THE Wairarapa Age SATURDAY, JULY 4, 1936. RISING COSTS AND PRICES.

Wairarapa Age, 4 July 1936, Page 4

THE Wairarapa Age SATURDAY, JULY 4, 1936. RISING COSTS AND PRICES.

A good deal has been heard of late from Ministers about what the Government proposes to do to check any attempt unjustifiably to raise the prices of goods and services. It would be much more interesting to have the Government’s ideas on the subject of justifiable price increases made inevitable by increased costs. Now that the Arbitration Court has given its first judgment arising out of the recent forty hour week legislation of the Government, this question is bound to come rapidly into the forefront. In a judgment that must be regarded as to some extent of representative significance, the Court has decided that after September 1 the hours of work in the footwear manufacturing industry of the Dominion are to exceed forty per week, exclusive of overtime. This plainly will riftun higher working costs in the industry and higher prices for its products. It is likely also to mean an increase in tariff duties on footwear unless the New Zealand industry is to suffer in competition with imports. Similar developments are to be expected in other branches of industry and all-round price increases are now being predicted. Prospective increases which have been mentioned in Auckland, for example, include 15 per cent, on the prices of footwear and 20 to 25 per cent, on the prices of clothing. Broadly speaking, the price increases in immediate prospect will entail a universal reduction in the real wages and real incomes of all sections of the population of the Dominion. In their total effect, however, the new conditions will divide the- people of this country into two main categories. A proportion of the people, particularly those working under awards, will have benefits of reduced working hours and higher money wages to set against the increased prices they will now be called upon to pay for goods and services. Another and very considerable section of the population will have to pay the higher prices as far as they are able—the alternative being to do without—■ and will have no compensating benefits to set against higher prices. This obviously is the prospect opened for those people in country and town who, by the prices obtainable for produce in oversea markets or for other reasons, are unable to secure wage or income increases. At Motueka the other evening, the Minister of Public Works (Mr. Semple) had something to say to men, earning an average of 19s 5d a day, who were demanding a guaranteed minimum price for their labour. He said, amongst other things:— Moat farmers ’ did not receive 19s a day. He had seen farmers and their families come in tired and weary at night 1 and had seen them in the tobacco gardens at Motueka at 11 p.m. with torches searching for caterpillars. How are farmers and many others whose position is no more favourable to fare in the economic conditions the Government’s legislation has opened upl Dairy farmers are to get guaranteed prices, not yet stated. It has yet to appear that these prices can be made adequately ,to offset increased costs. Most other farmers, and a great many people besides, have no means of securing increased wages or incomes which would offset increased prices. Account has to be taken, not only of the relative degree in which the changes now taking shape will affect differ/ ent sections of the population, but of the total effect of these changes. It has been claimed that there will be some general benefits from an increased circulation of money on account of the payment of higher wages under awards. No doubt this claim is in a measure justified. On the other hand, an important effect of raising costs in any industry and the prices charged for its products is to check demand for these products. Excluding any question of profiteering, good grounds appear for holding that the adjustments the Government is enforcing will be seriously uneven and unjust in their incidence and that the general effect of these adjustments is likely to be in some respects decidedly detrimental. It is a surprising fact that Cabinet Ministers have had hardly anything to say about these important aspects of the position, though they have said a great deal about possible profiteering.