"NO WAGE CUTS"

Stratford Evening Post, Issue 8, 1 August 1930, Page 5

"NO WAGE CUTS"

A SLOGAN ON TRIAL EXPERIENCE in AUSTRALIA. AMERICAN PRECEPT. The issue of stabilisation v. deflation, in its bearing on wages and salaries, is being fought to the death in Australia. Departments say that all prices must go, down together. “But not the price of labour,” says the Federal Labour Government. SThe Controversy is an echo of much that passed during the first stage (Octo-ber-November) of United States defla,tlon - When the first Wall Street crash alarmed the country and brought together President Hoover and the United States prosperity leaders, it was stated that “no wage cuts” was to be a condition of the emergency expenditure programme. In fact, it was cabled that Mr. Henry Ford had said that the time was a time to raise wages, not to lower them. Those Americans who believe that a high wage is the first ingredient in high purchasing power, and that sales must be maintained by paying people on a scale enabling them to buy, were emphatically for “no wage cuts.” American second thoughts on this matter are the subject of a bulletin by Benson and Co. The United States situation is merely referred to here to show that Australian Labour ideas are not necessarily a new development. Mr. Scnllin’s Defence. The attitude of Mr. Scullin as Prime Minister and Federal Treasurer of Australia was summed up in Tuesday’s issue by the Evening Post’s Australian representative. In brief, Mr. Scullin’s reply to the criticism that he is not reducing Parliamentary and Civil Service (Federal) salaries and Federal administrative departmental cost (three millions), is small relative to the fourteen millions gap in this year’s Federal Budget. 1 If the critics should say that even a relatively small factor should contribute its proportion to economy, the Labour answer will be that to curtail wages is to cut purchasing power, and that to reduce the £600,000 for invalid and old-age pensions would be to throw the burden of resultant distress on some other public authority. So also with the £140,000 for war pensions and repatriation. “Mr. Scullin contends that when only £3,000,000 is available for all the Government Departments for a great country like Australia, charges of extravagance must be unfounded.” If, again, the critics say that three millions is only a fraction of the tale, and that the State Governments have huge public service establishments also, Mr. Scullin will reply “that is their funeral” (or words to similar effect), and will cite the Federal Government’s grant ot one million sterling to the State Governments (for relief of unemployment) as evidence of the Federal Government’s recognition of a duty to the States at the cost of its own finances. Two Governments Dipping. All the same, the fact that the Federal Government has not taken special steps to reduce salaries and administration, and that its estimates of expenditure show an Increase of nearly a million, ■ has a moral (or immoral) significance, contrasting with reductions in salaries and wages ami working time by the State (Nationalist) Government of New South Wales. While the New South Wales Treasurer is busy with “rationing” and many other economic devices, the Federal Treasurer is acting in the spirit of “no Wage cuts.” This is at least confusing. But it is worse, for the Federal policy necessitates a bigger dip by the Federal Treasurer into taxation (e.g. # the new Budget), and in this the New South Wales Treasurer sees a raid oij what remains of public prosperity. Where there are two taxing Governments, the deeper one of them dips its cup into taxable resources, the less is left for the other. Therefore, the New South Wales Treasurer, having sweated to economise and avoid taxation, sees a new lot of Customs and income and other taxes imposed over bis head. That bit of taxing power that he thought he might have kept up his sleeve for a possibly still worse winter next year has been appropriated by the Federal powers, for the Federal Government is not only drying up sources of taxation by means of Customs taxes (its own special field), but also by higher income taxation and by an entirely new Federal tax on sales. A Gesture to Private Workers. Besides discouraging any State Government that wishes to economise and to avoid taxation, the non-economising Federal Government, in its defence ot Federal salaries and wages, is regarded as encouraging hundreds of thousands of private employees to resist wage-cuts that are the only alternative to dismissal. . ... A high wage as the first ingredient of high purchasing power sounds all right, but (it Is asked) will the Broken Hill mines, hard hit by the fall o metals in the world market, be able to sell any more of their product by virtue of maintaining their wages accounts? Only this week It was reported (by

cable from Sydney dated Tuesday) that “the Communist Party at Broken Hill Is' urging the workers to close every mine and declare a general strike.” This position at Broken Hill is worth diving into. In its monthly summary (June) of Australian conditions, the National Bank of Australasia, Ltd., writes: “The marked decline in the prices of primary products, which has not been accompanied by a reduction in working costs, has led to the closing of three of the smaller jpines at Broken Hill. A 17i per cent, reduction in wages, proposed by the owners with a view to keeping the mines open, was refused by the workers. The large mines are still in active operation”—until such time as the Communists may be able to close them. Jobson’s Investment Digest says that the “extraordinary” refusal of the Broken Hill miners closed the Proprietary and Block 14 mines, and will close the Central. “The reduction would, in effect, create a fixed flat minimum rate of £4 2s 6d below which the rate would not fall, even though quarterly adjustment of the basic wage might reduce the present wages rate in the agreement of 15s a shift. The Proprietary mine only reopened after two years’ idleness, in September of last year, and the same was the case with Block 14. The result of the restricted operations of the mines has been to increase the number of unemployed at Broken Hill to 2000,” Cutting the Court’s Claws. Perhaps even more significant is the Federal House of Representatives’ vote to repeal the section of the Act that allows the Commonwealth Arbitration Court to vary wages (apart from the basic wage), because of the “probable economic effect” of a wage rate in the industry or upon the community. This action took place early this month. The plain meaning is that the Federal Labour Government does not consider that in a time of deflation the Commonwealth Arbitration Court should have this power to consider economic effects when fixing wages. Is not that the glorification of the principle of “no wage cuts”? Does it mean that the colours arc nailed to the mast so far as nominal wages are concerned, and that the real wage may bo left to look after itself (which it will do)? But the Federal Labour Government may fail to pass its Bill through the Senate. If wages were to descend in ratio with prices, would the worker be worse off than he will be under a price-raising system of restriction? That is a question to which the Labour Government invites a practical answer. For its own part, it expresses determination to stick to its guns. The Australian experiment is different from the American, for the home market is in the one case small, in the other enormous. But both experiments are of profound interest.