Average hourly earnings have risen by the lowest amount since 2010, new figures show.
Labour market statistics for the June 2013 quarter released by Statistics New Zealand today show average ordinary time hourly earnings rose by 2.1 per cent over the past year - the lowest wage growth since the December 2010 quarter.
The Quarterly Employment Survey, Household Labour Force Survey and Labour Cost Index were released together and showed wage inflation dropped to 1.7 per cent in the year to the June 2013 quarter, down from two per cent at the same time last year.
The unemployment rate rose 0.2 percentage points from the previous quarter to reach 6.4 per cent in the June 2013 quarter - resulting in another 5000 people looking for work.
Labour's employment spokesman Grant Robertson said the figures made for depressing reading and came hard on the heels of hundreds of job losses at New Zealand Post.
However Employers and Manufacturers Association chief executive Kim Campbell said high unemployment coupled with the lowest wage increase rate in more than a decade did not necessarily make for an employers' market.
A large percentage of unemployed people were unskilled, which meant the pool of skilled people for employers to choose from was relatively small, he said.
"Even the most basic jobs today require a certain amount of training.
"Even the most basic warehouse work requires some numeracy skills with computers."
Overall, the economy was stronger than it had been in years, Mr Campbell said.
"All the surveys we've seen is there is a strong willingness to hire and invest and grow."
Council of Trade Unions' secretary Peter Conway said the news of flat wages brought no joy for workers.
Nearly 64,000 workers were wanting extra hours of work and it was a very tough time to be looking for a job, he said.
Wages were up only by 1.7 per cent and the median increase for those who got a wage increase in the last year was only 2.7 per cent - the lowest increase since 2001, Mr Conway said.
In the last year 45 per cent of employees did not receive a pay increase, he said.
"We need a renewed focus on decent jobs for workers. It is no point saying that the economy is slowly picking up if the benefits are not flowing through to wages and jobs.
"Much more could be done to boost employment through government procurement, community employment schemes, and training to ensure that local people are supported to meet the skill requirements of available jobs."
Tertiary Education, Skills and Employment Minister Steven Joyce said the figures showed a trend of growing employment as the economy recovered.
An extra 65,400 jobs were added to the economy over the last two years, he said.
"The results follow news the economy grew 2.4 per cent in the year to March," Mr Joyce said.
"While unemployment grew slightly in the quarter, it remains below the 6.8 per cent of a year ago.
"Results also show 6000 more young people are studying this quarter with the number of youth not in employment, education or training falling to the lowest level since the beginning of the Global Financial Crisis."
Green Party Co-leader Russel Norman said the Government's focus on dairying and mining was not creating an economic recovery diversified enough to create more jobs.
"The mining sector employs only 6500 people, shedding 1400 jobs from the last quarter, though there is some quarterly fluctuation."
The rising cost of living:
* Petrol: up 2c a litre year-on year (0.9 per cent)
* Power: up three per cent year-on-year
* Consumer Price Index (inflation): up 0.7 per cent year-on-year
* Wages: up 2.1 per cent year-on-year
Source: AA, MBIE, Stats NZ