The Waikato Times THURSDAY, MAY 14, 1935. NEW LABOUR LAWS.

Waikato Times, Volume 119, Issue 19885, 14 May 1936, Page 6

The Waikato Times THURSDAY, MAY 14, 1935. NEW LABOUR LAWS.

Those engaged in all forms of business in the Dominion have a. few weeks in which to complete the most drastic re-orgamsatlou yet imposed by legislation. Hours are to be reduced, wages are to he raised, limitations are to be imposed in many directions and the outcome must be awaited. The idea underlying this legislation seems to he that it’ wages are increased there will be added purchasing power and that this will stimulate domestic trade. It is an assumption, and it will be put to the exacting test of facts without much delay. There may be an increase in money wages, but that may not mean an increase in real wages. If the added income of the employees will not buy more, owing to movements in prices, than there will be no real gain. There is said to he a psychological beDEflt to he obtained by giving the worker a larger wage, and that may be 1:01‘TCCI, but if the actual purchasing power of the larger income is no greater then escape from the economic maze cannot be found along that path. The business firms must lay their plans to meet the new conditions ,and some results will be apparent at once. But there will he one change that will be made quietly and inevitably, and that is the establishment of a new price basis for commodities. There may, and probably will, be a. lag in this matter, but adjustment cannot be avoided. The proposals of the Government must increase costs, and if the cost of living advances relatively to the increase in wages then there will be a demand for further increases to the wages bill, followed by higher casts and the outcome will be problematical. The secondary industries, of course, will call upon the Government for higher tariff walls because the additional costs of manufacture will make it more difficult for them to compete in the local markets. The promised reduction of the exchange rates will further assist the import trade and local industry will have very limited scope for expansion. But there is one group of industries that cannot pass on additional costs, and that is the primary group. Has the Government carefully considered the ultimate effect of this legislation on the basic industries of the Dominion? It proposes to pay one section a guaranteed price, but what of all the other branches of primary production“? It appears to be putting the Cart before the horse. The economic stability of the country depends upon its primary industries, and if the gap between costs and returns is widened then the basis of national welfare will be shaken. It is evident that the Labour members representing country constituencies will have to combine in order to protect the interests of the men on the land. The trade union section seems to be having its own way in the framing of legislation, and, important as the secondary industries may be, they are secondary. The test to Which the latest measures should he put is their ultimate eifect on the primary industries. They form the basis, and if conditions are created in which they cannot possibly operate economically then recovery will be a matter of deferred hope.