More than 50,000 people arrived in New Zealand on work visas in the first quarter

Only because those businesses pay nothing. My father and his partner have relocated to a small town and she does semi skilled work for $2 an hour over minimum wage. You wont get kiwis working for that but third world labour will do it for next to nothing. Suppressing wages to the benefit of industry is not in the country's collective interest.

They advertise a job wanting a University degree, 5 years of experience, and a minimum wage pay rate.  Then when nobody applies, they import a worker from the third world to do the job who will put up with those conditions in return for a pathway to residency visa.

Solely because of pay. Money talks. 

Ocelot, how many employees do you have and how do you source them and pay them ?

Privatise the benefits and socialise the costs. I can only assume everyone voted for this.

You do know that the bulk of the welfare budget goes to people over 65, right?

Increased productivity doesn't come from people working harder and longer, it comes from investment in research and development and harnessing the power of technology. One lazy fat bugger driving a digger is more productive than 100 keen, fit young men armed with shovels.

Having ready access to cheap, exploitable labour disincentives productivity increases.

Our terrible productivity is mostly at the hands of our terrible incentives around landholding. Bring back land tax and we'd see massive efficiency and productivity gains by our landholders. You need to provide pressure to landholders to get them up off their assets and actually being productive and working. Inability to access space due to exhorbitant rents and limited tenancy space supply scuppers most business possibilities before they get off the ground. NZers are as good as anyone. We're just not as easy to exploit as 3rd worlders because we know what it costs to survive in NZ.

The blight of stagnant landholders being our largest beneficiaries is a burden that we can no longer afford to bear, weighing down on our cost of living and dragging down our productivity numbers.

There's never a labour shortage, only a pay shortage. There is always a price at which you will get exactly the kind of labour you want. Most complainers simply don't want to meet the market.

(As it is the RBNZ's day in the spotlight, and as we're talking about productivity and our use of Labor, here's comment on all three that I wrote somewhat belatedly on another article.)

Finally got round to reading the RBNZ analysis...

Link: https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/research/asse…

The fact that the RBNZ is placing weight on the NZEIR Quarterly Survey of Business Opinion (QSBO) for "labour as a limiting factor" is greatly concerning.

Consider that Production = Land + Labor + Capital + Entrepreneurship.

Note: if Production is constrained, Prices can rise, i.e. inflation.

Thus for the same output (Production), one factor, say Labor, may reduce if one (or more) of the other factors increases, say Capital.

NZ Inc has a very real problem with productivity - it is way lower than our peers.

And one observation - confirmed by empirical studies - is that NZ Inc. has a lower employment of Capital than our peers. I.e. we instead increase one of the other three factors to increase production. And in NZ this is most usually Labor. i.e. "throw another body at the job".

Thus when the NZIER asks whether the supply of labor is "limiting production", it isn't getting much of an answer to anything as the other 3 factors need to be weighed at the same time.

But what is incredibly interesting is that is that when labor is in a sustained period of short supply, businesses in NZ tend to invest more Capital into production. Simple example: It would take six men three days to dig a ditch, but a digger and driver could do the same job in less than a day.

Thus - when labor is being reported as a ""limiting factor" it becomes a far less useful figure without knowing whether the use of Capital (e.g. buying a digger and training a driver) couldn't be used instead.

A further issue in NZ is that we need sustained periods of Labor being in short supply before NZ business managers (Entrepreneurship) get around to investing more Capital into the production process. One suggested reason for this is the boom/bust business cycle in NZ. (Looking at you RBNZ!)

Going back to our low productivity - a suggested reason - and one I believe is significant in NZ's economy - is that by raising the OCR the RBNZ creates a double whammy by:

1) driving people out of work which make Labor more abundant and constrains the price of Labor, while at the same time,

2) raising the cost of Capital (and the risk of using it when the RBNZ wants to create a Recession!) meaning it becomes more expensive (and risky) for businesses to adjust the parameters of Production equation by using more Capital.

At times when Business Opinion is reporting Labor is becoming a "limiting factor", the RBNZ should instead be looking at encouraging the use of Capital to increase Production to starve off Inflation. Do they do this? I've seen ZERO evidence!

So once again we can see that the OCR is a pretty hopeless tool as it simply embeds low productivity through low capital investment into NZ Inc. every time the RBNZ uses the OCR to lower inflation.

"There is a lot of unemployable people in this country"

Do you have a percentage handy for how many there are?

I mean, if you're going to make claims like, that then I expect you'll be able to back them up in no time.

Pay peanuts, get monkeys. There is a price point at which you would find exactly the kind of labour you demand. You're simply not willing to meet the market.

Having tried to help a few of these people in previous and now my own business, I can tell you it is a very hard cycle to break. Not many escape the poverty cycle. Even people I thought were home and hosed have fallen from grace, shitty partner choices, alcohol, drugs and violence are the great opressors.

No we most definitely don't need some sort of union movement to sort wage suppression out.

But enough about Winston