Editorial: Leaders need to address wages

There are moments when the Bay's beauty still catches me off guard.

One of those moments came on Saturday after returning home from a trip to Rotorua. There wasn't a cloud in the sky as we made the journey back to the Western Bay, and we decided to head straight to the beach when we got home.

The sea was an inviting blue and the beach was uncrowded.

Scenes like this only add to the Bay's reputation as a lifestyle destination, which, it seems, may also be partly to blame for wages remaining low in the area.

A survey commissioned by Priority One and compiled by Infometrics reveals economic growth in the city jumped 4.6 per cent in 2015 compared with the national average which climbed 3.6 per cent.

Last year there were 61,057 jobs in the city, up 3.7 per cent on 2014, and 14,297 business units (one office or factory) in 2015 - a hike of 2.6 per cent over the corresponding timeframe.

However, according to Infometrics' latest statistics the standard of living and mean annual earnings in Tauranga for 2014 was $49,780 compared with the national average of $54,230.

Priority One projects manager Annie Hill says it is unfortunate that annual earnings are lower than the national average. She says the trend reflects the pay-off "to live somewhere with such a great lifestyle and a lower cost of living compared to, say, Auckland".

The job market, she says, is all about supply and demand, so employers will pay what they need to pay in order to secure the skilled and unskilled staff they need.

The fact Tauranga has had slightly higher increases in annual earnings over 2014 and 2015 than the national average hopefully shows the gap is closing.

Living in a vibrant city offering a great lifestyle is bound to be a major drawcard to skilled workers, but it is likely to be a limited counter balance to concerns about the gap in earning potential.

Bay leaders need to address the issue of wage growth to ensure it keeps pace with rising living costs and demand for labour. We cannot rely on lifestyle-appeal alone.