THE STANDARD OF LIVING

Wanganui Chronicle, Volume 74, Issue 148, 25 June 1931, Page 6

THE STANDARD OF LIVING

r yHL wage reductions which have recently come into operation by reason of the Arbitration Court’s decision, has caused many people to fear that the standard of living in the Dominion will be reduced to a lower level. This fear is understandable, because for nearly four decades, the wages of the workers have been consistently increased with the avowed object of keeping pace with the cost of living. A reduction in wages, therefore, at once suggests a corresponding reduction in living standards. But is this so? In the first instance the obvious fact must be borne iu mind that the hourly rate of pay is not of itself the index to a man’s wages. This must be multiplied by the number of hours worked. A man who works for four hours at half-a-crown an hour earns ten shillings, but the man who works for eight hours at two shillings an hour earns sixteen shillings, and despite his lower hourly rate is better off than the man on. the higher rate but who has worked only half the number of hours. If, therefore, the hourly rate of payment is reduced and the number of hours of employment is increased, the worker may conceivably be better off at the lower hourly rate than at the higher. Nobody. it is presumed, would gainsay such a simple proposition. Another factor, however, must be considered, and that is in how far will the standard of living be affected. For instance, a man working a normal full week is better off at the higherhour rate of pay than when he is working the same full week at the lower hour rate of pay. Will not his standard of Jiving be reduced by reason of his wage reduction" The answer to that question is that his standard of living will be reduced in any case. Consider first the man’s circumstances under conditions of no wage reduction whatsoever. National income is reduced, and this reduces the wage fund of the community. If this reduced wage fund is to be distributed among all the wage earners, then lower wages for each individual are inevitable. The alternative is employment for some and unemployment for others. But common human feelings will not permit those who arc fortunate enough to be employed to be indifferent to the distress suffered by those who are unfortunate enough to be unemployed. Donations to charities are a voluntary reduction of one’s income, while increased taxes are a compulsory contribution to the unemployed and tend to reduce the standard of living of the employed worker. l-'urther. with the reduced demand for goods and services consequent upon curtailment of consumption by those employed, ami by those fearing unemployment, the full-time worker’s job becomes more precarious and this places him at a disadvantage when negotiating with his employer. Further, the maintenance of wage levels iloes not eonfl ibute to I he solution of the unemployment problem.