HIGHER BASIC WAGE

Poverty Bay Herald, Volume LXIV, Issue 19364, 30 June 1937, Page 16

HIGHER BASIC WAGE

ECONOMIST’S ATTITUDE “DANGER OF BOOM” MELBOURNE, May 11. The raising "of. f-liti basic wage, at least to the 19-20 level, a.ud preferably to a level two or three shillings higher, was advocated before the Arbitration Court to-day by Mr. W. li. Reddaway, Research Fellow- in Economics at the University of Melbourne, and formerly a. member of the Economics Department of Ili u Bank of England. Mr. Reddaway said that a rise in wages was almost indispensable to avoid “an unhealthy boom.” Witness, who' was called J.y the Court as a. witness in tho basic wage inquiry, said that his evidence had the approval of professor D. B. Copland, Professor A. L. Gibliu, and Dr. G. L. Wood, of the Economic staff of the University. The case for a revision of the basic wage must rust primarily on the increased prosperity of the country, which enabled employers to pay a larger amount. It; was sometimes argued, Mr. Reddaw,ay continued, that Australia could not now be as prosperous or as capable of paying higher wages as she was before the slump, because she was no longer receiving £30,000,000 a. year in oversea loans, but the absence of borrowing, far from being a source of weakness, added greatly to the strength of the position. “Need Not Fear” Mr. Reddawav said that the court, need have no fear for the future level of prosperity, 'merely because Australia’s export industries wore wholly dependent on the maintenance of the present high exchange rate. Thcro was no reason why the exchange to to should ever revert to par. “The present position is,” Mr. 'Reddaway said, “that the real income of the community is increasing substantially. A part, of this increase is going le labour in tho form of wages to those previously unemployed, but if wage' rates .are not increased the greater part will bo concentrated on profits and rents. Business will be very profitable, and many people will be anxious to start new enterprises or expand cxising ones. .This is capable of producing a most unhealthy boom, if carried to excess. “A rise in real wages now would i, extremely valuable as a. restraining influence, 'both on the price of existing capital assets and the excessive construction of new ones.”

Replying to Chief Judge Dcthridgo and Air. C. Crofts (representing the .unions) Air. Reddaway said that; employers could generally pay rather more than they admitted, just, as taxpayers' could pay more when taxes were raised.