The labour cost index (LCI) all salary and wage rates (including overtime) increased 2.6 percent in the year to the December 2019 quarter, Stats NZ said today.
For the second successive quarter, annual wage growth in the public sector pushed national wage inflation to its highest rate since June 2009.
| Quarter | LCI adjusted | Private sector | Public sector |
| Dec-99 | 1.4 | 1.5 | 1.7 |
| Mar-00 | 1.4 | 1.4 | 1.8 |
| Jun-00 | 1.6 | 1.3 | 2.4 |
| Sep-00 | 1.5 | 1.4 | 2 |
| Dec-00 | 1.6 | 1.5 | 1.8 |
| Mar-01 | 1.8 | 1.6 | 1.9 |
| Jun-01 | 1.8 | 1.9 | 1.6 |
| Sep-01 | 2 | 2 | 1.9 |
| Dec-01 | 2.1 | 2.1 | 2.2 |
| Mar-02 | 2 | 2.1 | 2.3 |
| Jun-02 | 2.1 | 2.1 | 2.3 |
| Sep-02 | 2.2 | 2.1 | 2.5 |
| Dec-02 | 2.1 | 2 | 2.6 |
| Mar-03 | 2.3 | 2.2 | 2.6 |
| Jun-03 | 2.3 | 2.2 | 2.6 |
| Sep-03 | 2.3 | 2.1 | 3 |
| Dec-03 | 2.4 | 2.2 | 2.8 |
| Mar-04 | 2.2 | 2.1 | 2.6 |
| Jun-04 | 2.3 | 2.2 | 2.7 |
| Sep-04 | 2.2 | 2.3 | 2.4 |
| Dec-04 | 2.5 | 2.5 | 2.6 |
| Mar-05 | 2.5 | 2.5 | 2.6 |
| Jun-05 | 2.7 | 2.6 | 2.9 |
| Sep-05 | 3.1 | 2.8 | 3.8 |
| Dec-05 | 3 | 2.9 | 3.8 |
| Mar-06 | 3.2 | 3 | 3.9 |
| Jun-06 | 3.1 | 2.9 | 3.7 |
| Sep-06 | 3.2 | 3 | 3.8 |
| Dec-06 | 3.2 | 3.1 | 3.8 |
| Mar-07 | 3.2 | 3 | 3.8 |
| Jun-07 | 3.3 | 3.2 | 3.6 |
| Sep-07 | 3.1 | 3.2 | 2.6 |
| Dec-07 | 3.3 | 3.4 | 2.6 |
| Mar-08 | 3.4 | 3.5 | 3.1 |
| Jun-08 | 3.6 | 3.4 | 3.9 |
| Sep-08 | 4 | 3.7 | 4.8 |
| Dec-08 | 3.5 | 3.2 | 4.7 |
| Mar-09 | 3.3 | 3.1 | 4.3 |
| Jun-09 | 2.8 | 2.7 | 3.6 |
| Sep-09 | 2.1 | 2 | 2.9 |
| Dec-09 | 1.8 | 1.6 | 2.4 |
| Mar-10 | 1.5 | 1.3 | 2.3 |
| Jun-10 | 1.6 | 1.5 | 2.1 |
| Sep-10 | 1.6 | 1.6 | 1.3 |
| Dec-10 | 1.7 | 1.9 | 1.4 |
| Mar-11 | 1.9 | 2 | 1.4 |
| Jun-11 | 1.9 | 2 | 1.5 |
| Sep-11 | 2 | 2 | 1.8 |
| Dec-11 | 2 | 2 | 1.8 |
| Mar-12 | 2 | 2.1 | 1.6 |
| Jun-12 | 2 | 2.1 | 1.6 |
| Sep-12 | 1.9 | 2.1 | 1.4 |
| Dec-12 | 1.8 | 2 | 1.5 |
| Mar-13 | 1.7 | 1.8 | 1.5 |
| Jun-13 | 1.7 | 1.8 | 1.5 |
| Sep-13 | 1.7 | 1.7 | 1.6 |
| Dec-13 | 1.6 | 1.7 | 1.4 |
| Mar-14 | 1.6 | 1.7 | 1.2 |
| Jun-14 | 1.7 | 1.8 | 1.2 |
| Sep-14 | 1.6 | 1.9 | 1 |
| Dec-14 | 1.8 | 1.8 | 1.2 |
| Mar-15 | 1.7 | 1.8 | 1.2 |
| Jun-15 | 1.6 | 1.8 | 1.2 |
| Sep-15 | 1.6 | 1.7 | 1.2 |
| Dec-15 | 1.5 | 1.6 | 1.2 |
| Mar-16 | 1.6 | 1.8 | 1.4 |
| Jun-16 | 1.5 | 1.6 | 1.3 |
| Sep-16 | 1.6 | 1.6 | 1.7 |
| Dec-16 | 1.6 | 1.6 | 1.8 |
| Mar-17 | 1.6 | 1.5 | 1.7 |
| Jun-17 | 1.7 | 1.6 | 1.9 |
| Sep-17 | 1.9 | 1.9 | 1.5 |
| Dec-17 | 1.8 | 1.9 | 1.5 |
| Mar-18 | 1.8 | 1.9 | 1.5 |
| Jun-18 | 1.9 | 2.1 | 1.4 |
| Sep-18 | 1.8 | 1.9 | 1.5 |
| Dec-18 | 1.9 | 2 | 1.7 |
| Mar-19 | 2 | 2 | 2 |
| Jun-19 | 2.1 | 2.2 | 2.2 |
| Sep-19 | 2.4 | 2.3 | 3 |
| Dec-19 | 2.6 | 2.4 | 3.3 |
Collective agreements across industries continued to shape public sector wage growth, which increased 3.3 percent in the year to the December 2019 quarter. This compares with a 3.0 percent increase in the year to the September 2019 quarter.
The main industries driving the public sector increases were health care and social assistance; public administration and safety; and education and training, reflecting the pay settlements for nurses, police, and teachers, respectively. These drivers are comparable to those seen in the year to the September 2019 quarter .
"We are seeing wage growth across the LCI, with 61 percent of wages showing pay increases over the last year," business prices delivery manager Bryan Downes said.
"This is the highest percentage of wages that have seen increases since September 2008."
Annually, private sector wage rates increased 2.4 percent. The largest contributor was the private sector health care industry, partly influenced by hospital staff receiving pay settlements over the year. The minimum wage increase in April 2019 was another significant event for the annual increase in private sector wages, particularly for the retail trade and accommodation industries.
"We expect to see more minimum wage effects coming through in the LCI as it continues to rise in annual increments, reaching $20 per hour by 2021," Mr Downes said.
The increase in the unadjusted LCI for all salary and ordinary time wage rates remained at 3.9 percent for the year.
The LCI salary and wage rates measures movements in wages for a fixed quantity and quality of labour. This means that changes in pay rates due to promotions or the performance of employees are not shown in the index.
The unadjusted LCI takes quantitative and qualitative changes into account, which is why it is more comparable with the earnings measures in the quarterly employment survey (QES).
| Quarter | LCI adjusted | LCI unadjusted | Ordinary time hourly |
| Dec-09 | 1.8 | 2.9 | 2.8 |
| Mar-10 | 1.5 | 2.5 | 1 |
| Jun-10 | 1.6 | 2.9 | 1 |
| Sep-10 | 1.6 | 3.1 | 1.1 |
| Dec-10 | 1.7 | 3.6 | 1.8 |
| Mar-11 | 1.8 | 3.6 | 2.6 |
| Jun-11 | 1.9 | 3.4 | 3 |
| Sep-11 | 2 | 3.3 | 3.2 |
| Dec-11 | 2 | 3.2 | 2.8 |
| Mar-12 | 2 | 3.3 | 3.8 |
| Jun-12 | 2 | 3.4 | 2.9 |
| Sep-12 | 1.9 | 3.2 | 2.8 |
| Dec-12 | 1.8 | 3 | 2.6 |
| Mar-13 | 1.8 | 3 | 2.1 |
| Jun-13 | 1.7 | 2.8 | 2.1 |
| Sep-13 | 1.6 | 3.1 | 2.6 |
| Dec-13 | 1.6 | 3 | 2.9 |
| Mar-14 | 1.5 | 2.8 | 2.5 |
| Jun-14 | 1.6 | 2.9 | 2.5 |
| Sep-14 | 1.7 | 2.5 | 2.3 |
| Dec-14 | 1.7 | 2.6 | 2.6 |
| Mar-15 | 1.7 | 2.5 | 2.1 |
| Jun-15 | 1.6 | 2.5 | 2.8 |
| Sep-15 | 1.6 | 2.7 | 2.3 |
| Dec-15 | 1.5 | 2.7 | 2.1 |
| Mar-16 | 1.6 | 2.9 | 2.4 |
| Jun-16 | 1.5 | 2.8 | 2.1 |
| Sep-16 | 1.7 | 2.6 | 1.7 |
| Dec-16 | 1.6 | 2.8 | 1.3 |
| Mar-17 | 1.6 | 3 | 1.5 |
| Jun-17 | 1.7 | 3 | 1.6 |
| Sep-17 | 1.8 | 3.4 | 2.2 |
| Dec-17 | 1.8 | 3.3 | 3.1 |
| Mar-18 | 1.8 | 3.2 | 3.5 |
| Jun-18 | 1.9 | 3.3 | 3 |
| Sep-18 | 1.8 | 3.3 | 2.9 |
| Dec-18 | 1.9 | 3.3 | 3.1 |
| Mar-19 | 2 | 3.4 | 3.4 |
| Jun-19 | 2.1 | 3.6 | 4.4 |
| Sep-19 | 2.5 | 3.9 | 4.2 |
| Dec-19 | 2.6 | 3.9 | 3.6 |
In the year to the December 2019 quarter, QES average ordinary time hourly earnings increased to $32.76, up 3.6 percent. Public sector average ordinary time hourly earnings increased to $41.34 (up 4.6 percent), while private sector average ordinary hourly earnings increased to $30.56 (up 3.0 percent).
The key influences for higher average ordinary time hourly earnings in the QES were in the following industries:
- health care and social assistance (up 4.9 percent)
- public administration and safety (up 5.3 percent)
- retail trade (up 4.2 percent).
Average weekly earnings (including overtime) for full-time equivalent employees (FTEs) in the QES also increased on an annual basis - up 3.6 percent over the year to reach $1,272.12.
More than $20 billion in main government transfers, including New Zealand Superannuation, veterans' pensions, and paid parental leave, are adjusted each year, partly based on earnings as measured by the QES.
