MONEY WAGE LEVEL

Taranaki Daily News, 5 December 1930, Page 3

MONEY WAGE LEVEL

ARGUMENTS FOR REDUCTION. •AN ECONOMIC NECESSITY. A number of cogent arguments for a reduction of money wages in the Dominion were given by the president of- the New Zealand Employers’ Federation, the Hon. T. Shailer Weston, M.L.C.,; in his address at the. annual meeting of that body. “The prices of all our .primary products have fallen heavily and the national income has been severely reduced,” said Mr. Weston. “Unless this fall is not only checked, but replaced with a decided rise, this must inevitably result in reduced prices for landed properties—city, suburban -and rural—lessened returns from all businesses and a fall in money wages. ‘

“The' prices of our primary products are now in the neighbourhood of prewar prices and the secondary industries must be, indeed are being, affected in their turn. When money wages were raised during the war those rises were the logical result of the rise in prices of primary products. Now that prices have fallen again, how can the primary industries be carried on if money wages remain unaltered?

“Let me emphasise that this reduction of money wages, that must be. faced is not a reduction in real wages. This federation has, since the war, always endeavoured to maintain money wages at a high rate. It has realised the advantage of workers being well paid and contented. I think, therefore, that the members of this federation will be prepared to qualify any claim for a reduction of money wage's by stipulating that every, effort must.be made to prevent the reduced money wage having a less purchasing value than the old.” ..Referring to the arguments used by a Labour deputation against the readr justment of wage-rates by general order of the Arbitration Court, Mr. Weston said the deputation had urged that money wages should be maintained, because thereby the purchasing, power of the community would be .maintained or increased and, hence, more products of its prinifiry i and secondary industries could be purchased, within Now Zealand. The answer to this was that the policy had been tried in the United States after the collapse a year ago, and had now been abandoned .

To-day, the fall in prices had been so severe that after providing for money wages at the old rates, in many , cases, however good the management,, little or nothing. was left after payinent of taxes, rates, repairs and maintenance for wages of supervision or reasonable interest on capital invested. It would be little help to the farmer,if slightly-.more of his products were consumed locally, seeing that two-third's of them were exported and the local price was fixed by world parity. Besides, why had such an easy remedy not been tried? ■ ■Regarding the deputation’s second argument , that .capital and management must make sacrifices first,’ Mr.' Weston, said .that it had failed to recognise that heavy sacrifices had already been made by capital. There had been a fall of from 10 to 50 per cent, in the value of shares in different, undertakings, .varying according to the . soundness of th?se undertakings, .the efficiency of their management; and i their potentialities. Not only had 'values fallen/ but dividends declared were,less, with the’exception “f the few concerns which had accumulated big reserves (declared or secret) > by excellent and conservative riiana'gefnent. As to the fall in.the value of dwelling, houses, workers .throughout New -Zea,-: land knew this from their 'own experience.' ■ ' '

: As for a suggestion that many, if not all, undertakings were over-capitalised,’• it was true that companies in New Zealand had increased their capital from, time to time, but in the case of no company of iriiportance had this hew capital been issued except cash had - been paid by its. shareholders to the amount at-least of the nominal value of its shares, or the shares had been paid out of the savings of the company. arid distributed to shareholders in preference to declaring cash dividends./Many companies which had done this, however, had either disappeared or were strugA company whose-nominal capital was represented -by paper assets must come to grief. “If it is- any consolation to the worker who finds his money wages reduced,” said Mr.- Weston, “he can rest assured that, if prices for our primary products, do not improve, the owners in New Zealand of property, however well selected, will lose substantially, and where bad judgment has been shown will be lucky to have any left at all. He does not need to have- any doubts whether the man who has saved, and the managers and higher paid men in business, will suffer more than himself. Circumstances will ensure this.” «'