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the law ceased to be directly helpful to the very unions which had done
so much to bring it about and are the only means employees possess to
make the law serve them instead of becoming a new weapon for employers.

An early decision of the Arbitration Court in 1896 had declared that
preference should be given to the unionists. "Since the employer was the
judge of the qualifications of his employees, the unionists did not gain
much by this decision," say Le Rossignol and Stewart. "In later awards
it was usually specified that preference was granted only when the union
was not a closed guild, but practically open to every person of good
character who desired to join." These later decisions brought it about
that the so-called preference of unionists became no preference at all.
"The Arbitration Court, except in a few minor cases, has refused to
grant unconditional preference and the unionists, realizing that
preference to an open union is no preference at all, now look to
Parliament for redress and demand statutory unconditional preference to

In 1905 strikes and lockouts were made statutory offenses, and a single
judge was given the power practically to force the individual worker to
labor. After ten years of trial the law had become almost
unrecognizable from the workingman's standpoint, and from this moment on
the resistance to it has grown steadily. In a decision rendered in 1906,
the Chief Justice said: "The right of a workman to make a contract is
exceedingly limited. The right of free contract is taken away from the
worker, and he has been placed in a condition of servitude or status,
and the employee must conform to that condition." Not only do judges
have this power, but they have the option of applying or not applying it
as they see fit, for the amendment of 1908 "expressly permits the court
to refuse to make an award if for any reason it considers it desirable
to do so." With a law, then, that in no way aids the unions, as
such--however beneficial it may be at times to the individual
workingman--and which leaves an arbitrary power in the hands of the
judge elected by an agricultural majority, what has been the _concrete_
result? Especially, what principles have been applied by the judges?

Of course the first principle has been that all the working people
should get what is called a "minimum" or a "living" wage, but our
authors show that merely to keep their heads above the sea of pauperism
was not at all the goal of the workers of New Zealand. No doubt they
were already getting such a wage in that relatively new and prosperous
country, yet this was all the new law did or could offer, besides
keeping existing wage scales up to the rising cost of living. Anything
more would have required, not compulsory arbitration, but a series of
revolutionary changes in the whole economic and political structure.
"Another stumbling block in the way of advance in wages is the
inefficient or marginal or no-profit employer, who, hanging on the
ragged edge of ruin, opposes the raising of wages on the ground that the
slightest concession would plunge him into bankruptcy. His protests have
their effect on the Arbitration Court, which tries to do justice to all
the parties and fears to make any change for fear of hurting somebody.
But the organized workers, caring nothing for the interests of any
particular employer, demand improved conditions of labor, though the
inefficient employer be eliminated and all production be carried on by a
few capable employers doing business on a large scale and able to pay
the highest wages."

Here is the essential flaw in compulsory arbitration in competitive
industries (its limitations under monopolies will be mentioned later).
The courts cannot apply a different standard to different employers. On
the other hand, they cannot fix a wage which any employer cannot afford
to pay or which will drive him out of business. That is to say, the
standard tends to be fixed by what the poorest employer can pay, the
employer who, from the standpoint either of capital or of labor or of
efficient industry, really deserves to be driven from business. An
exception is made only against such employers as cannot even afford to
pay a _living_ wage--these alone are eliminated.

Le Rossignol and Stewart show that in view of these considerations the
court has repeatedly stated that "profit sharing could not be taken as a
basis of awards, on the ground that it would involve the necessity of
fixing differential rates of wages, which would lead to confusion, would
be unfair to many employers, and unsatisfactory to the workers

With such a principle guiding the court, and it is probably a necessity
under commercial competition, it is no wonder that some of the
representatives of the unions have claimed that annual real wages have
actually fallen. "It is not easy," say our authors, "to show that
compulsory arbitration has greatly benefited the workers of the Colony.
Sweating has been abolished, but it is a question whether it would not
have disappeared in the years of prosperity without the help of the
Arbitration Court. Strikes have been largely prevented, but it is
possible that the workers might have gained as much or more by dealing
directly with their employers than by the mediation of the court. As to
wages, it is generally admitted that they have not increased more than
the cost of living. A careful investigation by Mr. von Dalezman, the
Registrar-General, shows that, while the average wages increased from
1895 to 1907 in the ratio of 84.8 to 104.9, the cost of food increased
in the ratio of 84.3 to 103.3. No calculation was attempted for clothing
or rent." If we take it into account that rents have risen very rapidly
and are especially complained of by the working people, we can see that
real wages, measured by their purchasing power, probably fell in the
first twelve years of compulsory arbitration, notwithstanding that it
was on the whole a period of prosperity in the Colony. For ten years, as
a consequence, the complaints of the workers against the decisions have
been growing, "not because the wages were reduced, but because they
were not increased and because other demands were not granted."

When the unions perceived that the principles for which they have been
contending were not granted, and that their material conditions were not
being improved, it was suggested that the judge of the Arbitration Court
should be elected by the people, in the hope that the unions might
control the election, "but this would be at variance with all British
traditions and could not be brought about," say our authors. No doubt
British tradition has had something to do with the matter, but the
impracticability of this remedy is much more due to the fact that the
employees confront an agricultural and middle class majority.

At first it was the employers who were displeased, but now they are
becoming converted. The employers, say Le Rossignol and Stewart, "have
come to realize that they might have lost more by strikes than they have
ever lost by arbitration; and, since the workers have been dissatisfied,
the employers are more disposed to stand by the act, or to maintain a
neutral attitude, waiting to see what the workingmen will do."

It would seem, then, that the real gain from the law has been through
the abolition of strike losses, and since these had previously been
borne by employers and employees alike, this saving has been pretty
equally divided between the two classes, neither making any relative
gain over the other. But at the bottom this is a blow to the unions, for
the purpose of every union policy is not merely to leave things where
they were before, but to increase the workers' relative share. Any
policy that brings _mutual_ gain requires no organized struggle of any
kind. It is the workers who are the plaintiffs, and the employers the
defendants. When things are left _in statu quo_ it is a moral and actual
defeat for the employees.

This is why, in the last two or three years, the whole labor movement in
New Zealand has arisen against the law. In 1908 the coal miners' union
refused to pay a fine levied against it, alleging that it had no funds.
"In this position the union was generally condemned by public opinion,
but supported by a number of unions by resolutions of sympathy and gifts
of money. Finally, the Arbitration Court decided to proceed against the
men individually for their share of the fine. The whole of the fine,
together with the costs of collection, amounting to over 147 pounds, was
recovered by means of attachment orders under the Wages Attachment Act
of 1895. According to a recent decision of the Court of Appeals, the men
could have been imprisoned, if they had refused to pay, for a maximum
term of one year, but it was not necessary to do this, and public
opinion was not in favor of imprisonment for the offense."

This and other strikes in 1907 and 1908 "caused a widespread opinion
among _employers_ and the general public that the act should be amended
chiefly for the sake of preventing strikes. The laborers, as a class,
were not enthusiastic about the matter, since the proposed amendments
were designed to compel them to obey the law rather than to bring them
any additional benefit." After having been debated for a year, a new law
was passed, and went into effect January 1, 1909. This new law, though
still compulsory, repeals some of the features of the previous
legislation which were most obnoxious to the unions. Even this act,
however, they found entirely unsatisfactory, and "during the year ending
March 31, 1909, sixteen workers' unions, and a like number of employers'
unions, had their registration cancelled for neglect, while two other
unions formally cancelled their registration." This meant practically
that these unions have withdrawn from the field of the act and expressed
their disapproval of compulsory arbitration, even in its recently
modified form. Not only have the unions been withdrawing, but, freed
from its bondage, they began at once to win their most important
strikes, indicating what its effect had been.

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Keywords: people, business, because, refused, rossignol, authors, stewart, granted, practically, public
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