Story: Economy

Page 8. Workers and incomes

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Workforce

In the early 2000s about two-thirds of adults were in the workforce. Three-quarters of this group were full-time workers. Since the mid-1980s the number of part-time workers has grown rapidly. Women were more likely to work part-time. In 2000–2003 the unemployment rate hovered between 5 and 6% – one of the lowest rates in the developed world. Service industries employed two-thirds of the workforce. Over time the labour force has become increasingly skilled and better educated.

The public sector

About 18% of the workforce was in the public sector. This was relatively low by international standards. The figure has fallen from 25% in the mid-1980s, largely because of the sale of many government enterprises during the late 1980s.

Trade unions

From the 1890s New Zealand industrial law involved considerable state regulation of industrial relations and was supportive to trade unions. In 1989, 47% of the employed labour force belonged to a union. Over the next decade membership fell to 17%, largely as a consequence of the Employment Contracts Act 1991, which stripped away the privileges of unions and focused on individual employment contracts. This act was replaced in 2000 by the Employment Relations Act, which required employers, employees and unions to deal with each other openly and honestly.

This new legislation did not, however, reintroduce compulsory unionism, and there was only a slight rise in the proportion of unionised workers to 17.6% of the employed labour force at the end of 2002. They were in 174 unions, not all of which were members of the New Zealand Council of Trade Unions.

Incomes and poverty

Overall, New Zealand has become slowly more prosperous, albeit with setbacks in the 1980s and 1990s. The gap between rich and poor widened from the 1980s. In the year ending March 1996 the top 10% of households had just over a quarter (25.8%) of all income. In 1982 they had possessed about a fifth (20.1%). The lowest 10% of households had just 3.6% of the income. This widening gap was due in part to income-tax changes of the late 1980s and social security benefit cuts of the early 1990s, along with higher unemployment. During the same period the real incomes of 8 out of 10 people fell, in part because of the weak performance of the economy.

Many people in the lowest deciles are in considerable hardship, especially those with children.

How to cite this page:

Brian Easton, 'Economy - Workers and incomes', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/economy/page-8 (accessed 26 July 2017)

Story by Brian Easton, published 8 Feb 2005, updated 16 Sep 2016