H.—35.

small changes, adjustments, modifications, and tests rather than to big revolutionary changes. But the rigid and detailed regulations of the Court hinder these slight changes being made in the industries it controls ; hence much progress is cut off at the source, and the development of improved industrial organizations, owing to the stereotyping of methods, is made unnecessarily difficult. 3. The Revision of the Machineby. The existing official machinery of compulsory arbitration was devised mainly with a view to securing industrial peace. Over three-fourths of the field of employment it has neither been needed nor used. Where it is most needed to secure peace it fails to operate when needed. Where it does operate, it maintains an atmosphere of opposition and conflict; it standardizes wages and therefore tends to standardize efficiency at a mediocre level, and it tends to stereotype the organization of industry by over-regulation and to hinder improvement, in methods of production. Under these conditions, imposed on industry from outside, the progressive development of efficiency and increasing production are seriously retarded or altogether prevented. Wages, which must come out of production, cannot be increased. Because wages and conditions remain practically stagnant and improvement in the workers' standards is not attained, industrial unrest is promoted and a fertile soil is provided in which to propagate imported and destructive doctrines, alien to New Zealand conditions, which stimulate further unrest. Compulsory arbitration, unable to escape the effects it has been instrumental in creating, probably does more now to prevent them than to create better industrial relations. But better industrial relations must at all costs be fostered. To secure this end the machinery stands in need of revision, and whatever revision is made should be based soundly on the facts of industry. It must be recognized that better relations are bound up with closer mutual understanding between employers and employed, and with rising standards of life and improving conditions of employment. Of these the standard of living provided is the most important, for it is the main object of industrial organization. It depends almost entirely on the standard of output. Here the interests of employers and employed are identical. Both stand to gain from higher production; both stand to lose from lower production. The- gain possible for the wage-earners from a better distribution of present production is negligible compared with what can be gained from greater output. Production, therefore, is of paramount importance. Consequently it should be freed from all unnecessary hampering restrictions ; it should be encouraged by all reasonable incentives. In particular, it would be wise to avoid flat rates of wages wherever possible, and to adopt methods of payment according to results. Such a plan recognizes the variations in human capacity and de\elops efficiency. Probably even the most inefficient have nothing to lose by it; the great majority of wageearners and employers botli have everything to gain. In this connection special attention should be given to the question of demarcation of functions between various types of workers. Regulations which make unnecessary work or cause delays and inconveniences, and the rigid demarcation of labour which requires several men to do a trivial job, both fail to consider the effect on cost, which means that, though work is created, the market for the output and for labour as well is narrowed. Such regulations tend to accumulate, but must at times be drastically revised with a view to the lowering of labour costs in order that the market for both labour and goods may be widened. Because of the great need for effective production in order that standards of consumption may be improved, means should be sought which will promote the development of better co-operation and understanding between employers and employees. To this end it appears that voluntary conciliation might be much preferable in that part of industry now subject to compulsory arbitration. The latter system has done much to keep the parties apart; the former might bring them together. It would also permit the trying-out of decentralized machinery for.solving the problem of industrial unrest, which the. present centralized machinery has left unsolved. It would permit, too, a variety and flexibility of arrangements between the parties in keeping with the wide variations in conditions and methods of organization and operation in various firms and industries, which the present standardization effectively prevents. Present methods seek to relieve industry of the responsibility for solving what is specifically an industrial issue—the problem of industrial relations. It appears that much might be gained if the responsibility for securing industrial peace were imposed upon the active participants in industry who stand to gain most directly from peace, and if they were left free from any compulsion to develop their own voluntary organizations for its achievement. This does not necessarily mean that the Arbitration Court should be abolished. But our whole system of regulation of industrial relations has drifted far from the original intentions of its authors, and has developed in the process featured which retard rather than aid industry in its struggle against present-day difficulties. Revision is needed, but the details of revision cannot adequately be dictated from any single point of view. All aspects need to be fully considered —the immediate interests of employers and employed, and means of developing better relations between them, the interests of groups outside the scope of the system and of the general public; and, what is most important, the broader statesman's view of the effect of the machinery provided on the general welfare and progress of the Dominion. These are matters which call for full and searching inquiry. Unemployment. (Canterbury Chamber of Commerce Bulletin No. 31.) The facts necessary for a complete survey of unemployment are never easy to collect. In New Zealand, owing to the diversity, the relatively small size, and the seasonal nature of many of the industries, and to the consequent mobility of much of the labour-supply, the collection of adequate data is particularly difficult. For many years the official records have used information collected at five-yearly periods by means of the census ; this is supplemented by the records of the Labour Department's employment bureaux ; and since 1925 additional estimates have been collected from trade-unions. Some of the information so collected is used in the tables which follow, but it is in every case indicative rather than complete. The Government labour bureaux are probably used more fully by the unemployed in times of severe than of slight unemployment, hence their records may exaggerate the variations in unemployment. The trade-union returns of unemployment cover only about half of the total trade-unionists. Over the whole range of public-service, professional, commercial, and financial occupations, which lie for the most part outside the field of trade-unionism, there is normally but little unemployment; hence the trade-union sample, being confined to occupations where unemployment is common and variable, cannot be regarded as a measure of the percentage of unemployed to total wage-earners. These limitations must be borne in mind in interpreting the tables below. The first table gives some indication of recent changes in the extent of unemployment.

Government Bureaux: Applications on Books at End of Period.

The table shows a marked seasonal variation in each year. Even in a good year, such as 1925, there are some unemployed in the summer-time. More than half of these are usually unskilled workers who are probably drifting from one casual job to another. In the winter the numbers increase for almost all the occupational groups. In 1926 unemployment reached a peak with 2,247 applicants unplaced in June ; the number fell to 1,226 in December, and rose again to 2,282 in June, 1927. The table thus shows both a seasonal swing and a recent big increase in unemployment,

162

Mid-week of 1925. 1926. | 1927. February.. .. .. 297 466 1,501 April .. .. .. 342 571 1,768 June .. .. .. 493 2,247 2,282 August .. .. .. 451 1,815 October .. .. .. 429 1,604 December .. .. 344 1,226