Pay Rises: Who will get an increase in 2024?

Published 14 February 2024

What trends are shaping pay rises and employment confidence in NZ?

Change is in full force, blowing through our employment landscape. With recent data shedding light on the dynamics of pay raises and employment confidence, it's time to brace for what lies ahead.

In recent years, the labour market has been dynamic. Pay raises have been common, with workers experiencing significant boosts in their weekly earnings. However, optimism seems to be shifting as we progress, replaced by a more nuanced perspective.

The seasonally adjusted working age population expanded by 31,000 people between the June and September quarters, highlighting the changing demographics of our workforce. This influx brings both opportunities and challenges as businesses navigate a broader talent pool while addressing diverse needs and expectations.

Furthermore, the minimum wage trajectory provides insights into economic shifts. From $15.75 in 2017 to $22.70 in 2023, the minimum wage has steadily risen, signifying a commitment to fair compensation. Effective April 1st, 2024, it further increases to $23.15, reflecting ongoing efforts to enhance worker well-being and address income disparities.

"Industries experiencing labour shortages or influenced by minimum wage adjustments have been the epicentre of recent wage increases."

- Shannon Barlow, Managing Director at Frog Recruitment

Workers, once optimistic about brighter financial horizons, now grapple with uncertainties about job security and future prospects. The optimism that once prevailed is now tempered by the realities of a changing economic landscape.

Insights from Infometrics and Frog Recruitment underscore the need for adaptability and foresight in navigating shifting labor market dynamics.

In the face of uncertainty, it's natural to feel apprehensive about the road ahead. The recent Westpac McDermott Miller Employment Confidence Index reflects a nuanced picture, where slight improvements in sentiment are overshadowed by concerns about job security and future prospects.

"People are viewing their situation in inflation-adjusted terms - high inflation has meant that even those who have received larger pay rises in recent years still feel that they're struggling to get ahead."

- Michael Gordon, Senior Economist at Westpac

Unemployment is predicted to rise above 4% in the December quarter from 3.9%, with perceptions of future job opportunities at recessionary levels, pointing to potential rise in unemployment.

While the road ahead may be uncertain, it also presents opportunities for growth and resilience.

Kia kaha!