THE Wairarapa Age MORNING DAILY. MONDAY, AUGUST 9, 1926. WAGES AND PRODUCTION.

Wairarapa Age, 9 August 1926, Page 4

THE Wairarapa Age MORNING DAILY. MONDAY, AUGUST 9, 1926. WAGES AND PRODUCTION.

Although it no doubt takes account 6f other factors, the Arbitration Court in making its wages awards appears to work chiefly upon a cost of living standard. The cost of living of course depends upon the standard of living, but wages and the power to pay wages are determined ultimately by the volume of production. The cost of living, in these circumstances, obviously is an artificial standard on which to base wage awards, and it is rather surprising that more insistent demands have not been made before now for the adoption by the Court of a real standard, i.e., a standard of production. The matter was brought up at the Dominion Conference of the Farmers’ 1 Union last week when a debate arose on a remit from the Combined Conference affirming that the cost of living as a basis for fixing wages is wrong and unjust. In supporting this contention, Mr. L. T. Daniell declared that the Court concerned itself only with the cost of living, without regard to the cost of production or the cost of living of the farmer, or the return obtainable for our exports in the world market. These assertions may be a little sweeping, but there is certainly a lack of evidence that the Court is paying any such regard to the factors enumerated by Mr. Daniell as they undoubtedly should receive. The Wairarapa delegate was able to point out, for instance, that in face of the recent heavy drop in wool prices, the Court assumed that the general economic and financial situation of the wool-grower warranted a ten per cent, increase in shearers ’ wages. The time seems to be opportune for a statement by the Court as to the methods and standards by which it proposes to determine wages as time goes on. In its pronouncement at the end of last week, it dealt broadly with the necessary connection between production and wages, but in its general observations on this point there is no apparent indication that it proposes to adopt a standard of production in fixing wages. Some early advance in this direction nevertheless seems to be inevitable. The cost of living standard served its’purpose as a rough and ready method of adjusting wages to rapid price movements during the war and post-war periods. As a permanent standard it has such obvious shortcomings that the idea of retaining it indefinitely evidently cannot be de-

fended. As a step towards clearing up the situation, the Court should say what it intends to do towards developing a more satisfactory standard. There is the more reason for going seriously into this jfroblein since it is fairly clear that the policy to which the Court is committed, or is in some danger of being committed, of raising money wages at every opportunity, does not in the long run and at a broad view benefit even the wage-earners to whom the increases are granted. There is much to suggest that wage-earners, as well as farmers and other sections of the community, would derive benefit from a policy under which money wages ware as far as possible stabilised. The benefits such a policy offers to wage-earners are increases in real wages through the steadying of trade and industry and the lowering of prises.