While wage growth has been strong in recent years, and most people are now earning more than they used to, some sectors’ pay have comparatively increased much more than others.
Infometrics chief forecaster Gareth Kiernan ran the numbers back to 1989.
Gareth Kiernan.
Photo: RNZ / Rebekah Parsons-King
He found the ratio of industry wage compared to the average wage had increased 35 percent for financial and insurance services over that time, and 15.8 percent for electric, gas, water and waste services.
But education and training wages compared to the average wage were down just under 12 percent, while for arts, recreation and other services were down 11.3 percent.
Education and training initially had the third-best ratio, but had slumped to slightly more than average over the years.
Kiernan said the size of the workforce in the electricity, gas, water and waste sector had dropped a lot from the late 1980s through to the 2000s.
“Since then It’s been building back up again – the upward trend in employment has coincided with a lift in the average wage rate as well.”
He said the effects of the public sector pay freeze could be seen on the public administration and safety category.
The ratio of financial and insurance services wages, compared to the average wage, had increased 35 percent. File photo.
Photo: 123rf.com
NZ Council of Trade Unions policy director Craig Renney said the end of contracts for consultants brought in to help with Covid could also have had an impact on that sector.
Renney said financial and insurance services had probably experienced such strong growth because of a change in the make-up of the industry.
“That probably reflects the fact we have depersonalised a huge amount of financial and insurance services, we do it online. As we’ve got rid of branch networks for banks and insurance services and other things, we’ve taken many of the less well-paid workers out of that and retained many of the better-paid workers in that space.”
He said it was probably a skills issue driving increases in the electricity, gas, water and waste services area. “In many of those areas there have been diminishing numbers of people with the skills to operate in those industries. What you’re seeing is a lack of workforce plan manifest itself.”
He said retail and accommodation were occupations that “almost anyone” could access, so the available pool of workers was much larger.
That kept wages lower, he said.
Retail’s ratio was flat and accommodation and food services’ was down 6.2 percent but both were paid less than the average wage and experienced a slump from 2005 through to 2019.
Kiernan said the wages had probably not fallen further because of innovation such as self-serve retail outlets and petrol stations, and online booking.
“Sadly as is ever the case, these are industries that also tend to be female-dominated,” Renney said.
He said the fact healthcare had a relatively low wage-to-average wage ratio, and limited growth, also reflected the fact that there were a lot of female workers in the sector being paid very little to do care work.
Renney said it was notable that overall there had been relatively little change.
“The areas that were ahead to begin with are generally speaking the areas ahead at the end. The gap between winners and losers has grown across the workforce and the returns for success are falling on fewer and fewer people.”