POLITICAL TALKS

Sun (Auckland), Volume III, Issue 696, 22 June 1929, Page 29

POLITICAL TALKS

SECRET OF HIGH WAGES PAYMENT BY RESULTS (Written for THE SUN tty DAVID JONES, M.P ) XX. Austen and Lloyd, in their book on the secret of high wages in America, particularly emphasise the fact that the worker aims at high production and is paid accordingly The following figures prove it. From September, 1924, to October, 1925, employment in the manufacturing industries in America increased 6.4 per cent., but the wages bill in the same manufacturing industries increased 12.6 per cent, and the production increased by 24.8 per cent. It was out of this increased production that the increased wages were paid and the reduction in price made possible led to ever increasing sales on the world’s markets, including New Zealand.

Compare this with British figures, which show that in 1924 the wage level had dropped to 70 per cent, above pre-war and the wholesale price level had dropped to 74 per cent, above

pre-war. How can Britain on the above showing hold her own with America; the plain fact is it cannot be done. Mr. Philip Snowden, now Chancellor of the Exchequer in the British Labour Government, when reviewing “The Secret of High Wages,” said: 1. The traditional policy of British industrialists is out-of-date. 2. Our past command of the world’s markets is passing from us. 3. The enormous advantage which the American wage-earners have gained in recent year's is attributable to the system of payment by results. 4. Payment by results is not in general practice in Great Britain. 5. A century of painful experience in Britain has developed a trade union policy which the example of America is proving to be based on fallacy and error. 6. British employers’ belief in wage reductions and British trade union belief in the restriction of output is ruining British industry. These weighty and significant admissions from a Labour leader are important and arresting. Mr. W. N. Gillies, a member of the Board of Trade in Queensland and formerly Premier, said that the system of payment by results was worthy of consideration. Wages, he said, were at a dead end and he thought it was due to the workers that consideration should be given to any system whereby the standard of living could be raised. Mr. William Mybiil, secretary of the Metal Trade Employers’ Association, said in evidence on the Child Endowment Commission that from his experience in seven countries he had no. hesitation in saying that once workers tested payment by results they would never give it up. In the report of the Australian Industrial Mission to the United States they say the employers try to understand the workers and the workers understand that the interests of both are identical. The old system of one pulling one way and the other pulling the other way is disappearing. The payment by results works in the same satisfactory way wherever it is tried and the story of its adoption in the British Austin motor works is a striking illustration. The company passed through an exceedingly difficult period after the war, but they have made one of the most remarkable recoveries ever recorded. Their system is to assess the price on what an average operative can do the work. This is carefully worked out and demonstrated in practice. Once fixed, it is never altered and the worker knows that every improvement he can effect which increases his output also increases his wages. The workers in the Austin works looked at this system at first and refused to adopt it. For three months no man would work under it. Then one of the men tried it and was delighted with the increased pay, and so the lesson spread and the following remarkable results were obtained: Increase in turnover 209 p.c. Average increase in workers’ output efficiency .... 73 p.c. Increase in individual earnings 108 p.c. Increase in profits 93 p.c. Decrease in cost to purchasers due to lowered list prices and added equipment 62 p.c. When the article was written some time ago they had increased the output of cars to 25,000 cars a year. Under the old system they say we should not be selling a dozen a year owing to the cost of production. The wages of the operatives increased on an average 120 per cent, over local union rates, actually from an average of £1 14s to £4 Is a week. One good man earned £4 a week on day work and increased it to £l2 a week on piecework. Here we see an illustration of a company in difficulties and employing less than 3,000 men five years later employing 8,000 men at more than double the wages and no financial worries left. Sir William Morris tells a similar tale with the Morris car. The Socialists in the Dominion preach the doctrine of securing control of production, distribution and exchange. The American worker is doing it by his work and savings. In the Bell Telephone Security Company 62,500 employees are stockholders and 165,700 are purchasing stock by voluntary deductions from their wages. There are 38 labour banks, with a total capital of over 2J millions. Capital is flowing to labour and labour is becoming a partner and is readily welcomed. We could multiply instances of how- workers are investing largely in the manufacturing industries in which they work, but enough has been stated to show that under a sane system of employment i the worker in other countries is wellpaid and employed, doing our work in his country. If the workers of New Zealand would only wake up and remove their shackles they could make our goods in our own country, and create employment for many more men than we have in the Dominion at i present.