COST OF LIVING BONUS.

Star (Christchurch), Issue 17178, 23 October 1923, Page 6

COST OF LIVING BONUS.

NO CHANGE IN SCALE. COURT’S PRONOUNCEMENT A Press Association message received last night from Dunedin contains the following pronouncement by the Arbitration. Court:— The Court has investigated the movement in the cost, of living for the six monthly period April-September, 1923. As on former occasions it worked on the principle of a. six-monthly moving average and based its calculations on “all groups ” statistics, covering the whole field of the cost of living. The figures for clothing, footwear, fuel, light and the miscellaneous group all show decreases, but food figures disclose a small increase and rent figures an increase of 5 per cent for the half year. The combined figures for all groups, with their proper weighting, show an increase of 1.3 per cent for the period, following table indicates the movement of all groups. The figures are based on the six-monthy moving average during each half-year-ly period since March, 1922: Half year Percentage ended increase over July. 1914. March, 1922 . » * 67.0 vSeptember, 1922 * „ 59.6 March, 1923 » « 56.2 September, 1923 * * 57.5 Measured in wages, the increased cost of living for the half-year is equivalent to an increase of id per hour, or Is per week, in the male adult wage. Statistical investigation for the halfyearly period ended ?»larch 31, 1923, disclosed a. fall in the cost of living that represented a reduction of J-d per hodr, or 2s per week, in the male adult wage, but the Court on that occasion, with the concurrence of the employers of the Dominion, decided, in v iew of the rising tendency observable in. rents and the tendency to hardening prices in some of the other groups, not to make a general order reducing wages in accordance with the ascertained fall in the cost of living. The increase of Is per week now recorded reduces the fall of 2s per week to Is per week. The Court believes it to be desirable, in interests of trade and industry, that wages should not fluctuate at intervals more than is necessary, and as rents have again increased it has decided not to alter the existing minimum rates. The effect of this decision is that workers will still have Is per week in hand to offset any possible further increase in the cost of living. This is the last pronouncement of the Court under the cost-of-living legislation, which expires on December 31, 1923. The present bonuses and other cost-of-living additions to wages will, however, continue in force during the currency of all existing awards and industrial agreements. "When new awards and industrial agreements are to be made rates of remuneration will be fixed in accordance with conditions of trade and industry and other relevant circumstances then prevailing, and will not. be subject to variation in sympathy with any movement in the cost of living duriug their currency.

MOVEMENTS OBSERVED. It is. in the opinion of the Court, desirable to make some comment® on statistical results that have been ascertained. Food groups have remained almost stationary for the past eighteen months. There have been seasonal fluctuations in commodities generally subject to such fluctuations, and there has been an increase in meat prices during the past few months, which may or may not be maintained. On the whole, however, food prices have tended to stabilise during the period mentioned. Fuel and light have fallen slowly but steadily during the period, while clothing and footwear hare fallen very considerably and are still falling. The miscellaneous group, which comprises household furnishings, crockery and glassware, domestic ironmongery and hardware, newspapers, rail and tram fares and numerous other small items, has very nearly paralleled the clothing and foot-wear group in the fall that has been recorded. Rents, on the ether hand, have shown a steady increase sifcc.e 1914, and now stand at 49.8 per cent above the 1914 level. Since Marcln 1922, ■tf-ben calculations on which the first downward adjustment- of wages was based were made, the effect of the increase in rents <l2 per cent) has been to decrease the amount of reductions justified by the cost of living statistics by 6;s per week. To put it in another way, if the Court had ignored rent since March, 1922. reductions authorised to the present date would have been. 14s per week instead of 8s per veelt. THE RENT FIGURES. We desire to deal in detail with the rent figures, because there appears to be considerable misapprehension as to the method by which they arc ascertained. Application was recently made to the Court on behalf of the Wellington Trades and Labour Council to afford an opportunity of reopening the matter of rent statistics and to hear evidence in regard to rents actually paid. We do not think it reasonable to reopen the matter. We cannot see

bow any further evidence could add usefully to the information in the possession of the Court on the subject.

We think it desirable to remove any misconception by stating how the rent figures are obtained and by giving .•some additional particulars with which the Government Statistician has furnished us. To bogm with, the term “rent,” in the narrow meaning of theweekly or annual sum paid for the use of a dwelling, is a misnomer. The Court deals rather with the average cost of housing, and the term “ rent” is accordingly to be given a wider meaning, covering not only rent m the narrow sense, but also interest on capital invested on unpaid purchase money and other outgoings in cases where the owner of the house is himself the occupier. The rent statistics on which the Court has to work, in the absence of any statistics dealing with the cost of housing in the wider sense, are compiled from returns collected by the Government Statistician at half-yearly intervals from all land agents carrying on business in twenty-live principal towns and from as many private person* collecting rents as the Census and Statistics Office is able to get in touch with. These returns give actual rents obtained from houses of four, five, six and seven rooms. The total number of house? covered is 6039. It is freely admitted that, owing to the abnormal housing conditions prevailing, even so large a. number of houses as 6039 may not be fully representative—that the average rents received for those houses may be less than the average rents re-

ceived for all rented houses. On the other hand, the weight to lie allocated to rent in compiling the cost of living

index numbers (20.31 per cent of the total cost of living) was ascertained in 1911. before the present abnormal housing conditions were existent. Record has been kept of all increases since that date. Tt is, we think, sate to assume that although the rents of 6039 houses in reepeit of which returns are obtained may be below the general average, they have increased in much the same ratio as the general average, and it is percentage increases and decreases which the Court is concerned in adjusting wages to the cost of living. Further, according to the census of 1921, only 40.95 per cent of all houses are rented, and the cost of housing in the case of owner-occupiers is usually less than it would be if they were paying rent, for interest, insurance and raxes have not increased to the same extent as rents. The 1921 census returns in respect of dwelling houses occupied by salary and wage earners are not yet complete, but- if the increase in owner-occupiers in this class between 1916 and 1921 is in the same ratio as in the case of all occupied dwellings, the percentage of rented houses is slightly over 50—it was 59.30 in 1916.

On the whole, we feel justified in concluding that the increase of 49.8 per cent above the 1914 level disclosed by the rent statistics is a fair index of the increase in t-h© cost of bousing in the wider sense since 1914. While we recognise that there are many cases in which high rents are being paid for houses, we hare also to take into consideration many cases in which houses are held on long leases at moderate rents, and many cases in which no increase in rent or only a small increase has been demanded. We cannot base calculations .on eithei* extreme, nor can we overlook the advantage possessed by many owner-occupiers over rent-payers when we consider the broader question of the cost of bousing.

To sum up. our use of teht statistics in order to arrive at the movement of the average cost of housing is justified on four grounds—(l) that if we discarded the rent statistics we should have to resort to opinions or estimates of experts, which from the nature of the case would be most unsatisfactory : (2) that though not fully representative, the statistics available are accurate as far as they go : (8) that there is every reason to believe that they indicate with reasonable correctness the percentage movement in rents generally; and (4) that even if they understate the increase in rents in the narrower sense this is at least, balanced by their being used as an index of movement in the average cost of housing in the wider sense. NO GENERAL ORDER. The decision of the Court not to make a general order reducing wages by Is per week, the balance of 2s per week carried forward from our last half-yearly investigation does not, of course, operate so as to prevent em ployers bound by any award or industrial agreement from making application to the Court on special grounds for variation of the rates of remuneration fixed by that award or industrial agreement. Such application may he made to the Court in the ordinary- way and will he considered on ite merits. Dated this 29th day of October, 1923. F. V. Frazbti. Judge.