Labour supply stalls pay hikes

Supply and demand often dictates pay rises and Tauranga had a healthy labour force, says Personnel Resources managing director Ian Chitty. Photo / Andrew Warner

An inflow of labour into the Bay is holding down wage growth despite a spike in job vacancies, local business leaders say.

Typically workers moving into the area are also willing to take a cut in pay in exchange for the beach lifestyle.

Statistics New Zealand's June 2014 labour cost index report said salary and wage rates including overtime had risen across all sectors by 1.7 per cent nationally from the previous year. In contrast, the number of jobs being advertised rose 13 per cent in the Bay of Plenty in the year to July, according to SEEK data.

Recruitment agencies say the steady stream of workers relocating to the area combined with the healthy supply of labour means there is little incentive for employers to offer pay rises.

Recruitment agencies said there had been no or little movement in the pay rates since a Bay of Plenty Times survey in 2013.

Personnel Resources managing director Ian Chitty said if there was an over supply of labour incomes remained the same.

It usually effected the lower paid, unskilled jobs, he said.

"If there is a plentiful supply of people that is why incomes don't generally rise."

The pay gap also continued to exist between Auckland and Tauranga he said but incomes in the city had started to gather momentum for specialist positions including civil engineering, health professionals and chief financial controllers.

Mr Chitty said its job applications from outside the region had jumped 15 per cent on last year due to economic and business growth in the region.

Figures from TradeMe Jobs showed listings had jumped by 76 per cent for healthcare, 53 per cent for accounting and 47 per cent for construction and architecture in Tauranga year on year over a six-month comparison for 2014/13 from January to June.

In 2012/13 health care suffered a 1 per cent decline, accounting a 44 per cent decline and construction and architecture was up 9 per cent.

CBC Construction managing director Peter Cooney said there was no question pay rates were higher in Auckland and Christchurch where demand was greater and "sucking up a lot of the labour".

However, a lot of construction companies had moved to Tauranga and there was a large proportion of sub trades in the city so it was a competitive marketplace.

"That is the reason why rates haven't moved."

Chamber of Commerce chief executive Dave Burnett said the the city had moved past its "$10 Tauranga" tag.

The new Tauranga University planned to align itself with industry needs and that would produce well-paid graduates, he said.

"We are talking about IT, marine science, logistics, high-value manufacturing and innovative jobs in the kiwifruit industry. That will see an increase in skill levels with corresponding pay rates, salaries and wages."

New Zealand Nurses Organisation industrial adviser Lesley Harry said members covered by the DHB MECA received a 1 per cent pay increase on March 1, 2014. Since the last MECA CPI had increased around 4 per cent and wages had increased 4.5 per cent, she said.

NZ Transport Agency's Bay of Plenty acting highway manager Andrew Scott said more than 2000 people had been involved with the Tauranga Eastern Link since construction started four years ago with a peak of 280 people on site at any one time.