The Dominion MONDAY, NOVEMBER 28, 1921. THE WAGES PROBLEM

Dominion, Volume 15, Issue 55, 28 November 1921, Page 4

The Dominion MONDAY, NOVEMBER 28, 1921. THE WAGES PROBLEM

The new award for the meat freezing and preserving industry which the Arbitration Court has just issued at Christchurch embodies a comprehensive settlement which is to apply throughout the Dominion. It is perhaps chiefly of interest as illustrating the difficulty of effecting such an adjustment of war-time wages as may be expected to stand in after-war conditions. At an immediate view, slaughtermen and other workers in the industry cer'tainly have every reason to be satisfied with the terms of the new award, but it is at best an open question whether the industry is capable of bearing such a wages load in the greatly-altered conditions, as compared with the war and early post-war periods, by which it is now faced. The Court has left unchanged basic wages which were settled as recently as 1919, and the onlv reduction it has made is in bonuses which were added subsequently to these basic wages of 1919. The basic rate for slaughtering sheep is £1 15s. per hundred, and the reduction in the piecework bonus from 20 per cent, to per cent, means that the rate actually payable for this work is reduced from £2 2s. to £1 19s. 4ld. per hundred. This is a drop of only a little over six per cent. The percentage drop is slightly greater in the case of workers other than slaughtermen —it works out at approximatelj7 8 per cent, on the actual wage (basic wage plus bonus) payable to unskilled workers in the industry—but it obviously cannot be said that the award affords much relief to an industry which is at present in somewhat serious difficulties.

No doubt, hqwever, the Court has taken what it deemed thb best course open to it in the circumstances. In framing its award, it has endeavoured to put freezing works as nearly as possible in the same position with relation to workers in other industries as they occupied before the war. Under the awards current in 1914 unskilled workers in the freezing industry had secured a somewhat higher rate than general labourers. Freezing workers claim that they are entitled to this higher rate on account of the nature of their occupation and the fact that it affords them employment for only about half the year. Under the new award they retain this advantage in basic rate, and receive approximately the same cost-of-liv-ing bonus as workers in other industries. Working as it is in set conditions as regards the cost-of-liv-irig bonus, the Court no doubt felt bound to cortcede these terms to the freezing workers as a matter of consistency, but whether the award establishes conditions which reasonably favour the recovery of the Industry and therefore might be regarded as conserving the ultimate interests of those whom it employs is at least open to doubt. The award obviously means that working costs in the industry will stand at a very high level for the ensuing season, and this, of course, does not make for a full tide of activity in the freezing works. It seems at present rather likely that the effect of establishing these charges may be in some degree to limit operations and correspondingly restrict the volume of meat export trade. Like other leading examples of wage regulation in recent times, the freezing workers’ award serves to emphasise the difficulties under which the Dominion is labouring as a result of the unduly high level of local wages, working costs, and prices. In this case, it is particularly obvious that the high working costs of the industry are out of keeping with the poor prices obtainable for its output on oversea markets, but the circumstances in which the award is made at the same time demonstrate that the problem of wages and prices must be dealt with comprehensively. The Arbitration Court cannot be blamed for endeavouring to treat freezing workers on the same basis as workers in other industries, but it is becoming plainer as time goes on that the attempt to keep wages artificially at a high level in this country is likely to occasion serious economic dislocation. Indeed, it is already manifest that some way of escape must be found from these artificial conditions if a serious set-back to many industries in the Dominion, and consequent unemployment, are to be as far as possible averted. This presumably is one of the problems with which Parliament will be called upon to deal during the present session. The legislation which authorises the variation of awards by bonus increases or reductions expires on January 10, 1922, and no doubt will have to he extended in some form. The period for which the Court has stabilised wages docs not end until April next, and the matter evidently cannot be left in the air. Apart from the effect of high local wages on export trade, there is a good deal in existing conditions to suggest that the local level of money wages is the principal factor tending to prevent a rapid downward movement of prices. Already prices are falling, but the movement is and will be definitely checked while wages remain at their present level. In dealing with the problem Parliament is bound to consider that the worst service it could render to wage-earners would be to maintain a system under which wages are fixed with insufficient regard to the essential conditions of trade prosperity, industrial activity, and unrestricted employment.