Wage Gap with Australia

“It is ironic to see John Key ask Labour to please explain the wage gap with Australia when in fact it blew out in the 1990s under a National-led Government,” Council of Trade Unions Economist Peter Conway said today.

“The CTU estimates the wage gap with Australia to be around 30 percent. With variations in the exchange rate and depending which wage figures are compared, there are numerous figures circulating.”

“For instance, comparing the full time adult rate in Australia with the average weekly wage in New Zealand at current exchange rates showed a difference close to 50 percent.”

“However, if we compare the New Zealand average weekly wage with the Australian all employees rate of $AUD890.90, the difference is more like 15 percent.”

“The reality is that we have a significant wage gap with Australia. The gap grew by 50 percent in the 1990s and from 2000 to June 2007 it grew by less than 2 percent.

“Since then, wages in New Zealand have gone up faster than in Australia so it is likely that the gap has not expanded at all between 2000 and 2008.”

“ Australia has a higher minimum wage, kept occupational and industry-wide agreements that set out minimum pay and conditions, and invested in more capital per worker and skills development in the 1990s.”

“Since then, we have been in catch-up mode,” Peter Conway said.