The sector that earns 15 percent more - but there's a catch

grinding the head of screws making sparks
Photo credit: Getty

New Zealanders working as tradespeople are earning 15 percent more than the average annual wage, a new report shows.

The report, released by the Ministry of Business, Innovation and Employment (MBIE), shows manufacturing employees earn an average of $63,000 per annum - 15 percent higher than the NZ average ($54,749). 

But they are working long hours to earn that wage.

The average hourly wage is $1.10 per hour lower than the NZ average.

The story of this sector is emblematic of New Zealand's labour market in general. 

The report warns wages in New Zealand are being kept low because of low productivity - that is, how long people need to work and how much companies need to spend in order to produce goods and services. 

"New Zealand's labour productivity performance has been weak for a long time," the report warns. 

"This is a key reason why New Zealand's income levels are more than 20% below the OECD average even though our broad policy settings are considered to be at, or close to, best practice.

"When labour productivity growth is strong, wages for New Zealand workers increase faster."

Minister for Economic Development David Parker said the continued lack of productivity is a concern.

"Manufacturing is crucial to boosting jobs and growing our exports, particularly where New Zealand enjoys a comparative advantage. The sector's potential is clear and we need to devote more of the country’s resource it," he said.

"The Government's Tax Working Group and reforms we are making to the Reserve Bank Act are important steps on the path to a more productive economy."

It's also a sector in which demand for jobs is being met with immigrant workers. 

The number of work visas in manufacturing-related occupations doubled from 4187 in 2011 to 9469 in 2016. More than 60 percent of those visas were for technicians and trade workers.

There's yet another warning for people considering a job in manufacturing - an automated future.

"Manufacturing is unlikely to generate significant employment growth in the future," the report says.

"Increased efficiencies, automation and the increasing use of robotics will deliver more output with less, though potentially higher skilled, labour input," the report says.


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