Business and unions split on job skills shortage

1.00pm

Business leaders say immigration rules should be relaxed to alleviate a shortage of skilled employees but unions say higher wages are needed to retain skilled New Zealanders leaving the country in search of better pay.

Employment figures released yesterday showed the unemployment rate was at a 17-year low of 4.0 per cent during the June quarter giving New Zealand the second lowest rate of joblessness in the developed world.

Meanwhile the ANZ Bank Job Ads survey today found the number of jobs advertised in the nation's major newspapers during July was on the rise, underlining the current tightness of the labour market.

Economists say the low current unemployment rate is reflected in a shortage of skilled workers which will see inflation increase as employers raise wages to attract labour.

Finance Minister Michael Cullen yesterday said labour shortages were the single biggest constraint on economic growth in New Zealand.

Business New Zealand chief executive Simon Carlaw said immigration policy needed to be loosened to allow a more consistent stream of skilled migrants to enter New Zealand.

"It really underlines the necessity for New Zealand to get into a comfort zone for a population policy incorporating an immigration policy where the welcome sign goes out and stays put and doesn't get taken out or the wording changed on a regular basis," Mr Carlaw told Radio New Zealand this morning.

But Council of Trade Unions economist Peter Conway didn't believe immigration was the main solution.

"I think there's a real problem with wage levels," he said, also on National Radio.

"We're losing people to Australia. We've had no real wage response to the labour skills shortage."

"We've had this skill and labour shortage for three and half years and we haven't seen a wage response.

"Profits per employee went up 40 per cent in 2002 we've seen house prices go up 16 per cent, wages in the latest figures went up 2.2 per cent.

"I get a bit kind of annoyed when I keep hearing that this is somehow bad news, that wages might go up. If you want GDP per capita to go up we need wages to go up."

Meanwhile Dr Cullen said the pressures on the labour market would be relieved by more training, immigration, remuneration, working conditions and a more productive workforce.

Yesterday's figures showed construction, business and financial services were the key industries driving employment growth over the period, while there were significant falls in employment in agriculture, forestry and fishing.

Elsewhere, the Maori unemployment rate fell to 8.8 per cent from 9.4 per cent the previous quarter, its lowest since SNZ began the quarterly Household Labour Force Survey in March 1986.

The Pacific people's rate fell to 7.4 per cent from 7.9 per cent and the Pakeha rate fell to 3 per cent from 3.4 per cent and others dropped to 5.8 per cent from 7.7 per cent.

Dr Cullen said economic growth was the cause of the labour shortage and "There are always some people who will find the cloud rather than the silver lining".

- NZPA