WAGE REDUCTIONS

Southland Times, Issue 22157, 27 October 1933, Page 5

WAGE REDUCTIONS

EMPLOYERS’ ATTITUDE NECESSITY FOR DECREASE. A number of industrial awards and agreements have been reviewed during the year and in most cases wage rates have been fixed at about 15 per cent below that of March, 1931, states the annual report of the New Zealand Employers’ Federation. On the basis of 1914, 1000, the index number of the Dominion average wage rate at March 1933 was 1368. As the index number for retail prices on the same base was 1264, real wages for those workers in constant employment have been improved. Taking into account the reduction of working time and the increased casualness of many classes of employment it is clear that the standard of living of wage-earners, in common with that of all other classes has been reduced; It may be as well to reiterate here what has been said frequently before; that this federation does not put forward wage-reduction as a cure for the present economic troubles that afflict us. What we have claimed right through is that wage rates could not be maintained at the 1930-31 level in the face of our reduced national income following upon the fall in the prices of our exports. Moreover, that fall in the prices of our exports preceded concerted action on our part in the direction of reducing wages. It is fully realized that a reduction of wages that is not accompanied by a proportionate fall in prices lessens consumptive power. If further reduction of wages is to be made it is imperative that some means be devised of bringing about a corresponding and simultaneous reduction in all other costs. Further, it is clear that under modem methods of production, in which the proportion of labour cost to total cost is much lower than it used to be and the proportion of overhead due to machinery, plant, buildings, power etc. is becoming increasingly greater, the effect of a wage reduction upon costs is becoming less important than it has ever been before.