Image Engineering Scan Reference Chart TE263 Serial No. 
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IS THERE A REMEDY? 
.ve admitted the truth of the diagnosis set forth in these 
*apters, that they are in a position to invite the collaboration 
the Trade Union leaders on fair and reasonable terms. 
As soon as the Government admit that the problem is 
imarily a monetary one, then they can say to Labour: 
this is not an attack on real wages. We have raised the 
Jue of sterling io per cent. This means that money-wages 
.list fall io per cent. But it also means, when the adjust 
er is complete, that the cost of living will fall about io 
r cent. In this case there will have been no serious fall in 
al wages. Now there are two alternative ways of bringing 
'out the reduction of money wages. One way is to apply 
pnomic pressure and to intensify unemployment by credit 
striction, until wages are forced down. This is a hateful 
id disastrous way, because of its unequal effects on the 
ronger and on the weaker groups, and because of the eco- 
>mic and social waste whilst it is in progress. The other way 
to effect a uniform reduction of wages by agreement, on 
e understanding that this shall not mean in the long run any 
11 in average real wages below what they were in the first 
tarter of this year. The practical difficulty is that money- 
ages and the cost of living are interlocked. The cost of 
ung cannot fall until after money-wages have fallen, 
oney-wages must fall first, in order to allow the cost of 
dng to fall. Can we not agree, therefore, to have a uniform 
_ titial reduction of money-wages throughout the whole 
nge of employment, including Government and Municipal 
aployment, of (say) 5 per cent., which reduction shall not 
>ld good unless after an interval it has been compensated 
’ a fall in the cost of living? ” 
If Mr. Baldwin were to make this proposal, the Trade 
_.nion leaders would probably ask him at once what he 
tended to do about money payments other than wages— 
nts, profits, and interest. As regards rents and profits he 
n reply that these are not fixed in terms of money and 
ill therefore fall, when measured in money, step by step