WELLINGTON NEWS

Hokitika Guardian, 5 September 1929, Page 2

WELLINGTON NEWS

PRODUCTIVITY 'And wages. (Special Correspondent.) t ' '• % .'> v : : '" t \ WELLINGTON, September 2. The remarkable prosperity of the United States' is the. envy* of the.rest of the world. That prosperity; is not due to the war or to the fact’ that America is now a grs jit . creditor natipn but to economic advancement on safe lines. Some time ago,'a;committee on recent econpmic ohaiiges in U.S.A. was appointed, and the . investigation was made under the .direction of Pro* lessor E. F. Gay, of Harvard, and Professor. W. C. Mitchell, of Columbia. The report this ''committee, recently issued includes an interesting review by Professor Mitchell of the Committee’s findings. # The Professor, states, that intense application of science ; ,to v industry has been followed by efforts to introduce it into business management. There is not only more production, wages, and horse-power, but also more management per man. Amongst managerial experiments are co-ordinated staffs in place of one “big boss,’’ bonuses, better statistics and close inventory control. It may be desirable t> state that in the United States the word “inventory” is used for what we term stock-in-trade or stock. , According to Professor Mitchell la-bour-saving machinery has turned out to bef joh-sayimg machinery. Belief in the economy of high wages has become prevalent among the abler business executives. Trade unions are acting under a changed, .economic theory, which acknowledges the relationship between productivity and wages. Technical advances, .have been more in the nature of economical production; more goods are turned out at less cost. Comparisons between output per worker i'n later years and in 1919 often show sensational gains.

Without help from any extraordinaiy invention railroads also attained a higher level of operating; efficiency. Numerous .corporations (joint stock companies) and some trade associations are, maintainnig research departments of their owp. There has resulted a rapid expansion in the production arid sale of products unknown a century ago. ',. .. !-' . ' , .... , .

As to the savings in manufacturing Professor Mitchell found that waste elimination, standardisation of , parts and reduction of varieties .have contributed to lower costs and higher/profits. Avoidable or. reclamation of wastes may be credited (according to Mr L. P. Alford) Vibe-President of tjie American Engineering .Council) with a total saving. to-day of £1,000,000,000 on Mr Hoover’s estimate of. £120,000,009 annually. Savings tion canndt yet be determined but the automobile industry estimates its own savings £175,000,000 a year. More than 84 commodities have reduced their varieties or styles to a degree rangingupward to 98 per cent. An aspect oif the wtmpaign against waste, aided by industrial research, is the reclamation and re-use of materials, and the development of commercially valuable byproducts. New processes developed meant extensive savings annually, amounting to from £I2OO to £600,000. ■Since 1921,’ according to Professor Mitchell, Americans have found ways of producing more goods per hour of labour than before. They have received larger average incomes because they have produced more commodities and services. Perhaps none of the changes will prove more important in the long run than the change in the economic theories on which the American Federation of Labour and outside unions are acting, observes the Professor. “That organisations c'f wage-earn-ers should grasp the relations between productivity and wages, and that they should take the initiative in impressing upon employers constructive, plans for increasing efficiency, .is not wholly without precedent, but the spread of such Ideas, and the vigour , with which they are acted on by large organisatoins must startle those who have believed that trade unions are brakes upon economic progress.” ' One could wish that the men who set themselves up as leaders of labour could becGpne seized with the American ideals. In the United States the workers believe in producing to the limit, in New . Zealand the policy is to “go slow,” in the mistaken idea that in doing so they are providing work. In America wages are high, higher than anywhere else, hut those high wages are earned through increased produce tion per man, per machine, per hour.

As to the future, the Professor says, “If we are to maintain business prosperity we must continue to earn it month by month and year after year by intelligent effort. The incomes disbursed to consumers and to wage-earn-ers in particular must.be increased on a scale sufficient to pay for the swelling volume »n consumers’ goods sent to the market.”