Wage inflation was 2.1 percent in the year to the June 2021 quarter, while average ordinary time hourly earnings rose 4.0 percent, Stats NZ said today.
The labour cost index (LCI) all salary and wages (including overtime) increased 2.1 percent in the year to the June 2021 quarter, up from 1.6 percent in the year to the March 2021 quarter.
"The LCI captures reasons why employers change their pay. This quarter, a lot of firms reported trying to match market rates and retain staff in a tight labour market. This, combined with the rise in minimum wage in April, helped drive wage inflation this quarter," business prices delivery manager Bryan Downes said.
"Over half the roles surveyed in the LCI saw an increase to wage rates in the year to the June 2021 quarter - the first time this has happened since the June 2020 quarter."
| Quarter | Proportion of increases |
| Jun-08 | 61 |
| Sep-08 | 62 |
| Dec-08 | 60 |
| Mar-09 | 60 |
| Jun-09 | 55 |
| Sep-09 | 47 |
| Dec-09 | 44 |
| Mar-10 | 43 |
| Jun-10 | 46 |
| Sep-10 | 49 |
| Dec-10 | 53 |
| Mar-11 | 56 |
| Jun-11 | 58 |
| Sep-11 | 56 |
| Dec-11 | 57 |
| Mar-12 | 57 |
| Jun-12 | 56 |
| Sep-12 | 56 |
| Dec-12 | 55 |
| Mar-13 | 56 |
| Jun-13 | 55 |
| Sep-13 | 54 |
| Dec-13 | 54 |
| Mar-14 | 54 |
| Jun-14 | 57 |
| Sep-14 | 57 |
| Dec-14 | 59 |
| Mar-15 | 59 |
| Jun-15 | 57 |
| Sep-15 | 55 |
| Dec-15 | 54 |
| Mar-16 | 57 |
| Jun-16 | 56 |
| Sep-16 | 55 |
| Dec-16 | 55 |
| Mar-17 | 56 |
| Jun-17 | 57 |
| Sep-17 | 53 |
| Dec-17 | 51 |
| Mar-18 | 51 |
| Jun-18 | 52 |
| Sep-18 | 53 |
| Dec-18 | 56 |
| Mar-19 | 57 |
| Jun-19 | 58 |
| Sep-19 | 59 |
| Dec-19 | 61 |
| Mar-20 | 61 |
| Jun-20 | 56 |
| Sep-20 | 49 |
| Dec-20 | 45 |
| Mar-21 | 46 |
| Jun-21 | 53 |
However, for the first time since the December 2018 quarter, annual wage inflation (up 2.1 percent) did not outpace annual household living-costs inflation (up 2.5 percent).
See Household living-costs price indexes: June 2021 quarter for more information.
The LCI measures movements in wages employers pay to have the same work done to a set standard. The index controls for any changes in the type or amount of work, person doing the job or even change in qualification or experience. The Quarterly Employment Survey (QES), on the other hand, is a sample survey which calculates average earnings of employees captured by the survey and reflects changes in the composition of the paid workforce (such as changes in earnings paid within and between industries).
QES average ordinary time hourly earnings increased 4.0 percent over the year, to reach $34.76.
| Quarter | LCI adjusted | QES ordinary time hourly |
| Jun-08 | 3.6 | 5.3 |
| Sep-08 | 4 | 5.6 |
| Dec-08 | 3.5 | 5.5 |
| Mar-09 | 3.3 | 5.4 |
| Jun-09 | 2.8 | 4.7 |
| Sep-09 | 2.1 | 3.5 |
| Dec-09 | 1.8 | 2.9 |
| Mar-10 | 1.5 | 1 |
| Jun-10 | 1.6 | 1.4 |
| Sep-10 | 1.6 | 2 |
| Dec-10 | 1.7 | 1.9 |
| Mar-11 | 1.9 | 3.1 |
| Jun-11 | 1.9 | 2.8 |
| Sep-11 | 2 | 3 |
| Dec-11 | 2 | 3.1 |
| Mar-12 | 2 | 3.2 |
| Jun-12 | 2 | 2.6 |
| Sep-12 | 1.9 | 2.9 |
| Dec-12 | 1.8 | 2.4 |
| Mar-13 | 1.7 | 2.4 |
| Jun-13 | 1.7 | 2.8 |
| Sep-13 | 1.7 | 2.6 |
| Dec-13 | 1.6 | 2.9 |
| Mar-14 | 1.6 | 2.6 |
| Jun-14 | 1.7 | 2.2 |
| Sep-14 | 1.6 | 2.7 |
| Dec-14 | 1.8 | 3 |
| Mar-15 | 1.7 | 2.4 |
| Jun-15 | 1.6 | 2.5 |
| Sep-15 | 1.6 | 2.2 |
| Dec-15 | 1.5 | 2 |
| Mar-16 | 1.6 | 2.4 |
| Jun-16 | 1.5 | 2.4 |
| Sep-16 | 1.6 | 2.1 |
| Dec-16 | 1.6 | 1.8 |
| Mar-17 | 1.6 | 2.5 |
| Jun-17 | 1.7 | 2.5 |
| Sep-17 | 1.9 | 2.4 |
| Dec-17 | 1.8 | 3.1 |
| Mar-18 | 1.8 | 2.7 |
| Jun-18 | 1.9 | 2.9 |
| Sep-18 | 1.8 | 3.2 |
| Dec-18 | 1.9 | 3.2 |
| Mar-19 | 2 | 3 |
| Jun-19 | 2.1 | 4 |
| Sep-19 | 2.4 | 3.4 |
| Dec-19 | 2.6 | 3.3 |
| Mar-20 | 2.5 | 3.7 |
| Jun-20 | 2.1 | 3 |
| Sep-20 | 1.9 | 4.2 |
| Dec-20 | 1.6 | 4.3 |
| Mar-21 | 1.6 | 4 |
| Jun-21 | 2.1 | 4 |
Construction industry sees wages rise over the year
Wages in the construction industry, as measured by the LCI, increased 3.0 percent in the year to the June 2021 quarter, reflecting continued quarterly increases.
"This is the largest annual increase for the construction industry since the series began in 2009," Mr Downes said.
Average total hourly earnings (including overtime) in the construction industry, as measured by the QES, also increased - up 4.2 percent over the year to $32.09.
"We're seeing wages begin to rise as a result of the high demand for labour in the construction industry after a period of slow wage growth last year," Mr Downes said.
| Quarter | Annual percentage change |
| Jun-10 | 1.6 |
| Sep-10 | 1.4 |
| Dec-10 | 1.6 |
| Mar-11 | 1.9 |
| Jun-11 | 2.1 |
| Sep-11 | 2.3 |
| Dec-11 | 2.4 |
| Mar-12 | 2.3 |
| Jun-12 | 2.2 |
| Sep-12 | 2.3 |
| Dec-12 | 2.5 |
| Mar-13 | 2.5 |
| Jun-13 | 2.4 |
| Sep-13 | 2.0 |
| Dec-13 | 1.8 |
| Mar-14 | 1.9 |
| Jun-14 | 2.1 |
| Sep-14 | 2.4 |
| Dec-14 | 2.4 |
| Mar-15 | 2.1 |
| Jun-15 | 2.2 |
| Sep-15 | 2.1 |
| Dec-15 | 1.8 |
| Mar-16 | 2.3 |
| Jun-16 | 2.0 |
| Sep-16 | 2.1 |
| Dec-16 | 2.1 |
| Mar-17 | 1.8 |
| Jun-17 | 1.9 |
| Sep-17 | 2.0 |
| Dec-17 | 1.8 |
| Mar-18 | 1.9 |
| Jun-18 | 2.0 |
| Sep-18 | 1.9 |
| Dec-18 | 2.2 |
| Mar-19 | 2.0 |
| Jun-19 | 2.0 |
| Sep-19 | 1.9 |
| Dec-19 | 2.1 |
| Mar-20 | 2.1 |
| Jun-20 | 1.1 |
| Sep-20 | 1.5 |
| Dec-20 | 1.4 |
| Mar-21 | 1.8 |
| Jun-21 | 3.0 |
Retail trade and accommodation wage rates lift over the quarter
The industries that contributed the most to high wage inflation over the quarter were those impacted by the minimum wage increase, such as retail trade and accommodation.
In April 2021, the Government raised the minimum wage from $18.90 to $20.00 per hour.
Wage rates in retail trade and accommodation rose 1.7 percent in the June 2021 quarter.
Across all industries, the LCI rose 0.7 percent in the quarter. Private sector wages rose 0.9 percent, while public sector wages rose 0.3 percent.
