COST OF PRODUCTION.

Wanganui Herald, Volume LIII, Issue 160813, 22 November 1920, Page 5

COST OF PRODUCTION.

A MANUFACTURE’S VIEW v, POINT.

EFFECT OF COST OF LIVING BONUS. Some very interesting observations are contained in a letter from a local furniture 'manufacturer which was handed in to the Arbitration Court during its sitting in Wanganui. The writer, in referring to the new bonus of 2%d per hour, remarked that it had come at a time when it was least expected, either by the employer or worker. There was a feeling abroad that it was time prices declined, and there was no question but this was quite justified, and about time that better value was given in exchange than what obtained to-day. On the face of facts alone the new bonus was altogether unjustified, he continued. The worker was not really in need of it. In fact he had ,not asked for it and was just as much surprised' at its announcement as the employer. The desire of the great body of labour is to exploit the employer, on the grounds that he was making a great profit out of his products and could afford to p&y. While this might be true of some old established manufacturing firms in England and the older countries, it did not hold good in this country. It was here in New Zealand where we jivant to try and improve paatters.

A KITCHEN TABLE. The writer then proceeded to discuss the present cost of furniture withfa'view to showing thlat Its great advance in cost was not altogether due to the price of materials, but principally to labour’s 1 time and price. The cost of a kitchen'Hable, for instance, in 1913 was 14/(4, made up of the following items:—; 28ft timber at 2d per foot 4/8, one hour machinist's time at 1/6, 1% hours bench at 1/6, 2/3, %. hour polisher’s time at 1/6, 4%, sundries 6d, 15 per cent, overhead cost on cost of manufacture (9/3% ) 1/5%, 33 1-3 per cent, gross profit on 10/9 3/7, total 14/4. This article was usually sold for 14/6 in J. 914. -At that price there was only a small margin in it, and most retailers usually gave 5 per cent, discount for cash, which meant, after shop expenses were taken out of the 14/6 that the customer received the table for its cost price and the retailer went without his profit. “We will look at the cost of the same table to-day, and it will become apparent why manufacturers are unable to produce them so that they may be sold at a reasonable price:— 28ft timber at 4%d per foot, 10/6: 1% hours machinist’s time at 2/6,3/9; 2% hours bench time at 6/3; % hour polisher’s time at 2/6, 1/3; sundries 1/6; total, £1 3/3; 20 per cent, overhead cost 4/8, 33 1-3 gross profit 9/4; total £l- - “The cost of this article alone has advanced 260 per cent.’ without adding the new cost of living bonus. Let us examine the same article with this added and we will see a considerable difference in the cost of a necessary -household article of 'furniture: —28ft timber at 4%d foot, 10/6;, 1% hours machinist’s time at 2/B%d, 4/o%d; 2% hours bench time at same rates, 6/B%d; % hour polisher at same rate, 1/4; sundries 1/6; total £1 4/1; 20 per cent, dverhead expenses 4/10, £1 8/11; 33 1-3 per cent, gross profit 9/8; total cost £1 18/7. “The article is advanced in price 3% per cent, which still helps to make it piore unsaleable than ever. This Is the reason why kitchen tables are almost unprocurable. Not only has the hourly rate of the worker Increased, but the universal experience . apiongst manufacturers Is that his output per hour is 60 per cent, less than It used to be in 1913. The war is not altogether responsible for this. Two factors are the chief cause of a lesser output: less inclination to exert himself, principally due to scarcity of labour, and secondly higher wages bringing a desire for a higher standard of living and pleasure.

OUTPUT REDUCED, “The worker Is almost unable to buy the goods- he makes for his own home. He admits himself that they are costing too much, but declines to help reduce the cost. While the Court continues to raise the cost of production and whet his appetite for more money arid less work, so must the cost of his products increase. “As already pointed out the additional cost -of living bonus is unnecessary. There. is no poverty in the land amongst the. people, only in such cases as the improvident and “ho-goods.” The tramways, picture shows, various forms of .entertainment, high-priced drapery, footwear, and general incidentals which the worker indulges in demonstrate that 11 there is no need for a further 2&d per hour! Even if we grant the Statistician’s figures as borrect, it only, provds that the continued increase in the basic cost of production is the result''of continued rise in the cost of labour. The remedy does not lie in advancing wages, but in increasing the purchasing power of money. ' TJie worker to-day is only giving us *4O per cent, of actual value, which means at least 60 per cent, less work per man per hour.

OTHER ARTICLES OF FURNITURE. "The facts that apply to the kitchen table also apply to duchess chests, kitchen dressers, sideboards and bedsteads. In 1913 we could produce a 3ft duchess chest with 18 in x 14in mirror and two good roomy drawers for 30/-. To-day, without adding the 2%d per hour to it, we cannot produce under 90/-, which is a very great advance, Indeed. A 4% ft bedstead could be procured in T9l3* for 18/6; the cost to-day of the same bedstead is 42/-/ And so we could go on and give actual data for a great variety of articles. ' s IN A CIRCLE. “Remarkable to note, the trades unions have done nothing to increase the purchasing power of its members' labour, rather has it cultivated the opposite policy and used its influence to increase labour costs. Blindness, wilful or otherwise, prevents .them from adopting a policy that will §ause its members to speed up production, and insist on their products being sold for a reasonable price 'on the public market. “It is perfectly certain that this 2% d per hour, If insisted on, will cause considerable slackening off in