The Press Thursday, February 26, 1931. Wages and Prices.

Press, Volume LXVII, Issue 20172, 26 February 1931, Page 10

The Press Thursday, February 26, 1931. Wages and Prices.

■ \ In the latest number of the New Zealand Fhittocibl Times thfiro is printed ft Very cleat and useful review of the relation between wages and prices in the Dominion. All the better because it is not tiombative or even controversial in tone, the article exposes the weakness of certain arguments against reducing wages, such as that reduction must be " Unjust" and must lower the wage-earner's standard of living. The central point made: by the writer, Dr. E< P. Neale, is that compared with the 1914 levels wholesale prices to-day stand 35 per cent, higher, retail prices 55 per cent., and "hourly adult male " wages 76 per cent." Those figures are themselves prima facie evidence that wages may be reduced without detriment to the worker's rit&nd&td of living', but the case is greatly streagthened by ft. period stlrvejr. While wholeBale prices were already falling in 1920 and i9£)l, money wages were still rising' and continued to rise at least,nntil--1928. In the early stages, the rise in inoney wages was only overtaking the more rapid rise in wholesale and retail prices, for in 1920 wholesale prices were 99 per cent., retail prices 77 per cent., but wages only 47 per cent, above the 1914 levels. But by 1922 retail prices had fallen 17 per cent., then fluctuated between 58 and 63 per dent. aboW 1914 until last year, Since when have fallen to 55 per cent, above. For a considerable period, therefore, the real valud of yages ha& -been raised, first by their continuing to mount and then by their remaining more or less steady, while retail prices retreated. In other words, ■while "the wage-earner since 1823 has received 6 fixed wage, reckoned in terms of money, it lias enabled him to buy more and to 6sve more. It has also enabled hitft to be more extravagant, if! lie ehoafi to bp; and it wottld be to deny some extravagance. But although tills fact justified th 6 domflient that "wage-reductions can to some extent, at least, be offset by. economies! imposing no real hardship, it is a much more important poult that the fall in retail -|ipf& is already/ sufficient t& •' make Mod some loss of money wages, and < Jskt a further, fall might well sustain weir purchasing power completely. not'omit jto say, of • j course, that the leg of tttttil prices 18 a problem. They haVft'fatten, fdßt .rawugh' to increase the purchasing power of fixed wages considerably, but as fast as wholettale prices; ana. if 'aw to reconcile them-; jjrtthoiit inuolvdifflcultiyrto lower : tbenthttjr must be 'assured iqou and' as fully as possible that .ftp BRCe Ipvel is goiijg tojaty faster, and <o'a*#oinniodate itself more closely' to. thp wholesale price level, there are signs of its beginning to do i fco. There is, further, the Prime Minister's promise tp protect fhe wage->: airrigr'and theeoastimer/a promise which he might very well explain in definite terms but which, if it means (mytbiag at all, most mean that the v Sovermnpntwill take a stick* if neces■saxf, tq hasten, prices on their way ■ Inconsiderate aetion' would of but there is at jlsWt,ysfs? go<x| reason the Govern'vqmt Bhowd; myestigatd the correlation jet prtco AtQVometate fa* Nefr, Ze&laiid aet tusefully. This" .TOtiU! .be* or liarnW inveetiga-' - out* it would of- ahdtoiad asbd the incidence M | -influence of 'iVage ratesfoj-: "fvc6" $J®Wt of State, "t?P%, taxation on industry, fcoJafcT' Itsould,' in ita!l£ in the 1 liffe of the it' Vtfiild. show' Useful a 1 the end came in ,4U^Msalta oftnhet bo ; ■ q,.qi iicateias&agaf> < \ '[ , % !s[e| statement has been made at il&b % JibO'sed?etary of State for the thit British Governik" preparing for the .projected' in- Augußt shere is no suggestion of* a po&tptttometit; and it ia to.Jto iaped th4< the Commitj^o—and CabiAdvisory the Qcvemment to enter ,fcitp at Ottawa tetteD pre* tlpan,; it -Iras fox fye Imperial j in 'London four months ago.' vS\that booaaicm the discussions pis i-' Jltopire ■' economic co-operation f Very littld. They revealed— revealed—thb divofgity of Qpifcipii; oir the subject) and they 'ishintn}d> quite clearly that much harder, wor&tfu i:hd 'facts \yould bti neeessary, and action trere to emerge ftoixj' debate. reeonstitution of * f the Itnperial Eqohomia Gonunittee was , of oourae.a.Btop in that direotion. How j glconad it gained only the proceedings at Ottawa can but very little will have been gained if last battle is fought again in the same trtyj tiabour '!Ffeatradart on one ditte aHU Proroetfohistfii bnd" Preferett" tiassta from the Dominions on the other. should bo achieved, , however, if "it ig only i a decision to stop tinkering with the listing system 11 tnml Doihinion polities, .particularly Ai r |Stra]iaiv polities',' are .again more tiqptposed. There is political stability ill Canada; but unless the Federal Gov4>|3fineut changes its tarifE policy, there 'is'iio promising demand for a more geiicTous system of Imperial edOnomio As 'a Canadian contHbiiW to the Round "table -has ob« served, Mr Bennett, the Prime Minister 4f OimadAf is" WUHag to co-operate ,ifeitJl':ijy file Empire only if ■pproaoh the If a that there

with the concession that he will be jjated to accept nineperice for fottrpence from Grreat Britain. Australia's, if Australia has, a policy of any sort to-day, U o£ the afltne p£qflteeriiig kind." NeW Zealtod, to speak quite ffatofely, has much better intentions bat hag not thoroughly studied how to give them effect. If Mr Forbes can find any leisure between now and August, it lnigiit be demoted to that study.