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War Economy

The Second General Wage Order, April 1942

The Second General Wage Order, April 1942

However, between the September and December quarters of 1941, prices rose a further 1 ½ per cent while nominal wages were unchanged. The workers were now worse off than they had been before the 1940 order, and the Court granted a further 5 per cent increase. This order took effect from April 1942, with the then novel provision that it was not to apply to any portion of the workers' remuneration above the limits of £5 a week for adult males, £2 10s. a week for females, and £1 10s. a week for workers under 21 and for apprentices.1

The Court, in its pronouncement, noted that there had been a definite acceleration in retail prices since the increase granted in 1940, that the entry of Japan into the war in December 1941 had affected the trade and industry of New Zealand ‘to an almost unbelievably small extent', and that in England the actual threat of invasion and the cutting of overseas communications did not appear to have prevented wage increases, but had had rather the opposite effect.

These Arbitration Court increases tended to be passed on to salary and wage earners generally, in spite of the fact that many were not subject to the Court's jurisdiction.

Needless to say, the general orders did nothing to stop further price and wage rises. In the year ending in the December quarter of 1942, prices rose a further 4 per cent and wages rose by over 2 per cent more than was granted by the Court's order.

In the 3 1/4 years between the outbreak of war and the introduction of a comprehensive stabilisation plan in December 1942, prices and award wages had both risen by 14 per cent.

Chart 58 shows price and wage changes in the first 3 1/4 years of war.

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chart of economic statistics

Chart 58

1 The power to so restrict the application of an order had been given by an amendment to the Rates of Wages Emergency Regulations on 18 February 1942.