REDUCED WAGES

Taranaki Daily News, 29 January 1931, Page 8

REDUCED WAGES

LOCAL BODY PROPOSALS LOW COST OF LIVING SOUGHT PRODUCTION COST TOO HIGH GOVERNMENT LEAD URGED SUGGESTIONS IN TARANAKI A reduction of production costs and a general reduction of wages at intervals, with employers passing on to customers at once any benefit derived, were advocated by the ■ Taranaki Local Bodiete’ Association at a special meeting in Eltham yesterday. There were present Messrs. J. S. Connett (chairman), S. Vickers (Taranaki County); H. V. S. "Griffiths, F. Amoore (New Plymouth Borough), W. C. Green, J. S.’ Tosland (Egmont County), A. L. Campbell, R. J. Knuckey (Eltham County), P. Thomson' (Stratford Borough), I. J. Bridger (Eltham Borough), T. R. Anderson (Stratford County), E. Long (Waimate ■ West County), J. B. Murdoch (Hatvera County), E. A. Pacey, W. G. Walkley (Hawera Borough), A. E. Cowley (Inglewood County) and H. A. Gallagher, W. Marr (Kaponga Town Board). , The chairman said the question of wages was becoming an'important matter and it was thought the Government should give a lead. Consideration had no doubt been held over until the return of Mr. Forbes, and he understood the Government was to discuss the matter that day.

Mr. Connett considered the matter was of so much importance that it should be discussed on the lines set out in the resolutions. They should express their • opinions and share responsibility. giving-the Government the benefit of their though tty and/support so that it would be in a stronger position to deal with- the question. DECLINE IN LEVEL OF PRICES. Dealing with the present economic position of the country, the chairman said:—• “The economic life of New Zealand depends almost entirely on the products of., the land. The yield of our mines does not supply our own needs, timber is fast becoming exhausted and gum production is in its final stages. Therefore the question arises: Is our soil capable of paying interest on our debts with the present high rate of wages? “A very interesting bulletin has been prepared by the department of economics of Canterbury College and issued by the Canterbury . Chamber of Commerce,; in, which the necessity for adjusting the costs'of production to the lower price levels is urgently stressed, and in connection with this operation it is necessarythat the Government should give a lead. But all of us must recognise the need to co-operate in cost reduction. New Zealand exports in 1928 and 1929 were valued at about £56,000,000 in each'year and ,for the year ended June, 1930, £47,000,000. Official figures issued last October revealed that export 'price levels were then 301 per cent, belo'w the average level of 1928 and 1929, which meant that ■ exports which formerly realised £56,000,000 would now realise only £40,000,000; And as,about 94 per cent, of the exports were pastoral products practically the whole of the loss of income falls directly on the farmers.

“Taking the index number of 100 in 1914 for A. export prices, B farm costs, C purchasing price of exports, we find that -in October, 1930 (latest figures available), that export prices were 103 and farm costs. 164, thereby reducing the purchasing, power of exports to 63, as against 88 for 1929 and 93 for 1928. As export prices are now round about 1914 prices, farm production cannot be maintained at its present values when income from farm production fails to meet , the costs of that production, and that is the position at present. ‘ “Reviewing local body taxation from 1914 to 1929,. the rural taxatiqn. counties, road boards, river boards and land drainage boards, it is as follows:—

’‘1914: General rates £750,767, special rates £134,011. “1929: General rates £1,835,518, special rates £384,797.

“This is an increase of general rates of 144 per cent, and special 184 per cent, during 1 the past 15 years. The comparison in wages is as follows: — “Road workers: 1914, 9s a day; 1930, 14s a 'day. “Engine drivers: 1914, Ils a day; 1930, 16s a day. “This only shows an average of 50 per cent.',increase as against an increase of 144. per cent, in our general rates, which goes to show that there are other factors contributing to. our increased costs that must be dealt with. The cost of living has been claimed as the only factor to be considered in dealing with the wage question. The all-grolips index numbers for the Dominion (covering groceries, dairy produce, meat, rent, fuel and light, 'clothing, drapery, footwear and miscellaneous) has been reduced from 1776 in 1920 t0'1569 on May 31, 1930, the index number in 1914 being 1000. “The three food’ groups (groceries, dairy produce and meat) made a further fall of 11 points by September 15,' 1930, as compared with August, 1930, and represents an increase of 40.3 per cent, over that of July, 1914. However, as food consists of somewhat less than 2-sths of the expenditure of an average household we must combine rent, fuel and light, clothing, drapery, footwear and miscellaneous, which gives an allgroups index, number of 56 per cent, above the July, 1914, price level, so that it now takes £1 Ils 4d on the average to purchase what could have been purchased for £J in July, 1914. Rent is the only item *of the group which since 1920 shows an increase, all other items falling steadily—drapery, boots and clothing substantially.” SIX RESOLUTIONS CARRIED. The series of resolutions as prepared was then considered seriatum and with minor amendments were carried as follows : — “In view of the serious fall in the values of all primary products throughout the Dominion and of the future outlook for same, this meeting of local body representatives of Taranaki is of the . opinion that united action by all sections of the community is required to meet the position and supports the following recommendations: — “(1) That every effort should be made to cheapen the cost of production, and whilst it is recognised that some economies can be effected which will reduce overhead costs, we. arc satisfied that no material results can be obtained so long as the present standard of salaries, wage© and rates of interest throughout the country is maintained..

“(2) To meet the situation and be fair to all sections of the community a percentage reduction in conformity with the reduced prices ruling for our

primary products should be aimed at, covering the public service, all awards and public and private employment with a recognised minimum. “(3) To minimise the effect of wage reduction to the worker any cut should be made at such intervals, as may be decided on, but not less than three months, until a normal position is reached.

“(4) To facilitate a reduction in the cost of living all employers should be requested to pass on to customers without delay any benefits derived from reduced wages. “(5) To give, effect, to the foregoing all sections of Parliament should unite and give a lead to the country by making a reduction in the salaries of the civil service as from April 1 next, and if necessary legislation be passed to brino- the Arbitration Court into line to enable a general reduction in award wages to be made. “(6) That representatives of all bodies or associations interested in this important matter and the welfare of the Dominion (who have not already done so) be invited to express their opinions on this question in order to assist Parliament in coming to a wise decision.” It was decided to forward copies of the resolutions to the Prime Minister, Minister of Labour and provincial members of Parliament.

Mr. Tosland suggested that a deputation should proceed to Wellington to further the resolutions, but Mr. Griffiths pointed out that it was a time for economy and it was agreed that a deputation was not necessary. REDUCTION IN BANK RATE. Speaking to the first motion, Mr. Murdoch said that salaries and wages were not the only items to deal with in the' reduction of costs, and on his suggestion that the price of money should be reduced it was decided to include the rate of interest in the motion. Mr. Tosland in supporting this suggestion said that overhead costs in rates and interest had not materially altered and in an endeavour to economise the farmer was compelled to dispense with labour. There were many factors operating to make the position acute and they should be taken into account.

Mr. Green considered that the rate of interest was more important than wages. Even the workmen realised that the time was coming when wages must be reduced, but to the farmer there remained the high costs in rates and interest. .What farmer could pay. his obligations. and meet his present rate of interest? he asked. The banks were entitled to be financial and to make money, but he thought interest rates should now be reduced. No one wanted the banks to deplete their assets but they should be prepared to take 6 or 7 per cent, dividend instead of 16 percent.

Mr. Campbell remarked that as long as the Government offered the high interest of 5i per cent, the rate of interest would be kept up. The old days when they could obtain overdrafts at 5 per dent, were happy days. Mr. Walkley said he believed the motion was on right lines. The demand for money was great, but that for labour was not. Two years ago the banks in England reduced the bank rate to stimulate trade.. He believed that if the banks in New Zealand had the courage they would also reduce the rate. There was no doubt that if the bank rate came down it would stimulate trade. It was no use trying to bludgeon the banks but he thought that if the matter were put.to the Associated Banks by' the right people they might see eye to eye for a reduction of interest.

OTHER REDUCTIONS ADVOCATED.

Mr. Bridger regretted that he could not- support the motion. He did not think that a reduction in wages was a solution. It was unfair'to reduce wages unless everything else was reduced simultaneously. The interest on land purchased at high and unsound prices was certainly too high. This would be so no matter what the interest rate was. He advocated legislation whereby everything would be brought down together, from a pair of bootlaces to Government bonds. It required a wage of 14s a day for a married man to live at a decent standard. The increase in wages mentioned by the chairman was not too much to meet the rise in the cost of living from 1914. It was of little use to tackle only one portion of the problem, and he did not think if they discussed the matter for a whole day they would finalise it. The problem was exceedingly complex. Everythino- must come down at the same time to be fair to everybody. He agreed that 14s a day for relief work was too high, but as a standard wage it was not too much.

Mr. Vickers expressed the opinion that the cost of living should come down before wages, but he was satisfied that it could not be reduced before there was a reduction in wages. Mr. Bridger: How is it the cost of living went up before wages did? Mr. Vickers proceeded to explain that the Board of Trade had allowed replacement values to be charged on goods. However, they had to fix the ouestion within the limits of practical politics. What did the farmers do with their high prices’ he asked. They put the money into the land and apparently had lost it. The merchants’ high profits had also been expended in various ways and it was not much use saying that these should be used to supply cheap commodities. \The man with the money would always have advantages over the workers, he added. UNEMPLOYED MAY INCREASE. Mr. Tosland agreed yvith Mr. Bridger that wages should not be reduced so as to ride rough shod over the workers. The Government, he affirmed, should as far as was in its power endeavour to reduce all cost? throughout the country. In the righting of economic conditions a great deal of hardship would no doubt be caused and the number of unemployed might yet increase to 30,000 or 40,000. The country was not pinched for food, and while they had to bring down wages they must bring down costs in every department of life. The Egmont • County Council had reduced wages, and the men then asked for a reduction in rent. That was quite equitable. Some of the Arbitration Court awards were a great deal higher than they should bo. The thing was to try to make the standard of living more'equal. The speaker added that it was possible to foresee the serious effects of these crises. They might not become so in this country, but in some cases hungry men could be driven to desperation, anarchy and revolution. He hoped that the Government would tackle the question properly and thorough, ly. Mr. Thomson pointed out that an important aspect was the great increase made in the cost of the various' social services such as education, medical treatment and so forth. The chairman said they could not hope to achieve their goal all at “one hit.” If the Government gave a lead there would be no difficulty in all falling into line. If they could get uniformity in working and do things gradually everything would come right in the end. Why was rent dear? he asked. Because owing to high wages houses could not be built at lower costs. ARBITRATION CRITICISED. Speaking on the second motion, Mr. Toeland considered that the Arbitration

Court should meet and determine what was a fair living wage. After that they could make their reductions. Dealino- with the third motion Mr. Thomson° blamed the Arbitration Court awards as one of the biggest causes of unemployment.• He pointed out how boys could not be taken as apprentices owing to the restrictions and employers were unable to pay the wages demanded. Mr. Tosland emphasised that, award wao-es were operating on the basis of boom prices and should have receded as the prices of products fell. He thought the suggested cut of 5 per cent, in wages was too low. It should be 10 per cent. Mr. Bridger said that it would tie their hands too much to decide on a 5 per cent, reduction. They might have to reduce by 10 per cent, or in accordance with a fresh analysis of the position.

The chairman made it clear that if they reduced by 5 per cent, at intervals they would soon get down to a basis, but they could not be too drastic and do it all at once. They should be as reasonable as- possible. If the Government decided to do more well and good. i Mr. Pacey considered 'it unwise to mention any percentage. He said that many awards were inconsistent.

The chairman said the Arbitration Court set the standard of what wages should be paid for the respective trades and it would not be right to ask it, to upset its own judgments. He added that he wanted to see some result from their deliberations and they should make the changes as small as possible at a. time, so long as they would be effective eventually.

Mr. Green said that the Egmont County had made a reduction of 10 per cent, which must stand until the end of February. He pointed cut that it would be wrong to reconsider reductions where adjustments had already been made. TRYING TO RULE NEW ZEALAND. Mr. Campbell: I was just wondering whether we were the Taranaki Local Bodies’ Association, or whether we were trying to rule the whole of New Zealand. If we go on the way we are doing w? shall be here all day. Wages should not be cut down too severely at the start. Five per cent, is quite sufficient. Mr. Long pointed out that no farmer at present was paying his way. It was only a fair thing that the workers should receive good wages when things were good, and share in the hardships when times are hard.

Mr. Tosland said he was just as big a friend of the labouring men as he was of the ratepayers, but as they feel that a reduction was necessary; irrespective of percentage, they should push it forward. Sooner or later necessity would compel them. Mr. Vickers said that the appeal w-as to the Government, and they would make the necessary alterations through the Arbitration Court. It was not for them to make these reductions for them. It was not for them .to advise, the Arbitration Court, but to endeavour to effect a general reduction. The idea of, the motion was to ease the reduction. He thought that their heart had affected their ■ resolution. , Mr. Green declared that the Eltham county, paying 13s. a day, had been paying a lower wage than the award all along. • , • 1 ’’. • . The motion as amended was finally agreed to.

The fourth motion was carried without discussion. > . To the fifth motion Mr. Vickers moved an amendment that the preference to linionists clause in awards be suspended, but. several thought that this • was too drastic, and the amendment lapsed for want of a seconder.

GOVERNMENT ECONOMY URGED.

Mr. Walkley alluded to the growth of national, indebtedness, and said that this was one of the undesirable features of the position. They had many cases of influential public men and deputations advocating the expenditure of Government money on. works and various facilities, schools, and othep public services. As a result the national debt had grown to a very great extent, and taxation had been increased enormously instead of expenditure being cut down. Taxation was passed on, and this was one cause of the present troubles. They must all r,ecognise that they had erred in continually asking for Government expenditure, but' they must no longer look upon tht Government funds as a “milch cow.” He moved the following motion: — “This meeting is of the opinion that the 'remedy for restoring the country’s financial position will not Ire found by increasing the present oppressive taxation, but in the first instance by judicious curtailment of all State expenditure, and, further, that the people of the country can assist by refraining from urging the Government to spend State moneys oin works not immediately necessary.” In seconding, Mr. Murdoch condemned the expenditure of public money off works not necessary. He said that some of the things on which they expended money would not be ' wanted for 100 years. The motion was carried. UNEMPLOYED LEGISLATION. The chairman mentioned the serious, position that was developing in regard to unemployed, and said that it was assuming proportions never anticipated when the legislation was framed. The number of unemployed seemed to be unending, and instead of the legislation being helpful, the Government was being swamped by it. On the chairman’s motion, the following resolution was carried: —

“This meeting views with alarm the continually increasing numbers of the unemployed, and is ofc the opinion that the position has been largely accentuated by increasing the wage' to standard rates and so discouraging employers from making any effort to help relieve the situation.”

Referring to money for unemployment relief, Mr. Tosland 'said he would like to see a proportion made available to each local body so that men would not have to go running from all over th.e country to some centre only to find that the money had run out and no work was available. He thought the. representa fives of local bodies should put the position to the Government; and have funds remitted to them. Mr. Green said that he had that morning received advice that a sum would be available for expenditure in Egmont county. He thought that Government relief money should be made available for essential work instead of confining it to non-essential. Another thing lie wished to suggest was that the Government might spend relief money in destroying noxious weeds on native, lands and vacant Crown sections.' The chairman said that the Hon. S. G. Smith had intimated that he would be prepared to meet the local bodies early next month regarding the allocation to them of a. proportion of relief funds.