Wage increases need to keep on coming

Wage rises as indicated by latest data out this morning need to keep on coming, the Council of Trade Unions said today.

“With inflation forecast to reach 5 percent by September, annual wage increases of 3.5 percent are modest,” CTU Economist Peter Conway said, following today’s Labour Cost Index release by Statistics NZ.

“Workers have been facing rising food and fuel costs and therefore will be looking for reasonable wage increases to keep afloat.”

“Treasury estimate that labour productivity rose by 3.1 percent in the March 2008 year and this means that wage rises are unlikely to impact on inflation to any great extent.” *

“The labour market is still relatively ‘tight’ with employment growth of 2.5 percent for the year. This means that wage rises of a similar size can be expected over the rest of the year.”

For those actually receiving a wage increase in the last year, the average increase was 5.8 percent and the median 4.1 percent, Peter Conway said. Reasons given for wage increases included the cost of living and increases due to collective bargaining by unions.
 

Ends.

* June 2008 Monthly Economic Indicators, Treasury.