COST OF LIVING

Hokitika Guardian, 7 June 1921, Page 1

COST OF LIVING

STATISTICS AND AY AGES

AVARNING BY STATISTICIAN

AVELLINGTON, June 2

The cast of living index figures to April 15, on which the Arbitration Court made its recent pronouncement regarding future bonuses and stabilisation of wages, are now available. There is a lengthy preface to the index numbers, in which the Government Statistician combats the impression which lie say* prevails in certain quarters, that the policy and attitude of the Statistical Department towards its index numbers lias undergone radical changes during the six years in which these figures have bjjen published. The difficulties in selection of a budget or regime for computation of index numbers covering the whole field of the cost of living have, declares the Statistician, proved insuperable, for reasons lie has frequently stated. The index numbers issued cover only three-fifths of the normal household expenditure. “To measure variations in the ‘cost of living- the ‘living’ must remain "fixed, and lie costed according to prices at different times,” he says, “otherwise there is no measure of variation. There is not a comparison between the cost of, say, four pound of butter in January and the cost of a smaller quantity in June. To follow variations in ‘actual expenditure on living’ would be merely to indicate not variations in the cost of living but in the power, of spending on living. It is conceivable that with a great reduction, say 50 per cent in the price of certain commodities, such as eggs or jams, that the consumption thereof would within the limits of the income of the household be greatly increased not in substitution for, but as an addition to other items of diet, and then the expenditure on living would go up or remain about the same, while the price (cost) of the commodities had actually come down. °

“If ‘cost, of living’ meant actual expenditure on living, then it would he easy to solve the burning problem ot how to reduce the cost of living by simply reducing incomes or wages to the extent desired, and a reduction i» Hho cost, of living would follow as a matter of course* for no one can spend more on living than he receives. “The Arbitration Court has been under no misapprehension as to exactly what is measured by the index numbers, since their composition and scope were clearly explained to the Court from the beginning. Used with a proper understanding of the causes affecting their movement, they are useful and informative, but they should not be allowed to arbitrarily govern the situation.” Of the countries for which retail price statistics are obtainable New Zealand, with (19 ])er cent increase on pre-war prices, now ranks third. The lowest are India (Calcutta), showing 61 percent, and United States 55 per cent, while Australia in March last showed 81 per cent rise and the United Kingdom, according to a special cable just received, 132 per cent rise compared with pre-war prices.