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Sector wage movements comparison

To supplement the annual HRC survey salary information, SSC acquired a customised dataset from Statistics New Zealand's Labour Cost Index (LCI) to monitor wage movements in the Public Service and other sectors on a quarterly basis. The LCI measures movements in salary and wage rates, or wage inflation, for the New Zealand workforce.

In the year to June 2015, the LCI measured an increase in wages and salaries of 1.2% for the public sector and 1.8% for the private sector. Within the public sector, the Public Service's overall wage increased by 0.9%, the education sector by 0.8%, the health sector by 0.5% and local government by 2.2%. General inflation as measured by the Consumer Price Index (CPI) increased by 0.4%.

Figure 3.1 shows the LCI long term trend in salary and wage movements of selected sectors since March 2010 on a quarterly cumulative basis. Generally the gap in wages and salaries movement has been widening between the public and private sectors. Public sector wages and salaries have increased by 7.5% over the last five and a half years, compared to 10.4% for the private sector. Within the public sector, the Public Service has increased by 6.2%, compared with 6.4% for the health sector, 6.7% for the education sector, and 11.1% for the local government sector. The Public Service movement has been lower than those in the private sector and other government sectors. The CPI increased by 7.3% over the same period (excluding the effect of GST increase in 1st October 2010 from 12.5% to 15%).

It should be noted that salary movements measured by LCI and HRC figures are based on different concepts and are not directly comparable. The LCI figures are adjusted to ensure a constant quality and quantity of labour is measured, whereas the HRC salary movements (discussed in the following sections) reflect overall changes in workforce structure and occupational mix, and the movement in staff pay due to both bargaining movements and pay progression. The HRC movements are a composite measure and are generally higher.

Figure 3.1 Public and private sector wage movements, 2010–2015

Figure 3.1 Public and private sector wage movements, 2010–2015

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