COST OF LIVING

Dominion, Volume 12, Issue 154, 25 March 1919, Page 8

COST OF LIVING

APPLICATIONS FOR INCREASED WAGES

GOVERNMENT STATISTICIAN

GIVES EVIDENCE

By Telegraph-Press Association. Christchurch, March 2-i.

Six -unions applied at the Arbitration Court to-day for increased wages and bonuses on account of the increased cost of living. In the oase of tho Tinsmiths' Union the Court was asked to amend the agreement made by the Conciliation Council in order that the claims should be increased in accordance with the Wellington award.

The employers' representative contended that the oost of living was higher in Wellington than .in ...Chrietchurch, and that the Court should consider that circumstance in fixing Hhe rates.

Mr. Justice Stringer said that the Court might havo to. abandon the Wellington basis of the increased cost of living, and fix different standards in different places.

General interest in this afternoon's / session of the Arbitration Courc centred , in tho presence of Mr. Malcolm Fraser (Government Statistician), whoso cost-of-living figures were last week challenged '.. by Mr.. T. Cooper, as the employers' re- . -. preventative in the case before th* Court. Mr. Fraser was to-dav called bv Mr. M'Conibs, Mr.' Ellis, who conducted tho employees' case in the Tanners. Fellmqngers and Skinners' Union's application for increased wages. Mr, Fraser, at tho outset, explained what were the two factors primarily bearing on the cost of living—prices and income. They attempted to measure the movement in the price of living, but there wae no attempt' or endeavour to measure what effect income haii .oil tho domestic expenditure. iror living jn | ~ regard to pncee they' Jiad tn 'i<sk-.> into, consideration certain fo*d cro'i;.,. Cor. . tain foods were inore k .it«|.cn v ;.: .nn others, and those iniri at vswuv* "iuvt. Income variations afectecfMit •'<■»*. of living. By economies, mtro^in.* , ,! of .' the householder suffered a* decrease, iis wife must bring her expenditure into line.. If, on the othar hand, tiie price of those commodities which the ho-isa- , holder required decreased, 'ho could con- . eume more of them r.r consume t Wtter class. If prices increased ho was liable .'. to consume less. The "indei number" system of determining increases or decreases in prices was not new, but in the last fifteen years had been gradu- . ally improved, and bettered and rendered '- more. reliable. The method adopted in New Zealand, known as the aggregate ' expenditure method, .had been devised by the Commonwealth Statistician. It was adopted for New "Zealand because the New Zealand office considered it the beat extant In the measurement of living they must have one stable factor; they must have some conception or . vision of a-fixed .or Relatively fixed point. The ipre-war period, 1909-13, supplied that basis. In New Zealand it had bean ' arrived'at .by a close examination of the household budgets which had been collected, of the manufactured products of the Dominion, of imports and of ex- , porta. They had ascertained as closely as possible the annual Dominion consumption of a number-of foo.d and eroeery item's by investigation. Along that line they reached (heir index number. Then increases we're calculated from the ■ 1909-13 level, With regard to fuel and lisht, naturally more was consumed in winter .than in summer, therefore the figures -were applied best to a yearly movement. Mr. Fraser said that when he presented the figures he had stated that the method was primarily prepared for a yearly average; secondly,-with regard to figures for clothing and miscellaneous items, the figures were more or less artificial; and thirdly, they were applying income increases to expenditure, were perhaps rather artificial, but the best procurable. Mr. Fraser also .pointed out that so long as : . the articles included were the articles generally used_ for food in the Dominion, then the index r.umber was a true guide to the increase in prices. Tho increased cost of rents in the Dominion lad been 6.45 per cent, on pyo-irar prices, and in Wellington 10.13 per cent. But the increase in lighting had been lower in Wellington than in other parts of the Dominion.

The President remarked that the Tent 3 in Wellington had always been high, and the percentage of the increase was / not much greater- than elsewhere.

In reply, Mr. Fraser. said the National War Labouir Board settled strikes in the United States 'by granting increases of ■ ■wages in accordance with the rise in the cost of living, determined by index numbers. If prices rose and economies had to be effected, they were effected at the expense of something else.

.Hie Honour said tho worker ought to be able to maintain the same standard of "living as. before. The cost of living should, not be reduced by cutting down various things which he had previously beea accustomed to.

Mr. Fraser argued that if a commodity, increased in price the housewife used 'something else or cut out something ■else.' • •'

Hie Honour: Instead of buying boots for children^-she makes them go barefoot in'order to supply food?

Mr. Cooper gave examples of the difficulties of arriving at increases in the cost of living between the making of an award and the time when an application •was made for an increase in wages. ■Mr. Fraser said the distributing of the factor making up the cost of living in 1911 was correct,' and the only way to got over 'tho difficulties mentioned by Mr. Cooper would be to make" a fresh investigation.' It was part of tho Department's programme- that such investigations should bo made periodically in order to readjust the distribution of the factors.

• In reply to Mr. Cooper's query, "Is it not reliable for the Court to carry out the Act? Would it bo inoro reliable to go back to 1914?" Mr. I'rasor said "Yes," In the main, food formed tho biggest percentage, and was the greatest necessity. In ascertaining the increases in the price of food it would be more accurate to start from [914. from known facts.'

His Honour: The Act does not say that'the increases are to bo based on the 1914 prices.

Mr. Cooper: What I am trying to show is that the Act is asking the Court to do something that cannot bo done.

His Honour: "Wβ are bound, if we can do so reasonably, to give effect to the Act." Speaking to Mr. -Eraser: Suppose we took the 391-i prices, the increaso is k> much, and it would toEe a certain amount to bring the workers' wages up 'to'the cost of living. As we-know what ho was getting at the time the award was made, the increase necessary would be the difference between tho two?

Mr. Fraser: Of courso that is clear. His Honour: That is, of course, what WB'could do. ;

Replying to Mr. Cooper, Mr. Fraser said the figures he gave in Wellington were the Wellington figures for January, 1919.

Mr. Cooper: Do you think that it is good enough to take one month's figures and ono city's figures for a Dominion standard ?

Mr. Fraser: Wo have a Dominion weighted average based on twenty-six towns. Tho Court might consider that the best figure to bo used, or it might take the figures we mako up from tho four centres.

Mr. Fraser gave the following comparison (covering the period from .Inly, 1914 to January, 1919) of tho Dominion average and the Wellington figures:—

Dominion average. Wellington. Food 45.11 ii.il Housing 5.45 10.13 Fuel and light ... 33.83 '2-1.83 Tha Dominion average of the three factors was 31.!i7 as compared with the Wellington average of 31.13. His Honour remarked that; if thft Court took the increases from 1914 to tho ilsite of the award, and from the date of the award to the date of the application, it could arrive at the increased wages Hint should bo awarded. If that were so he did not think there was anything furtl'ov for Mr. Fraser to say.

Sli\ M'Combs said such a basis would ;lx" acceptable. . , : " His"Honour said fh'mVif the Court Tβqiiired any special 'figures from Mr. Fraser it would get him to work them put!

Mr. Cooper asked if the basis just laid down by tho Court would bo followed in respect of futuro applications. His Honour said that they would be decided on that basis.