The Wanganui Chronicle MONDAY, SEPTEMBER 28, 1931. AMERICAN WAGE RATES

Wanganui Chronicle, Volume 74, Issue 229, 28 September 1931, Page 6

The Wanganui Chronicle MONDAY, SEPTEMBER 28, 1931. AMERICAN WAGE RATES

RESPITE the protestations of the captains of American industry that wage reductions were not the way to American recovery, those wage reductions have eventually been forced upon America by the compulsion of circumstances. The belief that wage reductions were not good business was two years ago a canon of American commerce and industry. It was not possible to make up inefficiency in management by a deficiency in wages. This was the assertion, not of those who received the wages, but of those who paid them. There was, indeed, good ground for this belief. The United States of America is, to a large degree, a self-contained economic entity, and although its export trade expanded considerably during the war period and since then, this export trade nevertheless remains, but a small proportion of America’s total trade. Were the United States of America completely self-contained, then the permanence of American wage levels might be possible of attainment. With only a small proportion of her total trade dependent upon export markets, it was deemed a probability, but this notion has now been dispelled by the facts of the situation. The disturbing factor which has brought about the lower-

ing of the wage-levels of certain industries in America is the fact that all basic industries are, so big in their powers of production that they demand a market larger than even the 120 millions of Americans can supply. Basis industries in all countries to-day demand a world for their market. American steel can no longer be absorbed by Americans alone. American wheat is more than enough to provide America with bread. It is these products which demand the world’s consuming power, and it is because the world’s consuming power is lacking that surpluses are the order of the day.

If, therefore, the United States of America, with but a small proportion of her trade dependent upon world conditions, is compelled to reduce wages, how much more compulsory is it for the United Kingdom to reduce wages at the present time? The latter exports really three times as much per head of population as does the former. By the same token, how much more inevitable is it necessary to reduce wages in New Zealand, seeing that there is for our export industries so small a home market? Reducing wages are a necessity of the present situation. It is the problem of statesmanship to devise means, not only of reducing wages, but at the same time preserving the standard of living. Reducing wages is really only one half of the proposition.