New Zealand’s labour market is running hot – but workers aren’t yet seeing the benefit, the Council of Trade Unions says.
Stats NZ revealed on Friday that the unemployment rate had plummeted in the year to June, to 4 per cent.
CTU economist and director of policy Craig Renney said the labour market looked to have largely recovered from the shock of the global pandemic.
Average wage inflation was at 2.1 per cent, Stats NZ said, which was up from 1.6 per cent the quarter earlier but still less than the 3.3 rate of inflation.
An average wage increase of 2.1% is fine if inflation is 1%. The problem is that inflation is at 3.3% so anyone who gets less than that is going backwards.
The answer isn’t to make inflation worse by increasing wages faster (which increases prices) but to stop printing money and get inflation down.