100 AUSTRALIA'S RELATIVE DISADVANTAGE IN
justify the adoption of 114 as the employment norm for those
years. After the series had been constructed, it was discovered
that the Commonwealth Bureau of Census and Statistics had
constructed an index at 5-year intervals after 1891, and the
close agreement of the results from these independent investigations
 is a matter for satisfaction. It must still be emphasized,
however, that the index is open to the rather grave criticism
shat it takes no account of the exodus to the country as the
smployment in manufacture fell away, nor of the extent of
anemployment in the primary industries, which was, indeed,
not very serious.
It is now possible to construct an index of wages that is
adjusted for (i) changes in the retail price-level, and (ii) fluctuations
 in employment. It must be noted that the fall in wages
was accompanied by a fall in prices which, contrary to the usual
experience in such circumstances, displayed very little ‘lag’.
The fall in prices is, therefore, ‘masking’ the effect of unemployment
 in the last two columns showing effective wages. The
complete table is now given.
Tare XIX
Wages Index for Australia, 1886-96

V oar.

886
1887
1888
1889
1890
i891
1892 .
893
1894 . |
1895 . .
1808

Nominal |
waaes.

1,000
321
48
931
44
384
371
346
727
387
707

Retail
Drees:

Effective
wages.

1,000 1,000
928 992
924 1,262
912 1,023
912 1,035
398 984
385 | 083
362 083
757 960
746 | 921
7577 994

Effective
wages allowing
 for unemployment.


1,000
1,007
1,282
1,013
1,018
1,016
1,015
997
976
944
D61

We are now in a position to measure quantitatively the relative
 disadvantage in which Australia was placed with regard
bo her overseas trade by the operation of the two main factors,
excessive importation of capital in the first place and the fall
in world prices, particularly for primary products, in the second.