New report says it continues the trend of real-term losses for many workers
Wage growth in New Zealand declined to negative territory for the first time in over a year in July, with older workers hit harder by the decline, according to a new report from Employment Hero.
Its latest data revealed that wages were down -0.1% month-on-month and -0.4% year-on-year in July.
"Salaries have been struggling for a year, with the downward trajectory starting this time last year when wage growth stood at 4.7% year-on-year. The drop to -0.4% has been rapid," said Neil Webster, Employment Hero General Manager New Zealand.
Webster said this continues the trend of real-term losses for workers, with the gap below inflation becoming "significantly wider."
"With wage growth now falling well behind inflation, workers will continue to feel it in the back pocket, which piles more pressure onto an already high cost of living," he added.
Older workers hit the hardest
Older workers, in particular, feel the wage decline harder than other generations.
The median hourly rate of employees in the 55 to 64 age group was down -1.6% year-on-year, while those aged 65 and above declined -1.5% year-on-year.
On the other hand, workers aged between 18 and 24 years old saw their wages grow 1.8% year-on-year.
Positive wage growth was also recorded in some sectors, including agriculture, energy, and mining (5.1%), as well as retail, hospitality, and tourism (2.5%), according to Employment Hero.
Businesses face pressure
The decline in wage growth comes as businesses across New Zealand feel the pressure on wages, Employment Hero said.
Citing a separate report, it noted that wages, productivity, and employee burnout were the leading pressures facing businesses in the second quarter.
One in three (33%) small businesses cited wages as their biggest pressure, while nearly a quarter (24%) of larger organisations said it was their biggest challenge.
Despite these pressures, Employment Hero's Pulse Data found that 53% of businesses are optimistic about their company's financial performance in the next six months.
Nearly a quarter (23%) of employers are also intending to hire more staff, which comes in the wake of an 11-year high unemployment rate of 5.6% in the June 2026 quarter.
Webster said the latest unemployment figures show employers are "being cautious," adding that current pressures facing businesses continue to hold them back.
"With inflationary pressures, oil price challenges, and softer consumer demand all still in play, we don't expect a quick turnaround," he said.
"It's fair to say New Zealand business leaders are playing it safe with a focus on keeping costs under control rather than growing headcount."
