• Insurance sector leads wage growth in New Zealand

    Study unveiled sectors that fall behind

Wage growth in New Zealand has varied significantly across different industries, with insurance and financial services experiencing the highest increases, according to a study by Infometrics chief forecaster Gareth Kiernan.

 

The study compared sector wages to the national average wage since 1989.

 

Wage growth in services sectors

According to RNZ’s report, the insurance and financial services sector saw a 35% rise in its wage ratio compared to the average wage.

 

Meanwhile, the electricity, gas, water, and waste services sector noted a 15.8% increase.

 

Wage drop in services sectors

On the other hand, wages in education and training fell by nearly 12%, and the arts, recreation, and other services sectors experienced an 11.3% decline relative to the average wage.

 

Education and training, initially one of the top sectors in terms of wage ratios, has now declined to just above the average wage.

 

Kiernan pointed out a significant drop in the workforce in the electricity, gas, water, and waste sector from the late 1980s to the 2000s, followed by a recent upward trend in employment and wages.

 

“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, as reported by RNZ.

 

Factors impacting wage growth or decline

Kiernan said the impact of the public sector pay freeze was visible in the public administration and safety category.

 

Craig Renney, policy director at the New Zealand Council of Trade Unions, suggested that the conclusion of contracts for consultants hired during the COVID-19 pandemic might have also influenced this sector.

 

He attributed the substantial wage growth in insurance and financial services to changes within 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, as reported by RNZ.

 

The increase in wages in the electricity, gas, water, and waste services sector was likely driven by a shortage of skilled workers.

 

“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,”  Renney said.

 

Conversely, the retail and accommodation sectors might have been further reduced without innovations like self-serve retail outlets, petrol stations, and online booking systems.

 

Renney noted that sectors with a high proportion of female workers, such as healthcare, tended to have lower wage-to-average wage ratios and limited growth. Overall, he observed that while some sectors have seen changes, the disparities between high and low-wage sectors have widened.

 

“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,” he said.

 

Last year, Insurance Business identified the best insurance employers in Australia and New Zealand – companies that have created an environment for their people to thrive in.

 

 

 

 

 

Insurance Business NZ

 

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