Income inequality needs fixing

New Zealand’s employment law has led to declining real value of wages for many, increasing inequality and poor productivity performance, Labour’s spokesperson on labour issues, Andrew Little, says.

Speaking to HR practitioners and employment lawyers at a conference today he said New Zealand didn’t have a coherent wage-setting system and as a result the country was in the midst of a wages crisis.

“Over the past 20 years wages and salaries for the bottom half of earners have in real terms been either static or gone backwards.

“Nearly one fifth of the workforce – or 400,000 working people – is dependent on tax credits to subsidise their earned income in order to make ends meet.

“There has been a culture change in New Zealand when it comes to employment and status as a worker. The consensus we once had that workers should be treated fairly and with dignity is busted.

“Growing inequality has consequences for health and social cohesion, and it’s bad economically.

“Labour is confronting the major challenge facing the New Zealand economy today: how to shift our economy up the value chain so we can generate the wealth needed to maintain and grow our standard of living.

“This will entail not only good investment in new economic activity, but investment in skills and a stable employment environment with a good base of conditions.

“Labour is committed to improving collective bargaining rights, getting rid of the 90 day law and improving workplace culture.”

—