Friday, 19 October 2012

Wage and non-wage costs

A few interesting tidbits in the new Labour Cost Index.

Wage costs for employers - salary and wage rates including overtime - increased 2% over the last year. That's a bit over inflation, but real growth isn't strong.

Non-wage costs for employers, on the other hand, rose sharply. Says StatsNZ:
Annual leave and statutory holiday costs increased 8.4 percent in the year to the June 2012 quarter. In 2011 there were nine statutory holidays; in 2012 there were 11. This change increased employers' holiday costs, as did a 2.0 percent increase in pay rates.

Employers' superannuation costs per employee rose 4.1 percent in the year to the June 2012 quarter. This increase reflects continued growth in employer-subsidised KiwiSaver membership and higher pay rates, partly offset by falls in membership in other employer-subsidised superannuation schemes.
Of course wages are going to be pretty stagnant when legislation loads a pile of non-wage labour cost growth onto employers by statute but onto employees by tax incidence.

Prefer that you get more of your pay as wages rather than other considerations? Stop lobbying for more holidays and stop imagining that a pretty decent proportion of employer-side Kiwisaver contributions don't come out of your own pocket.

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