A report from the world's wealthiest countries found New Zealand needs to do much better on housing and pay, and the Government needs to sort out Maori water rights.
But the OECD report released on Tuesday found while fair pay agreements would increase wages, they could stall economic growth if employers lose flexibility around workers' wages and conditions.
Security guards, as well as supermarket workers and cleaners, will be unions' first focus for fair pay agreements.
If passed into law, the agreements will allow entire industries to set minimum conditions.
The OECD report also found Wellbeing in New Zealand is generally high but warned that Kiwis are working too many hours, housing costs are high but incomes are low, and recommended shifting funds from Kiwibuild into social housing.
The OECD said New Zealand should sort out iwi water rights and expand water charges.
"We have simply prioritised the issue of water quality. The ability to swim without getting sick," said Prime Minister Jacinda Ardern.
The report is a reminder of the biggest challenges the Government faces - housing, wages, productivity, and water, and it underlines how much work still has to be done.