WAGES POLICY

Waikato Times, Volume 130, Issue 21708, 20 April 1942, Page 4

WAGES POLICY

ECONOMIC STABILITY INCONSISTENCY NOTED In New Zealand some recognition of the need for a changed wages policy is given in the plan recently adopted for the building industry, where centralised control, longer hours and higher earnings have been provided for, states a bulletin issued by the Canterbury Chamber of Commerce. But events in recent years have progressively reduced the control over wage rates exercised by the recognised wage authority, the Arbitration Court. About half the total wage earners in New Zealand are members of registered trade unions. Most cf the other half, the non-unionists, are not working under awards, and in addition important groups of unionists are also outside the scope of awards. Moreover, awards set minimum rates only, and in present conditions a large number of wage earners working under awards are getting more than the award rates. Hence the Court’s control over wages is limited to the fixing of compulsory minimum rates for a fraction, and probably a diminishing fraction, of the wage earners. Stabilisation Policy It is difficult to reconcile this state of affairs with the policy of price fixing and of stabilisation, states the bulletin. There appears, in fact, to be no coherent policy. Price fixing sets maximum prices. Wage fixing sets minimum wage rates. The Government purchase of farm products sets what are, in effect, piece rates. Price fixing aims to ensure a reasonable distribution of the limited goods available, to control the cost and so to protect, standards of living. Price fixing is also a part of stabilisation and stabilisation aims to furnish a stable basis for economic; activity and public finance by keeping both costs and prices under control. But wages are the largest single element in internal costs, which govern internal prices, and the present wage policy, or lack of policy, is quite inconsistent with the need for stabilisation. What is wanted is not fixed earnmgs of labour, but fixed labour cost per unit of output, with earnings that increase when output increases. A policy on this basis would go far to make stabilisation effective and at the same time would encourage increased production where it is needed.