A BASIC WAGE.

Otago Daily Times, Issue 21735, 29 August 1932, Page 6

A BASIC WAGE.

The substantial reduction which the Industrial Commission, composed of three judges, has made in the basic wage in New South Wales suggests that industry in the State has been carried on for some time past under a very considerable handicap. It has been calculated that an effect of the reduction of the basic wage —to £3 10s a Aveek for a male, based on the assumption that the man has a Avife and one child to support, and to 38s for a woman — Avill be that the wages hill in the State Avill be diminished by £8,750,000. The Government itself, as the principal employer of labour, will apparently obtain relief to the extent of about £2,000,000 through the reduction in the AA’age, and the loss it Avill suffer in its receipts from the unemployment tax on wages should not be very material in comparison Avitb this saving. The principle of the basic Avage, which was introduced Avith the laudable purpose of safeguarding the Avorking man and working ivpman, is certainly fallacious, and it is by no means clear that it operates in the interest of those whom it is designed to protect. Industry cannot pay a wage that is in excess of that which its returns will enable it to pay. Wages are, in the final analysis, paid out of the products of industry. And when the basic wage is fixed at an amount which it is beyond' the capacity of industry to pay, the effect must necessarily be to restrict employment. One outcome of the reduction in the basic wage in New South Wales should, viewed from this aspect, be to open up avenues of employment that were closed when the basic wage was; if avg accept the conclusion arrived at by the ,Industrial Commission, higher than Avas economically justifiable. And thus the apprehensions of the trades unions that the decision of ,the Commission will curtail the spending power of the working classes may prove to be less than well founded. In other words, the spending power will be more Avidely distributed than it Avas.