Northland median salary rises $8k in four years

The average Northland worker may have more money in their wallet, but may be working harder and spending more, too. Photo/File

The median wage in Northland has increased by more than $8000 annually since 2012.

Latest Statistics New Zealand figures showed the median wage in Northland was $44,200 - up from $35,880 in 2012, a 23 per cent increase.

Economists have noted that workers have been receiving a smaller share of national income for decades - essentially helping their employers earn more, while not receiving an equal share of that increase.

However, according to Statistics New Zealand figures, Northland workers' wages increased at a much faster rate than the gross domestic product - the value of goods and services produced - in the last four years.

The 23 per cent median wage increase was more than double the 11 per cent GDP per capita increase in the period.

Regional economic development agency Northland Inc chief executive David Wilson said both growth indicators were positive, and showed Northland was performing better than economists gave it credit for.

"We've had the... 'zombie town' stuff, and there's one view that says the demographics are pointing in the wrong direction, and we need to look at our feet and bow our heads and accept this is just going to happen," Dr Wilson said.

"Actually, with concerted effort, good collaboration, the right programmes and the right focus, we can change the destiny of the region considerably.

"That's what it feels like in Northland right now. We feel there's a momentum building and all of the ingredients are there."

Dr Wilson said Northland's primary and secondary sectors had been historically strong but the region needed to diversify to build resilience during periods of fluctuating fortunes.

"We need to look at those kinds of jobs that are a little more sophisticated, a little more knowledge intensive perhaps, that pay more. So looking at our tertiary sector, and also quarternary sector."

The quarternary sector describes the knowledge and technology-based segment of the economy, and includes computing and ICT, research and development and consultancy, among many other industries.

Other factors impacting actual income, say economists, include the average employee working more hours and cost inflation of approximately 2 per cent per year.

Generally wage growth has been low for most New Zealanders since 2009, averaging at or less than two per cent per year - "muted growth", according to Westpac senior economist Satish Ranchhod.

He said the cost of goods and services - inflation - has also been low, so most workers' buying power has remained the same.

However, the consumer price index, a measure of inflation, rose in the March 2017 quarter above wage growth for the first time in six years. This meant costs of goods and services were likely to rise slightly more than wage growth, at least in the near future.

Mr Ranchhod said this would likely put some pressure on wages, and workers would start to feel a pinch.

"Consumer price tends to start rising and then that gets factored into wage growth, and combine that with a firming economy, we should see some wage growth in the next couple of years."

Council of Trade Unions economist Bill Rosenberg said incremental wage increases, although broadly equal to inflation, were hurting many workers - especially low wage earners.

"At the moment, I'm very concerned we're trapped in a low wage rut that's very difficult to get out of in the current circumstances. It's not good for New Zealand because it encourages low productivity."