DEPRESSION IN INDUSTRY

Otago Witness, Issue 3994, 30 September 1930, Page 8

DEPRESSION IN INDUSTRY

SEEKING A SOLUTION.

WAGE REDUCTIONS URGED. WELLINGTON, September 25.

A large deputation representing the primary and secondary industries and financial interests of the Dominion waited on the Acting Prime Alinister (Mr E. A. Ransom) and the Alinister of Labour (Air S. G. Smith) to-day. Mr A. C. Mitchell, vice-president of the New Zealand Employers’ Federation, said the deputation was firmly of opinion after a careful survey of the whole situation that wages, especially those of unskilled workers, would have to be reduced. Although certain individual members of the deputation were opposed to the Arbitration Court, as a body they were in favour of compulsory arbitration and conciliation.

“We are here because the condition of trade in New Zealand calls for action in the interests of the Dominion as a whole,” said Air T. O. Bishop, representing the Employers’ Federation. “ You are fully informed upon the subject of the Dominion’s finance. It is sufficient to call attention to the outstanding fact that the value of the exports from the Dominion for the year ended June 30, 1930, was less than for the year ended June 30, 1929, by nearly £9,000,000, in spite of substantially increased production. The prices of our produce for the season on which we have now entered are lower than at the close of last season, and the most optimistic forecast holds out no hope that they will improve as the season advances. There can be no doubt that our gross income from exports this year will be less than that of last year. We have not yet reached a stage when our exports are insufficient to pay our overseas indebtedness in espect of loans and for our imports, as has happened in Australia, but we have gone dangerously far in that direction. If low prices continue for another two or three years and if we do not bring our costs of production and distribution into line with our prices we shall be in precisely the same unenviable position as the Commonwealth. We are faced with one supreme duty to-day—to bring our expenditure within our inct The farmers have increased their output from year to year for some years past by scientific means, and to some extent they have offset the reduced prices by this means but in spite of their efforts the position of the farmers now is such that ther- is a serious danger of more land going out of production. In ths secondary industries, also, economies have been and are being effected in all directions. In spite of these very difficult circumstances which are being experienced by all industries the Government has found it necessary to impose increased taxation to balance its Budget, so that private enterprise suffers a still greater effect from the shrinkage of £9,000,000 in the national income. One result is that not only in primary industries, but in secondary industries also, there is a reduced aggregate sum out of which wages

'■n be paid, and that means that industry generally is faced with two alternatives from which there is no possible escape. These are—(l) a reduced scale of wages; (2) a reduced number of persons employed. We are convinced that the results which would follow a general reduction of wage rates would be a lowering of production and distribution costs, a further reduction of internal prices in sympathy with export prices, a lower cost of living, and increased employment. There is, however, one difficulty to be overcome—that, in many industries, wages are fixed by the Arbitration Court. Awards cannot be varied except by making new awards as the current ones expire. In 1921, when we experienced a similar position to the present one, this difficulty was overcome by the passage of a special amendment of the Arbitration Act empowering the court to revise wages under all awards. We ask for the enactment of a similar amendment of the Arbitration Act before the end of the present session of Parlia ment to provide that the Court of Arbitration may from time to time amend the provisions of“ any award or of all awards by general order in so far as these affect the rates of remuneration paid to any worker; that the court mayact in this respect either of its owe motion or on the application of any party; and that before amending any award the court shall hear evidence as to the economic conditions affecting any particular trade or industry or trade and industry generally, and" such other evidence as any party concerned may desire to submit so long as it is relevant to the matter before the court It is not at the moment a demand for a re duction of wages, but for machinery by which a reduction may be obtained with the least dislocation and the maximum benefit after a proper investigation' and consideration of the evidence.

Mr H. D. Acland, representing the New Zealand Sheepowners’ Federation, said that one of the greatest problems before the country was the statutory fixation of wages. Two or three years ago the sheepowners got as much as Is 8d for their_wool, but now they were getting Bd. They were formerly getting 35s for their lambs, but had now to be content with 10s and less. The dairy 'farmer, instead of getting Is 6d or Is 8d for butter, received only/Is. These primary producers, when they went tpay for wages,. rates, stores, or taxation did not pay in money but in produce.

Thus the sheepowner had to pay to-day two bales and a-half of wool where fornyjrly he had to pay one. The dairy farmer had to pay 181 b of butter for services which he formerly obtained for 121 b. The position was that the aggregate was not enough to pay for the services required, and if something was not done economics would assert itself with disastrous consequences. They had to think in terms of produce, not in terms of money. Air J. S. Jessep, of Gisborne, sup, ported the representations of previous speakers.

Air VV. Alorrison, representing the New Zealand Farmers’ Union, said that possibly the farmers were in a more serious position than any other section of employers. There were many dairy farmers who would be pleased if they were earning the wages paid to those engaged in the sheltered industries.

Air C. G. Wilkin, representing tho freezing companies, quoted figures comparing to-day’s values of freezing works exports with values in 1924. These showed, he said, the following declines: —Lamb, 35 to 40 per cent.; mutton, 40 to 50 per cent.; beef, 5 per cent.; fats, 35 to 40 per cent.; hides, 25 per cent.; wool, 70 per cent.; pelts, 35 to 40 per cent. Air Wilkin said that at the end of 1924 or from the beginning of 1925 the basic rate of wages in the industry was 2s per hour. To-day it was 2s Id, an increase of about 4 per cent. Speaking on behalf of the Associated Chambers of Commerce, Air C. A. L, Treadwell said they sought a re-enact-ment of section 9 of the Industrial Conciliation and Arbitration Act, 1921, That would be an easy way for the Government to solve the 'difficulty. The Alinister of Labour (Air S. G. Smith) said he thought the deputation had made out a very strong case in a very capable manner; but as the matter was entirely one for Cabinet he did not intend to discuss it further than to say that he was anxious to give the closest and gravest consideration to anything that was likely to solve the present difficulties.

The Acting Prime Alinister (Air E. A. Ransom) said he greatly appreciated the views which, had been placed before him, but he was sure they would recognise the nature of the difficulties which always confronted a Government when it set about to effect a radical change in regard to a policy matter. As a primary producer himself, he was naturally looking for a means of overcoming the difficulties which faced the producers. He had listened to what had been said, but he had been unable to obtain any solution of the problem from the suggestions that had been made. The first suggestion was that we should depart from the present system of compulsory arbitration and adopt compulsory conciliation and optional arbitration. He was unable to see exactly what they meant by compulsory conciliation. To him it seemed like a juggling of terms. Air Acland: It means that the parties have to come together and thrash the matter out.

Mr Ransom said he was well aware of the advantages of conciliation as against arbitration. Arbitration, to his way of thinking, was the last thing that an employer or employee should have to resort to in order to settle his disputes. The difficulties through which New Zealand was passing were not nearly so great as those of other countries. It was the duty of the Government to look at the questions raiseo by the deputation from the point of view of all sections of the community. He was prepared to admit that an all-round reduction would be a great relief to the primary producers, but it had to be remembered that wages were by no means the most serious handicap with which the producers were faced. There had been a suggestion that wages should fluctuate according to the values received for produce, but it was hardly in the best interests of the country that the wages of the workers should go up and down to such an extent as,, for instance, did the value of wool. A low wage standard should be the last thing which the primary producers advocated. If there were a low wagq standard at Home, for instance, the working people there would be unable to afford to buy New Zealand products. Another suggestion was that a reduction in the cost of living would automatically follow a reduction in wages; but what the workers were naturally concerned about was how they were going to fare while the readjustment was in progress. He was well aware of the fact that there were many workers at present who were disinclined to work on farms owing to the fact that standard wages were paid on relief works, and that was a question which the Government would have to consider very carefully. The representations of the deputation would receive careful consideration, and he sincerely hoped that the outcome would be of advantage to the Dominion as a whole.