Wages And Living Costs In Sixteen Countries

Press, Volume XC, Issue 27396, 8 July 1954, Page 3

Wages And Living Costs In Sixteen Countries

While the cost of living in New Zealand rose by nearly 90 per cent, between 1938 and 1953, average weekly wages increased by well over 100 per cent, between 1938 and 1951. New Zealand’s cost of living increased at a much slower rate than most other countries’ in the decade 1938-48, and at about the same rate as other countries between 1948 and 1953; the post-war increase in wages in New Zealand has been about the same as in most other countries.

These are some of the inferences to be drawn from a study of the United Nations’ monthly Bulletin of Statistics, from the New Zealand Year Book and other official publications. The United Nations publication lists indices for cost of living and wage rates in most countries which are members of the United Nations. From these tables the relevant information on New Zealand and 15 other countries of the Western world was extracted, and has been grouped in the table below. The United Nations bulletin does not give an index figure of wages in New Zealand in 1938, probably for the reason that the New Zealand Department of Labour and Employment has only since the war kept detailed statistics of this kind. The latest New Zealand Year Book, however, contains the statement that the average yearly earnings of male factory workers has risen by 111 per cent, (between 193839 and 1950-51) and those of female workers by 165 per cent. Since March 31, 1951, there have been two general wage orders, and the figures of 111 and 1’65 per cent, would have to be considerably increased if the years 1938 and 1953 were compared. There are so many factors involved in the compilation of such statistics as these that the statistical purist may claim the final result to be almost worthless. For instance, the retail price of tea

in New Zealand in April this year was 6s 6d, but in Australia only 3s B|d. Tea is still subsidised in Australia, tut not in New Zealand. In compiling retail price (“cost of living”) indices, statisticians are not usually concerned with subsidies —or the taxation from which the subsidies are financed—so that .it could be argued that the level of taxation should be shown as well as the cost of living. This is merely one example of how such indices can be misleading; others involve different methods of computing cost of living or wage indices; the South African cost of living index, for instance, relates to consumption by Europeans only, and includes taxes. When all this has been said, there are plain indications of general trends in the table given below. The cost of living in the 16 countries showed a general increasing tendency over the 15 years covered, the rate of increase being slower in the post-war period. Wages showed a similar trend, out in general have increased more than the cost of living since the war. The “average” figures for each year given at the foot of each column should be accepted with reservations, because of the different methods of computation used in each country, and because of incomplete data. To appease the purists, the mean shown is the geometric, not the arithmetic. Although the same figure—loo—appears opposite each country as the index for cost of living and wages Jn 1948, this does not mean, of course, that cost of living and wages in the 16 countries was the same in that year. A note to the table in the United Nations bulletin points out that cost-of-living indices reflect changes over a period of time in the prices of goods and services “bought, in general, by working class families living in urban centres. They do not, however, show differences in the cost of living between one country and another.”

Cost 1938. # New Zealand . .72 Argentina .. . 49 Australia .. , 69 Belgium . 27 Canada . 66 France . 7 West Germany . 64 Israel . 30 Italy Netherlands . 2 . 47 Norway . 63 Sweden . 61 Switzerland . 61 South Africa . 68 United Kingdom . — United States of America . 59 Average . 38

The table is as follows:— of Living. Wages. 1948. 1953. 1938. 1948. 1953. 100 138 — 100 145 100 297 — 100 282 100 178 56. 100 184 100 106 28 100 127 100 120 100 136 100 167 100 187 100 108 76 100 155 100 208 18 100 150 100 117 2 100 122 100 130 57 100 123 100 112 55 100 144 100 130 — 100 153 100 104 55 100 107 100 130 — -- — 100 130 42 100 130 100 111 63 100 131 100 137 33 100 149