COST OF LIVING.

Taranaki Daily News, 6 April 1922, Page 5

COST OF LIVING.

POSITION REVIEWED. BY ARBITRATION COURT. METHOD OF ASSESSMENT By Telegraph.—Press Association. Wanganui, Last Night. The Arbitration Court has made a pronouncement on the cost of living for the six months ending March 31, as affecting the wages of workers under awards and industrial agreements, with the exception of a few industries where special circumstances exist. The pronouncement is as follows: — The Court, in pursuance of the provisions of the Industrial Conciliation and Arbitration Amendment Act, 192122, has investigated the movement in the cost of living between the six monthly period April-September, 1920, and the six monthly period October 1921-March 1922. The rates of wages at present payable under the awards of the Court are based on the ascertained cost of living for the half year ended September, 1920. The accumulated bonus then declared represented an increase of 15s per week on the standard wages of March, 1919. The actual amount ordered to be paid was, however, 13s, a reduction of 2s having been made to balance the past over-payment. The Court has on this occasion, as in the past, covered the whole field of the cost of living. We particularly mention this matter, as an impression appears to be current that the Court considers only the statistics relating to food, or to the food, rent and fuel, and li<rht groups, and adopts the official figures of the Government statistician in respect of these groups, and also obtains returns in respect of price movements in clothing and miscellaneous commodities and services for which no official statistics are available. These are combined with their proper weighting with the official figures for other groups, so as to give the movement in the cost of living as a whole. It must be borne in mind that all the statistics with which we are dealing relate to retail prices. They are an accurate index of the movement in the cost of living for so long only as the average family spends the same relative amount on each commodity listed. DOMESTIC BUDGETS VARY. In normal times, domestic budgets vary from year to year, and this tendency is accentuated in times of abnormal and irregular fluctuations in prices. Such changes in the distribution of family expenditure do not necessarily involve any alteration in the standard of living, but they have tne effect of rendering the retail prices given by the statistician as an approximate, instead of an exact measure, of the movement of the cost of living. As the family expenditure budgets on which the "present statistics are based were collected in 1912, they cannot now be regarded as entirely satisfactory. Food, ren>, fuel and light together account for nearly 60 per cent, of the total expenditure of an average family, while clothing, which includes personal clothing, household linen, and drapery and boots and shoes, accounts for 13.89 per cent., and miscellaneous household requisites, medical and other fees, train and tram fares, newspapers and periodicals and other items of a general nature make up the remaining 26.45 per cent. THE CLOTHING GROUP.

In the past, the Court has had to base its information in regard to the clothing group on the prices of a skeleton schedule of articles which was reasonably representative of the whole group, while the genera] prices were uniformly increasing. Latterly this information had to be supplemented by estimates, owing to unevenness of the movement in prices of commodities within the group, which caused the schedule to lose its representative character. We may add, in passing, that the rapid changes in fashions and qualities have always made it impossible to construct reliable statistics on clothing prices, but we have now adopted a schedule which is representative and well balanced, and is sufficiently complete to obviate the necessity for having recourse to estimates. It covers 13 items of men’s and boys’ overwear, 6 items of men’s and boys’ underwear, 7 items of women’s and girls’ overwear, 5 items of women's and girls’ underwear, 15 items of household drapery, and 9 items of footwear and repairs. MISCELLANEOUS EXPENDITURE. In regard to the miscellaneous expenditure group, the Court has felt for some time past that 26.45 per cent, of rhe total expenditure of a family was too large an item to be covered by an estimate. We have obtained accurate data in regard to price movements of household furnishings, household ironmongery, brush ware and sundries (32 items), crockery, train r.nd tram fares, newspapers and periodicals, which together make up 13 per cent, of the domestic expenditure, thus leaving only 13.45 per cent, for which no definite information is available. The items comprising this portion of the miscellaneous group represent expenditure on insurance, medical, dental, and legal fees, subscriptions to lodges, clubs, religious bodies, charity etc., sport and recreation, and casual Expenditure of various descriptions that cannot be classified. We have assumed that the movement in respect of this sub-group is an average of the groups covered. EFFECT OF MOVING PRICES. The adoption of improved methods for ascertaining the movements of prices in the clothing and miscellaneous groups, and the temporary tendency to steadying prices in certain lines, have caused the fall in the cost of living to appear to be less than was generally anticipated. The new schedules have, however, enabled us to arrive at a reasonably accurate determination of the extent of the movement in the cost of living. In so far as. at all events, rental prices can be taken as an index of the cost of living, comparing the two lialf yearly periods, April-September, 192(1, •and October, 1921, and March, 1922, we find that the cost of living, measured In wages, has fallen to an extent that, would reduce the accumulated bonus of 15s per week to 8s per week, that is by 7s per week. As, however, 15s was paid instead of 15s (?) the actual reduction is 5s per week. BASIS OF REDUCTION. The Court has discriminated between adult males, adult females, and juniors in awarding past bonuses, and if the same principle is followed ia

wages, the amount of reduction will be as under:— Adult males 5s per week. Adult females 2s 6d per week. Juniors Is 6d per week. The Court, in computing past bonus alterations, has used six-monthly figures for the purjmse of comparison. We have made an alternative computation based on monthly figures. If the figures for March, 1922, are taken, instead of the six-monthly moving average for the period October, 1921, to March, 1922, the reduction is greater by 2s per week in the case of adult males and Is per week in case of adult females and juniors. QUESTION NOT DETERMINED. This pronouncement is in no sense a determination of the question whether or -to what extent wages are to be reduced. It is simply a statement of what the movement in the cost of living represents in wa-ges. The Court will sit at Wellington on April 26 to hear representatives of the employers and workers in regard to other considerations that should bear weight with the Court in determining whether wages are to be reduced and, if so, by what amount. BONUSES AND BASIC RATES. NO DISTINCTION MADE. Wanganui, Last Night. It is interesting to note, in connection with the Arbitration Court’s pronouncement, that the Act makes no distinction between bonuses and basic rates, so that any reduction will come oc the total rate of remuneration in each case. The pronouncement now issued is only a determination on the ascertainment of the movement in the cost of living, and has no legal effect in itself. The Court has fixed April 26 as the day when it will hear argument with regard to any proposed reduction of wages, and the general order for the reduction finally decided upon will not be mad'until after the hearing. Any general order made will not take effect until, early in May.