Wage growth: Earnings up above cost of living to end of June quarter

Is your pay packet getting bigger? Median wage and salary growth to the end of the June quarter has outstripped inflation. Photo / Janna Dixon

Inflation may not be adding to the cost of living for many Kiwis, with median weekly and hourly earnings for wages and salaries rising more than the Consumer Price Index in the past year.

Median weekly and hourly pay increased by 7.1 and 6.6 per cent respectively in the year to the June 2023 quarter, according to figures released by Stats NZ today.

Across the same period, Consumer Price Index inflation was just 6 per cent.

Median weekly earnings from wages and salaries grew by 7.1 per cent ($84) over the year, to reach $1,273.

This was the second-largest annual rise since the series began in 1998, surpassed only by the previous year’s annual increase.

Median hourly earnings from wages and salaries were up 6.6 per cent ($1.95) to reach $31.61.

This was the second-largest annual percentage increase in median hourly earnings since the series began in 1998, following from the largest increase in the previous year.

Strong hourly earnings growth was also seen in average ordinary time hourly earnings, as measured by the Quarterly Employment Survey (QES), which rose 6.9 per cent in the year to the June 2023 quarter to reach $39.53.

Based on gender, wage growth for women outpaced the growth rate of men - although not enough to erase the overall gender pay gap.

“Median weekly earnings continued to grow strongly over the year, especially for women, whose earnings rose 8.1 per cent annually, following record growth the previous year,” Stats NZ labour market manager Malak Shafik said.

Median hourly earnings for women were up 7.7 per cent over the year, to reach $30.15 - this was the largest annual increase in the series.

Men’s median hourly earnings were up 7 per cent to reach $33.00 - the second-largest annual increase in the series.

This put the gender pay gap for the June 2023 quarter at 8.6 per cent (based on median hourly earnings) - down from 9.2 per cent in the previous 12-month period.

“Although women saw historically-strong growth in median hourly earnings, there was no statistically-significant change in the gender pay gap over the year, meaning that it remained relatively unchanged since the June 2022 quarter,” Shafik said.

“Women working in fulltime wage and salary jobs saw higher median hourly earnings growth than those working part-time.”

Median hourly earnings for women in fulltime wage and salary jobs were up 8.8 per cent over the year, to reach $32.60, while hourly earnings for women working part-time increased 4.2 per cent annually.

Comparatively, men saw roughly-equal growth in both fulltime and part-time median hourly earnings, up 6.5 and 6.3 per cent respectively.

It wasn’t just workers that saw incomes rise above the inflation rate.

Median weekly income from government transfers increased by $30 (7.5 per cent) to $432 in the year to the June 2023 quarter.

Government transfers include income from New Zealand Superannuation and the Veteran’s Pension, the student allowance, and transfers from Inland Revenue and Work and Income.

Wage cost inflation, as measured by the labour cost index (LCI), was at 4.3 per cent in the year to the June 2023 quarter, according to figures released by Stats NZ on August 2.

The wage data reports on information about income collected annually from the Household Labour Force Survey (HLFS), Stats NZ said.

It provides information about individual and household income, including wages and salaries, self-employment, and government transfer income, both at an aggregate level and for subpopulations of interest.

Liam Dann is Business Editor-at-Large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.