A PROBLEM IN ECONOMY.

Manawatu Herald, Volume XLVII, Issue 2976, 17 December 1925, Page 4

A PROBLEM IN ECONOMY.

VAGES AND COST OF LABOUR

To many, the word “economy” means simply not spending. That is a miserly idea. It really means spending and doing to the best advantage. Without economy in our private business and public affairs the welfare of individuals and Society must suffer. The use and treatment of labour, meaning thereby all human service, is the foundation question of economy in industries and trade of all kind —Government, Municipal and private works. Employers and workmen differ largely because they are regarding labour from different angles. What he gets in wages is the worker’s concern. What it costs to employ the worker is the employer’s. Wages and cost here are not the same thing although many mistakenly think so. The question of whether labour costs is high or not relates more to the return secured than to the wages paid. TWO COMMON FALLACIES.

One of the chief practical dilTiculties of our time, as indeed of all times, is the tenacity with which old and bad doctrines grip the minds of men and hold them in thraldom. Two connected stupidities, for they are nothing else, may usefully be considered.

The first stupidity is apt to rule the minds of employers. It used to be expressed in the proposition that “Profits are the leaving of wages;” from which it followed, or seemed to follow, that the lowci a wage for which an employer could get his workers to agree to work, the higher his own profits would be Workers believed it as well as masters.

Our old school-friend, Euclid, is a good guide here, for one of the best

devices for showing that a proposition is not true is to suppose that it is true, and trace out the result* which would follow. You go gaily on till you run up against a sheer impossibility, which proves, of course, that it cannot be true. So here, if you are inclined to think that cheap labour is profitable labour to the employer, you naturally agree to the proposition that the more you cheapen the labour tho more you increase profits. Now the most thorough going way of cheapening labour is to make a slave of the labourer. Well, that plan was tried and the result was never in doubt. Negro slavery in the Southern States of America was an economic failure, just as serfdom in medieval England v T as. Slaves and Serfs can only do the simplest kind of work, and always do even that in a wastefull and slovenly way. In the same way “sweated” labour is not in general profitable labour, and the attempt to grind the face of the poor defeats itself. An employer gets in the long run just the thing he pays for, no less and no more. He “buys” cheap labour and gets a “commodity” worth the price he pays for it. No wage is too high.if every penny of it is well and truly earned, and the test of its being earned is simple enough—the market test.

But here we come up against the second stupidity, as we quite frankly and justly called it, which Is that each labourer must restrict his output in the supposed interest of his class. W|hen during the war tho supply of butter was greatly diminwe were put on rations so as to make it go all round. There never was any need to ration work, that is, to limit the quantity done by each worker so as to make it go ail round, and at the present time the persistence of this silly old belief is doing the nation great harm.

To particular kinds of at ( a given time there may be a limit. So much may be wanted, and no more. To work in general there is no such limit at any time, and in these days it would probably be impossible to (hid a limit in any particular direction, for the world is hungary for goods of every conceivable kind.

WHERE WAGES COME FROM. The ancient fallacy that “employers" pay wages should be got rid of. Economically il is untrue; wages are not paid by the owner of an undertaking but J>y the product of that undertaking. When employers and employed take hold together in industries as partners recognising that whatever is paid or received must come out of the industry and nowhere else then will come better understanding and success for both. By combined effort wages may be increased yet the labour cost kept down through increased output. W;haL il comes to is that the sensible employer is he who succeeds in paying higher wages and the sensible workman is ho who consents to earn them.

The problem of economy can only be solved by employers and wage earners giving earnest efforts towards the success of the industry or service in which they are engaged. Though their interests are not identical yet they have an interest in common which is all important the advancement of trade, for on that both depend. Not class conflict but co-operation is the means of industrial and social welfare. Only by pulling together can the nation and its members receive full benefit. (Contributed by the New Zealand Welfare League.)