Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Why is the Reserve Bank happy with low wage growth?

Media release

Why is the Reserve Bank happy with low wage growth?

“There seems little prospect for better wage growth if the Reserve Bank is to be believed”, says CTU Economist Bill Rosenberg. “It says the slow wage growth is because of more people wanting jobs, rapid immigration growth, and the high unemployment rate.”

“This is a circular argument. People are being forced into the job market because stagnant wages mean more people have to work for the needs of their households. At the same time harsher rules on social welfare benefits and the low level of those benefits force people into a job market where as the bank says, there is ‘elevated unemployment’. In these circumstances, immigration should not be used to undermine workers rightly asking for wage increases.” Rosenberg said.

“There is a high risk that growth peaks this year without most people seeing any sign of it in their pay packets.” Rosenberg said.

“The Reserve Bank’s rhetoric is not encouraging. It seems to see wages as just another price and it will rally against any significant rise in them. There is no recognition of the needs of workers who depend on wages for their livelihoods, nor of their productivity, which has risen much faster than real wages since 2009. The implication is that if wages do rise faster the Reserve Bank will clamp down with higher interest rates.” Rosenberg said.

“At the same time the Reserve Bank acknowledges the longstanding problem with the overvalued exchange rate. It seems to think it is a mystery, and just sits on its hands. There are policies that could be used in New Zealand to help address it. A more competitive exchange rate would help high value exporters and reduce our reliance on commodity exports whose prices have peaked, while creating better jobs.” Rosenberg said.

“Meanwhile there is little sign of a pause in interest rate rises.” Rosenberg said.


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines



Key In NY: Prime Minister Addresses United Nations

Prime Minister John Key has addressed the United Nations General Assembly in New York, focusing on a call for action in Syria and on other conflicts, reform of the veto process and on the UN’s Sustainable Development Goals. More>>.


Gordon Campbell: On The Lack Of Accountability Over Philip Smith

In New Zealand, accountability is an exotic creature rarely glimpsed at ministerial level, or among senior management. The flight to Rio by the paedophile /murderer Philip John Smith/Traynor is no exception. More>>


More On Corrections

Gordon Campbell: On Putin’s Diplomatic Coup Over Syria

There’s a simple historical precedent for what is occurring in Syria. During WWII, the Allies joined forces with a known butcher and tyrant – Joseph Stalin of the Soviet Union – in order to defeat a greater evil, Nazi Germany… More>>


Key 'Didn't Know': Brownlee Seeks Pandas In China

While Defence Minister Gerry Brownlee is in China pushing a taxpayer funded deal to bring two pandas to New Zealand, the country’s military look set to be hit with a pay freeze, Opposition Leader Andrew Little says. More>>


Scoop Business: GCSB Willing To Extend Cyber-Attack Programme To Local ISPs

The Government Communications Security Bureau’s ‘Cortex’ cyber-security programme has been successful in helping identify and mitigate a series of cyber attacks since its introduction and an extension to cover local internet service providers is still on the cards... More>>


Gordon Campbell: On The Chris Brown Furore

Thank goodness Dame Tariana Turia has been able to inject a bit of common sense into the Chris Brown visa issue – her argument being that forgiveness has a place in this decision, and there is an opportunity here that should be taken... More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news