The Gisborne Times PUBLISHED EVERY MORNING. THURSDAY, MARCH 18, 1909. THE EFFECT OF HIGH WAGES.

Gisborne Times, Volume XXVII, Issue 2453, 18 March 1909, Page 4

The Gisborne Times PUBLISHED EVERY MORNING. THURSDAY, MARCH 18, 1909. THE EFFECT OF HIGH WAGES.

“The man who tided to lift himself by his braces was not engaged in a more hopeless task than are the amateur economists who seek to promote prosperity merely by raising wages." By this ■ effective simile does the Melbourne “Argus” commence an exceedingly thoughtful article upon the economic aspect of high wages. It does not present the whole ease-—which can scarcely be circumscribed within the compass of a newspaper article—but it does emphasise some of the essential points that are frequently overlooked by trade unionists and-politicians. Most of us arc familiar with the fact that in New Zealand high wages have not spelt increased prosperity to the wor--I;.m-3, and any consideration of the principles responsible for this result is well worth the time given to it. The “Argus” reviews the position thus:— If by giving every worker to-morrow fifty or one hundred or one thousand per cent, increase general happiness were to be attained, liow easy it would be. But it is one thing for the worker to secure a high rate of wage—high, that is, in terms of pounds, shillings, and pence; it is quite another thing for hint to gain an actual rise—in power, that is, to purchase move of the commodities and services which he and his family need or desire. Whether his wages have advanced really or nominally only, depends upon the prices of those articles; it depends, in a word, upon tlio cost of living. These facts arc. clear, and yet the neglect of them is one of the sins of unwary legislators' and thoughtless agitators, to be lamented in history and to be reckoned with still. To them it has seemed a simple matter to provide easily-worked macTiinery for the raising of wages. The extra cost can be easily parsed on to the consumer ; and most of the public do not notice that it is paying the price. Now, .if the movement stopped when all junk grievances for underpayment were redressed, the result would be ameliorative to them; there would be no sweating nor oppression; all •would be receiving their fair remuneration, measured, as wages always should be measured, in capacity to purchase commodities. The wise employer always knows that it is prudent as well as right to pay good wages. The unwise employfer Would be dealing as justly with liis men. He would find that underpayment meant, inferior work —more waste, less care, less skill; that .up to a certain stage, impossible of generalisation, a rise in wages meant a fall in the cost of labor. The ccst of labor being less, or at any rate no more, the cost of production is ( not enhanced ; the price of the finished article is not increased; the benefit of the rise iu Wages remains wholly with the workmen. But ki this land of high tariffs, arbitration courts and wages boards, and trades halls and agitators all too many, the cry is constant for higher wages. Vvith higher wages secured, the cry is soon again for more. The fact is that the cost of living increases

“7 S 3 7 with tho rise in wage. If the bakers’ assistants' force more. and' more pay from tlieir employers, sooner or later the bakers must raise the price of bread. Then must not only the bakers’ assistants’ wives, but the wives of all working men, pay the added half-penny on the quartern loaf. Butchers’ assistants in their turn secure tlieir advances in pay ; and so on in every direction the cost of production.is increased, and- with it the price of the finished article in the 'retailer’s shop. Carpenters, bricklayers, painters, and so on are paid more, and the increased cost of building houses is represented by higher rents. Each advance in price of a necessary commodity raises the cost of living and decreases the real wages of every working man. He feels his buy-ing-power contracting again; he cries for more wages in consequence. As a matter of fact, the rise in wages is not and connot be general. There must be some who receive no more pay nominally., and considerably less really, because of tho extra cost of articles through the increases in others’ pay.. We are referring not only' to clerks and professional men and all those others who receive fixed rates of pay. Itecently we published a letter from a correspondent at Allendale, apparently a miner. “The miner is as big a consumer as any other person,” lie;states, “so that when his wages remain the same as for years past, the whole of the commodities that lie uses have increased, in price. I came to this district twelve years ago, and the miner’s 7s 6d will only go about two-thirds as .far as it did when I came here.” \Vages boards and Factories Acts have cost the miner much. Some would at once suggest that the miner’s wages at Allendale should be raised. But that depends upon the return from the mine. Increase in cost cannot always be thrown upon the consumer; the price of gold is fixed, and the price of other metals is determined m tho world-mar-ket. The miner prefers his present pay to unemployment. While he cannot at the time secure more wages, his fellowworkmen in other employments deprive him of a portion of his earnings. There are and always must be some departments of industry in which such conditions obtain. Wherever the price of the finished article is governed by demand and supply outside of Australia; wherever.. that is, the extra cost cannot be simply thrown forward on to the consumer ; wherever the article is made for export, and a- rise m its cost must be prejudicial to trade, wages cannot go on indefinitely increasing. Production and employment would sooner cease. All those employed where such circumstances prevail must suffer without any recourse, while all those employed in other occupations struggle for more wages all around, and find their cost of living correspondingly increases, aid then fight for more; and so on, after the manner of a dog gyrating in the vain pursuit of its tail. Meanwhile our higher cost of production prejudices us in foreign trade in competition with other producers. Meanwhile, too, there is discontent and unsettlement and friction incalculable. And all for lack of understanding that labor cannot, by whatever compulsion, secure to itself more than its fair share of the product, and that it is as important for the working man's welfare that his cost of living should be moderate as that "his rate of wages should nominally be high.