OUR DIMINISHING PAY ENVELOPE

Chronicle (Levin), 18 November 1946, Page 4

OUR DIMINISHING PAY ENVELOPE

C. F.

COUTTS.

Sir, — Tiie- Natiouul Federation of Labour is at present giving consid-era-tion to tlie necessity of a gen- ' eral increase in wages toi meet rijsing living costs. It. is less than nine rnonths- agc that the Arbitration Court sanctioned an increase of 11s 8d per week in all awards for this very same purpose. Prior to this we had two iive per cent. cost of living bonuses, one in 1940 and. the other in 1942. It is evident that as the present inflationary trend progresses further wages increases will be demanded at more and more frequent intervals, and is a clear indication of the futility of" the, operations of 'the Price Investigation Tribunal and the Economic Stabilisation Committee.

Unfortunately for the wageearner, wages always lag behind rising costs.. Employers, loathe to • increase wages because they know that further production costs will result, hold off the demands of their employees until general dissatisfaetion forces the issue. The wageearner soon finds that any- increase in his pay envelope- is within a very short time nullifled by corresponding increases in prices of consumer goods, while taxes on his pay envelope add to his dilemma. Any working .man who pauses to think will realise that wage increases are not a cure for this exasperating problem, but mereiy a sedative that allows the disease to spread under a eover of seeming prosperity. Each increase in wages causes a considerable increase in the amount of money in circulation and, without a corresponding increase in production, prices must rise still further. Under our present financial .set--up, not only the privately-owoed trading banks, but also the politically-controlled Bank of New Zeaiand, are permitted to push million after million into circulation without any due regard to che exigency of equating money with goods, so as to ensure a stable purchasing power in the community.

There is a practicable and simple solution to this problem and one that the Federation of Labour would be wise to consider:- "That Statutory direction be given the Reserve Bank, or currency authority to use all its powers of control over the money system to maintain a stable price-level for commodities, thus ensuring that the money in the pay envelope ds kept stable in purchasing power.'i If this suggestion is adopted, any future wage or salary increase will not be foy the purpose of meeting increased cost of living, but to raise the standard of living of the worker and at the same time protect his earnings and savings. If the electors want to ensure the sanctity of the pay envelope-, they should insist that the eandidate they vote for in the approaching general election is pledged to support this vital reform. Yours etc.,

Auckland, Nov. 15.