CTU MEDIA RELEASE
07 May 2007

Wage Growth Modest Compared with Inflation

Wage growth remains modest compared with inflation, with ordinary time wages up by 3.2% in the last year while consumer prices were up by 2.5%, the Council of Trade Unions said today.

“Only 58% of the workforce got an increase in the last year, but those that did averaged a 5.4% rise,” CTU Economist Peter Conway said, in response to the Labour Cost Index released today by Statistics New Zealand.

“This shows the value of collective bargaining through unions, and if we are to make any headway in closing the 30% wage gap with Australia we need more widespread collective bargaining, alongside improvements in labour productivity.”

“Between 2004 and 2006, wages rose overall by 8.7%, whereas house prices rose by 38.5%."

“This shows that in a tight housing market we get very high price rises, but in a tight labour market, we get only modest wage increases, which is making it harder and harder for first home buyers.”

"If we are to address the wide gap between house prices and incomes we need wages to rise on a regular basis, and the best way for workers to achieve that is through joining a union," Peter Conway said.

ENDS

© Scoop Media