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The Pamphlet Collection of Sir Robert Stout: Volume 81

Wages and Prices

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Wages and Prices.

Now let me point out that economists have never established any law of connection between increases or decreases in wages and the workers' cost of living. There is an immense amount of economic writing on this topic, but I will cite only one authority. An inquiry was made by the British Board of Trade into working class rents, housing and retail prices together with the standard rates of wages prevailing in towns of the United Kingdom. Their report is published in the journal of the Royal Statistical Society for March 1908 and it will be seen that the report admits after the fullest investigation "that no general law of connection has been established between variations in wages and the cost of living,"' Of course I do not deny that, if wages are increased all round, this must have an effect on prices, but it by no means follows that all prices will rise.

Now at Wanganui I quoted a report from the Registrar-General which showed, that in 12 years since the Act passed the cost of the workers' living based upon the chief articles of diet had increased 18.6 while the general increase in wages effected by the Act during the same period was 17.9. This report did not include rent or clothing and it is admitted that if these items had been included the increase in the cost of living would have been greater. Probably the increase has not been less throughout New Zealand than 20 per cent. How much of this increase is due to the Act? Now you cannot answer this question off-hand. A reliable answer can be obtained only by examining the items of expenditure which make up a worker's cost of living and ascertaining how much, if any, the Arbitration Act has affected the prices of these items. Let us take a worker on 50s. per week. Here is a statement regarding the weekly cost of living computed from actual expenditure for a fairly of father and mother with three children whose ages were 3, 5, and 7 years respectively living in a four roomed house in Christchurch. This statement was given before the Arbitration Court about 6 months ago by a worker's wife whose budget seems very carefully compiled.

s d
Groceries, including kerosene, butter and eggs 8 4
Bread 2 6
Meat 5 0
Fish 1 0
Coal and Firewood 2 8
Milk 2 3
Vegetables and fruit 4 6
Newspaper 6
Rent 11 0
Lodge and other society 2 0
Clothes and boots 10 0
£2 9 9

Probably other wives would vary these items a little, but with 50s to keep 2 adults and 3 children, there is little if anything for any luxuries and food rent and clothing must cost the family about 5s 6d of the worker's wages. The lower the wage as I have said, the greater proportion of it must be spent on the necessaries of life. Now let us look through these items, and ask how much the price of them has been increased owing to the Arbitration Act.