Despite the recession, wages have continued to grow at a record rate and, crucially, faster than inflation. The average hourly rate was up 5.5% over the past year. The percentage of the economy that goes to workers (rather than to the capital owners) continues to increase.
This is the outcome of running a low unemployment policy. Low unemployment is self-reinforcing because employers know it will be hard to get new staff later if they lay-off people now. That keeps people in work during tough periods; unemployment remains below 4% for now. Low unemployment also means employers have to offer better wages and conditions to attract and retain workers.
Contrast that with the history under National. The unemployment rate was kept high, benefits were cut, and the minimum wage was allowed to drop all in a successful effort to keep wages down and leave more profits for National’s business backers. Bill English said that the idea of unemployment below 6% was a “hoax“. Wages fell for most workers and the share of the nation’s wealth going to workers fell.
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