REDUCTION OF WAGES

Poverty Bay Herald, Volume LV, Issue 17452, 29 December 1930, Page 7

REDUCTION OF WAGES

THE COURT’S DECISION PRAISE AND CRITICISM GENERAL ACTION ADVOCATED (Special to the Herald.) CHRISTCHURCH, this day. Interesting views were expressed today on the big reduction in the wages of flax mill'workers. Mr. V. E. Hamilton, president of the Canterbury Employers’ Association, said: “I think everyone will regret the necessity for reducing wages, but we can’t control world prices and it is surely better for the flax industry to have a chance of surviving and for the men to be in work at reduced wages than to be out of a‘ job. I think, however, that it is unfair to the workers to single out one industry. It would Appear that a general reduction is inevitable, and I believe the fairest way would be that such a reduction should be by an Act of Parliament, as was done in a previous instance. This would quickly reduce the cost of living all fcmnd, whereas a reduction in one industry only is a great penalty on the workers in that industry. 1 think the Unemployment Board should assist the workers in the flax industry for a limited period until such time a.s the. cost of living is reduced by a general reduction. It will be. interesting to see whether the court‘’s pronouncement has any effect on the Government’s policy in regard to rates ( of pay on relief work.” “TOO DRASTIC” . The Mayor of Christchurch, the Rev, J. K. Archer, said: ‘‘This decision seems to mo to be an epoch-making one.- Some sort of cut. was widely necessitated, but nothing so drastic as that which has taken place. One wonders whether it is really necessary, hud if so whether the industry is worth preserving. Not only is the award rate fixed lower than that for general laborers, 15s 4d a day, but it is also lower than that fixed by the Government for unemployed relief works, 14s a day. At such wages first-grade workers cannot be expected to operate, neither can any worker be expected to take much interest in his work. “What .will be the influence of this decision on wages generally it is imposaiblo to say, but. undoubtedly it will ereate a feeling of unrest and insecurity.” Mr. H. D. Aelnnd, president of the New Zealand Sheepowners’ Federation; said: “It would appear that the Arbitration Court has at last recognised that the cost of production can cnly" be paid for out of the sale of the product. - I am inclined to think

also that the court realises that wages i cannot be based on the fallacious principle known as the cost of living, and that economic law cannot bo forever flouted.” STARVATION WAGES Mr. 11. T. Armstrong, M.P., said: “I say definitely that there is no justification for reducing the flax workers’ wages below the recognised minimum award. For many years I worked in the industry and I have known 1 the commodity prices to leap 50 to 60 per cent,,, yet never was there any corresponding increase in wages. When the price of fibre was going up wages were based on the cost of living, but how that prices are falling it seems that that rule is to be abandoned and wages fixed on fibre prices. “With a grave danger of employers losing the foreign market, assistance from the Government would perhaps seem to be the more reasonable remedy. Last session the flaxmillers asked the Government for a subsidy' to make up the difference between 10s a *day and the current of the rate of wages, but this was not granted. The employees were prepared to consider a reasonable wage reduction, recognising the state or the industry, but such a sweeping reduction as 33 1-3 per cent, is ridiculous. If an industry cannot exist unless starvation wages are paid to the workers it had better go out.’.’

SLIDING SCALE.

j WAGES AND PRICES,

THEORY OP JUDGE. “In periods of fairly stable prices, when market fluctuations upward and downward tend to balance one another over a number of years, a sliding Scale correlating wages with prices may sometimes be advantageously adopted. In general, however, it is more desirable in the public interest that award rates of wages should remain stable over long periods. The court’s minimum rates are so adjusted that in fairly normal times it will not be necessary to make frequent alterations, which are disturbing to employers and workers alike.” These views are expressed by Mr.

Justice Frazer in a memorandum to the Arbitration Court order reducing flaxmilling wages in the Wellington industrial district by 33 1-3 per cent., and his Honor deals generally with the court's attitude to the sliding-scale principle before applying it to the particular case concerned. if My own theory, he says, “is that in normal times the minimum rate of wages should in general give the minimum grade worker in an industry a wage that is fair and reasonable,

having regard to the nature and conditions of his work, the degree of skill and experience required of him. the general standards of living prevailing in the community, the cost, of living, the general financial and economic conditions of the country, and the circumstances of the particular trade or industry. PRICES MUST BE CONSIDERED. “Such a minimum rate should not be so high us to be oppressive to employers in the industry in times of temporary depression, and it should leave a margin sufficient to enable an employer to pay higher rates to his more industrious and deserving workers wheu trade is moderately prosper-

ous,* and to pay higher rates to his workers generally in times of trade activity. With this conception of a minimum wage in mind, one recognises that the general adoption of sliding scales, correlating the wages paid in an industry with the ruling prices obtainable for the products of that industry, is unsound, though in particular cases a sliding scale may be a desirable expedient, if it is worked out so as to keep wage fluctuations within definite limits, and is limited in its operation to a comparatively short period. “It is certain that, having regard to the ,economic position of the average worker, hie wage* rate* cannot .G' -V: - ' ■'* : . ■' V

fluctuate so violently or so rapidly as do the prices of our primary products, more particularly when it is borne in mind that those prices do not all always move to the same extent, or in the same direction, or at the samo time. The general level of prices must be a factor in determining wages ■standards generally, and it cannot bo entirely disregarded in favor of tlx* prices of the products of an individual industry.

“Applying these considerations to the circumstances of the present case, f do not think it advisable to proscribe a sliding scale. Tt would only delude the workers into hoping for compensating benefits in the future; and, on the analysis of costs submitted to the court, and on the view T take of the possible movements in the price of fibre in the near future, and of the probable movement of prices generally, I do not think that it would be either wise or just, to encourage hopes that are unlikely to be fulfilled."