Wage cost inflation, as measured by the labour cost index (LCI), was 4.3 percent in the year to the September 2023 quarter, unchanged from last quarter, according to figures released by Stats NZ today.
| Private sector | Public sector | |
| Sep-06 | 3 | 3.8 |
| Dec-06 | 3.1 | 3.8 |
| Mar-07 | 3 | 3.8 |
| Jun-07 | 3.2 | 3.6 |
| Sep-07 | 3.2 | 2.6 |
| Dec-07 | 3.4 | 2.6 |
| Mar-08 | 3.5 | 3.1 |
| Jun-08 | 3.4 | 3.9 |
| Sep-08 | 3.7 | 4.8 |
| Dec-08 | 3.2 | 4.7 |
| Mar-09 | 3.1 | 4.3 |
| Jun-09 | 2.7 | 3.6 |
| Sep-09 | 2 | 2.9 |
| Dec-09 | 1.6 | 2.4 |
| Mar-10 | 1.3 | 2.3 |
| Jun-10 | 1.5 | 2.1 |
| Sep-10 | 1.6 | 1.3 |
| Dec-10 | 1.9 | 1.4 |
| Mar-11 | 2 | 1.4 |
| Jun-11 | 2 | 1.5 |
| Sep-11 | 2 | 1.8 |
| Dec-11 | 2 | 1.8 |
| Mar-12 | 2.1 | 1.6 |
| Jun-12 | 2.1 | 1.6 |
| Sep-12 | 2.1 | 1.4 |
| Dec-12 | 2 | 1.5 |
| Mar-13 | 1.8 | 1.5 |
| Jun-13 | 1.8 | 1.5 |
| Sep-13 | 1.7 | 1.6 |
| Dec-13 | 1.7 | 1.4 |
| Mar-14 | 1.7 | 1.2 |
| Jun-14 | 1.8 | 1.2 |
| Sep-14 | 1.9 | 1 |
| Dec-14 | 1.8 | 1.2 |
| Mar-15 | 1.8 | 1.2 |
| Jun-15 | 1.8 | 1.2 |
| Sep-15 | 1.7 | 1.2 |
| Dec-15 | 1.6 | 1.2 |
| Mar-16 | 1.8 | 1.4 |
| Jun-16 | 1.6 | 1.3 |
| Sep-16 | 1.6 | 1.7 |
| Dec-16 | 1.6 | 1.8 |
| Mar-17 | 1.5 | 1.7 |
| Jun-17 | 1.6 | 1.9 |
| Sep-17 | 1.9 | 1.5 |
| Dec-17 | 1.9 | 1.5 |
| Mar-18 | 1.9 | 1.5 |
| Jun-18 | 2.1 | 1.4 |
| Sep-18 | 1.9 | 1.5 |
| Dec-18 | 2 | 1.7 |
| Mar-19 | 2 | 2 |
| Jun-19 | 2.2 | 2.2 |
| Sep-19 | 2.3 | 3 |
| Dec-19 | 2.4 | 3.3 |
| Mar-20 | 2.4 | 3.2 |
| Jun-20 | 1.7 | 3 |
| Sep-20 | 1.6 | 2.6 |
| Dec-20 | 1.5 | 2 |
| Mar-21 | 1.6 | 1.8 |
| Jun-21 | 2.2 | 1.9 |
| Sep-21 | 2.5 | 1.9 |
| Dec-21 | 2.8 | 2.3 |
| Mar-22 | 3.1 | 2.7 |
| Jun-22 | 3.4 | 3 |
| Sep-22 | 3.9 | 3.1 |
| Dec-22 | 4.3 | 3.6 |
| Mar-23 | 4.5 | 4.2 |
| Jun-23 | 4.3 | 4.2 |
| Sep-23 | 4.1 | 5.4 |
"The annual increase to the LCI was driven by an increase to public sector salary and wages," business prices delivery manager Bryan Downes said.
"This has been influenced by collective agreements for teachers, nurses, and the NZ Defence Force over the past year."
Salary and wage rates for the public sector increased 5.4 percent annually, the highest rate since the series began in the December 1992 quarter. This compares with 4.2 percent in the year to the June 2023 quarter.
| Quarters | Health | Education | Public sector |
| Sep-19 | 1196 | 1183 | 1186 |
| Dec-19 | 1210 | 1189 | 1197 |
| Mar-20 | 1219 | 1198 | 1203 |
| Jun-20 | 1228 | 1202 | 1206 |
| Sep-20 | 1233 | 1223 | 1217 |
| Dec-20 | 1235 | 1232 | 1221 |
| Mar-21 | 1236 | 1239 | 1225 |
| Jun-21 | 1245 | 1240 | 1229 |
| Sep-21 | 1247 | 1258 | 1240 |
| Dec-21 | 1264 | 1264 | 1249 |
| Mar-22 | 1290 | 1269 | 1258 |
| Jun-22 | 1302 | 1272 | 1266 |
| Sep-22 | 1319 | 1275 | 1279 |
| Dec-22 | 1348 | 1277 | 1294 |
| Mar-23 | 1392 | 1291 | 1311 |
| Jun-23 | 1401 | 1296 | 1319 |
| Sep-23 | 1414 | 1339 | 1348 |
"Public sector nurses accepted a new collective agreement in the first half of the year, while both primary and secondary school teachers ratified new collective agreements this quarter," Downes said.
"The education and health industries contribute to just over half the LCI public sector."
Average ordinary time hourly earnings, as measured by the Quarterly Employment Survey (QES) increased 6.7 percent to reach $40.40 in the year to the September 2023 quarter. This figure is the mean value of wages and salaries paid per hour excluding overtime in jobs measured by the QES, so it can rise or fall as the type of work being done changes.
For the public sector, average ordinary time hourly earnings rose 5.4 percent annually to $47.17, while for the private sector it rose 7.1 percent to $38.64.
The June and September 2023 quarters have not seen the effect of the ratified collective agreements for teachers due to the timing of the QES's reference period and the implementation of the agreements. For this quarter, the QES had a reference period of the latest payroll on or before 20 August 2023.
Private sector wage cost inflation slows
Private sector wage cost inflation was 4.1 percent in the year to the September 2023 quarter, down from 4.3 percent in the June 2023 quarter.
"The number of private sector jobs experiencing some kind of pay increase in a year has been falling over the past four quarters from a series high in the December 2022 quarter," Downes said.
The proportions of salary and wages increasing for the private sector in a year to the September 2023 quarter was 61 percent, down from 64 percent last quarter.
| Quarters | Private sector proportions | All sector proportions | No change |
| Sep-09 | 44 | 47 | 52 |
| Dec-09 | 40 | 44 | 56 |
| Mar-10 | 40 | 43 | 56 |
| Jun-10 | 43 | 46 | 53 |
| Sep-10 | 48 | 49 | 51 |
| Dec-10 | 52 | 53 | 47 |
| Mar-11 | 55 | 56 | 43 |
| Jun-11 | 56 | 58 | 42 |
| Sep-11 | 55 | 56 | 43 |
| Dec-11 | 55 | 57 | 43 |
| Mar-12 | 55 | 57 | 43 |
| Jun-12 | 54 | 56 | 43 |
| Sep-12 | 55 | 56 | 44 |
| Dec-12 | 54 | 55 | 45 |
| Mar-13 | 55 | 56 | 44 |
| Jun-13 | 54 | 55 | 44 |
| Sep-13 | 51 | 54 | 46 |
| Dec-13 | 53 | 54 | 45 |
| Mar-14 | 52 | 54 | 45 |
| Jun-14 | 55 | 57 | 43 |
| Sep-14 | 56 | 57 | 43 |
| Dec-14 | 57 | 59 | 41 |
| Mar-15 | 57 | 59 | 41 |
| Jun-15 | 55 | 57 | 43 |
| Sep-15 | 53 | 55 | 45 |
| Dec-15 | 51 | 54 | 46 |
| Mar-16 | 55 | 57 | 43 |
| Jun-16 | 53 | 56 | 44 |
| Sep-16 | 53 | 55 | 45 |
| Dec-16 | 53 | 55 | 45 |
| Mar-17 | 53 | 56 | 44 |
| Jun-17 | 54 | 57 | 43 |
| Sep-17 | 51 | 53 | 47 |
| Dec-17 | 49 | 51 | 49 |
| Mar-18 | 50 | 51 | 49 |
| Jun-18 | 51 | 52 | 48 |
| Sep-18 | 52 | 53 | 47 |
| Dec-18 | 55 | 56 | 44 |
| Mar-19 | 56 | 57 | 42 |
| Jun-19 | 57 | 58 | 41 |
| Sep-19 | 57 | 59 | 40 |
| Dec-19 | 58 | 61 | 38 |
| Mar-20 | 57 | 61 | 38 |
| Jun-20 | 52 | 56 | 42 |
| Sep-20 | 45 | 49 | 51 |
| Dec-20 | 42 | 45 | 55 |
| Mar-21 | 45 | 46 | 53 |
| Jun-21 | 53 | 53 | 46 |
| Sep-21 | 58 | 58 | 42 |
| Dec-21 | 61 | 62 | 38 |
| Mar-22 | 63 | 64 | 36 |
| Jun-22 | 65 | 66 | 34 |
| Sep-22 | 65 | 65 | 35 |
| Dec-22 | 66 | 66 | 34 |
| Mar-23 | 65 | 66 | 33 |
| Jun-23 | 64 | 65 | 35 |
| Sep-23 | 61 | 64 | 35 |
