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Wage campaign must continue says CTU


17 October 2005

Wage campaign must continue says CTU

Unions need to continue their campaign for fair wage increases said Council of Trade Unions President Ross Wilson, in his speech this morning to the CTU Biennial Conference.

“It is now widely acknowledged that there is a low wage crisis in New Zealand,” said Ross Wilson. “New Zealand workers have a compelling case for a wage increase. With corporate profits and director’s fees up significantly (see appendix), there is now no excuse for employers not to deliver on better pay for their staff.”

“New Zealand’s average wage is 30% lower than in Australia, and our minimum wage is 46% lower than that for Australian workers,” said Ross Wilson.

Ross Wilson used his opening speech to the conference to state the CTU’s three key demands of more widespread collective bargaining, another increase in the minimum wage, and a series of industry meetings where wages are put on the agenda alongside skill development and productivity.

“The CTU believes workers deserve a fair share right now,” said Ross Wilson. “We also recognises that a high wage, high skill economy also needs to be highly productive, and the CTU is launching a massive programme to work with unions on productivity issues.”

“The CTU is supporting workers taking strike action to achieve decent pay increases,” said Ross Wilson. “Many employers this year have reached an amicable settlement on wage increases of 5% or more. But those employers holding out will continue to face industrial action”.

Ross Wilson also said that the CTU does not believe there is a wage-price spiral.

“Many of the economists that warn about the labour market putting pressure on inflation were happy to ignore any inflationary impact of the massive tax cuts promised by the National Party. All of a sudden, post-election, they are now calling for interest rates to rise again,” said Ross Wilson”.

“But more importantly, wage rises are not inflationary if part of the wage increase is out of profits, and if productivity is improving. The main pressure on inflation at the present time comes from oil prices and housing – not from wages.”

The conference continues till Wednesday afternoon.



From 2000 to 2004, the Reserve Bank notes that corporate profits increased by 11% a year. This can be compared with wage rises of just under 2.1% a year in that period. Unit labour costs fell by nearly 1% a year for the last 5 years. In the last year, Director’s fees went up by 20.5%. Executive pay rates (except for one survey in late 2004) have regularly gone up by twice as much as workers’ pay. And the change in real wages over a longer period from 1980 to 2001 shows an actual fall for New Zealand of 6.5% compared with a range of other countries where there were significant increases (eg. Australia 28.8%, Canada 39.5%, UK 46.9% and Finland 68.2%).

Wage levels fell from roughly comparable to Australia in the 1980s to 60% of their level by 2002 according to Treasury . The paper notes that “with labour relatively cheaper in relation to capital than in Australia, it appears that New Zealand firms have opted for a lower level of capital intensity”.

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