Salient. An Organ of Student Opinion at Victoria College, Wellington, N.Z. Vol. 11., No. 9. 28th July 1948
The Prices Crisis
The Prices Crisis
One does not need to be an economist to know that the cost of living has risen in the last ten years out of all proportion to increases in wages. The increase is felt as severely by students as it is by wage-earners, except for those of us who are fortunate enough to belong to the income group in which cars are given for birthday presents—and the motions passed at the AGM and more particularly the discussions on them show that the more active students are concerned about the issue, and are not altogether prepared to leave it in the hands of a more or less benevolent government.
The prices crisis is a two-headed dragon. At first it seems that wages and prices follow each other upwards in a lurching spiral; many people fail to see beyond this spiral, completely ignoring the question of rising profits. An increase in the cost of living can be stopped in several ways, of which the most frequent, and the least desirable, is a slump. A more modern answer to the problem is stabilization, which we have enjoyed for the last six years. It is hard to say whether its failure is due to its loopholes, or to its intrinsic weaknesses.
If there is to be any relief from the present soaring of prices, drastic action is required. Stabilization must be tightened up immediately, to make it a means of protecting consumers, instead of a means of safeguarding profits.
An over-all increase in wages, which is badly needed, would only then be a means of increasing the standard of living of wage and salary earners. Proportionate increases in bursaries and Training College students' salaries must be made at the same time.
These increases will mean that company profits must be reduced. But this does not worry us at all, for profits are now at record levels. If any increase in taxation is necessary, the income groups below £300 p.a. must be exempted: the present position where a man on the basic wage is paying income tax is quite anomalous.
If these measures mean that some socially useful industries can no longer work at a profit, our Labour Government can show us a small instalment of its plan for ultimate socialism, by nationalizing them.