Wairarapa Times-Age MONDAY, JUNE 5, 1939. LIVING COSTS AND PRICES.

Wairarapa Times-Age, 5 June 1939, Page 4

Wairarapa Times-Age MONDAY, JUNE 5, 1939. LIVING COSTS AND PRICES.

TAKING a view that was cheerful in the mam of the recent and current trend of wages and prices in the Dominion Minister of Industries and Commerce (Mr Sullivan) de e lal ®“’ in Christchurch the other evening, that all the claptrap tl all the increases in wages and salaries given by this Governmei . have been cancelled out by increases m the cost of livm B is misleading and false propaganda.” Apart from the fact tl a a good many people may be inclined to question the stateme about increases in wages and salaries being given ij - Government,” the contention thus vigorously knoes.ee c by the Minister admittedly would be claptrap. Anyone wlic has asserted that ‘‘all increases in wages and salaries have been cancelled out by increases in the cost of living should now feel correspondingly humbled:

There are other aspects of the broad question of wage and price increases, however, about which it is not so easy to leei happy and comfortable. Mr Sullivan quoted official statistics showing an increase in cost of living, since Febiuaiy, 15.5 per cent and an increase in money wages, since 1.130, ol 27.7 per cent. Therefore, he says, real wages have increased by 12.2 per cent. Though these figures are a little sketchy in nature and treatment, some such broad average as the Minister draws no doubt is justified, and it is a material additional point that the number of people employed in factories lias increased very’ substantially.

It is of considerable importance, however, that benefits conferred in this way have been conferred very unequally. Some wage and salary earners are considerably better off than they were three or four years ago, but others are no better on., and many are worse off, because the increased cost oi living affects everyone, but increases in wages and salaries sumcien even to offset the increased cost of living are by no means universal. To a great extent, the benefits of the changed economic order are confined to award workers. A laige pioportion of those who live and work outside that charmed cncle find themselves left to meet an increased cost of living out ot wages or salaries that either have not increased, or have not increased in the same ratio as that cost. It has been pointed out, too, notably by the Associated Chambers of Commerce m a statement issued some time ago, that a large part of. the percentage increase in. money wages is accounted foi bj substantial increases in the wages of agricultural woikeis, who were paid formerly at very low rates.

Anyone who asserted that on an average the whole benefit of increased monev wages has been cancelled out by increases in the cost of living obviously would be flying in the face of statistical evidence. On the other hand, to suggest that all wage arid salary earners are on t.he whole better off than they were, would be something worse than what Mr Sullivan has called misleading and false propaganda. Individual wage and salary earners may readily measure up their own position in relation to the averages Mr Sullivan has cited. People who are getting the full benefit should find their monetary earnings increased by nearly £2B in every £lOO as compared with the amount, of these earnings at, say, the beginning of 1936. The average increase in real earnings stated by the Minister means t hat people should be about one-eighth better off than they were about three years ago. in spite of the increase during that period in the cost of living. Most people who undertake a little calculation probably will find that they are much less happily placed.

Still another aspect of the position that needs attention relates to the general effect of a continuing increase in costs and prices. The effects of this increase fall, of course, most heavily on those wlio obtain no accompanying increase in wage, salary or other income. There are many people not on wage or salary who have to get along on small incomes—amongst them the whole body of pensioners and of public and private siiperannuitants. Of people in these categories, those in receipt of old age and other benefits from the State have been granted increased payments. Others, including a numerous body of Public Service siiperannuitants and many who are dependent on one form or another of private superannuation or other provision for old age, have received no such benefit and on them the increased cost of living falls as a direct and unmodified penalty.

This, as Mr Sullivan said in another connection, is not the whole story. The broad effect of an increased cost of living is to cut down the purchasing power of all incomes in some degree (unless, of course, the amount of incomes is more than correspondingly increased) and at the same time increases in living and other costs definitely choke off demand and therefore check production. In a country in -which some money incomes only have been increased and others have not been increased or have been reduced, .it stands to reason that rising costs and prices must work out in a lessened demand and must keep production at a lower level than it otherwise would have attained. Mr Sullivan may be able to comfort his soul with the statistics he quoted, but a great majority of the people of this country would have been better off had the Government directed its policy to promoting an increase ; n real wages, as distinct from, money wages.