Here's who's getting the biggest share of NZ's pay rise

Wednesday, 7 August 2019

New Zealand workers might have recorded their biggest annual pay rise in 10 years, but the impact has not been evenly spread.

Average hourly earnings increased 4 per cent to $32.37 in June, the biggest increase since 2009.

Unemployment also hit its lowest point since 2008, at 3.9 per cent.

But if you're not feeling as well off as these stats suggest you should, it could be due to the industry you're working in.

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Here are the sectors that have had the biggest pay bump.

RETAIL

A pay deal for teachers is likely to flow through to another pay jump in the next data release.

A 7 per cent increase in the minimum wage, taking it to $17.70 an hour, boosted the fortunes of retail workers.

Across the retail sector, wages lifted 1.4 per cent in the June quarter.

Greg Harford, Retail NZ chief executive, said retailers were operating in a competitive market for talent. Experienced and enthusiastic employees were in high demand, he said.

'However, retailers do not operate in a vacuum. Average net margins in the retail sector are relatively low at just 3.7 per cent, and retailers can't just magic up pay rises. Wages are one of the largest costs of many retail operations, and any increase in wages needs to be covered either by increased sales or cost reductions elsewhere in the business.

'This does create a risk that significant jumps in wages may have the perverse effect of encouraging retailers to seek efficiencies by reducing staff numbers over time.'

HOSPITALITY

Another sector buoyed by the minimum wage rise was hospitality, where wages were up 2.3 per cent for the quarter.

Recruitment website Seek also reported a 6.8 per cent increase in advertised salaries in hospitality and tourism in the second quarter of this year.

'Accommodation, food, and retail industries are generally lower-paying industries, and are most affected by a minimum wage increase,' Stats NZ business prices delivery manager Sarah Johnson said.

She said pay for service, clerical, sales workers, machinery operators, drivers and labourers had also been influenced.

Jeremy Wade, head of Trade Me Jobs, said the biggest increases in pay for jobs offered on his site were in roles paying less than $60,000.

On average, they were now advertising salaries and wages that were 5 per cent higher than a year ago.

'What we are not seeing is that flow through to asking wages for jobs over $60,000. They've increased about 2 per cent.'

TEACHING AND NURSING

Collective agreements have also been a big driver of wage increases.

Nurses agreed to their new pay deal in the second half of last year. Agreements for primary and secondary teachers were finalised in late June.

'We expect to start seeing the effects of the teacher pay settlement in the September quarter,' Johnson said.

Wade said advertised salaries for healthcare jobs were up 5.7 per cent on Trade Me.

NZEI president Lynda Stuart said she expected to see more increases across the education sector this year. 'Primary principals are holding strong for pay parity with their secondary colleagues and negotiations have just begun for school support staff. Also, kindergarten teachers recently ratified their agreement for pay parity with other teachers.'

She said New Zealand had been operating in a low-wage economy but the increases in the minimum wage and the number of above-average increases in the public sector this year showed the Government was serious about addressing the issue.

CTU president Richard Wagstaff said wage increases should be more widely shared.

'There is no doubt that wage growth is being pushed up by collective bargaining and increases to the minimum wage. These increases need to be more widely shared across working people. Fair pay agreements and strengthened collective bargaining would help do that. Companies are making good profits: they can afford greater wage increases.'