THE WAGE LEVEL.

Star (Christchurch), Volume LXVI, Issue 20361, 19 July 1934, Page 9

THE WAGE LEVEL.

Employers Make Answer to Labour. PURCHASING POWER QUESTION. Per Press Association. WELLINGTON, July 19. In reply to a statement dealing with the question of the restoration of wage cuts submitted by representatives of the Alliance of Labour to Mr Forbes yesterday, the Emvloyers’ Federation has submitted a memorandum. The federation agrees with the alliance that every increase in tne purchasing power of the community is a step towards the restoration of the country’s prosperity, but contends that the purchasing power of the community must be considered as a whole, not in sections, and that to attempt to give one section an increase in purchasing power might have such repercussions that the aggregate purchasing power of the whole community would be reduced, and not increased. The economic storm had resulted in an enormous fall in price levels over the whole world. A fall in price level was a rise in the purchasing power of money. The fall had completely upset all economic relationships, and a process of adjustment had to take place until economic conditions settled down to a new price level, whatever it may be, and equilibrium was once more restored. After going into details, the statement says that New' Zealand is in the world stream, and must stay in it. She cannot draw aside into a little nook •of her own. To stay in the stream she must adjust herself to world conditions, and these, at the moment. are a greatly reduced price level, accompanied by the increased purchasing power of money.