THE INDUSTRIAL SITUATION.

Otago Witness, Issue 3854, 24 January 1928, Page 7

THE INDUSTRIAL SITUATION.

} A FIVE YEARS’ TRUCE I SUGGESTED.

THE ATTITUDE OE EMPLOYERS

Mr W. Cecil Prime., secretary of the Canterbury Employers’ Association, made the following statement on Tuesday at a sitting of the Conciliation Council in Christchurch to deal with a claim for a new Dominion award covering the clothing manufacturing trade: — “On September 15, 1925, the Arbitration Court issued a pronouncement with reference to the cost of living and the basic wage. The court reviewed th§ various factors which it had taken into consideration, including the cost of living statistics, which showed that the index figures had fluctuated within a few points of 60 per cent, above the level of July, 1914, and then set out the standard minimum rates of wages which it would adopt for the future. The court went on to say that the basic rates thus adopted did not take into account the improved conditions of work, increased overtime rates, and other benefits granted since 1914, all of which have a definite money value. When taken in conjunction with the increased basic rates, these concessions brought the total earnings of the basic rate worker well above 60 per cent, over the 1914 standard. Since that pronouncement was made by the court, practically all awards have been reviewed and brought into line with the rates and principles set out. The first awards thus reviewed have lately expired, and there appears to be a tendency on the part of the workers’ unions to make immediate application for fresh awards involving further concessions in conditions and wages. Under the circumstances it seems desirable that a statement should be made setting out the general principles which employers feel should be taken into consideration. It is possibly a corollary to our system of universal compulsory education that there should be a widesperad desire for a constantly improving standard of living; the general progress of the world in scientific achievement ensures continually increasing benefits, being made available for mankind, and it is reasonable to say that all classes should have the opportunity of sharing in these benefits as far as is reasonably practicable. But in deciding to what extent the benefits of modern civilisation should be available to the citizens of any country, regard must be had to the income of the whole community as well as to the earning power of the individual. During recent years our national income has not kept pace with the people’s desire to spend, with the result that there has been unemployment. No one- desires this state of things to continue. A fully employed community is more prosperous than a nation with an appreciable minority of its citizens out of work. “ New Zealand to-day stands at the crossroads, and must•, make a decision is to which road she will travel. Our national income is dependent mainly on the product of the land—our primary industries—and any increased handicap on the secondary industries which many result In higher costs to the consumer will react against the producer and so tend to curtail our national jncome. The outstanding

problem of the Dominion is the position the farmer has been placed in by the fact that he is receiving only about 40 per cent, above pre-war prices for his produce, while he has to meet increises of about 50 per cent, in his cost of living and general expenses. This is a position which cannot continue without inviting _ national disaster, and can be met only by increased production or by decreased costs. Those who are concerned with the welfare of the secondary industries must, therefore, bear these things in mind when seeking a solution of the difficulties of the present and in deciding which way we are to travel. Two main avenues are open: two main theories are espoused by opposing classes. The first of these, advocated by some employers, is a decrease iu standard rates of wages. Such a course, it is held, will reduce costs, and os a result, prices and the cost of living generally, enabling the worker to maintain his present standard on a reduced income. The first difficulty in giving this theory a trial is that it would admittedly be opposed by the workers, and could not be given effect to without bitter industrial strife. The chief contention against the adoption of a wages cut is that it relieves management from the necessity of seeking other economies in costs, such as improvement in technique, organisation, or finance. The second View, advocated by those who are mostly directly opposed to the first suggestion, . is that wages should be increased in order increase the purchasing power. of the

community, and in order to stimulate the employer into finding new and more economical methods of production. To insist that every rise in wages will evoke new and corresponding economies in methods of production is foolish. There is a limit to the extent to which the high wages theory can succeed, even where mass production is practicable; the limit is reached sooner in a small country where mass production cannot be adopted owing to the fact that there is not a sufficiently large home market. But more important still, our national income is not large

enough, and has so been proved by actual experience during the last two years, to stand the strain of further increases. Noris there any prospect that there will in the near future be any increase in income from increased prices. There must be a slow but steady decrease in prices of both primary products and manufactured goods for the next few years, although from time to time there may be brief upward movements due to abnormal causes such as shortage of production in countries which compete with New Zealand in overseas markets. There is a danger that too much importance may be attached to such temporary upward price movements; this must beucarefully guarded against, for both primary producers and manufacturers have much leeway to make up, and any apparent extra income from increased prices will do no more than assist to wipe out past deficits. “ The t,nie has come, therefore, to call a halt in the hitherto almost unbroken rise in the scale of standard wages. The limit has been reached. Whether money wages can be maintained at even their present level will depend mainly on what can be achieved by co-operation between the contending parties in the direction of reducing costs and so increasing the purchasing power of the money wages paid. That is the object of this statement —to ask if there is not another solution than the two opposing theories already mentioned. whether there is not a third road along which we may travel to normal trade and prosperity. On two occasions during the past three years, the Hon. T. Shailer Weston has put forward tentative proposals for an industrial truce. On August 24, 1926, speaking at Chritchurch, Mr Weston put the proposal very plainly in a speech from which the following are extracts: —

With regard to the -cutting of wages, and to this suggestion of an industrial truce for five years, I think that employers should refrain except as a last resource from using the expedient of cutting wages. With that expedient eliminated, employers, in order to cope with a fall in prices, would have to depend on their ingenuity and resource in improving their plant and lay-out, and also on the benefit they would get from the absence 'of industrial strife, and from that uncertainty which inevitably gives rise to increased costs. . . . ! I feel sure that if this project of an industrial peace and truce for the next five years were carried out, the certain result of that industrial peace would be such a reduction in the cost of living as would mean an increase of at least 10 per cent. —it might be more —inwages, and that the employers would not suffer very much.

In a nutshell, the proposal amounts to

this:—Let the Workers’ Unions refrain for a period—five years need not necessarily be stipulated, but unless or until abnormal circumstances arise—from seeking further concessions in standard rates of money wages, and the employers similarly refrain from seeking reductions. If both parties continue to be ranged in hostile camps, with the workers seeking further concessions unjustified bv the economic facts, employers will in selLdefence be compelled to seek wage reductions. With the prospect of freedom from industrial disputes of a major nature, with a certainty of stabilised conditions and rates of money wastes, employers will have confidence in seeking improvements in methods in order to bring down prices. From lower prices wage earners will reap the benefit in that their money wages will lave a greater purchasing power.- Increased purchasing power on the part of the workers should tend to stimulate trade and industry with resultant benefit all round. “ The idea of making this statement was suggested early in December. This s of interest in view of that ’ fact that on December 20 a cable from London was published in the New Zealand newspapers stating that a special meeting of the Trades Union Council had : been held, at which an invitation was accepted from the employers to attend an industrial peace conference. The view is gaining ground that co-operation will achieve more than strife. It may be charged that this statement is being made with a view to securing an advantage. It is made because of a sincere conviction that', money wages

cannot be increased without danger to the whole community, and because cf an equally sincere desire that wage earners should not have their standard of living reduced. Will the workers accept the position in this spirit ? Are they willing to join hands in seeking methods of improvement, in reducing costs, and so reap a benefit and an increase in their standard of living without imposing further handicaps on trade and industry ?

CONCILIATION PROCEEDINGS.

CHRISTCHURCH. January 17

The majority of the union’s claims were agreed to by the assessors for the employers on the lines of the old award, but the question of wages was remitted to the Arbitration Court for decision.