Bill English knows that our low wage economy is a ticking time-bomb for the government. He must be starting to get worried (great piece by Jenée Tibshraeny on interest.co.nz):
Prime Minister Bill English admits wage growth isn’t ‘hot’; Says businesses need to increase pay significantly before complaining about skills shortages
Prime Minster Bill English says businesses need to be willing to put cash on the table to attract the right talent, before complaining about skills shortages.
Hardly a radical idea. But the fact that English is prepared to come out and say it shows how worried he is that low wages are dragging the tide out from under National.
“The general wage data tells us wage growth is better than inflation, but [I] certainly wouldn’t describe it as ‘hot’.”
Annual wage inflation held steady at 1.6% in the March quarter, with growth in private sector wages falling to their lowest point since the June 2010 quarter.
While the consumer price index rose 2.2% year-on-year in the March quarter, wage growth has been higher than inflation in previous quarters.
Given that the official inflation measure significantly under-counts the huge and rapidly escalating cost of renting / housing that is hardly reassuring.
Asked about the extent to which an uptick in migration in particular has contributed to subdued wage growth, English said: “We see the skilled migrants filling the gaps. That’s what you pick up from the businesses who are employing them; that they’re employing someone from offshore because they can’t get locals to fill the gaps.”
Mmmm. In theory perhaps, but in practice “The Treasury warned that record levels of immigration could push New Zealanders out of low-skilled jobs, depress wages and increase housing pressures”. See also: Mike Yardley: New Zealand’s immigration settings suppressing pay rates, Bernard Hickey: Too many visas, not enough pay.
All this said, English expects wage growth to rise over time.
Mmmm. Over time. He said the same thing in 2016. He said the same thing in 2014. The same thing in 2012. The same thing in 2011 (when he also tried to convince us that low wages were actually an advantage for NZ). I could go on but you get the picture. Bill English promises you jam tomorrow. Always has, always will.
National represents those who are perfectly happy with a low wage economy. If you want to change that you need to change the government.
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