Wage Increases Make Price Rise Ineritable

Chronicle (Levin), 9 May 1949, Page 3

Wage Increases Make Price Rise Ineritable

U4P WELLINGTON, May 7. A preliminary survey of the effects of the recent wage increase reveals that a price increase in some industries is inevitable, says a statement issued by the Price Tribunal. This will particuluarly he the case where the wage bill represents a considerable proportion of total costs. The statement goes on to say that where, in the view of the Tribunal, all incerase is inevitable, every effort will be made to keep this increase down to a nainimuim. In no case will extra profit be allowed as a direct result of the wage adjustment.

It is not considered that any appreciable increase in the prices of foodstuffs will result, partly because the wage content in certain foodstuffs is relatively small and partly because the coriiumel1 price .of' many foodstufife is main^ained at a low level by subsidy. Public Hearing. , No fiiial docji&bn! bah be arfive3 at, liowevef,-until! thei matifcef has %een more closely examined, possibly after a public hearing. It will be appreciated, the statement continues, that if in certain cases the margins for distribution can without injustice be reduced, rises in manufacturing costs due to the inereased labour award will not necessarily mean inereased prices to the public. Where these inevitable increases to manufacturers can be offset against diminished margins for distribution this will naturally be done. It will also be possible in some cases to avoid increases in price by taking account of exchange savings which have not yet been refleeted in price adjustments. The Tribunal recently decided that consequent npon an inerease granted by the Court of Arbitration to clothing trade employees, manufacturers' margins should be reduced in most of the branches of the clothing trade. If the Court awards a further increase in the wages of clothing trade workers it is intended that manufacturers of [ women 's and men's outerwear, of children 's garments, and of industrial garments, shonld be permitted to increase their factory prices by adding as a surcharge on the end price any further wage increase allowed. Details of the procedure to be adopted will be discussed with the garment manufacturers. Woollen Goods As any substantial wage increase cannot be absorbed completely by all woollen mills, the opportunity will b'e talcen of re-pricing certain items of production. Similarly with footwear it appears that the most equitable way of meeting the wage increase will be for a blanket ceiling increase to be computed on an industry basis as an interim measure, after which individual firms will be required to prove-. increases up to the ceiling. In all the above cases the Tribunal will take the ndcessary action without application by the industries or firms concerned. Any necessary adjustments will be made by the Tribunal without application in respect of the following industries: — Tanneries, laundries, manufacturers of plywood, cement, briclcs, asbestos and other cement products, lime, plaster, fibrous plaster, plasterboard, wallboard, and furniture. Other cases, the statement concludes, will be dealt with later in order of urgency.