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tories and every year but one an increase in the number of factory employees, until in 1911 the number of factories registered was 5,638 and the number of employees 88,694.1
There have been, indeed, in Victoria since 1897, only a few unfavorable developments in the manufacturing industries which could in any way be held to have been the consequence of the labor legislation. Victoria, like other Australian states, has shared in the industrial prosperity which has so generally accompanied the upward movement in prices all over the world, and while it would be a mistake to hold the wages boards largely responsible for this prosperity, it is at least true that they have not caused depression.
The prediction that industries would be driven out of the state by the wages board determinations seems to have been fulfilled in only a few instances. I have already referred to the case of the brush factory which was closed and the business transferred to Tasmania, but this seems to have been due to the fears or stubbornness of the proprietor for he never gave the new system a trial in his establishment. The determination
was welcomed by other employers in this industry." Dr. Clark refers in his Report to a cigar manufacturer who moved to Adelaide to escape wage regulation. In the case of the fell-mongering industry, which employers declared had been well-nigh ruined by the first determination in 1900, the Royal Commission of 190203 was unable to find that it had been seriously affected except by the employers' action in closing their yards.*
1 Report of Chief Inspector of Factories for 1913, p. 5. Figures could be given for later years showing a further increase, but they would not afford a fair comparison since in 1912 an Order in Council was passed, extending to the whole state the provisions of the Factories Act which brought under registration factories not hitherto included.
2 Report of Chief Inspector for 1902, p. 17.
• Labor Conditions in Australia, Bull. No. 56, U. S. Bureau of Labor, p. 77. Report of Royal Commission, pp. liv-lvi.
At the time the Commission made its report it was able to state that,
One of these has resumed work with 50 hands, being about 30 less than before, and a second has started again with about 60 hands while the former manager of the last-mentioned firm has commenced business for himself with the same number. On the other hand, it is stated that one of the old firms has given up the business altogether.1
Three coöperative societies of workmen had begun work after the closing down of the plants. They paid themselves the minimum wage fixed by the board and worked only 48 hours per week. They bought skins in the open market and made no reduction in the price of the finished article, and seemed to be doing a good business. As both the number of establishments and the number of employees have continued to increase since 1901 in spite of a large increase of wages3 it is clear that the fears of the employers have not been realized.
The most notable example of the dislocation of industry following a wages board determination occurred in the boot trade, where the Royal Commission reported that after the first determination had been made,
The wage system combined with the use of labour-saving machinery and keener competition resulted in the closing of a number of small factories (47 in all, it is said). This cannot be regarded as wholly an evil, however, as many of them were started without sufficient capital, under the high protection given to boot factories by the State Tariff, and being provided with poor equipment, they were too often noted for producing inferior goods and paying low wages.
Among the complaints made against the wages boards in Victoria during the early years of their exist
ence, one of the most frequent was that the export trade of the colony had decreased as a result of the increase in prices made necessary by the artificial rise in wages. It was this complaint which led to the reduction already mentioned in the minimum rates at first fixed by the boards in 1897. In spite of the reduction in rates there was a considerable falling off in the exports of both boots and clothing during 1898 and 1899, and Mr. Ord admitted that " after making every allowance it is probable that Victorian manufacturers would find it difficult to compete in other markets with other manufacturers that were not subject to any minimum wage." 1 In both industries, however, the decline in exports was short lived, and the Royal Commission of 1902-03 reported for the boot trade that "any ground lost by manufacturers in the export trade had been fully recovered" and for the clothing trade that "the fears of manufacturers have not been realized but on the contrary the command of inter-state markets has resulted in a considerable expansion of exports of apparel from Melbourne."
In the furniture trade there was also some falling off in exports following the first determination, but this was largely if not entirely due to the fact that nearly onehalf the exports prior to the determination had been to West Australia, where the rapid increase in population caused by the development of the gold-fields led to an active but short-lived demand. Other countries shipping to the same market showed a similar decline.'
Not all the comments on the effects of the wages boards system on industry even during the early years are of an unfavorable sort. Mr. Aves refers to the 1 Report of Chief Inspector for 1898, p. 9.
2 Report of the Royal Commission, p. xxxvii.
opinion quite widely held that the determinations had tended to certainty and regularity of employment for at least all but the old and infirm workers, and he says that in the trades in which underpayment was most likely, especially women's trades, "the lesson appears to be being learned that low wages are not necessarily the cheapest." 1 In both the clothing and the woodworking some employers have admitted that they could produce at less cost with the higher paid than with the lower paid labor."
One possible effect of the minimum wage which does not seem generally to have been noted was mentioned to me by Dr. Purdy, the Chief Inspector of Factories in Tasmania. He says that shortly after the first determinations had become effective in that state, the merchants of Hobart reported that their sales had increased as a result of the increased purchasing power of the laborers.
Where the wages board system has tended to weaken the employer's position, it is generally because an apparent burden has been imposed on his business which has not been imposed on his competitors. Probably the most noticeable example of this is where manufacturers under the wages board system are compelled to meet the competition of manufacturers outside the state not under such a regulation. Many examples of this competition might be cited, such as that in the plate glass industry, where manufacturers declared they could not meet the competition of English manufacturers and must close their factories. It seems likely that in this instance the imposition of a tariff on the raw material was as much responsible for their embarrass
1 Aves, Report, p. 47.
2 Schachner, pp. 236–237.
Report of the Chief Inspector of Factories in Victoria for 1901, pp. 32-33; 1904,
ment as was the increase in wages. In the wicker industry the unrestricted competition of Sydney firms which were not at the time under wages boards was in 1906 seriously crippling the Melbourne manufacturers, who were compelled to pay 4s. for work which their Sydney competitors secured for 1s. 6d. In the clothing industry it was shown that manufacturers from Sydney and Melbourne were sending goods to Adelaide to be made up there and then returned to the owners, in the years before South Australia had adopted the wages board plan.2 Generally speaking, however, such competition was not very serious for two reasons. the first place, it was not long before the other Australian states had adopted legislation which placed the same restrictions on employers within their jurisdictions as had been placed on those in Victoria; and in the second place, the fact of outside competition is always brought to the attention of wages boards and is frequently responsible for the small increases allowed.
Another form of competition which the establishments subject to wages board determinations have at times had to meet is the competition of country districts to which the determinations did not extend. Thus the Victorian manufacturers in the saddlery trade in 1901 complained when the effect of the board's ruling was to raise the wages in the trade that the determination only extended to cities and towns and the shops in boroughs or shires were given an unfair advantage.' The same complaint was made some years later by the furriers subject to a determination.^ This form of competition, in Victoria at least, need no longer exist
1 Report of Chief Inspector for 1906, p. 43.
* Report of Chief Inspector in South Australia for 1899.
Report of Chief Inspector for 1901, p. 35.
Ibid., 1907, p. 33.