16 Mar 2011

If productivity's up, wages should be too - CTU

6:30 pm on 16 March 2011

Unions are calling for better pay rates to reflect the fastest annual growth in workers' productivity in a decade.

Statistics New Zealand says labour productivity rose 3.7% in the year to the end of March.

Labour productivity, a measure of how much a worker produces for a given hour of work, is considered critical to economic growth and the level of wages.

The Council of Trade Unions says that if productivity's up 3.7%, then pay settlements of 2-3% aren't out of order.

The council's economist, Bill Rosenberg, says wage growth over the same period was 1%, and it's less than 2% now.

But Business New Zealand says bigger pay rises could cost jobs, especially when firms potentially face large increases in production costs.

It says it's too early to tell whether the figures show a sustained pickup in productivity.