Bay of Plenty workers' salaries and wages on the increase

Bay of Plenty wages have risen ahead the Gross Domestic Product. Good news, right? Photo/File

The amount people are earning is rising in the Bay - but economists are warning it doesn't necessarily mean workers have any more in the pocket on payday.

Latest Statistics New Zealand figures showed the median wage in the wider Bay was $843 a week, or around $44,000 a year. This was a $103 more per week than four years earlier, -up about 14 per cent.

Economists say workers have been receiving a smaller share of national income for decades - essentially helping their employers earn more, while not receiving an equal share of that increase.

However, according to Statistics New Zealand figures, Bay workers' wages increased at a greater rate than Gross Domestic Product per person - the value of goods and services produced - in the past four years.

The 14 per cent increase in median wages was two percentage points higher than rises in GDP per capita of 11.8 per cent in the same period.

Western Bay economic development organisation Priority One project manager Annie Hill said wage growth above and beyond per capita GDP growth was a testament to the area's development.

"This is a large degree to do with the strong economy here and the strong job growth.

"We've pretty much had the highest economic growth over the country in the last two years as well as the highest job growth.

"I think the wage growth will come from business success.

"Successful business will take on people and they will pay them well because they'll want to keep them.

"Businesses realise they're competing with all the other main centres for skilled people."

Other factors impacting on the wallet, say, economists, include the average employee working more hours and cost of inflation of approximately 2 per cent per year.

The Statistics New Zealand Labour Cost Index, broadly a measure of wage growth, showed annual increases had not been above 2 per cent since 2009 - "muted growth", according to Westpac senior economist Satish Ranchhod.

Mr Ranchhod said inflation had also been low, so most workers' buying power had remained the same.

The consumer price index, a measure of inflation, rose in the March 2017 quarter above wage growth for the first time in six years. This meant costs of goods and services were likely to rise slightly more than wage growth, at least in the near future.

Mr Ranchhod said this would likely put some pressure on wages, and workers would start to feel a pinch.

"Consumer price tends to start rising and then that gets factored into wage growth, and combine that with a firming economy, we should see some wage growth in the next couple of years."

Council of Trade Unions economist Bill Rosenberg said incremental wage increases, although broadly equal to inflation, were hurting many workers - especially low-wage earners.

"I think people will be getting worried, because at 2 per cent you do start to feel the effects on the budget, and it affects people differently," Mr Rosenberg said.

"People are feeling fairly pushed because of various pressures in the household budget and deciding both [parents] will have to work to make ends meet.

"At the moment, I'm very concerned we're trapped in a low-wage rut that's very difficult to get out of in the current circumstances.

"It's not good for New Zealand because it encourages low productivity."