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Lower Growth in Wage Rates Continues

Salary and wage rates (including overtime) surveyed for the September 1999 quarter were 1.5 per cent higher than a year earlier. This follows an increase of 1.9 per cent in pay rates for the September 1998 quarter when compared with the same quarter of the previous year.

Statistics New Zealand figures show that the latest quarterly increase in salary and wage rates for all sectors combined was 0.5 per cent. Pay rates have been increasing each quarter at a similar level since they rose by 0.4 per cent from the June 1998 quarter to the September 1999 quarter. Private sector pay rates rose by 0.3 per cent this quarter while the public sector increase was 0.7 per cent. The first increase from the secondary school teachers contract, settled earlier this year, was included in the public sector pay rise for the September 1999 quarter.

From the September 1998 quarter to the September 1999 quarter, the pay rate increase for the private and public sector was of similar size. Salary and wage rates increased for the private sector by 1.5 per cent and for the public sector by 1.4 per cent.

The average total hourly earnings, as measured by the recently released Quarterly Employment Survey (QES), increased by 1.3 per cent between May 1999 and August 1999. The average pre-tax earnings from the Quarterly Employment Survey can vary by more than wage rate changes as they are also influenced by fluctuations in the number of people in the workforce and the number of hours they work. In contrast, the Labour Cost Index is a price index and measures changes in salary and wage rates for the same quality and quantity of work.

Compared with a year earlier industry group pay increases, as measured by the Labour Cost Index, ranged from 0.5 per cent for wood and wood products and for transport and storage to 2.5 per cent for insurance and financing.

The proportion of surveyed salary and wage rates which received annual increases in excess of 5 per cent remained at 6 per cent this quarter. This proportion has fallen steadily from a peak recorded in 1997, when 11 per cent of employees received pay increases in excess of 5 per cent. The proportion receiving increases of less than 2 per cent grew from 16 to 19 per cent in the latest quarter. The proportion of employees who did not receive an increase was 56 per cent for the September 1999 quarter. This compares with 55 per cent for the September 1998 quarter.

The median increase of salary and ordinary time wage rates from the September 1998 quarter to the September 1999 quarter was 2.2 per cent. The median annual increase recorded for the September 1998 quarter was 2.7 per cent.

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