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Workers feel recession’s pinch on their pockets

Feb 11th, 2010 | By | Category: Front Page Layout, Latest News, News

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Disgruntled workers: New Zealand salaries barely rose last year.

RECENT STATISTICS confirm what many workers suspected last year, that annual salary and wage rates barely increased from December 2008 to December 2009.

The Labour Cost Index released by Statistics New Zealand earlier this month shows annual salary and wage rate increases have steadily declined since peaking at 4% in the year ending in the September 2008 quarter.

In the year ending December 2009, annual salary and labour rates increased by only 1.8 %.

Statistics New Zealand says workers have not experienced such a small increase since the year ending June 2001, when salaries and wages increased by the same amount.

Council of Trade Unions economist and policy director, Bill Rosenberg, says in a statement that the index’s results are an indication of our country’s current financial situation.

He says it is important for New Zealand wages to match Australian wage rates if New Zealand is to recover from the recession.

“However, for many workers and their families, the recovery is not yet in sight,” says Mr Rosenberg.

He says it would be short sighted to allow wages to decline and risk the financial recovery that has started to occur.

Business New Zealand chief executive Phil O’Reilly says the increase reflects what companies can bear.

“Too high an increase could be a breaking-point for those already struggling with slim margins and low demand.

“There is the comparative fact that thousands of other workers have not had any wage increase at all and may not get one in the foreseeable future.”

He says the government’s decision to minimise salary and wage increases is reasonably balanced.

Mr O’ Reilly says the possibility of the wage and salary rates, including overtime, increasing significantly in the near future is unlikely in light of the government’s decision to increase the minimum wage by 25 cents.

The index reported annual overtime wage rates increased by 2.2 % in the year to the December 2009 quarter, following a 2.8 % rise in the year to the September 2009 quarter.

Statistics New Zealand says this is the lowest annual increase in overtime wage rates since the year to the December 2002 quarter when a 2.2 % rise was recorded.

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