INDUSTRIAL SITUATION.

Hokitika Guardian, 17 January 1928, Page 1

INDUSTRIAL SITUATION.

rx DU STB l AL SITUATION. G'HRLSTCTIURC'H, Jan. 17. The following statement regarding the industrial situation and the attitude of the employers was made by AA’. Cecil Prime to-day. Oil the 15th September, 1925, the Arbitration Court issued a pronouncement with reference to the cost of living and the basic wage.' 'The Court reviewed the various factors which it had taken into consideration, including the cost of living statistics, which showed that the index figures had fluctuated within a few points of 60 per cent above the level of July, 1914, and then set out the standard minimum rates of wages which it would adopt for the future. Tlie Court went on to say that tlie basic rates thus adopted did not take into account the improved conditions of work, increased overtime rates and other benefits granted since 1914, all of which have a definite money value. AATien taken in conjunction with the increased basic rates, these concessions brought the total earnings of the basic rate worker well above 60 per cent over the 1914 standard. Since that pronouncement was made by the Court practically all awards have been reviewed and brought into line with the rates and principles set out. The first awards thus reviewed have lately expired, and there appears to ho a tendency on the part of the workers’ unions to make immediate application for fresh awards involving further concessions in conditions and wages. Under the circumstances it seems desirable that a statement should he made setting out the general principles which employers fool should he taken into consideration. It is possibly a corollary to our system of universal compulsory education that there should he a widespread desire for a constantly improving standard of living; the general progress ol the world in scientific achievement ei - sines continually increasing benefits being made available for mankind, and it is reasonable to say that all classes should have the opportunity of sharing in these benefits as lar as is reasonably practicable. But in deciding to what extent the benefits of modern civilisation should he available to tl citizens of any country, regard must be had to the income of the whole community as well as to the earning power of the individual. During recent years our national income has not kept pace with the people’s desire to spend, with the result that there has been unemployment. No one desires this state of things to continue. A fully employed community is more prosperous than a nation with an appreciable majority ol its citizens out of work. New Zealand to-day stands at the cross-roads, and must make a decision as to which road she will travel. Our national income is dependent mainly on the product of the land—our primary industries —and any increased handicap on the secondary industries which may result in higher costs to tho consumer will react against the producer and so tend to curtail our national income. The outstanding problem of the Dominion is the position the farmer lias been placed in by tlie fact that he is receiving only about To-

per cent, above pre-war prices for his produce, while lie has to meet increases of about 60 per cent, in his cost of living and general expenses. This is a position which cannot continue without inviting national disaster, and can he met only by increased production or bv decreased costs. Those who are eon eerned with the welfare of the secondary industries must therefore bear tnese things in mind when seeking a solution of the difficulties of the present and in deciding which way we are to travel.

Two main avenues arc open, two main theories arc espoused by opposing classes. The first of these, advocated by some employers, is a decrease in standard rates of wages. Such a course, it is held, will reduce costs, and as a result, prices and the cost of living generally, enabling 'the worker to maintain his present standard on a reduced income. The first difficulty in giving this theory a trial is that it would admittedly be opposed by the workers and could not be given effect lo without latter industrial strife. The -'llid' contention against the adoption if a wages cut. is that it relieves management from the necessity of seeking ither economies in costs, such as imirovement in technique, organisation ,r finance. The second view, hdvented by those who are most directly

opposed to the first suggestion, is that wages .should be increased in order to increase the purchasing power of the community, and in order to stimulate the employer into finding new and more economical methods ol production. To insist that every rise in wages will evoke new and corresponding economies in methods of production is foolish. There is a limit to the extent to which the high-wages theory can suceed. even where mass production cannot he adopted owing to the fact that there is not a sufficiently large home market. But. more important still, our national income is not large enough, and has so been proved by actual experience during the last two years, to stand the strain of further increases. Nor is there any prospect that there will in the near future |,e any increase in income from in.•roased prices. There must be a slou but steady decrease in prices of both

primary products and manufactuiod goods for the next few years, although from time to time there may he brief upward movements doe to abnormal causes such as shortage of production in countries which compete with New Zealand in overseas markets. There is a danger that too much importance may be attached to such temporary upward price movements; this must be carefully guarded against, for both primary producers and manufacturers have much leeway to make up. and any apparent extra income from increased prices will do more than assist to wipe out past deficits.

The time has come, therefore, to call a halt in the hitherto almost unbroken rise n the scale of standard wages. The limit has been reached. Whether money wages can he maintained at even their present level will depend mainly on what can he achieved by co-operation between the contending parties in the direction of reducing costs and so increasing the purchasing power of the money wages paid.

That is the object of this statement - to ask if there is not another solution than the t"'o opposing theories already mentioned, whether there is not a third road along which we may travel to normal trade and prosperity.

On two occasions during the past three years, the Hon. T. Shailer-Wee-tmt has put form'd tentative propnw-

als for an industrial truce. On 24th. August, 1926. speaking at Christchurch, Mr AA’cston put the proposal very plainly in a speech from which the following are extracts: “AA’ith regard to the cutting of

wages, and to this suggestion of an industrial truce for file years, I think that employers should refrain except as a last resource from using the exjiedient of cutting wages. NV i tli that expedient eliminated, employers, in order to cope with a fall in prices, would have to depend on their ingenuity and resource in improving their plant and lay-out. and also 011 the benefit they would get from the absence of industrial strife, and from that uncertainty which inevitably gives rise to in-

creased costs.” “I feel sure that if this project of an industrial peace and truce for the next five years were carried out, the certain result of that industrial peace would he such a reduction in tlie cost of living as would mean an increase of at least 10 per cent.—it might he more—in wages, and that the employers would not suffer very much.”

In a nutshell, the proposal amounts to this: Let the AA'orkers’ Unions refrain for a period—-five years need not necessarily he stipulated, but unless or Until abnormal circumstances arise—from seeking further concessions in

standard rates of money wages, and the employers similarly refrain f- • seeking'reductions. If both parties continue to he ranged in hostile camps with the workers seeking further concessions unjustified by the economic facts, employers will in self defence be compelled to seek wage reductions. AATth the prospect of freedom I rom industrial disputes of la .major nature, with a certainity of stabilised conditions and rates of money wages, employers will have confidence :» sacking improvements in methods in order to bring down prices. From lower prices wage earners will reap the benefit in that their money wages will have a greater purchasing power. Increased purchasing power on the part of the workers should tend to stimulate trade and industry with resultant benefit all round. The idea of making this statement was suggested early in December. ’1 his is of interest in view of that' fact that on the 20th December a cable from London was published in the New Zealand newspapers stating that a special meeting of the Trades I nion Council had been held, at which an invitation was accepted from the employers to attend an industrial peace conference. The view is gaining ground that co-operation will achieve more than strife.

It may Ik> charged that this statement is being made with a view to securing an advantage. It is made because of a sincere conviction that money wages cannot be increased without danger to the whole community, and because of an equally sincere desire that wage earners should not have their standard of living reduced .

AA'ili the workers accept the position in this spirit? Are they willing to join hands in seeking methods ol improvement, in reducing costs, and so reap a benefit and an increase in their standard of living without imposing further handicaps on trade and industry?