According to the Westpac McDermott Miller employment index, expected earnings growth dropped one point to a net 24.3 per cent of employees who anticipate a pay rise over the coming year.
Senior economist Satish Ranchhod said the levels are similar to those seen during the global financial crisis.
“This nervousness about earnings growth is widespread, and is particularly acute in regions such as Gisborne/Hawke’s Bay and Canterbury,” he said. “It’s also evident across most income groups.”
However, there is one exception to this pessimism – according to the report, households earning less than $30,000 have become “notably more upbeat” about the earnings outlook. In fact, the number of households in this income bracket which report receiving a pay increase over the past year has risen sharply since the start of 2016.
Ranchhod pointed to the current unemployment rate – which dropped to a nine-year low in 2017 – as one of the reasons behind this optimism. Planned increases to the minimum wage are also likely to be driving expectations.
While workers aren’t expecting a pay hike, the report did show that Kiwis are slightly more confident about job opportunities with the employment confidence index rising 0.1 points to 113.9 in the fourth quarter – the highest level in a decade.
The present conditions index also rose 2.2 points to 117.9, while the employment expectations index dropped 1.4 points to 111.2.
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Employers can breathe a sigh of relief this week after one new survey showed the majority of workers don’t expect a pay rise in 2018.