PM puts onus on businesses
Wage growth is not ‘‘hot’’ and businesses need to do more to make themselves ‘‘attractive’’ to potential employees, Prime Minister Bill English says.
But English also expected significantly higher wages in industries such as construction would eventually spread through to the rest of the economy.
At a post-Budget lunch in Auckland yesterday, English was asked what could be done to address skill shortages in the economy.
He said skill shortages were showing up in the numbers for the construction industry, but not really elsewhere.
‘‘I’ll believe businesses when they tell me they’ve increased the pay significantly and still couldn’t find someone.
‘‘The general wage data tells us wage growth is better than inflation but you certainly wouldn’t describe it as hot.’’
English said the Government could do a couple of things to help skill shortages.
This included getting more young people to the starting line through improvements to education and changes to the immigration settings.
Where skills were needed, English said he was happy for those jobs to be filled by immigration, and shutting it down would gradually ‘‘throttle’’ economic growth.
But businesses needed to take more responsibility, he said.
‘‘It’s not the Government’s job to run your machine, or pick your fruit, or run your hotel
‘‘It’s not our job to staff those places, it’s your job, and I see more and more businesses who understand, there’s a bit of a departure from the traditional Kiwi model, that they need to invest in a supply chain, or supply line of qualified skilled people.’’
English said this could range from tapping up local schools, to investing more in employees through training.
But they could also just pay people more.
‘‘It’s simply the case that in a growing economy there is demand for skills and we’d expect that when firms are discussing it with the Government, we’d expect businesses would do as they’re doing in the construction industry, and that is they have to make themselves more attractive to the skills that are around.
‘‘It’s in their interest to make themselves attractive to skills just as the same way as employees have to make themselves attractive to employers.’’
English said the construction sector had seen strong wage growth on the back of a rapidly expanding construction boom.
Wages were therefore rising as construction businesses needed people.
He said wage growth was slow because a large number of people were showing up to the labour market, combined with low interest rates and wages.