31 MAY 1930, Page 20

[To the Editor of the SPECTATOR.] SIR,—How is it, and

why is it, that in discussing our huge and alarmingly increasing unemployment problem, almost everybody shuts his eyes to the chief cause of unemployment, not only in England, but in other countries ? The chief cause, as everyone can see who opens his eyes, is high costs, and the' undeniable chief cause of high costs, in our case at least, is high wage costs. Yet nobody cares to say so. One third of our people cannot find employment without our export trades : and we cannot maintain our export trades, because our costs and prices are too high.

Mr. Baldwin says our wages in England are twice as high as M France and Italy. Mr. J. H. Thomas says real wages in Germany are only seventy-five per cent. of ours, and in France are only fifty-five per cent., and in Italy only forty- five per cent. of ours. Mr. Lloyd George also tells us our real wages (for those who are employed) are much higher than in other countries. Yet they shut their eyes to the 'fact that that is why we cannot sell our goods and find employment. Is it for fear of losing votes that they dare not say so ?

Mr. Henry Ford and some of our Labour leaders tell us high wages increase our purchasing power ; which for our people as a whole is not true, and if it were true would not help us to maintain our exports. And we must not only maintain, but largely increase them, if our workers are to have work and wages. Until we do we cannot even partially solve the unemployment problem.

Salesmanship, reorganizing, amalgamations, rationalizing, Safeguarding, Free Trade, Empire Free Trade, increased credits, factory and machinery improvements, research, lavish. expenditure on roads and public works may all be more or less good, but they have all, during nine years of talking about them, disastrously failed to sell our goods and absorb our unemployed, and they will fail until we reduce our costs.

Wherever costs are high there is unemployment. In America, aided by wild speculation, wages and other costs have been raised until the high costs could no longer be faced and there has been a crash. In Australia high wages have caused terrible unemployment, until, notwithstanding the natural wealth of their country, immigration has been checked, and people, for want of work, are leaving the country. Even Germany has, by too rapidly increasing wages since the War, checked her improving industries and exports. France. and Italy, with lower costs than Germany, are prosperous and, we are told, have no serious unemployment problem.—I am, Sir, &c., Newcastle-on-Tyne. G. B. HUNTER, K.B.E., Hon.D.Sc.