Source: Council Of Trade Unions (CTU) – Press Release/Statement:
Headline: Transforming New Zealand’s low wage economy
This commentary is an edited version of a recent speech, “Transforming New Zealand’s low wage economy”. Whether we look at international comparisons, or look at whether employees are getting a fair share of the income that their work generates, New Zealand is a low wage economy. New Zealand wages adjusted for the cost of living have fallen from middle of the 23 countries in the OECD in 1990 to 5th lowest. Part of the reason is the poor productivity performance of firms. But wages have failed to keep up with even that weak productivity growth. If real wages in the market economy had risen at the same rate as labour productivity since 1989, the average hourly wage would have been over a quarter or almost $8 higher in March last year. Similarly, we can look at the share of the nation’s total income going to wages: the labour share of income. If it was the same as in 1981, average annual wages would have been $11,800 higher in the year ending March 2018. We have among the lowest labour income shares in the OECD – 7th lowest in 2017. It is sobering that two of our largest export industries, agriculture and tourism, have among the lowest wages.
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