TRANSACTIONS OF SECTION F. 487 
(3) Claims for flat rates of wages—reasons advanced—instances of attain- 
ment and instances of increasing diversity of rates—general tendency. 
C. Rising Wages.—How far the Boards have created, and how far merely 
regulated, a rising tide of wages. The effect of increases of wages upon 
employers, assets, and business. The relevancy of profits to wages, and the 
movement towards the adoption of higher standard for prescribing rates of wages 
rather than the mere prevention of sweating; prescribing the standard wage. 
Conjecture as to the future operation of the system in periods of falling as well 
as of rising markets. 
5. The Artificial Regulation of Wages. By G. 8S. Brssy. 
The original conception of the Australasian experiments in industrial regula- 
tion was the prevention of sweating by the legal enactment of minimum wages. 
To this has been added the statutory prohibition of strikes and lock-outs, and 
the consequent establishment of tribunals with power to substitute elaborate 
codes of working conditions, capable of legal enforcement, for voluntary con- 
tracts of employment. There is now suflicient data available to justify a critical 
analysis of this experiment. 
Industrial arbitration has been successful in removing from Australia the 
reproach of sweated industries, and in raising the standard of unskilled workers. 
It has proved that permanent conciliatory machinery is of value in bringing 
disputing parties together and effecting earlier settlement of serious strikes. 
Constant open inquiry into the wages and working conditions of employees 
has been of great educational value and has led to more sympathetic considera- 
tion by the general public of the wage-earners’ agitation for a higher standard 
of comfort, and to a wider public interest in economic problems. 
It has failed to give the promised immunity from strikes and lock-outs, but 
has reduced the duration and intensity of serious industrial disturbances. By 
encouraging and facilitating the organisation of employees in many occupations 
which were not previously unionised it has increased the number of minor strikes. 
It has contributed to a decline in the standard of efficiency in two ways: 
first, by largely increasing the wages payable to unapprenticed juniors, thereby 
reducing the incentive to follow fixed trades; secondly, by—in exercise of its 
arbitral functions in settlement or prevention of strikes—prescribing high 
minima, which become ‘standards,’ thereby removing the competitive incentive 
to inefficient workmen to improve their earning capacity. This decline in effli- 
ciency is accompanied by a reduction of output. In many occupations, notwith- 
standing the increase of wages, the average output per employee has substan- 
tially decreased. But this cannot be regarded as a result of artificial regulation 
of wages. It is clearly traceable to shortage of labour—the continued increase 
in demand for workmen, without a corresponding increase in supply. 
Australia’s greatest period of material development and progress has syn- 
chronised with its industrial experiments. Employers as a class have up to the 
present generally been able to adjust increased labour cost without reducing 
profits. But we are approaching the breaking-point. The elaborate codes which 
the Arbitration Courts substitute for ordinary contracts of employment, and the 
persistent increases in minimum wages, will shortly begin to encroach on profits. 
When this happens, and shrinkage of enterprise follows, a general reconsidera- 
tion of the whole scheme of industrial regulation is inevitable. 
Before long I believe we will sift the good results from the bad, and out of 
the whole system will retain the living wage, the maximum hours of employment, 
and a revised scheme of apprenticeship. We will draw a line below which there 
will be no competition for employment, but above which the ordinary economic 
forces will again come into play. 
The elaborate machinery now existing will give way to a Board of Trade 
which will each two or three years prescribe a general living wage. The attempts 
to penalise strikes and lock-outs will give way to simple conciliation machinery, 
under which every threatened industrial upheaval will be openly inquired into 
and the parties encouraged and assisted to voluntarily settle their differences. 
The worker will before long realise that we have reached the limit of artificial 
