THE WAGES QUESTION.

Manawatu Herald, Volume XLIV, Issue 2422, 29 April 1922, Page 4

THE WAGES QUESTION.

CASE BEFORE ARBITRATION

COURT,

Wellington, Wednesday.

n The Arbitration Court to-day commenced the hearing of the employers’ and employees’ view on the Court’s' pronouncement regarding -wages reduction. Mr Bishop, for the employers, summarised his arguments as follows: —(1) There is undoubtedly most urgent need for readjustment for wages and prices. The need is not restricted to New Zealand, hut it is world-wide, and we cannot blind ourselves to the experience of other countries. Apart from the effect we must feel from the world situation, the position of our primary industries to-day is such as to call, for immediate remedy, and reaction upon our secondary industries, has already become most serious; (2) It has been abundantly proved that we can no longer adjust wages and cost of living regardless of the economic situation, and Parliament has recognised this fact by making it mandatory that in any adjustment of wages, the economic and “financial conditions shall be given- due consideration; (3) The worker is not being asked to bear any undue share of the sacrifice. The employers have been losing for the last year, are losing to-day, and are prepared to continue to lose by passing on to the public the benefit of wage reductions if by doing so they, are establishing their business and increasing the volume of their trade; (4) The effect of 'adequate wage reduction will be increased employment and increase in the total wage bill, and therefore the purchasing power in circulation. The effect of inadequate reduction will he prolongation of a period of half time employment, continuation of the stagnaion of all development work, and a maintenance of high price; (5) ultimately the situation will bring its own cure and competition with foreign countries will force down our prices of manufactured goods. The prices of our primary products must fall lower than they are to-day. The result of inadequate reduction will be unemployment to such an extent that the average wages of the community will be reduced perforce, and the whole arbitration system will fail. Is it not better and wiser to face the situation boldly to-day, undergo an operation and suffer initial pain followed by a speedy recovery, rather -than wait for the sickness to develop" still further and then suffer a very long drawn-out convalescence; (C) The New Zealand workers are the best off in the world to-day, and by making a brief sacrifice they can maintain that position. Is the Court going to call upon them to face the situation, or is it going to permit them to drift into the condition prevailing in other countries What is the position in Australia today? Copper mines are idle in nearly all States. The Broken Hill 'miners are almost all idle, and the iron and steel works at Lithgow and Newcastle have closed down. Hear what the senior British Trade Commissioner for Australia says on the subject: “The most serious nature in the economic situation is the refusal of the labour leaders of organised Labour to permit any wage reduction to meet the situation caused by lowering the cost of production in other countries. The result is creeping paralysis in manufacturing industries; which, although protected by a. high tariff, are subject to overseas" competition.” That is only one aspect of the ease, and to adopt it Zealand we must go further and say that we cannot protect secondary industries by a high tariff, because if we do we are only increasing the burden of taxation on our primary producers; (7) I wish also to emphasise this point most strongly: If the Court make a substantial general order, it hits everyone ’alike at the same moment, and produces the maximum benefit in return, but if the Court makes quite an inadequate general order the effect will be that the workers in some trades will be fully employed, and will enjoy continuance of high wages, while the workers in other trades will receive high nominal wages but small actual wages, because he will have to pay high prices for the products of his better paid fellow-workers, and to put a concrete case, the workers in*the iron trade will continue to work half time as they are doing to-day. Their cost of living will be kent up, because, in the wollen trade, owing to absence of. competition, the prices and wages have not been reduced. There are two ways in which the present situation may be faced, and only two. One is ignoring all the necessities of the .case, and the lessons that others have learned by bitter export ience in the endeavour to maintain a false standard of wages and prices, and as a result to suffer creeping paralysis in all our industries, and the other is to grasp our nettle, to join hands in the necessary initial sacrifice, and so get back. The question for this Court to decide is which of (he two courses we are to adopt.

Wellington, April 27. > When the Arbitration Court opened to-day Mr Justice Frazer said he wished'to clear up a misunderstanding Avitfr regard to the Court’s Wanganui • proouncement. That pronouncement was not a tentative proposal that wages should be reduced by 5s p6f week. Tfce Court’s state’ment was a purely statistical one and not in any sense a statement of whether or to what extent wages should be reduced.

The employers’ evidence wa continued. Arthur Seed, secretary of the Dominion Federated Sawmillers’

Association, read a statement showing the closing down of mills and the shortening of hands, and a general reduction of 2s per hundred feet in prices at the mill. The labour costs represented 70 to 75 per cent, of the total prodtwtion costs. Beaumont Mapplebeek representing to the unparalleled prosperity of the boot trade between 1015 and 1918. Witness spoke of the effect of heavy importations in 1920, causing New Zealand factories when the slump came to work halt time. England, where wages were £2 18s per week, compared with £4 11s 8d here, and where workers put in four extra hours, was New greatest competitor. The manufacturers- had had to sell below cost, as much as 50 per cent, in some eases. The latest figures showed that in March last there were employed 170 less workers than in March, 1920. Mr McCombs congratulated MiBishop on the choice of the engineering trade as the principal basis from which to fight the case, and for the avoidance of the wollen and other industries, which were paying handsomely. Dealing with the result of stabilisation, he said the reduction in the cost of living had not been as (he Court had anticipated. The fall of 10s, which should have taken place at the end ol" the first six months, did not occur until the end of the year. The workers therefore urged that the stabilisation period should be extended for one year, and in making the request they relied on the promise of the Court that if the fall in the cost of living should prove to he less than was anticipated there would be a readjustment. Having protested against the nonpublication of all groups index numbers since August, 1920, lie said the Court! could not, if it was to maintain a’ fair standard of living, possibly reduce the -present minimum rates of wages, and in this connection he contrasted the decision of the Australian commission in fixing the average basic wage at £5 14s sd. Wages, apart from the withholding of the 5s bonus, had already been reduced by the employers, who were paying only the minimum wage, and by having only intermittent employment the workers’ wages had always lagged behind the increase in the cost of living. To reduce wages by the amount shown by the reduction in the cost of living would be to multiply by two the disadvantages which the workers had to put up with'during the war and since. Last session’s Act required the Court not to lower wages below what was necessary to maintain a fair standard of living, and it was perfectly plain that this was to override all other considerations. It was true wages had fallen in other countries, but wages there had increased in a greater ratio than the increase in the cost of living. He contended that in 1914 the standard was not fair in New Zealand, and unfortunately the New Zealand workers did not to-day obtain as high a wage measured in purchasing power, as they did in 1914. Discussing economic conditions, Mr McCombs argued that there was evidence of increasing prosperity for New Zealand exports. For the year just closed they exceeded in amount the total for the two best pre-war years. The heavy importation in 1920 only temporily disturbed ' the balance of trade. Very substantial reductions in prices should take place before the wages were reduced. In conclusion Mr McCombs urged the Court if he had succeeded in proving that the present basic wage did not afford a fair standard of living, not only not to reduce wages, but to urge upon the Government the appointment of a commission to go into the question of what is a fair standard of living. It wa bettre economy to make the wages bill the last instead of the first to touch.