The Dominion MONDAY, NOVEMBER 21, 1921. MOVING BACK TO NORMAL

Dominion, Volume 15, Issue 49, 21 November 1921, Page 4

The Dominion MONDAY, NOVEMBER 21, 1921. MOVING BACK TO NORMAL

According tofthc General Secretary of the Public Service Association (Mr. F. W. Millar), the Prime Minister's proposal in regard to a cut in Public Service salaries is inconsistent with an agreement entered into last year by representatives of the Government and those of State employees. Presumably this assertion rests on some sort of misunderstanding. As yet the Government’s proposals in regard to salary or bonus reductions have been stated only in very broad and general terms, and with no mention of the precise period at which they are intended to take effect. Looking a little way ahead, it is apparent that serious problems will arise in connection with the adjustment of the national finances during the financial year which opens in April next, and that the position can only be met by effecting drastic economies. From the incomplete disclosure thus far made, the Government seems to be shaping its plans for a reduction of salaries on the basis of the reduced cost of living, as indicated in the official statistics, but until more information is supplied these plans, of course, cannot be discussed in detail. Mr. Massey indicated in general terms that it was proposed to make a reduction of ten per cent, "down to, say, salaries of £2OO, or perhaps £300.” No doubt this means that the cut will extend onlyin exceptional cases to salaries of a less amount than £3OO per annum. It is to be hoped' that in working out details some more equitable adjustment will be devised than that of merely effecting a flat-rate reduction of ten per cent., or whatever percentage may be decided upon, in salaries above the limit of exemption indicated. It may appear feasible and equitable to make more than the average cut in salaries in the higher grades and less than the average cut in salaries nearer the exemption limit. Unless some such arrangement were made State servants/ with salaries just above the exemption limit might find themselves unfairly treated as compared with those, whose salaries are on or just below this limit.

Detail adjustments apart, the prospect of a reduction in salaries of course does not place State servants in an exceptional or unfavourable position as . compared with other wage and salary earners throughout the community. Although the. Arbitration Court is adhering as far as possible to its plan of stabilising minimum wages until April next, and in dealing with the .shearers' award merely reduced rates of payment which were exceptionally high with relation to those generally ruling, a not inconsiderable reduction has been made in the wages actually paid in some industries in both town and country. There is no doubt that further general reductions must follow. It is becoming clearer every day that the only safe and assured line of economic and financial recovery, here as in other countries, is to be found in an all-round reduction of prices and money wages. With world prices on the down grade an attempt to ke<\p wages and salaries artificially at a high level is merely a rather foolish way of committing economic suicide, or, more specifically, of dislocating trade and industry, and occasioning needless unemployment and hardship. The important point for a wage or salary earner is not the amount of money he receives, but what the money will buy, and if this elementary fact is accepted as a basis to work upon any obstacles now raised to a satisfactory adjustment of local wages and prices will soon disappear.

Public servants, of course, are bound to consider that a reduction in salaries, besides being in keeping with an adjustment which is evidently necessary in all classes of industry and employment throughout the Dominion, is an alternative to the dismissal of State employees whom it is desirable in their own interests and those of the public to retain. Failing a comparatively early reduction in salaries, there is no doubt that the Government would find it necessary to_ effect economies by further reducing the number of its employees, even at the cost of restricting or abolishing useful services. Similarly, a. downward adjustment of wages and salaries in industry generally will do much to avert unemployment, besides justifying a reduction in prices which will tend to maintain real wages, stimulate trade and industry, and generally assist a return to prosperity. We have urged on a number of occasions that a sound readjustment of wages and prices would be greatly facilitated if the manufacturers and traders of the Dominion engaged in a concerted movement of price reduction. Immediate action on these lines was very strongly advocated at the annual conference of the New Zealand Employers’ Federation, a few davs .ago, by its president (Mn. T. Shatler Weston), but the conference. contented itself with recommending the Government

to call a conference of representatives of financial imstßvtions, shipping companies, agriculturists, manufacturers, professional men, anil ofher bodies as early in the New Year as convenient with a view to simultaneous reduction of prices and wages toward a normal state, and thus avert short-time employment and trade stagnation.

The proposed conference, if it is held, may serve a good purpose, but it is already quite obviously in the interests of all concerned that local money wages and prices should be brought down to a reasonable level as soon as possible. Some

manufacturers and traders are no doubt inclined to argue that since wages enter very largely into prices a general price-reduction movement to some extent anticipating a fall in wages would be putting the cart before the horse. This cannot be denied, but it remains true that a broad-based movement of price-re-duction offers a hopeful means of rapidly transforming the unsatisfactory existing conditions of trade and industry and of facilitating the comprehensive readjustment which would serve the interests of all parties.