The Daily News. TUESDAY, MAY 17, 1921. COST OF LIVING BONUS.

Taranaki Daily News, 17 May 1921, Page 4

The Daily News. TUESDAY, MAY 17, 1921. COST OF LIVING BONUS.

The Arbitration Court is making a new departure in connection with, the granting of the cost of living bonus. In the past it has worked on a six-monthly average. It now proposes to stabilise wage conditions for a full year. It estimates there has been an increase in the cost of living during the past six months of three shillings per week, to which has to be added two shillings deducted from the amount of the last bonus to discharge the previous overpayment, making a total of ss. The Court estimates there will be a considerable reduction by September, and it proposes to set off the 5s increase against this reduction until April of next year, when the bonus will again be reviewed. Few disinterested people will agree with the Court that there has been an increase in the cost of living during the past six months. On the contrary’, on most necessary articles it will be found that there has been a decided drop. Meat is down 50 per cent., tea, riee, sago, fruits, etc., are greatly reduced, so is almost every article of clothing and boots. Butter, cheese and sugar remain the same. Rents also have not changed. Where, then, has been the increase? In point of fact the index numbers are not, and never have been, reliable so far as fixing the wage bonus is concerned. They have decided limitations, and do not take into consideration certain essential factors for the purpose for which they ate used. Indeed the Statistician himself acknowledges this, and says that in themselves they should not be used to arbitrarily fix wages, but that they only “should be considered and studied in relation to existing circiynstances. ” Instead, the index numbers have been used, and are still being used, to entirely govern the wage movement. It is a very great mistake, the consequences of which in times like we have been passing through have not been acutely felt, but in times like the present may operate seriously against those it is desired to benefit. The bonuses have been given indiscriminately, to single as well as to married men. The former have -scarcely felt the increase in the cost of living, whereas the family men have been hard hit, throughout the piece. Much better had the bonus been awarded on the same principle as obtains in respect to war pensions—cn the number of dependents. No cognisance has been takeh of the fact that many workers during the past year or two have been working less hours than formerly, yet they are entitled to rank in the matter of the bonus equally with those who work longer hours. Manifestly there should be some discrimination. The fact is that the application of the index figures is but a rough and ready way of adjusting wages.. A little study and more scientific

means could have been devised. Not that a complete solution is possible, for experience has shown that an increase of wages has be'en closely followed by increased prices for goods or services, so that in the end the wage-earners have been no better oft’, but perhaps worse off. Now, however, prices of practically everything are falling, chiefly 'because of the decrease in consumption, which always follows a period of inflated prices, and wages must fall in sympathy, or else there will be a great deal less work available. To prop up wages artificially, as is proposed by the Arbitration Court, can be done without harm in times of prosperity, but in times of depression like we are passing through it may have a boomerang effect upon the workers themselves. No one likes to see wages reduced, so long as value is being given, but the fact cannot be ignored that many businesses and industries are not paying to-day, and if the high wages are continued then there must either be a drastic reduction in the number of the staffs or stoppage. In America and England, where the Arbitration system does not operate, there is some elasticity in the matter of the rate of wages, and so industries are kept going in bad times by an all-roUnd “cut.” Here there is no such possibility. Our Arbitration system, hard and fast as it is, is about to be tested for the first time, and, frankly, we are apprehensive of the results.