Why is New Zealand's Pay at the Bottom of the Stack?

This country has fallen behind Australia in wages and labour productivity because we have failed to put money into modernising our businesses and increasing workers' skills and we have ignored the positive power of unions, Peter Conway, told the Remnet Conference in Taupo, today. The gap started with the Employment Contracts Act, which pushed down wages and encouraged businesses to hire cheap labour rather than invest in capital.

"There doesn't seem to be much point in giving huge tax cuts and in the process undermining the ability of the government to invest in infrastructure, industry training, tertiary education ? all the things that underpin a productive economy."

Peter Conway said that a US study found that when unionisation is combined with innovative work practices the level of productivity growth was 20% higher than when there was no unionisation and low involvement.