A RETURN TO INCENTIVE

Otago Daily Times, Issue 27391, 17 May 1950, Page 6

A RETURN TO INCENTIVE

In the course of an address to the Civil Service Institute the other day the Prime Minister stated that the Government must arrest the tendency to narrow the gap between the lowest paid workers and senior officers. This is a problem which should be faced soon in order that action may be taken during the period of adjustment following the reduction of the subsidy system. Throughout the Labour Government’s administration the tendency has been for the gap to be gradually lessened. No fault could be found with this so long as the purpose was to improve the position of the poorest paid worker to a reasonable standard of living, but the development was allowed to continue and 'became an instrument of what appeared to be an intention to create a “ classless society.” Not only was there a crude attack against capital, regardless of its position in the national economy, but the rewards for zeal and ability were also attacked. Perhaps latterly there was some appreciation by the Government of the real effects of this process and some verbal recognition was given to the need for checking the “ material disparities which have arisen in the general wage structure.” Words were not followed by deeds, however, for militant unionism was using its strength recklessly and irresponsibly to preserve and extend its gains.

An example of what has been happening was provided in the Court of Arbitration’s general wage pronouncement in 1949. It was stated that during the period 1936-37 to 1946-47 statistics showed that the average earnings of managers and overseers rose from £ 407 for males and £2ll for females to £614 and £365 respectively, the increases being 51 per cent, and 73 per cent., fpr accountants and clerks the average rose from £258 and £ll9 to £368 and £2Ol, increases of 43 per cent, and 69 per cent.; and, for wage-earning employees, from £204 and £9O to £365 and £lB9, increases of 79 per cent, and 110 per cent. The disproportion of the increases obtained by wage-earning employees is impressive. It may be recalled that the court’s order increased by J,d per hour the margin between the standard minimum rate for skilled and unskilled workers, making a new margin of 6d per hour. The distortions of the normal wage relationships produced by the shortage of certain classes of labour and the possibility of adverse effects on the apprenticeship system because of the high rates for unskilled labour should also receive attention in the course of a review by the Government of the wage position. It must

be agreed that, as Mr Holland pointed out, unless the margins are preserved between classes of workers a cult of mediocrity will be encouraged and the best men, those with ability and initiative, will leave the country—as many have noticeably been doing since the war. The aims of State Socialism are facilitated by the creation of such mediocrity, but it is repugnant to all that the National Government stands for. Action of the sort suggested by Mr Holland should indeed be a necessary consequence of the change of Government.