With most political parties’ employment relations policies now out CTU Policy Director Dr Bill Rosenberg says it is inescapable that National’s policies, which weaken collective bargaining, will mean lower wages and salaries.

“Higher wages are affordable, even with current economic output and growth rates. And of course wages could be higher yet, if productivity increased faster – and the results of that were fairly shared with wage and salary earners,” says Dr Rosenberg.

A look at historical average hourly wage statistics shows the real average wage was at its highest in March 1982 when it was $29.97 in June 2011 dollar terms. In June 2011, it was $26.27. The current level of the average wage is about the same as it was in December 1972, yet the output of the economy per person has grown considerably over that time.

“By comparison, Australia has thrived with more of its income going to wage and salary earners. In fact New Zealand has one of the lowest labour shares in the OECD.”

“In theory, wages should rise as fast as labour productivity. New Zealand’s wage rises are far behind productivity growth. Measured labour productivity rose 52 percent between 1989 and 2010. The real average hourly wage rose just 16 percent.”

“The economy and employers could afford higher wages – and higher superannuation contributions for their employees. An essential ingredient to change this is improving employee bargaining power through collective bargaining. Higher wages would not only have social benefits, but could lead to a high skill, high value economy.”