Strike action on the rise as power balance shifts - is Labour to blame?

Everyone from bus drivers to lawyers to nurses and now to aviation engineers haves been involved in industrial action this year. Photo/File.

With a planned strike at Air New Zealand following industrial action by teachers, bus drivers, midwives, court staff and others it seems like the country is in the grip of a growing spate of pay disputes.

Is this a symptom of a union-friendly Labour Government - as the Opposition would claim - or are there bigger structural forces at work?

Two big economic trends may be fuelling increased worker unrest.

First, we've been through a long period of historically low wage growth.

Inflation has been low since the global financial crisis but has started to rise. Wage inflation has lagged even as unemployment has fallen.

But unemployment is extremely low and employers are facing skill shortages.

So, combine a feeling among workers that they are overdue a decent wage rise, with the fact that they have more job security than ever - throw in a new Government which is more sympathetic to unions - and the rise of industrial action comes as no surprise.

Ganesh Nana, chief economist with think tank BERL (Business and Economic Research Limited), says the "tone of industrial relations has changed".

"We have had a considerable period of time where wages have lagged productivity growth," he says. "Those pressures have been building up and they have to come to bear at some stage in the system."

Employers and Manufacturers chief executive Kim Campbell says "unions have been emboldened".

"They've got a very sympathetic Labour Minister [Iain Lees-Galloway] who used to be a union organiser and a bunch of union-friendly legislation already enacted, with more coming," he says.

Campbell describes the latest action by Air New Zealand engineers as unfortunate and cynical and "a precursor of more to come".

"If you think you can put all this union-friendly industrial relations legislation in place and have a harmonious workplace, you've got to be dreaming."

But putting the blame on the new Government is a bit simplistic, Nana says.

Of course, there is a political overlay to it all, but there are bigger structural forces at play, he says.

We have been through a long period of time where there had been very low levels of industrial action - largely due to uncertainty in the economy and employment market.

So while there was a sense that there was more industrial action now you could turn it around and say this was more of a return to normal levels.

"The guts of it is that wages have been lagging productivity growth and one would think there has got to be some sort of catch-up sooner or later - especially at the bottom end of the income spectrum," Nana says.

With unemployment now under 4 per cent the balance of power has shifted a bit, Nana says, although only to a marginal degree.

Here Campbell agrees. But he argues that with acute skills shortages in key industries employers are paying more.

Where productivity rises there will be rising wages, he says.

Campbell makes the point that unions are at risk of shooting themselves in the foot with strike action by turning the public against them.