The Hokitika Guardian TUESDAY, FEBRUARY 7, 1922. SUPPLY AND DEMAND, AND WAGES.

Hokitika Guardian, 7 February 1922, Page 2

The Hokitika Guardian TUESDAY, FEBRUARY 7, 1922. SUPPLY AND DEMAND, AND WAGES.

Thk war was supposed to have broken the natural equilibrium which supply and demand used to adjust automatically and an American financial journal now reamrks that it ia nothing new to have the law of supply and demand pronounced a back number. Pronouncements of that kind have been appearing with great frequency for a long time, but it has always turned out that the law was working where the observers were not looking and in ways they did not understand. It may be suppressed for a time in one place, but it is like water on its way to the sea, it gets there eventually no matter how much its course may be hindered. The Committee on wages of the American Federation tof Labour recently made a report to the Executive Council which contains the following: “The law of supply and demand has long since ceased to function in wage fixing, except under exceptional conditions, and the most acute suffering from arbitrary imposition of unscientific wage theories is found in industries where there is no organisation of the workers, and where the voice of the employer constitutes final iajuthority from which there is no appeal.” These views coma quit* naturally \

Australian

from men who are engaged constantly in contentions over money wages, and who are judged as successful or not according to the wages rates the y are able to win. They are so close to wage rates that they see nothing else, but wage rates are not all of the wage question. The fact is that there never was a o learer demonstration of the impossibility of defeating the law of supply and demand than is afforded by the high wage rates and high state of unemployment existing in this country to-day. The committee takes no account of the necessity for balanced relations between the industries or of the purchasing power of money wages, and unfortunately that has been true of many labor leaders in the present situation. The labor, organisations have developed great power, largely by the aid and sympathy of the public, but they are using it in this crisis cfor obstructive purposes—to prevent the natural, readjustments between the industries that are necessary to afford full employment for their own members. They are making the price of everything into which their labor enters sio l high that millions of consumers are unable to buy. It may appear that they are defeating the law of supply and demand by maintaining wage rates, but the law is having its w-ay in the actual volume of wage payments. Wages are far from being maintained for the wageearning population as a, -whole. That body as a whole would l>e better off with lower wage rates and morcTeinployment, and even those who now have employment would be compensated by the lower living costs. With such staples as flour, sugar, coffee, ricej meats and butter much below the prices of last year, liberal wage, reductions can be made without reducing the standard of living and they would accomplish still further reductions in the cost of living. It is evident that the balance must be restored before general prosperity can bo regained.