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War Economy

Dissatisfaction in 1944

Dissatisfaction in 1944

The period from December 1942 to the end of 1944 was one of considerable stability. The Wartime Prices Index showed no significant change, and the index of nominal weekly wage rates page 318 rose by less than 2 per cent. Towards the end of 1944, however, it became increasingly clear that a rigid pegging of wage and salary rates could not be maintained indefinitely. For example, in February 1944, an exception was allowed for wages below £5 5s. per week for male and £3 per week for female workers to permit the rates to be raised to those levels. Then, in June 1944, the rules binding the decisions of the Court of Arbitration were revised, and instead of being restricted in its action to anomalies and specific minimum rates, the Court was merely required ‘to have regard to the general purpose of these regulations.’1

There were other signs, too, of increasing flexibility in the operation of the regulations. Difficulties arose out of the spreading of the wage-fixing function. Besides the Arbitration Court, the Wages Commissioners, and the Economic Stabilisation Commission, there were several other authorities having jurisdiction over particular groups of wage and salary earners. These included the Coal Mines Council, the Waterfront Control Commission and the Emergency Disputes Committees, all of which had been set up in 1940, and the Railways Tribunal which was set up in 1944. In addition, the Government had full jurisdiction over the wages and salaries of state employees other than those in the Railways, while Cabinet fixed by Order in Council the wages of agricultural workers, after agreement had been reached between workers' and employers' representatives. Parliamentary salaries were fixed by act of Parliament.2

During 1944 a number of wage and salary increases or special allowances were granted, for various reasons, by some of the wage authorities. For example, workers on dairy farms, tobacco farms and orchards were granted increased wages by Order in Council; coalminers and seamen received special allowances; and the salaries and allowances of Members of Parliament were substantially raised in December.3

However much the increases were justified in individual cases, the fact that some sections of the community appeared to be receiving special favours denied to others caused considerable unrest. A number of industrial disputes resulted, including several major ones. There were increasing threats to the flow of production and trade. One writer, N. S. Woods, suggests that the dissatisfaction went deeper. Of the period December 1942 to June 1944 he says:4

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‘During these years there was some restiveness amongst the trade unions at these restrictions on wage increases. It was a period of acute labour shortage. (At one point in 1942 approximately one man in every three had been withdrawn from industry for military service.) There was, therefore, the knowledge on the part of workers that on a free labour market they could obtain a scarcity premium on their services. There was the belief that here and there the regulations were being evaded and that some workers subject to them were obtaining substantially higher remuneration. There was a stronger belief that the stabilisation policy as a whole operated more effectively against the workers than against other sections of the community and that farming and business incomes were increasing while workers' incomes remained pegged to a 1942 level. There was also a belief (more strongly voiced later) that the Wartime Prices Index was not recording the full rise in cost of living.’

1 It was not until May 1947, however, that the Court was authorised in dealing with individual awards, as distinct from general orders, to take the ‘cost of living’ into account.

2 Recommendations were made by a Select Committee of the House.

3 Section 24, Part 5, of the Finance Act (No. 3) of 15 December 1944.

4 N. S. Woods, Industrial Conciliation and Arbitration in New Zealand, p. 154.