Now this is rich. National, the party that gave New Zealand its low wage economy, is running the line that the trans-Tasman wage gap is “Labour’s legacy”. You’d think such a shameless rewriting of history would be laughed off in a second, but it seems in the age of the memory hole even senior political journalists can be fooled.
So let’s get a few things straight. When National entered government in 1990 the wage gap was 18.9%. By the time they were kicked out in 1999, the wage gap had increased to 28.4% – a whopping 50% increase over nine years. Under Labour the wage gap has not moved, despite the minerals boom in Australia.
The reason for this is simple. National’s policy on wages was deliberately designed to remove minimum employment conditions, restrict the ability of workers to bargain for higher wages, let the minimum wage fall behind inflation and use high unemployment as a lever to put a lid on wage increases. The catchcry then, as now, was ‘flexibility’, a term that gave bosses the power to ‘reduce labour costs’ by cutting your pay and gave you the right to go to bed at night not knowing if you’d have a job in the morning.
As a result, most Kiwis’ average weekly earnings dropped or stagnated under National – by 1999 incomes had risen by just 0.3% after inflation. By comparison, eight years after Labour became government average weekly earnings have increased by 9.3% – more than thirty times National’s increase.
The real reason for the wage gap is clear – National’s attack on New Zealand wages.
So when National says Labour caused the wage gap, they’re lying. When they say it can be solved by tax cuts, they’re lying. And when they say they’ll close the wage gap if given a chance, just remember they’re hoping to do so with the very same policies that caused the wage gap to expand in the first place.