38
Our Industrial Problems.
tion, - Wages. boards do not fulfil the re-
juirement. The . Australian method of
handing the task to Judges obviously dees
not. A fundamental qualification is a deep
knowledge of econon:ie science and.a wide
knowledge of human nature.
Were it possible -to form a council of
such ‘men, industrial disputes would not
necessarily cease. But at least
there would exist an authority whose con-
zlusions would be acceptable to all: reas
sonable persons and would be an invalu-
able guide to public opinion. With such
yuidance, industrial disputes could be ex-
pected to decrease greatly and the disput-
ints who acted conirary to its findings
would probably usually meet with defeat.
An important function of such a body
would be to
Educate Public Opinion
n ecobnomie and industrial affairs. A prime
ary need would be for it to define the eco-
nomic principles on which it based its
aonclusions and those principles would
need to conform to the views of the ma-
jority of the people. This implies that
she principles would not be unalterable but
would change with the steady evolution
of public opinion and sentiment that is
always in progress. The fact that its find-
ings and manifestoes would influence that
svolution, does not alter. indeed aecentu-
ntes this feature.
ounals constituted on sonrewhat similar
ines -to the existing ones may function
reasonably well—assuming the more ideal
CL suggested above are not obfaine
able. =. :
Fallacy of “Fixed” Wages. =.
Ihe principle of adhering to a fixed “real”
vage however, is illogical in a society wheres
n productivity ‘per bead is changing or
ig desired to rexpand. ln production two
main factors -exist—Capital and Labour,
We need not here consider management,
1s it 13 no cause of present industrial dige
outes. For any given period the return
due- to eapital is the average interest that
it can earn.” It can be gauged, as to total
or average, by the rate at which money
s lent. If productivity per head expands,
the total capital of a conununity expands
concurrently. ‘The cause of most of the
ncrease in produetivity is generally the
mproved appliances that increased capital
orovides. If wages remain stationary, ail
inercase of production would be absorbed
by Capital. This condition is not. ace
ceptable to Labour. Contrariwise, if pro.
duction decreases,” Capital would object
t0 wages remaining stationary. If Labour
was previously receiving its full propor.
tion: of: production, the mdintenance of the
previous wage level would cause many
concerns to cease producing and the great
mount of unemployment created would
orce an adiustment.
At present the principle accepted by
Austrahan Arbitration Courts is briefly
-hat the minimum wage must provide for
a reasonable standard of living and that
variations from the minimum depend on
the skill, arduousness, unhealthiness, risk
of accidents, lack of continuity, ete., ins
volved in the eccupations concerned. In
any one occupation these factors do not
alter greatly and the Arbitration Courts
wre occupied mainly in adjusting “nomi-
nal” wages according to changes in the
ost of living—i.e., to making adjustments
‘hat will make “real” wages conform to
2» fixed basis and more or less constant.
An [Inefficient Machine.
Hf increase of productivity per head ba
lesired, adherence to fixed wages tends
to prevent that consummation, inasmuch
as no Incentive ds given to Labour to pro-
duce its maximum, The result to be expects
ad is that Labour, being unable to reap
its proportion of the increase, will try
to compensate itself by performing less
work, This is neither so saristactory to
§ wor to the eommunity-~including Capis
The Alternative.
A system therefore is wanted that not
suly will proportion satisfactorily the pro-
luction at a certain date between Capital
ind Labour, but will provide for proper
proportioning as productivity varies. There
appear only three ways to deal with this
*equirement;—
1) To leave it to the laws of supply
and. demand fo make the adjustment;
tbe need of labour to carn wages
and the desire of capital to avail ite
self of all the opportunities of making
profits being the controlling face
tors.
12) To leave it to be fought out between
organised Labour and Capital. This
process is affected by the conditions in
(1) but involves also other factors.
i8) To create an anthority to regulate
wages.
If {1) or (2) are to be adopted, there
s nothing further to be said. Natural {or
‘jungle”} law will decide the issue. All
reasonable people will approve (3), It has
een legislatively adopted by Australia,
ut is functioning so inefficiently that
This function does not appear to be ef
jeiently or economically served by the ex-
isting machinery. Lengthy hearings where~
in similar evidence as to living costs is
repeatedly stated, often erroneously, are
waste of time and energy. That work is
far more efficiently performed by the com~
pilation of statistics. [i wages are to be
sased ofr certain. fixed figures with varia-
tions for changes in living costs, the logi-
tal method is for those changes to A
automatically effected at suitable periods
on accepted statistics and to be applied
aniversally. Both employers and employees
would know what they had to expect.
Much expense would be saved. Delays in
adjustments, or in the consideration of
demanded adjustments, would be avoided
andthe canse of mueh friction and indus~
trial loss thereby removed. As regards
modifications of wages to meet changes in
ronditions other than lvine costs. trie
Every
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