IS ARBITRATION A SUCCESS?

Sun (Auckland), Volume II, Issue 316, 29 March 1928, Page 13

IS ARBITRATION A SUCCESS?

DISCUSSION BY INDUSTRIAL CONFERENCE ECONOMISTS STATE THEIR VIEWS (Prom Our Resident Reporter.) WELLINGTON, Wednesday. rS National Industrial Conference progressed a further stag-e to-day when unanimity was reached on the question ox appointing a chairman, and the recommendations of the business committee, concerning the grouping and classification of committees and the presentation of napers, were unanimously adopted. The day was occupied mainly with the reading of papers prepared by professors of economics. The short debate which followed will be replied to by the professors to-morrow, when other papers given notice of will be read.

rpHE suggested grouping o£ committees contained in the order paper did not commend itself to the Business Committee, said Mr. T. O. Bishop. It was unanimously resolved that there should be two main committees, with 25 members on each side, a Farming Industry Committee and a Secondary Industries Committee, and a joint subcommittee should be set up of the two principal committees. The first, or farming industry, committee might work in two divisions instead of thre*;, as suggested in the order paper. Agricultural farming, sheepfarming and the freezing industry might well be grouped together and dealt with by a sub-committee. Dairy farming might be dealt with by another sub-commit-tee. The second, or industries committee, should be formed of two sub-com-mittees, one dealing with manufacturing and the other with distribution. There did not appear to members of the Business Committee to be any need to set up a special committee of shopkeepers or a special committee for the timber industry. It was thought that the timber trade might very well be dealt with by the manufacturing section, and that shopkeeping be included in the distribution section. Upon the question of whether papers should be discussed by the conference the committee had decided that papers by professors of economics be open for discussion after all have been read, each speaker to be limited to five minutes and to speak only once, professors each to have 15 minutes for reply. Regarding other papers it had been decided that relevant questions should be allowed, the questioner not to exceed three minutes in putting and explaining his question, and the reader of the paper to be limited to 15 minutes for reply. The report of the committee was adopted. * Employees’ Viewpoint The employees’ section of the conference presented a report stating what it considered should be the objective of the conference. An adjustment calculated to give better results than were at present obtained, said the report, could only be brought about by a greater degree of co-operation between all the parties who contributed anything essential to the national well-being than had hitherto prevailed. “Having said that,” the report proceeded, “we wish also to state that in our opinion trade unionism can never make peace with capitalism in the sense of acquiescing in that system. This, however, does not imply a blind destructive fury against the existing economic order.” “The objective of the conference as we see it is to discover if possible a way by which in this country a greater measure of social justice can be secured,” continued the report. "Social justice should not be subordinated to consideration of iidustrial progress, but we recognise hat its attainment very largely depends on securing increased industrial, commercial and agricultural prosperity and that prosperity cannot be solid and lasting unless it is based on social justice. “The conference should aim at using the organised powers of employers and workers to promote effective cooperation in developing better methods of production, eliminating unnecessary waste, friction and causes of conflict in order to increase national wealth and provide for a steadily rising standard of social life and continuously improving conditions of employment for all workers. While the total elimination of such waste, friction and causes of conflict may be quite impossible, as we believe it is so long as the wages system lasts, the hope of the immediate future undoubtedly lies in the intimate and continuous association of both management and labour for the purpose of adjusting differences, and for the purpose of promoting the progressive improvement of the industrial services from which alone the national prosperity can be derived. “If the conference will regard its task as part of the permanent necessity to adjust the economic and development policies of the country to meet the condition of a rapidly changing world, this representative gathering and the help which its discussions can give in getting at the facts may be regarded as one of the most important events of recent years. We thmk, however, it must not be regarded as an isolated event, but rather as one which must lead to and show the need for permanent machinery to carry on the continuous work of collaboration on the part of the parties to this conference, who are also the Parties to production and distribution.” Arbitration—For and Against The virtues and disadvantages of the Arbitration Court system were dealt with by Professor A. H. Tocker, of Canterbury College, and Professor A- Q. B. Fisher, of Otago University, in their respective addresses. “Labour costs constitute a large and important proportion of total costs,” said Professor Tocker. “Many investigations have shown that national ■wage bills are at least half of the total national incomes in various countries. They are likely to be appreciably over half the total income in New Zealand, and. therefore, constitute the largest factor in average costs of production. “It appears, too, that high labour costs in the sheltered industries are Passed on with other costs to be borne by unsheltered industries and consumers, excluding workers undor award conditions whose standards of living are protected. Index numbers *how that in 1927 agricultural and pastoral wages were 47 per cent, above the 1914 level. Other wages, mainly award rates, were 63 per cent, above that level, while wholesale export and import prices had risen only from 37

per cent, to 40 per cent. Official figures, too, estimate that the net value of total production per head is slightly lower than before the war. “No reasonable objection can be raised against high wage rates and high standards of living. On the contrary they are much to be desired, so long as they are justified by high productivity of labour. It appears, however, that wages and labour conditions are fixed in New Zealand with very little regard either to the productivity of labour or to the capacity of the country to absorb labour under tl rates and conditions awarded. For this the system of compulsory arbitrati“n is mainly responsible. "Our system was established as an experiment aiming mainly to promote conciliation and collective bargaining, with the court as a court of appeal to be used in case of emergency. It has developed in a manner never Intended into a system of State regulation of wages and labour conditions.” Court Defended Professor Fisher said it seemed unreasonable to condemn the court because it did not succeed in preventing every possible breach of the law. As a preventive of industrial conflict the court appeared to have been as efficient as could reasonably be expected. Some machinery for wage determination was essential. “ff we have become used to machinery of a certain type it would be unwise to alter it unless very good reasons are shown for the change,” said Profesor Fisher. One of the objections raised against the court’s work was the allegation that, by forcing up wages, the court had forced prices up as well, and therefore was largely responsible for the increase in the cost of living since 1914. In the opinion of the speaker there was not the slightest doubt that, compared with the influence of currency charges the part played by the court was quite negligible. The change in the price level was a direct consequence of currency inflation. It had changed in much the same way in other countries which had never heard of Arbitration Courts. "There is no reason to doubt the claim that general financial and economic conditions are considered by the court in making its awards,” said the professor. “The fact that I am assured by intelligent and sincere partisans on either side that the judge always gives the unions what they ask for and that he also always gives the employers what they ask for, encourages me to believe * be has succeeded, broadly speaking, in fixing wages very near the level to which they would be directed by the operatic" of economic forces, but that ‘his has been done with a great deal less friction than would have accompanied any alternative mf»de of regulation.” The general adoption of profit-shar-ing would mean that the less efficient and less favourably situated firms would be able to get their labour more ch' —ly than their more efficient rivals, said Professor Fisher. That was not in the social interest, which demanded that as far as possible work should be concentrated in the most, and not in the least, efficient hands. Dealing with exemptions, the speaker suggested that where an industry could devise machi""rv of its own which would satisfy its members without reference to the court there was no reason why the court should insist on exercising its control there. Exemption might also be granted on industries ,where conditions did not make collective bargaining of some kind a practical necessity, where there was no danger of "sweating” and where conditions of work were such as not to admit that degree of uniformity presumed in an Arbitration Court award. Unemployment The problem of unemployment was also dealt with- by Professor Fisher. It was impossible to lay down any formula for the guidance of the court judges, said Professor Fisher. There was no reason why the existing relation between wages in different industries or -wages for different grades of work should be regarded as fixed or unalterable. Wages should be fixed at the highest point consistent with the avoidance of an undue amount of unemployment. Pushed higher than that, unemployment would certainly follow. That did not mean that the existence of unemployment was necessarily or even usually a proof that wages were too high. “The causes of unemployment are far too complex to admit of any such easy solution, and I do not believe that the existing employment in New Zealand is to any considerable extent the result of unduly high wages,” said Professor Tocker. “Nevertheless, fluctuations in the volume of unemployment are probably the best guide we have at present of when it is safe to raise wages. It is much to be desired on this and on other grounds that we should have a more accurate knowledge in New Zealand on this subject so that the influence of seasonal unemplwment can be measured and proper distinctions drawn between the various industries.” It is expected that the conference will adjourn on Friday until after Er-ter.