Older workers win while young workers lose as employers seek highly skilled talent
Wage growth in New Zealand has stalled, with uneven increases recorded across the country's sectors, according to a new report.
Findings from Employment Hero's Jobs Report for February 2026 revealed that average wages only grew by 0.2% year-on-year, down from the 5.6% growth recorded 12 months ago.
"Wages have well and truly stalled for Kiwis. With inflation hovering around 3%, this represents a real-time loss for Kiwi workers," said Neil Webster, Employment Hero General Manager NZ.
The manufacturing, transport, and logistics sector drove the country's wage growth with 3.2%, according to the findings. This was followed by the retail, hospitality, and tourism sector, which saw a 3.1% increase.
Wage growth in the science and technology sector was relatively flat at 0.2% year-on-year. Declines were recorded in:
- Agriculture, energy, and mining (0.6%)
- Healthcare and community services (5.5%)
Skilled workers demand drives wages
By age group, wage growth was also uneven among brackets, with older employees seeing better gains.
"The situation is particularly stark for the 25–34 age group, where year-on-year wage growth is -1.1%," Webster said.
People between 45 and 54 years old saw their wages grow by an average of 2.3% year-on-year amid strong demand for experienced employees, according to the report.
"We know businesses are struggling to find highly skilled workers, which could be why this age cohort is more desirable," Webster said.
"Another possible reason is the growing focus on retaining skilled staff and ensuring existing employees are compensated fairly with annual increases."
Employment growth positive
Meanwhile, the report further found that employment grew by 6.7% year-on-year in February despite wages stagnating, driven strongly by casual employment.
According to the findings, casual work persisted after the holiday period, rising 21.7% year-on-year after consistent monthly increases over the past 12 months.
"One of the drivers for this increase could be businesses opting to hire casual workers instead of expanding their full-time staff because they're cautious of future economic headwinds," Webster said.
Canterbury saw the biggest employment growth in New Zealand with 6.2%, followed by Auckland with 6.1%. Younger workers (25 to 34) saw the biggest increase in job numbers with an increase of 9.7%.
Demand for employees with strong AI literacy skills are also increasing among employers, according to the report.
Job listings mentioning AI reached 0.6% in the first quarter, close to Australia's 0.67%.
"This shows that the AI hiring shift is a consistent trend for small businesses across both New Zealand and Australia. Employers value talent with strong AI skills even outside of technical roles," Webster said.
The findings come as New Zealand's unemployment rate went up to 5.4% in the December quarter of 2025, according to Stats NZ.
"It's positive to see the number of available jobs increasing, but with unemployment still high and a large pool of available workers, this is being reflected in workers' pay," Webster said.
