Wage rates grow 1.7 percent

Salary and wage rates, which include overtime, grew 1.7 percent in the year to the December 2010 quarter, Statistics New Zealand said today. This follows 1.6 percent increases in both the years to the September 2010 and June 2010 quarters. Annual labour cost index (LCI) wage growth had declined from a peak of 4.0 percent in the year to the September 2008 quarter to 1.5 percent in the year to the March 2010 quarter.

Salary and wage rates for the private sector increased 1.9 percent in the year to the December 2010 quarter. This is the largest increase since a 2.0 percent increase in the year to the September 2009 quarter. Public sector rates rose 1.4 percent in the year to the December 2010 quarter.

The slight pick-up in growth is due to a higher proportion of wage rates increasing. The average size of increases remained about the same. Fifty-three percent of salary and ordinary time wage rates in the LCI sample rose in the year to the December 2010 quarter, up from 49 percent, 46 percent, and 43 percent in the years to the September, June, and March 2010 quarters.

The Quarterly Employment Survey (QES), also released today, showed that average total hourly earnings continued to rise. In the December 2010 year, average total hourly earnings increased 1.9 percent, which is up from a 1.3 percent increase in the September 2010 year. Private sector average total hourly earnings increased 1.8 percent.

In the December 2010 quarter, seasonally adjusted average total weekly paid hours for full-time equivalent employees rose 0.9 percent. This is the third consecutive increase and is the largest increase since the December 2004 quarter.

The LCI tracks nearly 6,000 positions and measures changes in pay rates for a fixed quantity and quality of labour.

The QES is designed to measure quarterly estimates of change in, and levels of, average hourly and average weekly (pre-tax) earnings, average weekly paid hours, and the number of filled jobs. QES statistics are derived quarterly from approximately 18,000 surveyed business locations in a range of industries and regions throughout New Zealand.

Geoff Bascand 1 February 2011

Government Statistician