6.3.b Average wage rates, annual average income and annual injury rates in major forest employment categories

Rationale

This indicator provides information on average wage, income and injury rates. These are important aspects of employment quality and the economic value of forests and forest-related employment to communities.

Current state

Average earnings in the forestry and timber processing industries

Moderate growth has occurred in hourly earnings in New Zealand since 2008. Total hourly earnings increased in nominal terms by an average of $2.90 per hour or 11.5 percent over the 2010 to 2014 period and in real terms by 2.6 percent (adjusted for inflation). This growth has occurred against the back drop of a recovering international economy, improving domestic activity and gains in productivity. Unemployment levels increased in the period following the 2008 global economic crisis, but there is now positive momentum in the job market, leading to labour and skill shortages in several areas.

Wage growth has not been consistent across the board. In the case of the log trade, sustained demand from China (and other Asian markets) has resulted in increased harvest volumes and prices over the past four years. This has produced increased demand for logging contractors and associated services. While improving log prices have favoured growers and logging contractors, they have raised input costs for the timber processing sector. The processing sector has also been squeezed by the relatively high New Zealand dollar and constrained demand in key markets for sawn and remanufactured timber.

Workers in the forestry sector have seen strong growth in earnings over the past two years. This rise has substantially exceeded the New Zealand average. Total hourly earnings (which include overtime) increased in nominal terms by $4.83 per hour, or 25.7 percent, between 2010 and 2014. When adjusted for inflation, forestry workers experienced a 15.7 percent increase in real earnings.

Earnings in the wood product manufacturing sector increased in nominal terms by $2.79 per hour, or 13.2 percent, between 2010 and 2014. The increase in real terms was 4.2 percent. Wood product manufacturing is a skilled activity, and processors are competing for labour with other sectors of the economy (in particular, other manufacturers and the construction industry). This demand for labour keeps pressure on wage rates.

Both sectors have seen their hourly earnings move closer to the national average. The change has been particularly noticeable in the forestry sector where average hourly earnings have increased from 74 percent to 84 percent of the national average since 2010. The increase for wood product manufacturing has been from 84 percent to 85 percent of the national average.

Average hours of work

For the forestry sector, the average number of paid hours worked each week has fluctuated over the past four years, between 37.5 hours and 42.5 hours. This fluctuation reflects varying demand for harvesting services, the availability of crews (particularly new crews coming on stream) and the location of sites. Nationally, the New Zealand labour force worked an average of 38.75 hours a week.

The average working week for employees in the wood product manufacturing sector is within a narrower band of 38.8 hours to 41.4 hours of paid labour. Part of this variability relates to the level of overtime occurring within the industry.

Occupational health and safety

New Zealand operates a national accident and injury prevention scheme, which provides cover for all residents and temporary visitors. The scheme covers workplace, sporting and household injuries. The scheme was introduced in 1974 and is administered by the Accident Compensation Corporation (ACC), a Crown agency.

ACC has developed a range of resources to improve safety practices in the forestry sector and to up-skill contractors and staff. These include training and supervision resources, tools to improve operational and workplace practices and material on the identification of hazards. In the June 2013 year, ACC spent close to $22.4 million on injury prevention schemes.

The monitoring and assessment of workplace health and safety was reorganised in late 2013, with the establishment of a stand-alone Crown entity, WorkSafe New Zealand. WorkSafe New Zealand has committed additional resources to addressing injury (and fatality) rates in the forestry sector and is being more proactive in assessments and monitoring safety compliance. Between August 2013 and April 2014, it undertook 235 worksite inspections of forestry crews involved in breaking out. Of these inspections, 95 percent were proactive assessments and 5 percent were reactive workplace investigations.

Workplace safety in the forestry sector

The forestry working environment can have a high degree of natural risk, due to terrain, slope and climatic conditions. Slope is a particular issue in New Zealand, with a significant proportion of forests located on steeper sites, which cannot be traversed by mechanical harvesting equipment.

Site preparation, earthworks and harvesting also bring with them operational risks related to the use of heavy machinery and the felling and extraction of logs.

The industry recognises the challenges of the New Zealand forest environment and has been working to ensure that safe operating practices are followed and lessons are learnt from accidents. The focus has been on both reducing operational risks, through improved procedures, training and support, and mitigating the effects of natural conditions. An important issue is the level of manual tree felling due to slope and terrain conditions. The industry (in collaboration with the Government) has a six-year project under way to research innovative harvesting technologies that will improve worker safety and productivity on steeper sites.

Work-related injury claims for forestry accidents are recorded as part of the larger “Agriculture, forestry and fishing” industry category. In 2012, ACC received an average of 201 injury claims for every 1000 full- time equivalent (FTEs) employees in this category.

The rate of injury claims by workers in these three primary sectors was more than twice the national average. In comparison with other sectors, the agriculture, forestry and fishing industry has the highest incidence of injury and entitlement claims on an FTE basis.

Detailed forestry sector data are available for serious harm and fatal incidents, which are notified to WorkSafe New Zealand. Since 2008, the number of serious harm injuries has fluctuated between 161 and 188 per year. Over this same period, the annual harvest increased by 40 percent, from 20.4 million cubic metres to 28 million cubic metres. Fatal incidents in the forestry sector have reversed a downward trend in the 1990s and the early 2000s, with a spike over the past two years. Tree felling and breaking out are the two highest risk tasks in forestry, with 52% of fatalities attributable to felling, and 31% to breaking-out over the last three years.

The increase in fatal incidents has led to an industry review of safety and the implementation of new initiatives by WorkSafe New Zealand and other agencies.

Initiatives to improve forestry workplace safety

  • In 1984, a national database on logging injuries was established. Companies voluntarily reported the details of injuries sustained, days of work lost and near-miss events.
  • In 2005, the New Zealand Forest Owners Association, with the support of ACC, launched a web-based Incident Reporting Information System (IRIS). This is an interactive database that enables companies (and the industry as a whole) to benchmark their health and safety performance.
  • In 2010, the Department of Labour, in a partnership with ACC and the New Zealand Forest Owners Association, put in place an action plan to address the high injury rate in the forestry sector. The action plan identified tree felling and breaking out as the priority areas for intervention. The Forest Industries Training and Education Council (now part of Competenz) increased the availability of health and safety training, and a new certification process for breaking out. Initiatives were also developed to increase the culture of safety within companies and the workforce and to update the Approved Code of Practice for Forestry Operations.
  • With the establishment of WorkSafe New Zealand, additional resources have been committed to the inspection of forestry operations and the enforcement of safety regulations. WorkSafe New Zealand has increased the number of dedicated inspectors along with identifying new tools and resources for improving education and compliance.
  • In January 2014, the New Zealand Forest Owners Association, the Forest Industry Contractors Association and the New Zealand Farm Forestry Association initiated an independent forestry safety review to identify the causes and contributing factors to the high rate of serious injury and fatalities occurring in the forestry sector. The review team had a broad mandate to look across the sector and its supply chains. This included the regulatory framework, contractual arrangements, working conditions, skills of workers and managers, work practices and equipment.

Trends

Nationally, New Zealand workers recorded an inflation adjusted 2.6 percent increase in average hourly earnings between 2010 and 2014. In nominal terms, the increase was 11.4 percent. Earnings in both the forestry and wood product manufacturing sectors increased at rates above the national average. In the case of forestry workers, the rise in inflation-adjusted hourly earnings was 15.7 percent, with a significant proportion of this increase occurring in the past two years, due to the rise in harvest volumes and increased labour demand. The wood product manufacturing sector saw hourly earnings increase by an average of 4.2 percent in real terms.

Average hourly earnings in both sectors sit below the national average, but the gap has narrowed over the past four years, particularly for forestry workers. Average hourly earnings in forestry now sit at 84 percent of the national average and 85 percent for wood product manufacturing.

Injury prevention and reduction are critical issues for the forest industry and New Zealand’s workplace regulators. The injury claim rate for the primary sector (which includes agriculture and fishing) is more than twice the national average; and 2013 saw a rise in fatalities (reversing a historical downward trend in the 1990s and 2000s).

In response, the industry is working closely with WorkSafe New Zealand and the Accident Compensation Corporation to identify and mitigate the highest risk tasks, and adopt injury prevention and monitoring initiatives. A strong emphasis is placed on recording incidents, to enable companies to learn from past experiences. WorkSafe New Zealand has committed additional resources to addressing injury rates in the industry and is being proactive in assessments and monitoring. The industry commissioned an independent forestry safety review in January 2014 to identify the causes and contributing factors to the rate of serious injury and fatalities occurring within the sector.

Trend Status /

Data Quality H

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