All New Zealanders must benefit from economic growth to improve the lives of Kiwis working long hours for low wages, New Zealand Labour leader David Shearer said on Thursday.

In a speech at the Nelson Chamber of Commerce, Mr Shearer said government has to focus its policies more on improving the incomes of its people.

Mr Shearer stressed New Zealanders were working harder than people in most countries in the developed world but were bringing home less money for their families.

If wages had increased as productivity has in the last twenty years, Mr Shearer said the average income would be $31.85, not the present $24.43.

"That's an extra seven dollars an hour, or $297 a week that the average worker earned but didn't get paid... How many people would be wanting to go to Australia as they are now in record numbers if we paid that?"

Mr Shearer further argued that government's policies are not encouraging businesses to pay higher and subsequently people are pushed to look for jobs overseas.

Without making policy announcements, Mr Shearer said he was beginning to like the idea of a voluntary "Living Wage," which has been introduced in London. When finances allowed meeting the living wage, London's council gradually began paying the Living Wage level. The idea has reportedly improved quality of work and minimised staff turnover in London.

Mr Shearer's speech was the second of his "scene-setter" speeches, the first one being about making the economy grow faster by improving education system and leveraging science and innovation to create more high-value exports.