Low unemployment points to higher wages

The unemployment rate continues to drop, sending a strong signal to employers that higher wages and better working conditions will be needed to attract and retain staff, the Government says.

Statistics NZ figures out yesterday reveal unemployment at 3.4 per cent, the lowest in the 19 years since the Household Labour Force Survey began.

This was 0.2 per cent lower than in the June quarter.

The labour force participation rate grew a further 0.5 per cent to 68.2, also the highest since the survey began.

Social Development and Employment Minister David Benson-Pope said 300,000 more people were now in work than in 2000, when Labour got back into office and the unemployment rate was 5.8 per cent.

He said the labour market remained "very tight", with employers continuing to report shortages in skills and staff.

The Government would continue to invest in industry training and the creation of modern apprenticeships.

It was also working to remove barriers such as childcare and transport for those wanting to enter the workforce.

But the figures also sent a message to employers, Mr Benson-Pope said.

"If they want to attract and retain good staff, there is real value in them improving wage levels, investing in childcare and offering greater flexibility around work hours. Employers know how the market works and clearly when it's tight they need to have a margin in their advantage."

Council of Trade Unions secretary Carol Beaumont backed that call.

She said the higher unemployment rate for Maori and Pacific people was a further challenge. Pakeha unemployment was 2.2 per cent, Pacific unemployment 5 per cent and Maori 9.1.

Workplaces also needed to be made more productive, she said.

Employers and Manufacturers Association spokeswoman Janet Perkins thought employers were already doing the things Mr Benson-Pope suggested.

Salary and wage rate figures were rising and Statistics NZ had said the latest quarterly and annual increases were the largest for the public and private sectors since it began measuring them that way in 1992.

Childcare help and more flexible working hours were matters for individual businesses and the larger ones were more likely to be able to undertake such initiatives.