Pay value hit by inflation
By
MICHAEL HANNAH
in Wellington
Wage and salary earners saw the value of their pay packets drop 8 per cent in the 12 months ended in June, after inflation had eaten into wage rises. Private sector workers came off worse, with a drop of 8.7 per cent in real wages, compared with a drop of 7.8 per cent in public sector rates. According to the Public Service Association’s economist, Mr Peter Harris, the figures cannot be used as a base for wage-fixing but they do reflect what inflation has done to wage rounds.
Nominal wages, that is before inflation is taken into account, showed rises of 6.5 per cent among awards generally in the private sector, and 7.6 per cent in awards generally in the public sec-
tor. Releasing the figures yesterday, the Acting Government Statistician, Mr R. J. Latimer, said they were only provisional, and did not include all rises in the last wage round. The figures could therefore be revised depending on how much later awards were backdated. Mr Harris said two other factors should be taken into account in reading the figures. They did not include above-award pay rates, which occurred in the private sector, but only award rates.
“In the State sector, the award rate is the paid rate,” he said.
Secondly annual movements between public and private sectors could differ depending on from where they were measured. Mr Harris said that public sec-
tor rises tended to occur in one quarter, whereas private sector rises were generally spread over several quarters because of late award settlements. The figures released showed wage movements in terms of index figures rather than as monetary figures. But on the index basis, public sector award rates were 7 per cent lovtar than private sector award rates, though they had improved over the year from being 8 per cent lower in June, 1984. Mr Harris said that this comparison should be read cautiously, however, as the index base, set in December 1977, would have included the traditional November award rise for the public sector, while private sector award rises would have been more spread out. Mr Rodger, Page 9
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Press, 3 August 1985, Page 1
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363Pay value hit by inflation Press, 3 August 1985, Page 1
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