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Solution to wage-gap in hands of business

Written By: - Date published: 10:48 am, February 8th, 2008 - 61 comments
Categories: economy, labour, workers' rights - Tags: , ,

Larger (but still small) numbers of kiwis are leaving for Australia and higher incomes are part of the attraction.  At the same time unemployment here is at a record low, which is good but employers are complaining about a lack of workers.  To keep skilled workers in New Zealand higher wages are needed.

The government can continue raising the minimum wage, further strengthen work rights, invest in productivity, pay its own employees more, and lower income tax (all but one of which National opposes, incidentally) but these measures can only make a marginal or long-term difference. The real power to raise wages lies with business. 

Employers are the ones who set wages for most workers and if they are having trouble finding staff that is a market signal that they are setting wages too low. It is their own fault if they choose not to pay enough to attract workers. Businesses can afford to pay more: since Labour came to power profits have risen 13% after inflation. This year businesses will get a nearly 10% cut in their tax rate.  Wise employers should use these record profits and tax savings to boost kiwis’ wages and keep them here.

Fundamentally, it is business, not government, that has the power to solve New Zealand’s low wage problem.

61 comments on “Solution to wage-gap in hands of business ”

  1. Tane 1

    Fundamentally, it is business, not government, that has the power to solve New Zealand’s low wage problem.

    I disagree. While obviously business (as the employer) needs to pay more, the government can do something – it can allow effective industry bargaining that enables workers to raise wage levels across the industry rather than fighting the race to the bottom that is enterprise bargaining.

    As glad as I am to hear Cullen finally talking about wages, New Zealand’s employment law is a major issue here, and it’s one Labour doesn’t seem to want to tackle.

    Laila on unions

    National and the wage gap

  2. Santi 2

    “Larger (but still small) numbers of kiwis are leaving…”

    What would constitute a large (and certainly large) number to the wise editor of The Standard? It seems just another failed attempt at spin.

    “To keep skilled workers in New Zealand higher wages are needed.”

    What’s the purpose of getting a salary increasy if you see 39% of your pay going to the rapacious hands of this socialist government?

    How can you claim pay increases are the way to success, while advocating these levels of taxation?

    Do you really believe the 39% tax rate applied to income of 60,000 a year is fair and help us promote NZ?

  3. Steve Pierson 3

    Well, yes,and higher rates of union membership would help too.

    I’m all for MECAs but while most industries have low unionisation there’s only so much stronger union law can do (of course strengthening union law would increase membership over time).

    My argument is business is facing is a market signal, supply of workers is not meeting demand, and they shouldn’t cry to the government about that (and then complain about government regulation) they should simply offer better wages.

  4. Tane 4

    while most industries have low unionisation there’s only so much stronger union law can do

    One of the reasons unionisation is low is because it’s uneconomic for unions to assign an organiser and manage a collective agreement for a site with half a dozen people.

    That’s why, for example, you’ll find few cafes or bars that are unionised. If you could string together twenty bars in central Wellington (or even two hundred across the country) into a single collective you’d suddenly find unionisation viable. There’d be decent industry standards and a significant increase in wages and conditions for these workers.

    I agree though that business should stop crying to the government and pick up their act. Just the other day Charles Finney from the Chamber of Commerce and Alasdair Thompson from EMA Southern were complaining that the government needed to do something to reduce ‘wage pressure’ – why John Key isn’t attacking them over the wage gap I’m not sure.

  5. Steve Pierson 5

    Santi. There is no level of income at which 39% of your income is being paid in income tax. The first $38,000 is always only at 19.5%, and the next $22,000 is always at 33%. Even at $100,000 only 30% of your income goes on income tax. Anyway, in Australia on a full time income you only pay a few percent less tax at best (plus they have Stamp Duty and taxes we don’t have)

    0.8% of kiwi citizens left last year. Not large in my books.

  6. Policy Parrot 6

    [i] Do you really believe the 39% tax rate applied to income of 60,000 a year is fair and help us promote NZ? [/i]

    What is your point with the 39% tax rate? Is it just you personally? The people who are migrating to Australia on the most part don’t even qualify for this rate of tax. They are sick of low wages – and because wages are relatively low, tax seems relatively high.

    On the one hand, conservatives say you shouldn’t rely on the government to help you out, its individual responsibility, yet they tell hard-up voters to bug the government for money.

    Those on or over $60,000 p.a. are more likely to stay here. It is also 50% more likely that you are employed in the public sector if you earn $60k .

  7. Santi 7

    “What is your point with the 39% tax rate?”

    39% it’s simply too high. It should be slashed, so people can get more money in the pocket. Greed is good!

    “..conservatives say you shouldn’t rely on the government to help you out, its individual responsibility,..”

    And rightly so. Individual responsibility, an anathema to socialism and its notion of the greater community, should be encouraged. Among other measures: a) Handouts like WFF should be removed; b)a drastic reform of the welfare state should be pursued.

  8. Yikes, Steve – you say that “The real power to raise wages lies with business” and that “Fundamentally, it is business, not government, that has the power to solve New Zealand’s low wage problem”.

    This sounds like a real throwback to the extremes of economic neoliberalism! “Let the market rule!”; “Government is not the solution!”; “Keep the Government out of industrial relations!”.

    I knew that the Labour Party and many of The Standard bloggers are rather centrist (and probably recovering Rogernomes) but I didn’t realise you guys are quite that pro-market.

    Bryce
    http://www.liberation.org.nz

  9. Tane 9

    I didn’t realise you guys are quite that pro-market.

    Bryce, I refer you to my earlier comment.

    Solution to wage-gap in hands of business

  10. Phil 10

    What ever level of wage/salary employees in NZ get, we are always going to have a ‘problem’ with those who leave for other countries.

    Why?
    Because we’re a country of 4 million, in a world of 6.5 billion. There is so much more to experience, learn, and do, on the rest of the planet. It’s an inescapable fact we have to deal with. Trying to tie people here is futile.

    The focus should not be “why are they going?” but “how can we lure these people back with the skills, experience, and international contacts that the rest of the country can make use of?”

  11. Policy Parrot 11

    “And rightly so. Individual responsibility, an anathema to socialism and its notion of the greater community, should be encouraged. Among other measures: a) Handouts like WFF should be removed; b)a drastic reform of the welfare state should be pursued”

    And you are quite happy with the likely consequences of these reforms which will drive us back to an era where 30% of all children live below the poverty line.

    What type of future is that?

    How do you plan on raising real wages for everybody, even those who end up working in the low-skilled sector Santi?

  12. AncientGeek 12

    Bryce: It is like everything else, it is a matter of balance.

    As an analogy only – please – no dickhead remarks.

    The legislation sets the size and shape of a playing field, and the rules of the game. After that the teams get considerable leeway in how they setup the plays and the game strategy.

    Tane is saying that changing the rules is important right now because it is uneconomic to do small workplaces.

    Steve is saying that is important, but one of the teams should stop kicking to touch and start a more free flowing game otherwise is will be a stalemate draw.

    Both are probably correct..

  13. Steve Pierson 13

    Bryce. I’m dealing with the world as it is not as I would wish it to be. The fact is until the government radically strengthens the bargaining position of workers the market will be the main determiner of wages and right now the market is saying business ought to increase wages to get the labour it wants.

  14. Santi-

    “Do you really believe the 39% tax rate applied to income of 60,000 a year is fair and help us promote NZ?”

    You apparently don’t understand our tax system. A person earning $60,000 doesn’t pay anywhere near 39% of their income in taxes.

    Steve:

    I’m all for MECAs but while most industries have low unionisation there’s only so much stronger union law can do (of course strengthening union law would increase membership over time).

    A lot can be achieved through an awards system (which implies MECAs), even if union membership is low. i.e. in France only 6% of employed workers belong to a union, yet they have possibly the most worker-friendly labour market in the world (i.e. six weeks annual leave etc…)

    Tane:

    “I agree though that business should stop crying to the government and pick up their act.”

    The practical problem here is labour cost competition. The only way to take labour costs out of competition is to have minimum industry wages and conditions, otherwise there will always be the “race to the bottom” problem.

  15. Billy 15

    Cool Rog. Let’s aim to be like France. Now there’s a well run country.

  16. “Cool Rog. Let’s aim to be like France. ”

    Billy, no way should NZ be like France. Their labour market is far too rigid, and it leads to a lot of people being crowded out of employment. What I want to see is a middle ground, something akin to Australia, which has minimum standards and wages by industry (it’s much better to work in Aus than NZ), but still has a relatively low unemployment rate (labour costs aren’t so high that too many people are stopped from working).

  17. AncientGeek 17

    Phil: That is exactly the way I think.

    And even if they do stay overseas, make them part of the Kiwi mafia. Any exporter will tell you that having all of those ex-pats everywhere in the world is an immense help. It is almost as good as having the people who did education in NZ (they are better – home market).

  18. Regan 18

    One cannot put all the onus on business to raise wages. Government should be working with business to improve productivity and reduce costs while fostering their growth.

    NZ is made up a thousands of small to medium businesses who are being hamstrung by compliance and paperwork which ties up valuable time and resources.

    The SMB’s are the backbone of this country and until they’re given a break I can’t see things changing at all.

    It is no wonder that people are relocating their businesses elsewhere.

  19. Tane 19

    Government should be working with business to improve productivity and reduce costs while fostering their growth.

    I think that was reasoning behind the 10% cut in the corporate tax rate in the last Budget.

    NZ is made up a thousands of small to medium businesses who are being hamstrung by compliance and paperwork which ties up valuable time and resources.

    According to the World Bank, New Zealand is the second easiest country in the world in which to do business.

    http://en.wikipedia.org/wiki/Ease_of_Doing_Business_Index

    I hear a lot about red tape and compliance costs, but not a lot of evidence to show New Zealand employers have it any harder than in other countries.

    It is no wonder that people are relocating their businesses elsewhere.

    No, they’re doing that because they can take advantage of unfree labour in squalid third world dictatorships.

  20. NZ is made up a thousands of small to medium businesses who are being hamstrung by compliance and paperwork which ties up valuable time and resources.

    http://www.doingbusiness.org/economyrankings/

  21. Steve Pierson 21

    Regan. Most people are employed by large businesses and, while higher productivity is obiovusly a good thing, if employers are crying out for labour now they have record profits out of which they can afford to pay higher wages.

  22. Billy 22

    “Most people are employed by large businesses..”

    Oh yeah?

  23. AncientGeek 23

    Steve: I’m afraid I have to echo Billy there.

    I suppose it depends on what you refer to as a large business?

  24. Steve Pierson 24

    Yeah. I can’t remember the definations and it’s friday so I’m not looking it up but its something like this: most businesses are classed as small, they employee fewer than 10 people or something like that, but most people are employed by a relatively small number of large businesses who employ hundreds or thousands.

  25. Billy 25

    “What I want to see is a middle ground, something akin to Australia…”

    I recall that, in NSW at least, you used to be able to sack an employee for being useless without all of that hand holding and pretending to go through a fair process if the employee earned over a certain amount. The idea was if they earned enough money, they were obviously smart enough to look after themselves. I thought that was quite a good idea.

  26. Tane 26

    Under Howard’s WorkChoices you could be sacked for no reason if your employer had fewer than 100 employees, or else for ‘operational reasons’.

    The effect this had on the balance of power in the employment relationship was huge – effectively the worker had no work rights as they could be sent down the road for anything. There were several high profile cases of workers being sacked under extremely dodgy circumstances, and public revulsion against these laws was one of the main reasons Howard got the boot last year.

  27. Billy 27

    The exception I remembered was in something I was working on ten years ago, and related to people (I think) earning over $100k.

  28. Ok, I should have put in the caveat “pre-work choices” Australia (as people point out on this thread, work choices have undermined the awards system for many workers. Fortunately Rudd will be rolling back that legislation. So the question remains why don’t we re-adopt our awards system (we had one between 1936 and 1990)? Australia doesn’t seem to have done too badly with theirs.

    [lprent – better keep an eye out on the other blogs. d4j just tried to post here as you]

  29. Phil 29

    For the Record;
    Employees by enterprise FTE size (from StatsNZ table builder, rounded to the nearest 1,000 in both cases)

    0-9 employees in organisation; 320,000 in 319,000 enterprises
    10-19; 202,000 in 15,000
    20-49; 241,000 in 8,000
    50-99; 158,000 in 2,000
    100 ; 843,000 in 2,000

  30. Leftie 30

    Increasing productivity is good for business. I think it is too assumed that increased productivity is passed on in the form of pay increases to workers. This would imply that all business owners are honest and have a conscience.

    Yeah I agree, NZ businesses need to make serious moves to increase wages. Some should work with unions instead of against them. Many should work harder to keep their employees from moving down the road or overseas.

  31. Tane 31

    Thanks Phil, some interesting figures.

  32. burt 32

    So for business we have;

    * A prescription for taxation.
    * A prescription for employment laws.
    * A prescription for compliance.
    * A prescription for public safety.
    * A prescription for reporting.
    * A prescription for ethical behaviour.
    * A prescription for environmental impacts.
    * A prescription for funding political parties.
    * A prescription for expressing their political views.
    * A problem of low wages and low profits to solve themselves.

    Bugger the bureaucrats, business in NZ needs leaders.

  33. Tane 33

    Yes Burt, it’s called living in a society. Remove the prescriptions on how society behaves and you get anarchy. You certainly don’t get a private property regime and state enforcement of contracts – go check out how Somalia compares on the World Bank’s Ease Of Doing Business survey. Here’s a hint, they’re not at number 2. In fact, I don’t even think they made it…

    http://www.doingbusiness.org/economyrankings/

  34. burt 34

    Tane

    The bit I’m talking about is Dr. Cullen sledging the responsibility for low wages to employers. For the last few years the reserver bank has been urging business to be restrained in wage rises due to inflation pressure. Now what has driven inflation pressure in NZ since 1999? – Yes you guessed it, that old chestnut “govt spending”.

    So, the actions of the govt have created an environment where employers have been requested to be restrained and now all hell breaks loose it’s their fault.

    I agree that a framework is required, I don’t agree we already have the correct architects in charge of the design.

  35. AncientGeek 36

    Phil: interesting…

    The low band is almost entirely one person per company.
    next band average 13 odd
    mid bands close to the mean
    top band averages 400

    Usual survival problems until the organization gets large enough to get good access to capital

  36. Peak Oil Conspiracy 37

    Steve Pierson says:

    Larger (but still small) numbers of kiwis are leaving for Australia and higher incomes are part of the attraction.

    And Phillip John/Roger Nome says:

    What I want to see is a middle ground, something akin to Australia, which has minimum standards and wages by industry…

    Given those comments, what do people make of this recent story from Australia?

    http://www.businessspectator.com.au/bs.nsf/Article/Wholl-stand-up-to-Reynolds-BM2YV?OpenDocument

    Some selected quotes:

    “It has attracted little media attention in the eastern states, but in Labor Party and construction industry circles especially in Western Australia they have been watching like hawks as the story about the aborted challenge to militant construction union boss Kevin Reynolds unfolded this week.

    It’s not only employers that have come to see Reynolds as a real problem the Labor Party and the working people it claims to represent are increasingly arriving at the same view. Which is why it’s instructive to remember Gallagher’s legacy. In the 1980s, the BLF was running amok in Victoria; a favourite tactic was the disrupted concrete pour. The cost to the state, industry and employees was incalculable. But eventually a State Labor Government said enough was enough and ordered a police raid on the BLF’s Melbourne offices in October 1987.

    The Victorian Minister for Labor at the time, Steve Crabb, was resolute in his bid to curb the union’s power, willing to incur the wrath of other unions and Labor supporters it was colourfully described at the time by left-wing Labor MP George Crawford as “a fascist police raid’ but wiser elements in the Labor movement (especially at the ACTU) quietly lauded his actions.

    Western Australian Premier Alan Carpenter should take note. Now is the time to take on the CFMEU head-on. Kavanagh’s failed bid for the top job virtually rules out any possibility of internal reform; Reynolds and McDonald, have a vice-like grip on the union.”

    Granted, this story is more about union politics (in a specific context) than wage-gap solutions.

    On the latter point, it’s probably unwise to make overly-generalisd comments about Australia. From what I’ve read, Australia has a two-speed economy, with Western Australia (particularly the Pilbara region) accounting for much of the current inflationary pressure. I’d say it’s advisable for those seeking out higher wages to look more closely at Australian economic trends, before booking their one-way flights.

  37. AncientGeek 38

    POC: Pretty common in aussie. WA is disjoint from the rest of the economy. At present it is running hot on top of the minerals. Pretty much the same thing happened in the late 80’s. Then it cools off and goes quiescent. NT is also disjointed, but for a different reasons.

    Eastern aussie is a lot more more uniform.

  38. Rich Prick 39

    This has been an interesting thread. Each of you advocating that business/employers ought to just pay their employees more seem to have no experience in the real world. Having been an employer with my own capital at risk, I fail to understand why I should have risked my capital to pay employees more and become uncompetative, just to serve your socialist ends.

    Capital doesn’t come cheap, perhaps the unions could dip their own hands into their pockects for a change and become venture capitalists with interest free loans (you know like what the students get now-a-days) so that we can pay your lot more? Now there’s a thought.

    Otherwise, buggar off and leave business to its own devices, or add value by getting cheaper airfares to Oz for your members.

  39. outofbed 40

    Well the business owners In OZ seem to get by, paying higher wages in fact its working for them They are attracting skilled migrants from everywhere.
    If you can’t pay a decent wage then your business model is faulty I suspect

  40. ak 41

    (burt: commenting under the alias of “rich prick” doesn’t make you any less boring, and don’t bullshit, you’ve never been an employer – but I still like you for some weird unfathomable reason! (yes, I have been drinking!)
    As it happens, I have, (been an employer – for many years, but not now) and it always astounded me to see that those who could most afford to pay their workers best (alas not I) were the stingiest. It’s nonsense to lump all “employers” together – the variety of circumstances is infinite. I take succour in my dotage from the fact that most of the worst I knew have long gone or otherwise met a variety of sticky ends.

    To all you young tories: talk to some older people and travel as much as you can: life is never even remotely black and white, and if you think John Key is your saviour, then God help you.
    Good on you for being concerned about politics, but don’t drag us backwards, our beautiful country was founded on social justice and Jesus’s (and the other greats)lovely compassion for all people. Believe me, life’s short – so think of the country you kids will live in: we continue to lead the world, why threaten the marvellous progress we have made?

  41. AncientGeek 42

    RP: I didn’t…

    But I’d point out that in a tight labour market, employers have little choice but to pay more. That was the point of the post.

    The Nat’s or kiwiblog or someone seem to be trying to say it is all the fault of the emigration. Thats just the usual “I’ve got a quick fix” stupidity of stuffing your head in the sand and looking for china. Like Key’s youth speech – a pathetic excuse for policy.

    The truth is that skilled and semi-skilled employees are leaving for higher wages, especially to Western Australia. But that isn’t where the problem is. The numbers are too small.

    The last household labour survey shows the market is pulling people in who weren’t previously looking for work. Looks to me like thats happening at rates far higher than the increase in emigration.

    It is a tight labour market… Employers are going to have to spend money, either in wages or in capital expenditure to get productivity gains.

    The only thing that the government could do about it is to increase immigration higher. But it is pretty high now, and is likely to just whack up inflation.

    I think that wages will rise, and that will be another stress on inflation – that to me is the worrying aspect.

  42. burt 43

    ak

    I didn’t post as Rich Prick. But I agree with much of what Rich Prick is saying.

  43. Peak Oil Conspiracy 44

    Burt:

    I’m inclined to believe AK, given how much he/she knows about you:

    – you commented under the alias of “rich prick’
    – you’ve never been an employer

    Of course, like AK, I could indulge myself in fantasies about the secret lives of other bloggers. But why bother?

    Lynn Prentice:

    [lprent – better keep an eye out on the other blogs. d4j just tried to post here as you]

    Are you basing this on an IP check? I take it the comment portrayed Phillip John/Roger Nome in a poor light? He has a particular posting style, as does Dad4Justice.

    [lprent: IP check. Same IP as two other typically d4j messages trapped in moderation. In a d4j IP range. All three with different psuedomyms. Not the same IP range as roger nome uses. Had the wrong e-mail address, but correct website. The comment was a oneliner (don’t know roger nome’s style).]

  44. Phil 45

    “talk to some older people and travel as much as you can: life is never even remotely black and white”

    I couldn’t agree more – life is rarely black, white, or even shades of grey. However, I do find it interesting that someone who seems to feel the left has a monopoly on good political ideas (or is it just that John Key is the devil?), and that ‘business’ is solely responsible for low wages… seems a little bit inconcsistent with your own apparent belief, dont you think?

  45. Phil 46

    Hey, did anyone else spot the StatsNZ publication on Labour Costs that came out on the 5th?

    The December quarter of 2007 showed the largest quarterly (and annual) rise in salary and wage rates recorded since the series began in 1992!

    How dare those nasty employers talk about skills shortages when they’re not willing to pay their staff more… oh, wait, they are.

  46. burt 47

    Peak Oil

    – you commented under the alias of “rich prick’ – Wrong
    – you’ve never been an employer – Wrong

    I guess as you say ‘ak’ is a typical socialist and knows so much about me.

    He/she has probably attended Labour party spin 101 – Make up stuff to discredit anyone who disagrees with your world view. Keep repeating the lies and denigrating the people you seek to discredit and never forget the golden rule. Labour good – National bad. When all else fails Deny, Delay, Denigrate.

  47. AncientGeek 48

    However, I do find it interesting that someone who seems to feel the left has a monopoly on good political ideas

    In my case it is more of a reaction to the daft “Labour bad, Helen bitch” chorus that I see on on kiwiblog. No ideas – just a faith that the key and the nats would fix everything. Not something I’ve observed in the past.

    I think that labour has proved over and over again that they are quite willing to implement good ideas if they fit into their framework. They don’t really care about the source of the idea.

    At present it is hard to see any ideas from the Nats that are worth pinching. The real problem with the nats is that it is really hard to see what they stand for in what they do, when you look back from 20 years. At present I see them offering short-term fixes for puffed out problems.

    I’m into puffery, faith or marketing. When are the Nats going to release some real policy? The vision of where they are heading and the implementation road map to get there.

  48. AncientGeek 49

    Oopps should have been
    “I’m not into puffery, faith or marketing”

  49. burt 50

    AncientGeek

    I think that labour has proved over and over again that they are quite willing to implement good ideas if they fit into their framework. They don’t really care about the source of the idea.

    This is exactly what all the noise here on the standard has been about re: John Key.

    If it’s good for Labour why is it so bad for National ?

  50. AncientGeek 51

    Phil: Too recent for me (but I’ll have a peek at it)

    It is good to see that employers do respond to wide scale labour market forces. Last time was probably about 1977 before the unemployment started rising sharply.

    With the whinging I’ve been hearing, I was wondering if they were able to adapt to that change.

  51. AncientGeek 52

    burt: I agree with u-turns. Fixing positional mistakes is government. Of course there is no harm in pointing out the u-turns.

    I think it has more been about pointing out what key or the nats have said in the past about the same topics. From the quotes here, they have used absolutist language in the past. The “we will never” sort of thing.

    Thats the language of extremism rather than of government. When they change from extremism to the pragmatism required for government, you have to ask – what do they believe it?

    The lack of deep policy from the Nat’s has to make you ask if we are simply seeing camouflage.

  52. Burt. Don’t worry about POC, he seems to have lost the the plot a bit of late. Almost seems like a different person.

  53. Peak Oil Conspiracy 54

    Phillip John/Roger Nome:

    Burt. Don’t worry about POC, he seems to have lost the the plot a bit of late. Almost seems like a different person.

    I posted a response to you but it’s gone missing.

    Burt clearly understood my joke. If it was too subtle for you, then you might need to recharge your humour battery.

  54. r0b 55

    To all you young tories: talk to some older people and travel as much as you can: life is never even remotely black and white, and if you think John Key is your saviour, then God help you.

    As another old fossil, can I just say re ak’s comment, a hearty Amen!

  55. The Double Standard 56

    To all you young tories: talk to some older people and travel as much as you can: life is never even remotely black and white, and if you think John Key is your saviour, then God help you.

    As another old fossil, can I just say re ak’s comment, a hearty Amen!

    Similarly if you think Helen Clark is your saviour too eh?

  56. Santi 57

    “Similarly if you think Helen Clark is your saviour too eh?”

    Incubus and succubus may agree with you.

  57. Having been an employer with my own capital at risk, I fail to understand why I should have risked my capital to pay employees more and become uncompetative, just to serve your socialist ends.

    Your absolute right not to pay any more than you can get away with, of course. It appears the rest of the right wing agrees with you. And yet you all also seem convinced it’s the govt’s fault that people are heading over to Aus for higher wages. Is there any level at all on which you grasp this contradiction, or are you just thick?

  58. Back to the the thread topic: I find it strange that market forces aren’t helping to drive wages up. I believe it is not just low wage workers (like fruit pickers) that are in short supply, but across the board, including doctors and many professionals. So why is there not a wage war on?

    The govt can help the situation insofar as it is the largest single employer, assuming that the govt is experiencing the same employee shortage as other sectors. Some employers (including DHBs) I believe are recruiting in places like England with lifestyle the attraction rather than money. I understand that less than half our doctors now are NZ born.

    Really I don’t think any employers (govt or private) can complain about staff shortages. Market forces ensure that people go where the money is.

  59. AncientGeek 60

    So why is there not a wage war on?

    That was what I was wondering as well. The household labour survey was showing that we had been extracting people back to work who had previously not been looking for work. That is a sign of a very tight labour market.

    Looks like Phil answered that above. He referred to this Labour Cost Index (Salary and Wage Rates): December 2007 quarter.

    It looks like it has started.

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