Call for wage increases 'unrealistic' say employer groups

Employer groups have labelled union calls for across the board 5 per cent wage increases unfair and unrealistic.

The Engineering, Printing and Manufacturing Union (EPMU) is making the claim on behalf of nearly 50,000 members.

The union says the claim follows good economic times with some companies recording record profits.

Auckland Chamber of Commerce chief executive Michael Barnett said today any wage increases should be tied to productivity and the blanket claim was "unrealistic".

"I don't believe it's a realistic basis on which to approach the employers," Mr Barnett told National Radio this morning. "I think a more positive move from the unions would have been to work with the employers to increase productivity."

EPMU secretary Andrew Little said productivity had been continually increasing, many companies were operating close to capacity and in many cases expansion was likely to come further down the track.

"In the meantime the economy is booming, profits are soaring in a way we haven't seen for many years and our members want a share of that," he said.

Mr Barnett said where there had been good productivity and improved performance a better share of the rewards was justified, but the Government took its share, as did shareholders.

The majority of New Zealand businesses were small and employing less than 20 people.

"We shouldn't be rating the success that we can see coming from the larger businesses. To assume that those smaller businesses are making significant profits is absolutely wrong, it's unfounded."

Mr Little said the point was that business in general was enjoying significant profit growth.

"The claim we are making -- the 5 per cent -- is a modest increase that gives us a margin above the cost of living. But it starts to address the real crisis that we have in New Zealand which is that our comparable wage levels are slipping behind other countries -- particularly Australia," he said.

Business New Zealand chief executive Phil O'Reilly also said it was difficult to justify calls for overall wage increases.

Mr O'Reilly said from a business point of view, workers had already effectively been given a 2 per cent pay increase by getting an extra week of annual leave.

Council of Trade Unions (CTU) president Ross Wilson also backed the wage increase claim, saying there was strong evidence to support such an initiative.

The economy had grown by about 20 per cent in the past five years but wages had gone up by only 10.9 per cent, Mr Wilson said in a statement today.

Company taxes paid to the Government were up by more than 19 per cent in the last year -- which showed employers were making higher profits, because the tax rate had remained the same.

Mr Wilson said he recognised a need for upskilling and further increases in productivity from workers, but there needed to be more incentive.

"If workers are to work to achieve further increases in productivity, then they need to see that the benefits will be shared.

"The CTU is calling on all New Zealand workers to get organised in union collective bargaining and get the fair wage increase they are entitled to," Mr Wilson said.

Green Party industrial relations spokeswoman Sue Bradford has also entered the debate, saying in a statement today the Government should support the wage claim.

But the Labour Party's Labour Minister Paul Swain has indicated the Government would rather leave employers and unions to sort through the issues themselves.

"It is unfortunate and remarkable that the Labour Minister of a Labour Government has nothing to say about one of the Labour movement's staunchest wage claims for many years," Ms Bradford said.

She said Mr Swain could easily send a clear signal to employers that its time to share the wealth with the workers that create it.

"Ordinary Kiwis deserve to share in New Zealand's prosperity, so I congratulate the EPMU for their stand."

Ms Bradford also said small businesses concerned by the prospect of a 5 per cent wage claim should put the heat on the Government to reform its trade agenda.

Many New Zealand businesses faced unfair competition from imports made in countries where workers get paid less than the cost of living and put up with low basic labour and environmental standards.

"The Government could be avoiding this unfair pressure by not signing Free Trade Agreements with such countries," Ms Bradford said.

- NZPA