Labour leader David Shearer says economic growth needs to work for all New Zealanders, because too many Kiwis are working long hours for low wages.

In his second "scene-setter" speech at the Nelson Chamber of Commerce this afternoon, Mr Shearer said the Government's policy needed to focus more on lifting the incomes of all New Zealanders, not just a privileged few.

He said New Zealanders were working harder than most countries in the developed world but were earning less.

If wages had grown as much as productivity in the last two decades, the average wage would be $31.85, not $24.43.


"That's an extra seven dollars an hour, or $297 a week that the average worker earned but didn't get paid.

"How many people would be wanting to go to Australia as they are now in record numbers if we paid that?"

He argued that the Government had pushed businesses to pay lower wages, or the same pay, and also pushed people to move to jobs overseas.

"It's now making a virtue of our low wage rates, calling it 'New Zealand envy'."

Mr Shearer did not make any major policy announcements, but he said he was warming to the idea of a voluntary "Living Wage" - the amount a person needed to provide for themselves and their family.

He pointed to the introduction of a Living Wage in London, where the mayor set up a unit that worked out the Living Wage level each year.

As finances allowed, London's council gradually began paying the Living Wage level. The idea has spun off to businesses such as KPMG, where it had improved quality of work and minimised staff turnover.

The Labour leader also focused on the problem of youth unemployment.

He said the number of 15 to 24-year-olds not in work, school or training was enough to fill Eden Park - a rise of 20,000 people from three years ago.

"That's a ticking time bomb. I'd rather get in behind these kids now that pick up the tab when they're in prison.

"That's why I'm confirming my support for the policy where we convert the dole into a subsidy for employers to take on young people as apprentices.

"We need to get these kids before they become a problem."

Mr Shearer also reasserted his belief in Working For Familes.

He said while New Zealand did not share the United States' vast wealth, it was beginning to show similar signs of wealth inequality to America.

The speech was the second of his "scene-setter" speeches. His first focussed on how to make the economy grow faster by lifting educational achievement and encouraging science and innovation to create more high-value exports.