REDUCTION OF WAGES

Waipa Post, Volume 42, Issue 3304, 2 June 1931, Page 4

REDUCTION OF WAGES

THE COURT’S JUDGMENT. GENERAL CUT OF 10 PER CENT. EFFECTIVE NEXT WEEK. “ I am convinced that it is economically impossible to maintain money wages at their present levels,” says the President of the Arbitration Court, Mr Justice Frazer, in a memorandum accompanying a general order reducing by 10 per cent all rates of remuneration, under awards and industrial agreements. _ The order applies to time and piece wages, overtime and other special payments. The order will apply to monthly wages as from yesterday to all other wages as from next Monday. Provision is made for exemption of all apprentices and there are some technical restrictions upon its operation. The president’s memorandum states that economic and financial conditions taken alone would justify a reduction of 15 or 20 per cent in award rates. However, he observes that until recently many workers received wages in excess of award rates and allowance should be made for the drop in their earnings through the reduction to award minima. A reduction of 20 per cent in award rates would involve that indicated by the cost of living statistics. Consideration has also been given to the position of workers who are paying off the purchase money of their homes.

“ A reduction of 10 per cent,” says the judgment, “ will give relief to producers and consumers by lowering the costs of production and distribution and will not inflict undue hardship on the workers.”

The employers’ representative, Mr Cecil Prime, expresses the opinion that the reduction should be 121 per cent, but he concurs with the president’s judgment. The order is therefore made by a majority of the Court, as the workers’ representative, Mr A. L. Monteith, has entered a dissenting opinion. Although the order itself is brief, members of the Court append memoranda running into about 11,000 words explaining the reasons for their personal decisions. Mr Justice Frazer and Mr C._ W. Prime, employers’ nominee, refer to the decreased national income and the need for reducing costs in order to stabilise industry, the opinion being expressed that with the change in money values a 10 per cent reduction will not bring hardship to the workers concerned. They both urge employers to pass on the reduction in wages in the form of reduced prices so as further to reduce the cost of living.

QUESTION OF AN APPEAL.

COMMENT BY MR McCOMBS,

(By Telegraph. Press Association.) CHRISTCHURCH, Monday.

Commenting on the reduction in wages, Mr J. McCombs, M.P., who was one of the principal advocates for the workers in the Arbitration Court, said: “I must say I am grievously disappointed to find that the Court has slavishly followed the lead given by the Government. It may be that an appeal will be lodged. “ The decision has been given under an entirely new Act, which does not connect up with the Industrial Conciliation and Arbitration Act in the usual way that amending Acts do. The usual formula is that an amending Act ‘shall be read together with and form part of, the principal Act.’ This formula is missing in the Finance Act, 1931, and it seems to me that decisions under the Finance Act are not governed by the provisions of the Arbitration Act, which forbid an appeal. “ The two Acts seem to be in conflict. Legal advice is being sought from two eminent counsel in Wellington and one in Auckland.”

It may be hoped that the reduction of 10 per cent in award wages will make the desired correction in o” economic system, although it would seem, on the data available, that some improvement in commodity markets is required before a proper adju ment can be held to have been made, comments the Dominion. At

rate, paradox though it seem, the cu J should improve the lot of workers generally. For, to quote Mr Justice Frazer, “the reductions in aware rates of wages in New Zealand necessitated by the depression of 1921-22 were followed with two years by ar increase of 7345 in the number of workers employed in manufacturing industries and an increase of in the amount of wages paid.” From the wage earners’ viewpoint also, ttv reduction in money wages should soon be compensated by the fall in prices due to lowered costs of production. If may prove, indeed, that the worker will suffer no reduction in real w' or his standard of living. In any case, as the Judge’s memorandum shows without need of further demonstration, a reduction of money wage" was necessary and inevitable in sent economic circumstances unless great inequalities were to be suffered All the sophistries that the trades unionist advocates brought forward at the hearing, cannot get round the simple proposition that since the national income is reduced there is less to go round and each of us must be content with less money, although purchasing power may before long be as great as heretofore.