of no small importance. The decision of the court is justified in its view by reasons of national .emergency, and, broadly speaking, nothing further in the way of justification should be required. For if it has been'shown—and such is the opinion of the Federal Arbitration Court —that the wage reduction is essential to the well-being of the Commonwealth, ' the national claims must overshadow those of any particular section of the community. Australia is in the throes of an economic crisis, and if her industries are to survive, and if employment is to be found for her unemployed, conditions must be adjusted as the circumstances require. In his evidence before the Arbitration Court Professor D. B. Copland, Dean of the Faculty of Commerce at Melbourne University, said: “ The position at present is so delicate that within the next six months anything may happen. My considered opinion is that Australia will be fortunate if she escapes with a 10 per cent, reduction in real wages. Tf all classes of the community co-operate, we will get off with 10 per cent. If they do not, we will not. Very few of the organised bodies have a' full recognition of the seriousness of the position.” The Court’s decision in reducing wages can only be seriously impugned if it can be demonstrated that a sacrifice is being called for from one section of the community without the imposition of a corresponding sacrifice on other sections of it, including, of course, persons in receipt of salaries and those whose income is derived from investments. But in Australia civil servants, called upon to accept salary reductions, have had to realise that employment at a diminished emolument is very much preferable to no employment. Sir ■ Otto Niemeyer pointed out that while the money wage of Australia is almost double that of 1911, the number who can attain that wage is steadily decreasing.. Wage-reduction is regarded as an essential- preliminary to the re-absorption .of the present large army of Australian unemployed. Professor Copland estimated that it will take eighteen months to get the unemployment figures down to the average of what they have been since the war—that is, a little under 10 per cent. It has been.contended that, as a result of high wages, profitable production has become almost impossible in the Commonwealth. “ All must adapt themselves,” the Federal Court says, “ to the fundamental fall in the national income, and national wealth.” Sacrifice on the part of classes other than the wage-earners is certainly evident when industries arc wrecked or tottering. Australia is in the position, it has been pointed put, that her spending power has been suddenly and disastrously reduced, with the result that she has at present at least £100,000,000 a year less to spend. The sacrifice made by capital in these circumstances must be very impressive, though of the extent of it the people of New Zealand may not be wholly in a position to judge. But taxation has been increased to a degree which demands very considerable additional contributions from those who enjoy incomes on the larger scale, and it is obvious that the inability of companies to continue the payment of dividends at the rate Avhich has prevailed in the past must have reduced very appreciably the incomes of investors. The question of the revival of industry in Australia is in the balance, and the sacrifice necessary to solve - this problem satisfactorily, and to promote the restoration of stability in public finance, must be equitably shared. The circumstances themselves must tend to ensure this to a very wide extent, though in certain cases specific adjustments effected through legal machinery may be requisite.