STABILISATION OF WAGES.

Star (Christchurch), Issue 16426, 14 May 1921, Page 10

STABILISATION OF WAGES.

! GOST OF LIVING BONUS. j j ARBITRATION COURT j AWARDS FIVE SHILLINGS. j money not to de paid. A SCHEME OF STABILISATION. [Peh Press Association.! WELLINGTON, March 11. Th© Arbitration Court this morning delivered the folio wing prououncementon the question of the cost of living bonus •- - The Court has considered the question of tho cost of living bonus for 1 lie period commencing May 1, 1921. As on former occasions wo have called supply data in respect of the movement in retail prices during the six monthly period from October 1, 1920. to March 31, 1921. The Court, m dealing with tho figures submitted, has adhered to the principle adopted in the past of working on a six-monthly moving average. On this basis the sum of 3s per week is required to meet the inoroase shown in prices. To this has to be added the sum of 2s, I which was deducted from the amount of the last bonus to discharge a past overpayment. The total additional bonus calculated in accordance with the system laid down by the Court is therefore 5s per week. We desire to make it clear m passing that tho figures supplied to us by the Government Statistician do not indicate with absolute accuracy the movement in the cost of living. The movement in. retail prices is not- uniform. All commodities do not move at th© same rate or in th© same direction. a circumstance which has a bearing on their relative rates of consumption, though it does not necessarily affect tho “standard of living.” This matter is dealt with in the Government Monthly Abstract of Statistics for April, 1921. The Court has decided, however, that in view of the fact, that thro© former bonuses have been calculated on the basis of tho movement in retail prices, it would bo undesirable at this stage to introduce a modified system of calculating the increase in th© cost, of living. In any event wo have no reason to think that any great difference in the result would be shown for tho period now under review. RETAIL PRICE MOVEMENTSIt is of interest to note the recent movements in retail prices in the three food groups. In. September, 1920, ill© last month of the previous sixmonthly base period, the increase for the month over the prices for July, 1914, was 72.80 per The percentage increase rose to 73-97 in December, but dropped each month * thereafter until March, 1921, when the increase was only 69.10 per cent, or 3.64. per cent less than in September, 1920, and 9.81 per cent less than in December. 1920. When the estimates for clothing and miscellaneous items are taken into account and combined with their proper weighting with the figures for food. rent, fuel and light, the reduction is still more marked. The advance figures for April, which by courtesy of the Government Statistician we were enabled to peruse, show that notwithstanding the increase in ! price of bread and the unusually high price ruling temporarily for eggs, a Further reduction has taken placePRESENT ECONOMIC POSITION. Wo have now to consider, the general financial and economic position of the industries of the Dominion. M c do not think it is necessary to discuss this matter in detail, for the present financial stringency is of so pronounced a nature, that its results arc apparent to everybody Th© Court has given very full ' and' careful consideration to the rmostion whether, in view of tho condition of trade and industry at the present time, it. should declare an> bonus at all. Me are satisfied from the information that we have collected that it is no longer possible for the employers of the Dominion to pay increased wages, and that the granting of an increased bonus by tho Court would bring about a marked increase in unemployment and tend to check the reduction in the cost of living. On the oilier hand it must not be overlooked that while tho cost of living was increasing the effect of basing the Court’s calculations on the six-monthly moving average was to delay for several months th© increases due to the workers, and tlie Court must now give due weight lo the representations that they made in the past on this aspect of the matter. To deny them any measure of consideration at this time would be inequitable. The Court lias approached the question with the gravest concern, and has avail, ed itself of all the information obtainable, and considered the matter fully end at length. STABILISATION OF WAGES. Tt has come to the conclusion that from a na.tional view point, as well as in the interests of employers and work era alike, a system of stabilisation of wages is highly desirable at the present time. The fact that the drop in prices in food groups since January lias been sufficiently marked to bring the figures for April and the first month of the current six monthly period several points below the figures for September (the last month of the period m respect, of which the last bonus was calculated) is an indication that unless any tiling unforseeri occurs the six monthly moving average to be ascertained at the end of the current period will represent a decrease at least equal to and probably greater than the increases for the last two periods. The world’s markets show reductions in prices of all classes of clothing materials, and numerous items in the miscellaneous class are falling in price. Butter, which was largely responsible for the increase in the October figures, cannot maintain its present price ior more than a very limited p?rmd, an I a fall in butter will react on dair' T produce generally, arid very materially reduce the cost of living, in fact> it will probably s-uffice in itself io eoualise averages f°r the periods. These considerations have enabled tho Court, to decide to introduce a scheme of stabilisation. Living is now cheaper than it was at the commencement of tho last six monthly period, and the market which was then rising is now falling- "Workers accordingly will, during the current period, have more purchasing power for tho same money than they had during the last period and, as prices continue to fall, 1 heir purchasing power will continue to increase. Th© Court is of opinion that the workers should not be deprived of the extra os per week which represents their loss of purchasing power for the past six months, but considers that instead of this sum being paid during the current six months, it should be set off against the inevitable reduction that the September figures will show. This will have the effect of stabilising wages until April 30, 1922, and we believe that both employers and workers will derive more benefit from the stabilisation on the basis of present rates than from the increase in May followed by a greater reduction in November. Under such a scheme the workers, whose cost of living lias in fact been reduced, will benefit, by having their wages secured on a falling market for twelve months instead of six, and employers. wlu> cannot now pay the higher wages, will

benefit by the stabilisation of labour costs. THE GOVERNMENT POLICY. In deciding on this course the Court, though working independently and on different principles has arrived at a policy that does not differ materially from that of the Government, the largest employer of labour in the Dominion. In regard to I lie Public Servants or the Dominion, the Government has indicated its intention ol withholding, and its inability to pay, any further cost of living increases to salaries; hr*- p.' ’he same time has stated that itwill not reduce salaries or dismiss Public aerveutts, so long as it is possible to .. . .• r ■ , u .M , The imperial Parliament in 1918 passed special legislation for the purpose of stabilising wages over a period, and subsequently renewed this legislation. The Court cannot, of course, prevent unemployment. but by stabilising wages on the basis of the* prosent rates, it hopes to trig months. This pronouncement is of a. general nature and is issued for the information and guidance of the parties. It. will not bo subject to review until f.fler April 30. 1922, ©scout as hereinafter mentioned. It is not intended to take, away the right of either party to an award or to an industrial agreement to make application to tho Court . nder tim f- isiin • h-gNIa Hon. hu the Court will require proof of extraordinary circumstance before departing from the principles herein laid down, unless the parties agree to a modification.