The Press Friday, March 11, 1932. Wages and Purchasing Power.

Press, Volume LXVIII, Issue 20493, 11 March 1932, Page 10

The Press Friday, March 11, 1932. Wages and Purchasing Power.

When the member for Lyttelton, in the speech reported this morning, repeated the old, specious, exploded argument that the Goveimment's policy of wage outs had reduced the purchasing power of the people, he was true to the Labour politician's habit of repeating what it suits him to say and ignoring correction. Mr Downie Stewart speaking towards the end of the General Election campaign protested against the Labour Party's persistent use of incorrect figures about the incidence of taxation and tho effect of the latest changes in the scale, though he had himself over and over again corrected the figures and exposed the source of the error; and Mr McCombs's speech iii the same way and for the same pui'po3e disregards the facts as they are, and as frequently stated, most recently in the re.port of the Economic Committee. It is nonsense to say that the reduction of wages reduced the purchasing power of the people. That was reduced by the decline in the national income, which has fallen, according to the Committee, from £350,000,000 to £110,000,000, is still falling, and will continue to fall until prices and costs closely conform with the level of export prices. If Mr McCombs means anything at all, he means that tho Government somehow impoverished the people by making £12,500,000 of purchasing power disappear; he actually says that the result of the cuts was that there was "Jess " money to go round." But there was the same amount of money to go round, with this difference, that more people stood a chance of getting some of it. The loss in wages—£l2,soo,ooo, to accept Mr McCombs's figure—was the wage-earner's share in covering the very much greater loss already incurred and being borne largely by tho export producer, together with the unemployed, traders and manufacturers, shareholders, and—despite criticism—landlords and mortgagees. Mr McCombs's suggestion is that these classes should continue to bear the loss, wage-rates to bear none of it, and that by this mean 3 distress might have been avoided. If So, then it is surely very clear that, to escape from tho depression altogether, all that was necessary was to pay higher and still higher wages. Unfortunately, they would be paid to fewer and fewer workers, or else they would be paid, at successive steps of inflation, ill less ' and leas Valuable pounds, sliillings, and peilce; and the end, either way, would be paralysis.