This paper reports the results of Victoria University's Industrial Relations Centre's annual survey of trade union membership in New Zealand for 2004. The survey has been conducted since 1991, when the Employment Contracts Act 1991 (ECA) ended the practice of union registration and the collection of official data. This year we report changes in union membership, composition, and density from December 2003 to December 2004, taking an historical perspective to compare the industrial relations periods framed by the ECA and the Employment Relations Act 2000 (ERA).

What do unions do? The major objective of unions is to improve the terms of conditions of employment for their members. At the same time, unions have a considerable impact on the employment conditions of not only their own members but non-unionised workers as well. One of the most important employment terms unions negotiate is wages. As a result, wage bargaining has been identified as a primary function of unions, and differences in wages between union and non-union members are considered an important measure of union power. In most countries this differential is called the ‘union/non-union’ wage differential. In New Zealand, however, there are employees who are union members but are not covered by collective agreements, contrary to the more common occurrence in other countries (e.g. the United States and Canada), where non-union members are often covered by collective agreements. Therefore, in New Zealand the differential should be more precisely called the ‘collective versus individual’ wage differential. In this article we focus on the raw ‘collective’ wage differential, but due to convention we still call it the ‘union’ wage differential.

<p>International studies almost uniformly conclude that union members receive higher wages than their non-union counterparts. This study investigates differences between collective and individual salaries using the New Zealand State Services Commission's Human Resources Capability Survey 2005. It explores the impact of collective bargaining on pay by controlling for a large number of employee and employer characteristics. As very little research has been carried out on the subject in New Zealand, I focused on the international literature in order to identify the major factors that explain the magnitude of union/non-union wage differential. Major industrial changes, which have shaped the NZ public service bargaining structure and its outcomes are identified. A range of statistical tests are used to examine the pay differences between collective and individual agreements in New Zealand public service. I, first, carry out basic comparisons of the average collective and individual wages across gender, employment type, occupations, ethnicity, age, employer size and tenure, followed by numerous multivariate regressions to work out the true contributing factors to the union/non-union wage differential. Finally, I analyze the results in the unique NZ context to allow new ideas and theory to emerge and compare it to international trends. Looking at the basic comparisons, I found that, in the New Zealand public service, employees on individual agreements earn significantly higher wages then those who are covered by collective agreements. However, multivariate analyses have revealed a different picture. The study found that occupational composition is the largest contributor to the variability in collective/individual pay in NZPS. With the exception of the senior, high skilled and specialised employees, no pay differential was found between collective or individual agreements in the New Zealand public service.</p>

<p>International studies almost uniformly conclude that union members receive higher wages than their non-union counterparts. This study investigates differences between collective and individual salaries using the New Zealand State Services Commission's Human Resources Capability Survey 2005. It explores the impact of collective bargaining on pay by controlling for a large number of employee and employer characteristics. As very little research has been carried out on the subject in New Zealand, I focused on the international literature in order to identify the major factors that explain the magnitude of union/non-union wage differential. Major industrial changes, which have shaped the NZ public service bargaining structure and its outcomes are identified. A range of statistical tests are used to examine the pay differences between collective and individual agreements in New Zealand public service. I, first, carry out basic comparisons of the average collective and individual wages across gender, employment type, occupations, ethnicity, age, employer size and tenure, followed by numerous multivariate regressions to work out the true contributing factors to the union/non-union wage differential. Finally, I analyze the results in the unique NZ context to allow new ideas and theory to emerge and compare it to international trends. Looking at the basic comparisons, I found that, in the New Zealand public service, employees on individual agreements earn significantly higher wages then those who are covered by collective agreements. However, multivariate analyses have revealed a different picture. The study found that occupational composition is the largest contributor to the variability in collective/individual pay in NZPS. With the exception of the senior, high skilled and specialised employees, no pay differential was found between collective or individual agreements in the New Zealand public service.</p>