PLIGHT OF INDUSTRY

Taranaki Daily News, 22 December 1930, Page 14

PLIGHT OF INDUSTRY

PRICE LEVELS AND WAGES

NEED FOR A READJUSTMENT.

’ ARBITRATION COURT’S tOWERS,'

Signs are not lacking that/ the condition of trade and industry in-New Zealand will at'nd remote date' bring , under urgent notice the necessity for a , careful revision of wage levels; Economists seemed agreed that the present depression is not of the ordinary type, which may be expected to be followed shortly by a period of prosperity; the . indications are rather that prices and profits are falling t-o a permanently lower level, comparable with the years before the war. The problem thus arises, says the New Zealand Herald, as to liow labour costs in'production can most smoothly be adjusted to ' conform with the /new .order.

:/ It is generally recognised tha t capital recently .been called oh '.tq'-bear ,an ’ increasingly heavy burden, ■ many com-' paries having.had their gharei'values reduced from between 20 to 50 per cent. So far, there has been ho reflection of this in the Arbitration Court’s awards. It Ms-to be remembered, however, that the policy of the Arbitration. Court in New Zealand differs from that of the various industrial tribunals of .Australia, inasmuch as the award rates in NewZealand are true minimum rates in the' majority of cases. ,In Australia the rule has been, to make the minimum the maximum. When proof was submitted to an Australian Court _that a number of em-> •players..in any industry -were -paying some - or all of their employees a:higher rate, than the. minimum rate provided by -the appropriate award, the Court accepted the circumstance as .a ground for-increasing the award rate. In New Zealand, however,-, the Court-has regarded such. a. state of affairs as detrimental to efficiency, inasmuch as the payment, of . the same wage to a highly efficient worker as that, paid,’ to a inediocre worker tended to a general levelling down of the standard of efficiency by depriving the more industrious and efficient worker of the incentive supplied-by a higher, wage. . WORKING-ON'A WAGES MARGIN. The.declared policy; of the Arbitration’ 'Court in -New- Zealand: is /that,, the- mini-'-miirn wage in. any industry is to be: sufficient to reward . the ’ fairly' for. the skill and labour required of him, but is not to be so high as to preclude' the'employer from paying.'higher -wages' to the ; mpre descrying -workers, or from paying- higher wages/to 'al,l his workers, '•in times :of prosperity.- /; -.' . " • •?/./, Similarly, the minimum wage has in

.each case been fixed at .such a .level -as not to be oppressive to employers in periods of depression., In other/words, the minimum rates of:wages have been fixed at a level that will allow.a margin on which the employer can “come and go” without it being necessary to make application to the Court for reconsideration. of its whges ' scale- ,in ordinary periods of ttade depression'. ‘ ; ;

.For some years past., it has been,found /that, in the "trades, - employ-.: ere .generally have been paying a .considerable percentage of their workers more than the award rates,..but during the past 12 months the margin has been, availed of, and an increasing, percentageof workers are now-on or only- slightly' above the minimum rate.' ' •■. -•. . ; - COST O" LIVING FACTOR, ■ Wages.in Austi-alia.are still based-on ■the /cost of living, -and/ rise dr fall in mathematical accordance with themovements. of/price/levels. In New ’Zealand the Court treats the cost of • living- as ;a. factor :jn; the-assessment ‘it ; is regarded as only ofie 'pf •'ai/number/ <of .factors.-; The,.other-matters/which-the; Court ’ intoconsideration- are /.the; /general financiaband economic condition :qf i-the: country., and /of ctrade ahd'.industr.y, generally, the prosperity ■ orothcr■/wise'of .the' particular 'trade or. industry' ; -with '/which 'the Court -is dealing at ’the . time, and any : other condition's: which, ,in the opinion of the Court,; are relevant .to- the issue. ' ‘

’ A " During .'the latter' part. of the war /period'and-.the early post-war years the ; Arbitration Court was.empowered‘to in-' ■ erpase ;or reduce / wages in ■ accordance / with the-movement of the cost of-living, .. and it effected these adjustments'at sixmonthly intervals. The' legislation was -amended'arid renewed ‘on a-number of ", occasions, but finally expired at the end ,pf-1923. Since, then the Court has'had lib power to vary the rates- of wages ■ .during the'currency of an award unless ■i /with', the 'consent 1 of all parties.' ' The on'Ly,'Way-ini which the employers Zip' apy trade or .industry could seek a re- : ductibn in Waj- ''rates', under their ’awards would be-to wait until,an award expires,- and'then apply for a new . award.-.with lower rates-of wages. The onus of proving that circumstances had so" changed as to warrant the Court in granting the application would be on the. applicant in such a case. . GENRE AL'REVIEW-OF AWARDS. ■ The objections that have been advanced to: dealing with wage levels in such, piece-meal fashion might be summarised as follows:—■

(!) - A reduction in' earnings for the workers in a single trade or in a single /district • would. press hardly on those .‘particular workers while others remained .at the’former Wage levels; , (2) Until a ; considerable-, number, of such adjustments had been effected, there: would be no . appreciable ‘diminu-, tion in-.the general cost .of production. (3) The .Court, in dealing with an isolated trade, would: probably, hot have all, the material before it to'enable it to make a comprehensive survey .- of the general position, a circumstance. which might cause such.wage reductions to be lacking in uniformity. If the legislation which expired in 1923 were revived and,' if .thought necessary, modified'to'meet. present .conditions,, the Court could deal with a representative case: in ' which employers and workers generally 'would take part. The Court woull then be in, a, position to give a comprehensive judgment on the'whole situation,.and make a general , order applying to all .trades and 'ifidus/ tries under its jurisdiction;

' The advocates :of such • a procedure claim that that method would,'mean less sacrifice to-individual; workers, because the drop in money wages would 'immediately •be reflected in ' lower production costs, with a corresponding diminution in the cost of. living/sb that real wages, measured in - purchasing power; would remain at or; neartheir present level, while industry generally .'would, derive an immediate benefit' from a general reduction of labour costs in’production. • -' ■-

■.. A policy of careful revision of wage, levels, calculated in accordance with .the circumstances of the'general situation, will, it is considered, help to bring'about the 1 necessary readjustnient without in-. volving any section ■ of the community in special hardship.- .'lt ; is', notorious, that, the prices of : primary products; have fallen to an extent'that.-has been

described as alarming and disastrous. Although ‘here may be a slight recovery, and .it.is axiomatic tligit'■ there cannot, for any- lengthy period,: be a great disparity between • the prices of primary products and the prices of manufactured goods. In time one-must fall to the level of the other, or both must meet on a common level.'.Hence arises the absolute necessity; for the equation of wages costs to costs generally. • , ■ .... •-■. I