ARBITRATION COURT

Otago Witness, Issue 4028, 26 May 1931, Page 24

ARBITRATION COURT

WAGES OF WORKERS QUESTION OF GENERAL ORDER. FINAL STAGE OF PROCEEDINGS. WELLINGTON, May 23. The final stage of the proceedings io the Arbitration Court in connection with hearing argument and evidence on the question whether a general order relating to wages should be issued was reached this morning. Mr T. O. Bishop, secretary of the New Zealand Employers’ Federation, replied on behalf of the employers to the issues raised by the other side. Mr Bishop said the employers’ case followed one broad line of argument; the advocates on the other side had devoted less attention to disproving this than they had to pursuing minor questions of varying degrees of irrelevancy. Mr Roberts had alleged that the reduction of the purchasing power of the workers in New Zealand had contributed as much to the depression as the reduced price of primary products in the overseas markets. In view of the fact that two-thirds of New Zealand’s primary products were exported and one-third consumed locally, this statement was obviously an exaggerated one. Mr M’Combs had endeavoured to show that a reduction in wages of 10 per cent, ■would reduce the farmers’ total cost by only £4 4s per annum on 100 acres, and had stated that since that applied to dairy fanning, where labour costs were the highest per unit of production, it would apply with even greater force to any other class of farming. He referred the court to a pamphlet on the cost of wool production prepared by the lecturer on farm economics at Canterbury Agricultural College, from which, he said, it would appear that, on a sheep farm, the actual wages accounted for from onethird to one-half of the total working expenses, and this was not taking into account any wages apart from the farm itself.

He expressed the opinion that the workers’ case could be summarised under three headings—cost of living, purchasing power, and interest. He contended, in the first place, that there had been a steady improvement in the workers’ position from the cost of living point of view, and that this was borne out by the quarterly returns. During this term the index number had shown t. rise, but for 1G similar periods it had shown a drop. The greatest rise had been 1.4, and the greatest fall 11.8. It was clear, he continued, that there would be no reduction in the standard of living and purchasing power unless the wage redaction was out of proportion to the fall of prices. Commodity prices had fallen very rapidly in the last few months, and were still falling. He submitted figures demonstrating the fall in the cost of living subsequent to the wage reductions in 1922, and he submitted that there would be a similar effect if a reduction were made at the present time. If wages in the secondary industries remained at their present level the cumulative effect of the present unemployment would continue. If wages were increased the present position of the farmer would be made even more desperate, and it must be remembered that even now his income had fallen by 40 per cent., and the capital value of his property in many cases had disappeared. Dealing with a statement by Mr Roberts with respect to waterside work in which the latter stated that he had examined the returns submitted for wages earned on the five main ports for the year ended January, 1930, and had found that 400 of the highest paid men earned (overtime included) on an average £4 16s per week, Mr Bishop said that the ports referred to presumably were Auckland, Wellington, Lyttelton, Dunedin, and Port Chalmers. At these ports for the year ended December 31, 1929, said Mr Bishop, the men who followed the wharf regularly, i.e., men who worked for 39 weeks or over during the year (less 10 per cent, of the highest and 10 per cent, of the lowest paid men, deducted by the court’s instructions in order to obtain a fair average), numbered 2253, and their average earnings were £4 13s Id per week worked. At these ports for the year ended December 31, 1930, the 39-week men, ascertained on the basis mentioned above, numbered 2197, and their average earnings were £4 6s 8d per week worked, or a drop, as compared with 1929, of 6s 5d per week. At these ports for the year ended December 31, 1929, the men who worked 34 weeks or more during the year (less I 10 per cent, of the highest and 10 per cent, of the lowest paid men) numbered 2421, and their average eearnings were £4 Ils 9d per week worked, and for the year ended December 31,1930, these men numbered 2397, and their average weekly earnings were £4 5s 6d, or a drop, as compared with 1929, of 6s 3d per week worked. The returns were made up for 34 weeks’ and 39 weeks’ men on the basis already mentioned, in accordance ■with the instructions of the court given at the hearing of the waterside dispute in 1922. The figures given by Mr Roberts referred only to 400 men, or about one-sixth of the total covered by these returns. They were stated to refer to the highest paid men, but this could not be right for the year 1930, as Mr Roberts’s figure was considerably lower than the average of about 2400 men for these ports during that year. * Sii ice the New Zealand waterside

workers’ award came into operation in October, 1929, the Australian waterside workers had had their rates reduced 23.3 per cent.

The labour cost of loading coal at the loading port, Air Bishop said, was not less than Id, as was stated by Mr Roberts, but was approximately is per ton. It might be that Air Roberts’s statement in this respect was a mis print. As regards the cost of handling butter, cheese, boots, flour, linoleum and clothing it was impossible to check these figures, but he thought it was appropriate to point out that the cost of handling cargo on the waterfront bore no relationship to its value. For instance, basic slag, which was carried at practically ballast rates of freight, was a most expensive cargo to handle when it reaches New Zealand. It was a consolation to know, continued Air Bishop, that our banking institutions to-day were in a strong, almost unassailable position. It was also a matter for congratulation that we had some successful New Zealand industries. In no case did Air Roberts disclose anything more than a reasonable rate of profit for commercial undertakings. One could submit a very long list of commercial enterprises which had not made profits, and it was cheering to know that there were some at least which were making a sufficient profit to encourage capital to flow into industrial channels in the Dominion. Mr M'Combs had said he thought there must be some mistake in his (Air Bishop’s) figures regarding Australian wages. As a matter of fact Air M‘Combs had access to all the Australian depart mental publications and it would have been easy for him to have produced to the court actual records of each wage adjustment which had been made in Australia since 1929, but Air Al'Combs chose to ignore entirely the official publications of the State and Commonwealth Departments of Labour and to rely upon a quotation from the Sydney Alorning Herald to support an argument of his own that the reduction of wages in Australia must have been something different from that quoted by the speaker. Aloreover, he had stated that the application of the Commonwealth reduetion of wages was limited to a very small number of industries. The court also had access to Australian official publications, and he would therefore just submit figures relating to wages paid in Australia and the actual reductions made since 1929, showing that basic rates of wages had been reduced, the reductions ranging from 20 per cent to 25 per cent. Air M'Combs had endeavoured to show that following upon the wage adjustment of 1922 the employers of New Zealand had made greatly increased profits and workers had received no benefit. He adopted a rough and ready method in his calculations and referred to the added value less the wages paid to productive employees as the gross profit. Mr ARCombs said: “In 1922-23, during which period the wage cut of 6} per cent, had been in operation for 10} months, the manufacturers made additional gross profits totalling £1,626,621. The saving in wages at 6| per cent, on productiveemployees’ wages alone would be approximately £770,000 if al] the employers made the reductions. Some did not. So -->t only did the manufacturers not pass on the £770,000 reduction in wages, but they made an additional profit of £856,000.’ Now why put forward speculative figures when correct figures were available? asked Mr Bishop. The facts were follow:—

Now what became of Air M'Combs’? £770,000 saving in wages as between 1922-23 and 1921-22 and £1,579,035 for the two years 1922-23 and 1923-24 as compared with the previous two years. In actual fact the wages paid for the 1922-23 year, in which, as Mr M'Combs said, the cut operated for 10} months, exceeded the wages paid in 1921-22 by £87,508 and the wages paid for the two years 1922-23 and 1923-24 exceeded those paid in 1920-21 and 1921-22 by £762,430. so that instead of the employers saving and the workers losing one million and a-half in wages in two years as the result of the cut workers actually received an increase of wages of over three-quarters of a million. Air Al'Combs was also incorrect in his calculation as to the increased gross profit, but as the error was only £58,337 it was not a serious one—for him.

Referring to interest, Air Bishop said the reference to the bondholders called for a brief reply. The position in regard to interest on the National Debt was that New Zealand had been buying her roads, bridges, railways, public buildings, development of land, and many other things on the time payment system. She had arranged for the instalments to be spread over a long term, and throughout many years of rising prices she had reaped an advantage. She was under a disadvantage now that prices were down, but having acquired the goods she was under an obligation to-pay. It must be remembered also that the workers re ceivcd a very large share of the borrowed money in the form of wages. The bondholders, both in England and New Zealand, were people who had invested small savings, and the effect of failure to pay interest in New Zealand would be to jeopardise savings in the Post Office and other savings banks and all life insurance policies and funds in the hands of the

Public Trustee. Failure to pay interest in England would mean that New Zealand would never again be able to borrow on favourable terms.

In conclusion, Air Bishop denied emphatically that the employers were seeking to lower the standard of living. Air Bishop on completing his address said he knew his side of the case was an unpopular one and he would have been glad to have been absent from New Zealand at the present time. He was, however, not the only one in the country who had to face an unpleasant task. The position was serious and had to be met.

Air M'Combs, in the course of a personal explanation, contended that Air Bishop had not disproved his statement. Following the wage reduction in 1922-23 there had been a saving in wages of 6} per cent, on productive employees’ wages alone. The figures produced by Air Bishop referred to the total wages, and it had to be remembered that there were 10,000 more employees participating in that amount. There had been a misunderstanding in connection with the figures given relating to the value of production per £lOO expended on productive wages between 1920 and 1925. Air Bishop had quoted from one volume of the Statistician’s report, but this had been subsequently corrected. Air Bishop agreed that this was so and also that the figure for the year 1921-22 (to the omission of which in the speech of Air Al'Combs he had drawn attention) had been omitted in the corrected report. Air Roberts said that Air Bishop in referring to interest had imputed that the workers’ advocates had favoured repudiation. This was not so. They had only desired that arrangements might be made in regard to the rate of interest so that it could be spread over a longer period. Mr Bishop: I didn’t use the word “ repudiate.” Air Roberts: No, you’re too able to do that. There was just the suggestion —the sting was in the tail. Mr Roberts expressed appreciation of the freedom that the court had given the workers’ representatives in the matter of presenting their case. At the conclusion of Mr Bishop’s address the Arbitration Court representatives on both sides paid a tribute to the friendly manner in which the proceedings had been conducted. Mr Justice Frazer also expressed appreciation of the spirit in which the argu ments had been presented by both sides. He said he could not help contrasting the friendly, frank spirit with that under which similar proceedings had recently been conducted in the Federal Court of Australia. It seemed that there was an underlying current of friendship and desire to understand the other side’s view

in this country, and this had been exemplified during the bearing. He assured the parties that he" and his colleagues would go very carefully into the arguments submitted, and would arrive at a decision which would be in accordance with the facts. He hoped that it would be pos sible to give the decision some time next week. The court then rose.

Total Wages. Total Employees. 1920-21 . . £13,811,011 72,286 1921-22 . . 13,677,376 70,316 1922-23 . . 13,764,884 73,662 1923-24 . . 14,573,441 77,661 1924-25 . . 15,690,202 80,327