06 August 2004

Wages Fail to Reflect Acute Skill, Labour Shortages

“The yawning gap between the demand for labour and wage rises is further evidence that strengthening collective bargaining will benefit everybody,” Council of Trade Unions president Ross Wilson said today. New figures showed salaries and wages were not rising as high as they should in response to persistent labour shortages and a high demand for skilled labour.

The Labour Cost Index showed that wages increased by only 2.3 percent for the June 2004 year.

“A high demand for housing has meant a 16 percent increase in house prices, but a high demand for labour pushes wages up just two percent,” Ross Wilson said. “This shows that the labour market is not operating as it should.”

Strengthening the Employment Relations Act had the potential to ensure a more effective market response to labour shortages, he said.

Calls to increase immigration would not solve the problem.

“If we match Australian wages and conditions for skilled workers, thousands of Kiwis driven across the Tasman by low wage strategies will come flooding home.

“The CTU supports appropriate immigration but not at the expense of providing work for New Zealanders forced to work abroad or who are still unemployed,” he said.

Lifting and targeting investment in apprenticeships and industry training is also a key factor in tackling skill shortages, Ross Wilson said.

ENDS

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