However you measure them, wages and salaries have lately been growing more slowly than prices.
But while falling real wages are unpleasant and unfortunate, they are also inevitable.
Covid-19 is — along with the other worse things that it is — a global negative productivity shock. Lockdowns and disruptedsupply chains have not been good for productivity.
And just as productivity gains are essential to sustainably lifting real incomes, the converse is also true.
Statistics NZ's preferred measure of wage inflation, the labour cost index, records that 38 per cent of salaries and wage rates did not increase at all in 2021.
That is a smaller proportion than usual, reflecting a tight labour market which saw the labour cost index rise 2.6 per cent overall and 2.8 per cent for the private sector, up from 2.4 and 2.5 per cent respectively in the September survey.
But in a year in which consumer prices overall rose 5.9 per cent, getting no increase in the pay packet is tough. And another 13 per cent of pay rates rose by less than 2 per cent.
At the other end of the spectrum, 20 per cent of them increased by more than 5 per cent.
The occupations recording the highest increases were construction trades workers, mobile plant operators, and road and rail drivers.
Overall, and perhaps surprisingly, there was an inverse relationship between skill levels — at least as the statisticians define them, largely in terms of formal qualifications — and the average pay increase last year.
You might say it was a year in which it was better to possess work boots than a bachelor's degree.
Last week's labour market numbers reaffirmed New Zealand's ranking as a country with one of the highest employment rates: 68.8 per cent of the population over 15 is employed.
When those aged 65 or older are excluded, the "prime age" employment rate, at 79.4 per cent, is the fourth highest in the OECD. It is well above the OECD average of 68 per cent, or 70.5 per cent in the United States, where the prevailing narrative is how tight the labour market is.
Australia's prime age employment rate is a respectable 75.9 per cent, which suggests some risk that the longstanding net loss of people across the ditch will resume when the risk of being stranded there as second-class non-citizens is removed as the border reopens.
A prime age employment rate of nearly 80 per cent is per se a good thing.
But it can also be seen as the flip side of something not so good: capital shallowness.
New Zealand's capital-to-labour ratio — the amount of capital firms have invested per worker — is low by developed country standards and is a major factor in our relatively low labour productivity.
It reflects a tendency of firms, when looking to expand output and when the two are substitutable, to hire rather than invest.
Building workers did best, but almost 40 per cent of workers got no pay rise last year. Photo / Jason Oxenham
That may be the rational choice when labour is relatively cheap and easily shed if business takes a turn for the worse, while capital expenditure is a sunk cost.
But it suggests the proposed income insurance scheme unveiled last week, which would widen New Zealand's comparatively low tax wedge on wages, might for that reason encourage some capital deepening and the attendant productivity improvement.
The other most widely watched measure of wage growth is the quarterly employment survey (QES).
It reflects changes in employers' wage bills, with some exceptions, notably agriculture and fisheries.
It is also the source of the measure of wage growth to which NZ Superannuation is indexed — average ordinary time weekly earnings in the last QES before March 1 — which was up 5.6 per cent in the latest survey.
Average ordinary time hourly earnings in the private sector in the December 2021 quarter were up 4.1 per cent on a year earlier. The national average dilutes down to a 3.8 per cent rise when the public sector is added. Either way, it lags behind CPI inflation.
But one firm's employee is other firms' customer.
When that increase in the average wage is compounded by a 4.2 per cent increase in filled jobs and a 1.9 per cent increase in average paid hours per week, the net effect the QES found is that the collective weekly gross earnings of employees were up 10.6 per cent on December 2020.
While that sort of increase might sound good to a business chasing the consumer's dollar, offsetting it in the year ahead will be:
• The squeeze that falling real wages will put on discretionary spending power. • The hit to the cashflow of households with mortgages as the Reserve Bank's tightening flows through to that majority of home loans which are due for an interest rate reset this year. • Omicron's effect on consumer behaviour and sentiment, on top of the effects of large numbers of people being off work sick or isolating at the same time. • And the highly uncertain effects on net migration flows as the border is gingerly reopened.
One person who is making out like a bandit, though, is Finance Minister Grant Robertson, in the sense that five months into the current fiscal year, the PAYE tax take was running 10 per cent higher than in the same five months a year earlier.
Some of that increase would reflect the kicking in of the 39 per cent top tax rate and bracket creep.
But mainly, it reflects the combined effects of employment and wage growth, even if, for so many people, the latter falls short of the rising cost of living.
