The Daily News. FRIDAY, MAY 12, 1922. THE REDUCED BONUS.

Taranaki Daily News, 12 May 1922, Page 4

The Daily News. FRIDAY, MAY 12, 1922. THE REDUCED BONUS.

Whatever may be the view taken of the Arbitration Court’s decision to reduce the cost of living bonuses by five shillings weekly for adult male wjtirkers, half of that amount for adult females, and eighteen-pence for juniors, it seems quite evident that the sums arrived at are more in the nature of a compromise than a logical result of a full consideration of all the circumstances bearing on the cost of living. Moreover, it is not a unanimous judgment, the position of affairs being that the workers strongly object to any reduction, while the employers asked for a reduction of thirteen shillings. The duty of evolving a majority decision imposed on the President of the 'Court necessitated his obtaining the concurrence of either the employees’ representative or the employers’, hence the compromise in the workers’ favor. If the Court’s lengthly pronouncement is closely studied, the general impression gained from the involved calculations and the general review of the whole subject, will probably be that, though the verdict may be admirable, the reasons on which it is based are—to say the least — questionable. 'The pronouncement certainly covers considerable ground and many interests. It admits errors in dealing with the granting of bonuses; it superficially deals with the questions of costs of production, economic conditions. efficiency, and the important part played by high cost of production on the primary producers, and attempts to define the term “a fair standard of living.” That considerably ingenuity has been exercised in dealing with the relevant and irrelevant considerations of the Court in order to make the decision a corollary to the arguments and circumstances set forth in the judgment seems apparent. Nothing is to be gained at this juncture by discussing whether the principle of granting bonuses was right or wrong, or by examining the correctness or otherwise of the basis on which the increases were made. The intent. was the very worthy one of enabling the workers to meet the high cost of living, while its operation increased rather than diminished the struggle to make both ends meet. It is necessary to note the effect of these bonuses in the boom time, when there was a shortage of labor, because there can be no question that the law of supply and demand was, and always is, a dominant factor in the rate of wages. The judgment states:— “These increases (cost of living bonuses) were, as the Court then stated, granted in view of the genera! shortage of labor, and the fact that employers in several industries had, by agreement with their Workers, undertaken to pay higher basic wages than those in force. . . . There were

many factors beneficially affecting the real earnings of the workers. . . .

Award rates were true minim?., and very many workers received substantially higher wages. . . In many occupations young lads became selfsupporting almost as soon as they left school. . . . Unskilled and semi-skilled workers were often able to command skilled workers’ rates of pay. ... In our opinion, during

the period of rising prices, actual conditions of employment were such as on the whole to compensate workers for the increased cost of living.”

While it is true that in some directions the price of the necessaries of life have been reduced, it is equally certain that many commodities and services are still far higher than they should be. That, however, is not the factor mainly responsible for reducing the bonus grants. It is the fact that general depression and the position as regards employment is now reversed that is bringing down the wages and causing unemployment, especially among the unskilled and semi-

skilled classes. Efficiency now counts, as it always should count, to a man’s advantage, particularly when backed up by expeditious workmanship. The crux of the whole matter is that when prices—either for commodities or for labor—grow too tall for the public to reach there must inevitably ensue a falling off in purchases and a depression sets in. It is greater and cheaper production that can alone turn the scale, and that is where organisation and efficiency score. The judgment of the 'Court emphasises this view by stating that “inefficiency in production in one set of trades increases the cost of living to workers in all trades '. . . and every worker who does not give his best to his work is holding back a reduction in bis own cost of living to workers in all trades . . . and every worker who does not give’ his best to his work is holding back a reduction in his own cost of living and in that of other workers.” The moral of this is obvious. With regard to the question of what is a fair standard of living, which is discussed at some length in the Court’s pronouncement, there is but one way of settling it on sane and sound lines, namely, on the quantum meruit basis—payment according to the value of the services rendered, the alternative being Communism. The idea of paying according to a man’s dependents is too absurd for jvords. Not even the wisdom of King .Solomon could settle this wages question to the satisfaction of all parties—including the public, and., although the Court appears to be aware of this fact, yet there is good ground for belief that, had its judgment followed the main reasoning, it would have proved better in the long run had a larger reduction been made, so as to give a chance for the cost of living to come down to bedrock and thus make the lower wages go further than is possible with the high cost of commodities resulting from the wages being continued at the present level.