This week's jobs data suggests the labour market is still pretty tight, and may even be tight enough to rouse wage growth from its long slumber.
Employment growth slowed to 1.5 per cent, continuing a softening trend, but that was still enough to keep the unemployment rate trending lower, to 4.2 per cent, even with a high labour force participation rate of 70.4 per cent.
And the level of employment — as measured by the employment rate or proportion of people over 15 employed — was 67.5 per cent. While that is off its peak six months ago, it remains high by historical and international standards.
Meanwhile, how torpid or perky wage inflation looks depends on the measure you focus on.
The labour cost index (LCI) for the private and public sectors combined rose 2 per cent in the year to March, up fractionally from the 1.8 or 1.9 per cent pace recorded in the past four quarters. In the past year 42 per cent of pay rates were not increased, while 25 per cent rose by 3 per cent or more — the highest proportion since December 2012.
The LCI attempts to measure movements in pay rates for the same quantity and quality of labour, so it filters out pay rises that reward the performance of individual employees, including promotions, or years of service.
The unadjusted LCI, which leaves them in, rose a more cheerful 3.4 per cent in the latest year, the highest rate since September 2017.
And the quarterly employment survey's measure of average ordinary-time hourly wages in the private sector rose 3.7 per cent in the year to March.
That compares with an average over the past 10 years of 2.6 per cent a year. In real terms, after adjusting for consumer price inflation, that was just 1 per cent a year. Hardly Hallelujah Chorus stuff.
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It is, however, in line with growth in labour productivity, or output per hour worked, over the post-recession period.
And in the end, to be sustainable, wage rises have to be underpinned by productivity gains, and by the willingness of firms to pass those gains on to their workforce.
Commenting on ANZ's latest Business Outlook survey, the bank's chief economist Sharon Zollner reminds us that firms can lift output by either lifting employment or investing in capital, or both.
In the current business cycle, and over the past five years particularly, they have opted more heavily for labour, she said. That has absorbed the rapid growth in labour supply from net immigration but has unfortunate implications for productivity growth, which is what drives real wage growth over the medium term.
This is evident from the ANZ survey when they subtract employment intentions from investment intentions, as an indicator of which option firms have preferred — capex or hiring.
It is the same story across the developed world. An OECD report on productivity released on Monday says that for the OECD as a whole, annual growth in labour productivity since 2010 has slowed to 0.9 per cent, about half the pace recorded in the pre-crisis period.
Per capita economic growth has largely been sustained by growth in labour force participation, as employment rates have climbed to historic highs in most countries. That is true of New Zealand, where the proportion of people aged between 15 and 64 who are employed is now the fourth highest in the OECD.
But it is the quality rather than the quantity of the jobs growth that is the problem.
"In many countries recent employment growth has been in activities with relatively low labour productivity, dragging down overall labour productivity," it says.
"More jobs in lower labour productivity activities has also meant more jobs with below average wages in most economies, weighing down on average salaries in the economy as a whole, compounding the effects of slower productivity growth and its ability to drive wage growth."
The OECD does see some signs of improvement, however, in real wage growth. This week's numbers from Statistics NZ suggest that holds true for New Zealand as well, given an inflation rate of 1.5 per cent.
Still, we are left with a puzzle. Employment growth has been strong enough to cope with a rapid increase in the working age population fuelled by net immigration, plus a rise in the participation rate (or share of the working age population either employed or actively seeking work), and still see the unemployment rate decline from its peak of 6.7 per cent in September 2012 to 4.2 per cent now.
But that has not been enough to deliver anything more than tame wage inflation. How come?
Part of the explanation may be that headcount measures of employment and unemployment understate the amount of slack or spare capacity in the labour market.
So Statistics NZ now provides a broader measure, the under-utilisation rate, which includes the unemployed (102,000 at the latest count) plus the under-employed, who are part-timers willing and able to work more hours (116,000) plus a group called potential job-seekers (105,000) who say they would like a job but are not actively seeking one or who are looking for a job but are not available to start one quite yet.
The under-utilisation rate is 11.3 per cent of the extended workforce and has been trending down over the past two years.
Another limitation of the household labour force survey, the source of official data on unemployment, is that it picks up changes in people's employment status from one quarter to the next, from unemployed to employed or vice versa. It does not capture whether people were employed in both periods but by different employers.
Inland Revenue, on the other hand, does know if a different employer is peeling off PAYE for the same person.
Research undertaken in the Reserve Bank last year looking at that data, which captures job-to-job flows where someone leaves one job to take up another, found that it is historically a good fit to wage growth. Since the recession that flow of people has been much slower than before it.
It is not clear why this is the case. Skills mismatch between the supply and demand sides of the labour market might be a factor, or a reluctance to move to Auckland.