In the warm afterglow of the huge wage increase for health care workers the case for addressing NZ’s creaking low-wage economy is getting some recognition:
Bosses need to ‘bite the bullet’ and lift wages
Employers will eventually need to “bite the bullet” and start paying more to their staff following the higher than expected inflation, BNZ chief economist Tony Alexander says.
Inflation in the year ended March was 2.2 per cent, according to Statistics New Zealand’s Consumer Price Index, the official measure of inflation. In the March quarter, inflation was 1 per cent. Both the annual and quarterly inflation figures were well above estimates by the Reserve Bank and economists.
Alexander said employers having to pay more to their staff might be especially so in response to the change in migration rules announced last week by Immigration Minister Michael Woodhouse.
Inflation is certainly a factor, as is the insane increases in housing / rental costs that are not adequately captured in the CPI. As to immigration, it has been a factor in keeping wages down, according to Mike Yardley in The Press:
New Zealand’s immigration settings suppressing pay rates
I find myself in the not so familiar position of applauding and admiring some recent flourishes by the the union movement and collective power.
The monumental union-negotiated settlement to significantly boost pay rates for the aged care sector is a stunning victory for basic decency.
The sharper lens of an election year, and the ongoing public unease about growing inequality, would have certainly helped embolden the Government to strike this historic $2 billion settlement, which will substantially transform the pay packets of 55,000 residential care and home support workers.
…
With crappy pay rates soon becoming consigned to history, rest home operators will no longer have to sponge off third world labour markets by importing vast hordes of generous-hearted Filipinos to staff their facilities.It is a classic illustration of the folly behind New Zealand’s immigration settings in recent years, which have been crudely and expeditiously cheapened to allow the country to be flooded by third world migrants, who will willingly work for miserable pay.
(I just want to note that I’m unhappy with some of the language / imagery here. I’m in favour of slowing down immigration for a while, but we need to be able to discuss the issue factually, and respectfully.)
Not only has this kept Kiwis frozen out from legitimate jobs and suppressed pay rates, but it has fuelled the downstream impact on housing prices and infrastructure strain.
The Government’s latest tweaks to our immigration settings, whereby “skilled” migrants must earn more than the median wage and “essential skills” work visa holders must leave after three years, are grossly overdue. …
Will the tweaks make a difference? Maybe not, see: Government changes will have “almost no impact” on medium term immigration: ASB. Fran O’Sullivan also explores these topics:
Forget immigration, let’s talk wages
The Government’s latest tweak to its immigration policies does nothing to alleviate the real issue: the urgent need to step up investment in house builds – particularly in Auckland; step up investment in infrastructure and take more steps to move New Zealand to a higher-wage economy where people can actually afford to live in our prime commercial city.
True that.
…But if New Zealand is to evolve as a highly skilled economy it needs to set the bar higher, and pay decent wages which will also spur employers to take initiatives to drive greater movement on the productivity front.
This requires a major reset of the NZ economy – not simply using immigration to spur economic growth, then screwing the taps down when the cost of running things too hot becomes a political negative.
Where Labour is on point is with addressing the “Future of Work”.
If this fosters debate on the skills New Zealand needs to build a strong, innovative and highly developed economy that will be a positive.
OK, so, great to see this new consensus on the need for higher wages. Better late than never I guess. And O’Sullivan is right to note Labour’s “Future of Work” as the way forward. National has nothing to offer except status quo and excuses.
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