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Low wages driving inequality

Media Release: FIRST Union
Tuesday February 7, 2011

Low wages driving inequality

New Zealand’s structural problem of low wages is driving the gap between the rich and poor, FIRST Union said today.

Statistics NZ figures out this morning showed wages increased 2% on average last year, only marginally above inflation for the year of 1.8%, and much less than the 5.3% spike in inflation that occurred during that year.

FIRST Union General Secretary Robert Reid said the contrast in incomes with those at the top couldn’t be starker.

“Workers’ wage increases are well short of what those at the top of the economic pile are awarding themselves,” he said.

“Last year’s NZ Herald CEO survey last showed average salaries among those surveyed had shot up from $1.4 million to $1.6 million in just a year. This was followed by a 20% increase in wealth of those on the NBR’s Rich List.”

Members of unions were typically achieving better wage increases than 2%. FIRST Union itself has negotiated wage increases of more than 4% for at least a third of its 27,000 members.

However New Zealand had a structural problem of low wages dating back to the 1990s and more workers needed access to collective bargaining to improve their incomes, Robert Reid said.

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“Any government with a serious plan to close the Australian wage gap would not want to put any barriers in the way of workers accessing unions to bargain collectively, but that is exactly what the government intended with the employment law changes of 2010.”

Robert Reid said that as Parliament resumed today, the government should consider what they were doing to address income inequality.

“Last term in office they delivered a GST rise for the poor and big tax cuts for the wealthy, very small minimum wage increases, and even had the gall to talk up New Zealand’s wage gap with Australia rather than putting in place a plan to narrow it.”

“This term they need to do better, but we’re not holding our breath,” he said.


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