Bernard Hickey says a surge of low-skilled migration is frustrating the natural forces of supply and demand that would generate the wage inflation that both the Reserve Bank and the Government need in the long run

Bernard Hickey says a surge of low-skilled migration is frustrating the natural forces of supply and demand that would generate the wage inflation that both the Reserve Bank and the Government need in the long run

By Bernard Hickey 

Normally, strong economic growth starts to generate much stronger wage inflation after a year or two because the supply of labour is not enough to keep up with demand. Economics 101 tells us that prices or wages start to rise when demand outstrips supply. 

New Zealand is certainly now getting the economic growth. The Reserve Bank forecast last week that GDP growth would be 3.4% over the next two years. The Government regularly points to record booms in tourism and construction in Auckland, along with plenty of jobs growth, and that's all true.

So where is the wages growth then? 

Quarterly Employment Survey and Labour Cost Index surveys for the June quarter showed wage growth slowing despite an acceleration in economic growth. The QES measure of average hourly earnings showed annual wage inflation slowing to 2.1% in the June quarter from 2.8% a year earlier, while the LCI measure showed the Index's annual inflation rate falling to a six-year low of 1.5% in the June quarter. The construction sector's hourly wages grew just 2.1% in the June quarter from a year ago.

So why isn't all this economic and jobs growth turning into wage growth? Reserve Bank Governor Graeme Wheeler is tasked with understanding how supply and demand affect wages and prices in the economy and last week he pointed straight at increased supply of labour through migration, in particular the 160,000 new migrants who have arrived in New Zealand since 2013 and increased the size of the workforce by 4%.

"That's added some downward pressure on wage outcomes in terms of the expansion in the labour supply," Wheeler said. "And clearly it's added quite a lot of pressure into the housing market as well," he added for good measure.

The Governor said he was particularly interested in the quality of the migration surge, and he's not the only one. Treasury warned the Government in December it was concerned low-skilled migration was dragging on productivity and wages, and may frustrate the Government's push to move beneficiaries into work because lower-end jobs were being scooped up by migrants. 

Immigration Minister Michael Woodhouse and Finance Minister Bill English said this week they had not seen evidence yet that the surge in low-skilled migration was suppressing wages and stopping beneficiaries from moving into work, but there are plenty of signs in the statistics. 

This week's delayed and revised Household Labour Force figures showed unemployment fell just 1,000 to 131,000 despite a 58,000 increase in the number of jobs in the June quarter. Statistics New Zealand also reported there were 342,000 New Zealanders or 12.7% of the workforce who were 'under-utilised', which is an internationally-accepted standard for measuring the number of people out of work, who want more work or who are not currently looking for work but would take work if it was available.

Overall wage inflation has been weak and falling in the last year, but even areas where jobs growth has been fastest and there is the most pressure in the economy have seen wage growth fall or stagnate. The Quarterly Employment Survey showed retail sector average total hourly earnings growth fell to 3.4% in the year to June from 4.6% the previous year. Wage growth in accommodation and food services fell over the last year to 4.0% from 4.9%. The Labour Cost Index measure of salary and ordinary time wage rates showed annual inflation of agricultural wages fell to 1.5% in the June quarter from 1.7% a year ago, while wages for labourers fell to 1.9% from 2.1% a year ago.

So why not let the market work by letting the stronger demand exceed the local supply and lift wages? Immigration New Zealand awarded 209,461 work visas in the year to June 30, up 23.5% from two years ago. The top 20 occupations for those visas show just four of them were in higher skilled occupations. If those work visas weren't awarded, the market would start to generate some heat and increase wages at the low end. 

That would encourage people to move within the economy, either to new regions or into new occupations. It would also encourage employers to find ways make their existing workers more productive to match those wages, including by improving training, management and investing in new technology. That's how an economy gets wealthier in the long run, by improving productivity.

Woodhouse, however, is reluctant to unleash the market.

"If you completely remove the international labour market and have a pure supply and demand model, I think in the short term that could be quite damaging," he said this week. 

Damaging for whom? Employers? Workers? 

It actually wouldn't be damaging for the Government in the short and long terms, as English himself pointed out this week. 

"We look at it both from the point of view of household incomes, which we'd prefer to be rising, and also from the point of view of the welfare liability," he said, referring to the long term estimates of the costs of people staying on benefits and out of work. 

The best way for an economy to grow is for the market to allow wages to grow. Enabling a flood of low-skilled migrants is frustrating that market mechanism with the short term aim of keeping wages low for employers. It does nothing to develop the economy and the society in the long term.

Here are the top 20 occupations for work visas in the year to June 30, 2016 year (with numbers in brackets):

Tour Guide (6,248)
Chef (4,218)
Dairy Cattle Farmer (2,253)
Retail Manager (General) (2,369)
Cafe or restaurant manager (2,045)
Carpenter (1,507)
Retail Supervisor (1,693)
Student (1,157)
Aged or disabled carer (1,005)
Deck hand (895)
Dairy Cattle Farm worker (876)
Software engineer (716)
University Lecturer (680)
Cook (543)
Registered Nurse (aged care) (509)
ICT Support Technicians (494)
Developer Programmer (489)
Entertainer or Variety artist (465)
Office Manager (456)
Waiter (452) 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

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27
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Sorry but this article contains nothing new, we've been saying this since 2014 and nothing has changed.

But the top 20 list is extremely insightful. What a complete load of bollocks.

John Key is most definitely asleep at the wheel.

What the HELL are we doing giving work visas for WAITERS? and what does the "STUDENT" category entail? And COOK vs CHEF? We can't train up our own to be able to deep fry some chips?

This is just taking the complete and utter piss now.

16
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And, going by the cases brought to the courts, it is immigrant business owners who "employ" these people. My guess is those on temporary work or student visas probably know no different and think indentured slavery is how things work in this country. The way things are going, who would be surprised if before long, it is.
Many of these businesses wouldn't last five minutes if they complied with NZ law.

12
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You are saying that massive mortgages are anything but indentured slavery?

Pretty sure Retail Supervisor, Cook/Chef, and Tour guide are Chinese immigration scam categories.

And that.

10
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there was an article a while back about how disappointed a leading travel agent was that her groups got shown around NZ by workers on visas and were missing out on a kiwi experience .
I can totally believe it as most of the guides I have come across have been such, but I can see why the pay is very low and most are on a working holiday.
so how do you fix it put the pay up and scare away tourists with price rises?

Most of the above categories are scam as employers give job letter to get PR and charge a heavy fee (unoffical) and also get labour for few years below the minimum wage and for long hour.

Part of scam unleashed by national government in the name of ecenomy. Asians will easily jnvest few year and appox $50000 to get PRas this is the only developed countrywhere one can easily get resident visa and also by far the cheapest in comparison.

Am sure government and all so called experts knows about it but turn a blind eye as it suits their personal agenda/ interest and NOT Kiwi interest.

This is what we get by voting people with speculative and manipulative mindset for whom everything is related to $$$$$

18
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There are 4 maybe 5 at best on that list that are actually "skilled" jobs.

Seriously, we are importing waiters, cooks, and retail staff - and then wonder why NZ is failing.

16
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What does "Student" consist of? A work visa for being a student is beyond taking the piss

25
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sometimes i wonder if this is a sick joke by the government, that in their meetings they discuss how far they can take the piss before the people of this country will actually react.

I mean 6248 tour giudes?? Over 4000 cafe and retail mangaers??? Really????

11
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Tour guides and retail supervisors are used for Chinese immigration scams.

13
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Common sense seems to be out the window with these guys. Then again are we really that surprised? If their job is to keep GDP growing and firmly believe in the trickle down effect, rising wages ain't going to be that effective as opposed to allowing businesses to expand rapidly with cheap labour while the share of the pie for the rest of the peons decreases. The PC way of saying this is "there is no evidence".

16
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Rest homes. Profitable industry despite all their whinging. In recent years big players have paid lots to get into the industr and not because they like old people. And we have unemployed new graduate New Zealander nurses at the same time the industry imports foreign ones.
Clearly this setup is not designed in the interest of New Zealanders.

17
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New Zealanders need to not surrender to the false song of globalism.

But that's what Trump said ! I want a Trump

But we already have....like, decades ago...

11
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Intensive for-profit fogie-farming isn't going to be so great for the fogies. So many incentives to cut corners on the staff and care levels to max out those profits. I'll be looking out for lobbying to decrease regulatory oversight and eliminate inspection regimes in the name of deregulation and the free market.

What's the difference between software engineer and "developer programmer"?

Or cook and chef?

Retail manager and retail supervisor?

Entertainer is probably artists on tour, very short-term. But what about tour operator? How temporary is that? How long are those visas issued for?

You know those bus drivers who drive Chinese tour buses? Yeah that. They're here permanently.

Chef is a semi-skilled worker in a food preparation environment. The person has some (quite basic, no rocket science; anyone can manage) qualification in the field and a couple of years of work experience.
A cook is basically an unskilled worker who does the manual work in a kitchen; garbage dumping, chopping, cleaning dishes and sections, mopping the floor among other work handed-down by chefs.

Chef is a semi-skilled worker in a food preparation environment. The person has some (quite basic, no rocket science; anyone can manage) qualification in the field and a couple of years of work experience.
A cook is basically an unskilled worker who does the manual work in a kitchen; garbage dumping, chopping, cleaning dishes and sections, mopping the floor among other work handed-down by chefs.

Student work visa. Amazing.

11
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"Statistics New Zealand also reported 342,000 New Zealanders, or 12.7 per cent of the workforce, were "under-utilised" - an internationally accepted standard for measuring the number out of work - want more work or are not looking for work but would take it if it was available."

Statistics NZ changed their definition of unemployed so those "Only Looking online for work" are no longer considered to be actively looking for work. INCREDIBLE. Professionals these days ONLY look online for jobs. Taking NZ back to teh dark ages.

So the real Unemployment rate is more likely to be closer to this 12.7% that the 5.5% Statistics NZ quote.

Students is a highly skilled profession... them & temp workers need to buy 13,500 houses a year in Auckland. That is no easy task

Don't worry - shortly it will be yesterdays news - forgotten about

What I can see in that list of jobs is a lot of night work and weekend work and from my experience,no sooner have you employed a young kiwi to work and they approach you to have weekends off for sport and parties etc .

15
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Maybe the wages need to be higher?

I remember when I was a kid, you used to get a night rate, overtime rate in weekends etc.... It was a bit more of an incentive to work.

Pay the right wage and who knows, you might even get someone older than a teenager to do the job, then problem solved.

13
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And just think, if people were paid a living wage rather than a barely-subsisting-even-with-subsidies wage, we could create disposable income and demand in the economy without importing lots of people who need expensive infrastructure built to accommodate them.

Maybe people, especially younger people and certainly parents should not, on the whole, be having to work on weekends, maybe family, sport and yes, even a bit of entertainment are actually important.

12
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The bosses at my company are always complaining that they can't get workers in on Sundays and late nights.
I tell them that by even by paying them twice we would cover the cost (we charge clients 60$/hour, workers get paid 20) and anyway we make much more money on other stuff. Of course they are too old School to understand so they Just give the shifts to the most desperate retard they can find. Jobs then are done poorly, need twice the time, client complains gets refunded we lose money.

There is no forward thinking in this country.

I think that management in NZ is very conservative, as for the last 10 years you could make money doing the same thing all over again. Also by having govt backing business all the time empowers lazy management.

agree

We need to change the whole perspective in NZ businesses where employees are only viewed as assets with "salary or wage costs" attached to them. Businesses which view employees as long-term investments tend to churn out more profit on the hard work and dedication of happy and productive employees.
The whole priority needs to shift from cutting costs to boosting productivity.

So why isn't all this economic and jobs growth turning into wage growth? Reserve Bank Governor Graeme Wheeler is tasked with understanding how supply and demand affect wages and prices in the economy and last week he pointed straight at increased supply of labour through migration, in particular the 160,000 new migrants who have arrived in New Zealand since 2013 and increased the size of the workforce by 4%.

"That's added some downward pressure on wage outcomes in terms of the expansion in the labour supply," Wheeler said. "And clearly it's added quite a lot of pressure into the housing market as well," he added for good measure.

Hmmm...

"In years of prosperity, monetary policy is said to be a potent instrument, the skillful handling of which deserves credit for the favorable course of events; in years of adversity, monetary policy is said to have little leeway but is largely the consequence of other forces, and it was only the skillful handling of the exceedingly limited powers available that prevented conditions from being worse."

"The difficulty of having people understand monetary theory is very simple-the central banks are good at press relations. The central banks hire people and the central banks employ a large fraction of all economists so there is a bias to tell the case-the story-in a way that is favorable to the central banks.". Read more and more

"If you completely remove the international labour market and have a pure supply and demand model, I think in the short term that could be quite damaging," he said this week.

Replace International Labour Market with housing.

This is an absolute farce, the national government and its cronies need to be chucked out on their ears. There is no other way forward

Well, all the above are good comments .. but, away from the anxiety ....The devil is always in the detail and let's not be too selective in displaying the numbers as BH likes to do ...
How many waiters , Cooks, and chefs are there in NZ to fill these positions in Chinese, Thai, Japanese, Indian, and Other Asian restaurants where the prime requirement is to speak the language and know the culture ?? ... how many unemployed New Zealanders you know would qualify to fill these positions in almost hundreds of ethnic restaurants in all NZ cities??

Isn't it also an essential requirement for qualified tour guides to speak several languages and specially Mandarin to fill tourist guide positions? it must be much easier to train and educate an asian young person on NZ history and heritage than for a Kiwi to learn Mandarin !!

How many commerce or product managers dealing with chinese businesses who again need to know the culture and the business are there to employ in Chinese Wholesale businesses be it in Food, Bathrooms, tiles, tyres, and building material etc ?? the answer is NON

wage deflation?, absolutely .. these immigrants will do the $20/hour job for minimum wage and so will others - mind you their productivity is much higher than us ... you just have to employ them and watch - they are cheaper and a delight to work with , they don't moan, don't take long breaks , have excellent work ethics ....and happy to work overtime and don't scape mondays because they had a party in the weekend ... all that counts for employers...
I hope some of you would agree with that

Rather a Asian chef doing the meal correctly than some white person who knows next to nothing on Asian cuisine.

Huge percentage of those brought in in those categories are unemployed after three years, when they've done the time to upgrade to PR and can be cut loose and replaced with a new fee-paying import. Around 30% was the last figure I saw. One of the warning signs that the system's being scammed on a grand scale.

Leaves a perfectly adequate pool of now-local skilled chefs who could be recruited, if there was a genuine need for chefs, and the whole thing wasn't an excuse to keep the fraudulent conveyor belt going.

Says Who Kakapo? the figures you saw must be incorrect or pulled out of thin air , just like most numbers nowadays .... The Fact is That Unemployment is down ... with all these imports, work visa, etc, Unemployment is down ....

How many businesses you know will cut loose their employees and replace them with new ones ... and why would they do that after being trained and established ... this kind of assumptions are just fantasies ... totally disconnected from the real business world , just another moan to exaggerate issues ... Infact worker of the above mentioned calibre will do anything to hang on to their jobs and raise their families and bring in relatives for a better life - these people are not in a hurry. If they move then they will be going up the ranks or a better pay one because it exists and that is natural. .. How many indians, chinese, and other ethnic immigrants you know currently on the DOL? very few I would say if any!

I would like to know how many beneficiaries who have been on the DOL for the last 3 years have joined the work force, and what is the percentage of that category's unemployment rate ??

We all know that between 4.5 - 5% of the work force is unemployable .. no matter what is available, right? Anyone who wants to work he / she will find a job today ... the building industry is crying for people .... but most either like to sit on their bums all day sipping drinks and pop out kids like their parents or like to have a manager's salary for a labourer job - Well tough !! businesses will not wait for these to wake up.

Talking about MOST of these unemployable percentage ... As long as governments under the pressure of social do goods and tree huggers keep the current benefit levels and does not question young lads roaming the streets in race car and bikes -- then no one will seriously starve and look for work to feed himself or his family....!

Kakapo is correct

Within 3 years 30% of Asian migrants are unemployed
These facts and figures have been highlighted by Michael Reddell of croakingcassandra.com on several occasions in the past 12 months quoting Treasury and RBNZ sources

@two otherguys, I have gone through the web site and found nothing referring to this, i just read articles about general figures and wishy washy stuff citing BH's articles etc ...I would appreciate if you can post the articles you mentioned on Michael's site please...
All I got from his site was useless stuff and empty jaw boning like this one ...
http://thepolicyobservatory.com/2016/05/think-big-auckland-immigration-a...

What you miss is the number who are "contractors" being paid well under the minimum wage. This is rife. It's a great way to profiteer in the building industry and keep your fried rice under 10 bucks.
In my opinion kiwis are generally hard working, but why should we conform to Asian standards ? Is that the end point ?

that's racist, why are you saying white chefs can not cook Asian cuisine

Anyone can learn a skill.

And it's not like the average takeaway is producing anything you could describe as classical cuisine which needs highly-skilled chefs. Shoving frozen wontons in a deep-fryer or churning out crappy fried rice with frozen diced mixed veg is hardly rocket science.

High-end restaurants can legitimately claim to need trained chefs who have done proper apprenticeship courses, but most places just need somebody who can get the lid off an industrial-sized bottle of generic sweet 'n' sour sauce. Same for any restaurant, not just ethnic. Some require skill and training, some require reheating pre-made glop.

And the Asians baking pies, making fish and chips etc? Same thing apply there?

I spent the winter of 2014 absolutely perfecting my Chinese claypot cooking. If only somebody had told me it was impossible for my pasty self before I went through all that rigorous Youtube watching and a bit of practice.

Agreed. That's why I insist that my taxi driver is white. Since whitey invented the automobile. Same goes for any pilot that flies me around. Must be white. Ditto my doctor.

Funny!

Without new ponzi scheme members my scam will collapse!

New Zealand needs immigration at this point in time with a fast ageing population,birth rates below replacement level & tens of thousands of New Zealanders still moving for overseas. so immigration is the only solution to replace those New Zealanders leaving New Zealand.

40,000-50,000 Kiwis moved to Australia annually over the last 15 years. 1 million+ expat Kiwis live overseas so plenty of more people to immigrate back to New Zealand.

Migration has been slowing for New Zealand over the last few months.

So how do you reconcile the warnings that jobs are rapidly being displaced by robotics with the contradictory argument that we need more people. Both arguments cannot be right, so someone is telling porkies.

BH when you talk about GDP figures these days, given that the govt is apparently desperate to import growth and hoping nobody looks too closely at where it comes from, not to mention the imaginary "growth" of real estate assets, please talk in GDP per capita terms.

Gross domestic product (GDP) was up 0.7 percent in the March 2016 quarter. This follows a 0.9 percent increase in the December 2015 quarter. Growth for the year ended March 2016 was 2.4 percent.

GDP per capita was up 0.1 percent in the March 2016 quarter, following a 0.3 percent increase in the December 2015 quarter. GDP per capita for the year ended March 2016 increased 0.5 percent.

( http://www.stats.govt.nz/browse_for_stats/economic_indicators/GDP/GrossD... )

Context and trends:

http://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locations=NZ

and

https://www.google.co.nz/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_g...
(look at Australia's deviation from NZ from the early 2000's on)

Yeah but the Australian GDP per capita took a sharp drop from 2013-2014 $67,652 dropped to $61,979.

Must have been those 50,000+ New Zealanders who moved Australia during that time frame which helped contribute to the wage decline in Australia from 2013-2014.

Tax Cuts due maybe after next election and Interest rate cuts another form of a pay rise for some.

apart from carpenters, I don't see any evidence that NZ is getting the building industry workers that we need

Not only is the government hobbling the free market for labour, but it is failing to force a free market in residential land (complicit with the council in rigging the market for their mates) and is also failing to enforce a free market operates in the building material market.
To help sustain this ponzie scheme the county is also wasting vast sums of money subsidizing rental and income through working for families and the housing subsidy, and providing housing, infrastructure, schools, hospitals etc for the hordes of immigrants that we do not need as evidenced by the list of their occupations.
If we had a free market for labour as Bernard suggests we would find that workers and productivity would more highly valued with a result that business would focus far more on staff training and productivity rather than the present lazy third world approach of importing more cheap unskilled labour. Those businesses that could not cut it in a competitive higher wage environment deserve to fade away; the whole country will be better off without them and our people better employed where they can make more money through training smart business and high productivity. The present system is sustaining unproductive businesses that need either a kick in the pants or to be kicked out of the economy.

Sorry Chris-M, but your last paragraph is full of contradictions .... there is no ponzi scheme here,
1- the Gov is handing out money to the " supposedly" most needed slice of society - the working families with kids - and that was done in agreement with all other parties who pushed for the same mantra ages ago ... Rental subsidies is the same, its a hand out to prevent more homelessness and to house people on benefit because the Gov could not afford housing them itself ( Housing NZ blunders are enough proof --etc) .. no future gov will remove these unless they have provided BRAVE alternatives.
And NZ tax payers are paying the above in a big collective CHARITY arrangement.

2- A word of truth ... I think that almost all immigrants or their families are TAX payers whether they are students, businesses, or visa workers ... so they are not getting services for free.

3- Let's get real, Free labour market and productivity: Well no employer will undervalue productivity at any given time .. its called PROMOTION! and BTW that happens every day. Starving the work force from people will not make existing ones more valuable and will not force businesses to train useless it needs to , it can actually backfire and motivate bosses to get rid of those who fail to measure up. that is called TRIMMING.

" Those businesses that could not cut it in a competitive higher wage environment deserve to fade away" ... Really?? and what happens to its staff?? .. fade away too or go back on the DOL and get WFF and Supplements or be forced to sell their homes ?? or cry blue murder on the streets and obviously blame the Gov?

Making such assumptions " led by similar inflammatory articles like this one" leads to disasters - one needs to examine the details behind the headlines and think rather just generalize!! .. try to suggest the above to a businessman and see what sort of response you get ...

Bottom line: wages do not rise because of supply and demand ( only does in very specific and small close industries like ICT, Engineering etc, and even then businesses will import its needs to cover shortage and not increase wages endlessly ) .. Not because we have less workers around all wages will rise - that is very wishful thinking - money does not grow on trees - the more business struggles or closes down the higher unemployment goes.

Make no mistake, Unlike Govs , businesses are NO charities .. they have bottom lines and shareholders to look after.

Reads like National PR spin....

:) ... Again? ... why does anything close to reality sounds like NAT PR spin?

What I am saying is common sense, and good on everyone who calls it as it is ... rather than clinging to wishy washy hopes that the sky will rain money soon ...

because your points are not common sense but are idealistic and run squarely on national paty policy settings
the government can not afford housing but can afford to subsidize private housing is pure national party policy
ie private enterprise can always do it better than government .
a smaller pool of workers DOES force up pay rates. supply and demand
many big companies lobby hard to keep the immigration tap open as it lowers there costs so is a form of corporate subsidiary as the government has to top up the lower paid with welfare, WFF accommodation supplements, social housing with wage related rents
again another national party policy, all the other main parties want to cut back and force wages up

Cool, before you align my comments with the NATs policy etc, I have to say that these comments are not idealistic , I have been in both employment and business for very long time so I know well what is out there in the real world.

The rent subsidies was not invented 8 years ago or was it? .... Accommodation Supplements has been there for ages ( over 21 years at least) so that is not Nat policy .. and it is a FACT that topping up someone's benefit by $150 or even $200 a week is much much cheaper than buying or building a House to lodge them - the sum of $7500 a year hardly covers the maintenance, inspection and rates cost of any Housing NZ property!! Plus the Gov has to come up with cash money or BORROW it to buy it or build it....so does that make any sense now? .This is not about who does it better , it is about using the private sector's money to fill a gap in the rental market - Or are you saying that Labour over the previous 9 years were as silly as the Nats by doing the same when they had $7B in surplus?? ... So who created welfare in NZ ?? why don't Labour or the Greens have a policy to get rid of it all together if it is that BAD ?? ... what alternatives are they proposing?? ...Borrowing billions to build a new set of Housing NZ slums and endept the country a bit more to get elected this time?

I am not really sure !!

Govs do this because they don't have the money to invest up front and would need time to implement ( it is there all around the world - this is not a NZ invention)...the best thing that housing NZ could do few years ago was to lease new houses from the private sector at around market rents on a long lease to lodge the beneficiaries ... almost the same thing!

You seem to assume that a smaller pool of workers will force pay rises , I said that is true in certain industries , not for all ... Generalising an argument doesn't make it true .... a small pool in a certain industry will effect its own industry employment and wages for some time, depending on how much spare workforce capacity it has, example: architects, heart surgeons, ICT engineers, etc... ( apart from the conspiracy theory that some like to indulge in ) a smaller pool of workers may force some rise in the VERY short term but supply and demand will INCREASE that pool again once pay rises get out of control lay offs begins and businesses consolidate as it start affecting the profitability of businesses ... unless you believe trade unions will shut down the country and block the streets !!
Does that make sense?
Does any of these ring any bells? NZ post? Fonterra? Ports of Auckland? freezing works ? .

This issue is not Black and white, its not Nat or Labour, it is more complicated than just shutting the doors and keeping it in the family!! and it won't surely be solved by bold titles, selective stats or political nonsense.

However, should anyone likes to depart from economic logic, Hope that money will be created out of thin air, or Robin Hood is coming back, then please be my guest ... you can discuss these topics in these terms, until the cows come home!

I suggest that you keep the strong faith and argue these matters after the Labour Green Coalition wins the next election and hold them in check !! I will be looking forward to that.

I rest my case ...

Businesses are holding out their hands for government welfare, though. If a business can't pay its workers a wage they can live on, so their pay has to be supplemented by the government, it is the business who is bludging, not the worker, as it's the business who reaps the profit.
.
Promotion? Really? You may thinkt NZ is a meritocracy, but it's still the old white boys network which gives jobs to other old white boys. People don't get promoted on hard work. It's who you know which still counts for a lot.
.
Economics 101: you pay your workers a higher wage, they will spend more money, boosting he economy. It's as simple as 1, 2, 3.
.
It's never the rich who need more money: they just hoard it.
It's the poor who spend. Always. They don't have anything spare to save.

14
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Pretty obvious why these traitors are doing this. Protect the bubble at all costs. Even if it means bringing in a million in 10 years or less. They know, continued capital gain via creating severe shortages in housing is key to pushing demand in this area. Supply will never be matched.
And looking at the polls i would say for many NZders its all that matters to them. Particularly if the majority of the "voting" population are still homeowners, investors, and speculators.

"Traitors" ?? .. lol, So are you suggesting that the majority of home owners are now Nat voters ( right) and there is very few lefties who own homes ? or these too are going to Vote National? what about the green guys who own Mansions and few rentals ?

I am sure you did not make this comment out of Jealousy !!

It is really useful to broaden our minds a bit and be objective in facing the problem we have, come up with useful solutions instead of this useless blame game.

By "traitors" im referring to any person, mp, real estate agency etc that has fuelled the transfer of ownership of this country, lands, homes and businesses to foreign ownership. That clear enough? They ARE traitors. Many were willing traitors under Labour. I sight no one party mate. And we will see where the "useless blame game" as you put it plays out after it all tanks. I will be pointing my finger at those people for sure and come what may to them. The youth of this country will have my back

Oh well, Nothing is going to tank , there is too much at stake here to let that happen , however if you put it that way, ... then we just have to agree to disagree.

But keep the finger pointing to everyone who has actually caused this problem, including ACC who all of a sudden all gone soft when shown the thick stick by the Gov... as I said before, it's essential to keep everyone in check now and in the future ...

New Zealand has to be the most poorly managed "developed" country on earth.

haha, by that standard so is Japan, the UK. Italy, Ireland, Greece, Cyprus and even France and few dozens more ...

How do you figure that?

Given the way we are going it is becoming moot whether we are developed and the quotation marks are very appropriate. Eg one of the highest levels of gastric disease from polluted drinking water, child poverty and abuse, increasing corruption and homelessness to name a few. We are increasingly looking like a South American banana republic sliding down the world rankings while a select few hoover up the wealth and the government sells out it's own citizens to foreigners. How long will it be before we see a shanty town set up in Auckland; it can't be far off.

Maybe there is some truth to the 3 years and then cut frof their jobs. What I can't understand is how the median income of Chinese can be so low. Indians are slightly higher at 27k and European at 30k. Do these numbers reflect the low skilled migrants ?

Per stats nz :
Median income
For people aged 15 years and over identifying with the Chinese ethnic group and living in New Zealand on 5 March 2013:

The median income (half received less and half received more income) was $16,000, up from $10,500 in 2006.
The median income for men was $19,100. This was higher than for women ($14,100).
Those born in New Zealand had a median income of $18,600, compared with $15,700 for those born overseas.

Just on the side of this discussion , i came across the following doco on china .. hope we learn few things about these people and help us understand how others work and behave - A bit long but worth watching ... enjoy
https://www.youtube.com/watch?v=wQ6D4h31xIk&ab_channel=EducationDocumentary

Huh, up is down? I don't care about how they think and behave in China, this isn't China.

Yet.

Never knew 'Student' was an occupation in this country.

You can’t fight a “race to the bottom” currency war with decent rates of wage inflation. Because if we had inflation then the RBNZ would have to put interest rates up. If the interest rates went up then we’d get debt deleveraging and house price deflation (outside Auckland). So the Government is deliberately importing wage deflation, and house price inflation. Just look at the wealthy migrant visa. Miserable for non asset owning kiwis. The consequences will be felt for decades.

Judging by the continuing commentary on interest.co.nz every month showing complete disdain for the current Key govt, instead of waiting for next years election you could organise to embarass this ineffective govt into change ?
Louisiana flood cost 40,000 homes which is the exact same number quoted Auckland is short of right now.
Perhaps Mr Key could organise shelters like Louisiana ? Thats how serious the Auckland housing shortage is that he keeps denying.
That tells me he is not a good leader.

For once I agree with BH although I have trouble believing this top 20 list, if true the government is on crack and makes me depressed as next we will go looking for snake charmers...

The Minister of Immigration, Michael Woodhouse doesn't agree with any of your comments!! Another sign that this governments out of touch! Housing, economy, poverty, education ect ... other than these fundamental aspects of a functioning Country, what else are they accountable for? Oh yeah. Campaigning for 3 years in-between elections!

The good news is national will be out one day and it will take them a long time to get back in power after all the mess they left.

Can we also have 'House buyer' as a skilled category immigrant please ?

Would need to demonstrate multiple prior skills to qualify.

I think that comes under the buy a business category.