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Wage Growth at Record High

Labour Cost Index and Quarterly Employment Survey: September 2005 quarter

Wage Growth at Record High

Salary and wage rates (including overtime), as measured by the Labour Cost Index (LCI), rose 3.1 percent in the year to the September 2005 quarter, and 1.0 percent in the September 2005 quarter, Statistics New Zealand said today. These are the largest annual and quarterly increases since the series began in the December 1992 quarter. High growth is also reflected in the Quarterly Employment Survey (QES), where average total hourly earnings rose 4.2 percent (to $21.17) in the September 2005 year.

In the September 2005 quarter, salary and wage rates (including overtime) rose 1.5 percent in the public sector and 0.8 percent in the private sector. On an annual basis the increase was 3.6 percent in the public sector and 2.8 percent in the private sector. The latest quarterly and annual increases are the largest for both sectors since the series began in the December 1992 quarter.

Twenty-two percent of positions surveyed received an increase in salary and ordinary time wage rates in the September 2005 quarter, and 60 percent in the year to the latest quarter. Over this annual period, 19 percent of positions received an increase of more than five percent. These are the largest proportions since the LCI began in the December 1992 quarter.

In the QES, average total hourly earnings increased 0.9 percent in the September 2005 quarter, following a 2.0 percent increase in the June 2005 quarter. The QES average earnings statistics reflect changes in pay rates and also other changes such as composition of the paid workforce. By comparison, the LCI measures changes in salary and wage rates for a fixed quantity and quality of labour input.

QES results for the year to September 2005 show continued growth in employment. The number of full-time equivalent employees (FTEs) rose 4.0 percent and filled jobs were up 3.5 percent.

Brian Pink
Government Statistician


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