New Zealand - Wage & Salaries

For New Zealand, the Quarterly Employment Survey (QES) is a sample survey of businesses that employ more than two people, conducted every three months. It produces estimates of average hourly and weekly earnings, average weekly paid hours, and the number of filled jobs and full-time equivalents, by industry. Estimates can also be broken down by sex, ordinary and overtime paid hours, and for most regions.

The survey excludes agriculture and certain other categories.

Complementary statistics are provided by the Household Labor Force Survey (HLFS) and Labor Cost Index (LCI).

Active:

• Sample design: KAUs
• Industry classification:
  • Version: ANZSIC06
  • Scope: B to S excl. L6711, O7552, O76, S96
• Measurements:
  • Unitary count of persons (#)
  • Thousands of New Zealand dollars (Ths. NZD)
  • New Zealand dollars (NZD)
• Adjustments:
  • Trend
  • Seasonally adjusted (SA)
  • Not seasonally adjusted (NSA)
• Native frequency: Quarterly
• Start date: Uniformly 1989Q1
• Geo coverage: Country

Predecessor:

• Sample design using GEOs - 1989Q1 to 2020Q4 ("_20")

The survey excludes agriculture and certain other categories, specifically: A01 Agriculture, A02 Aquaculture, A04 Fishing, hunting, and trapping; A052 Agriculture and fishing support services, L6711 Residential property operators, O7552 Foreign government representation, O76 Non-civilian defence staff; and S96 Households employing staff.

The source writes:

How is the data collected?

Each quarter, 3,500 businesses in 18,000 different locations are surveyed. These businesses include a range of industries. Each of the 18,000 locations is asked to provide details of the number of its male and female, and full and part-time employees, and the hours and earnings of those employees. The reference period is the payweek immediately before the 20th of the middle month of the quarter.

How is the QES used?

The QES is the most timely source of information on earnings, hours, and filled jobs by industry. It is the only source of information on paid hours by industry, which can be broken down by ordinary time and over-time. The QES also provides information on the number of part-time and full-time jobs and full-time equivalents each quarter. Information from the QES is an economic indicator of the volume of labour used in each quarter, and measures from the QES, such as hours and earnings, are used in the production of quarterly gross domestic product (GDP) and in productivity statistics.

Movements in the QES measures ‘average hourly earnings’ and ‘average weekly earnings’, which are used in legislation to benchmark figures such as the level of National Superannuation, Accident Compensation Corporation (ACC) levies and payments, paid parental leave, and the calculation of Child Support.

What are the common confusions?

The QES measure ‘average hourly earnings’ can be confused with the labour cost index (LCI). The LCI measures changes in pay rates between quarters for a fixed quantity and quality of work (that is, the LCI excludes pay increases gained due to the acquisition of qualifications or a promotion). The QES measure ‘average hourly earnings’ is calculated by adding the total wage payout for all businesses and dividing this sum by the total number of hours worked across all businesses. Changes in average hourly earnings in the QES therefore, can mean a pay rise OR an increase or decrease in the number of hours worked in a higher or lower paying industry.

The number of filled jobs from the QES is different from ‘employment’ in the Household Labour Force Survey (HLFS). The HLFS is a survey of 15,000 households, where each person aged over 15 years in each household is asked whether they are in the labour force, and if they are employed (among other things). Employment in the HLFS is thus, a count of people rather than jobs. Hence, when unemployment increases it is wrong to say that people have lost their jobs. We cannot know this for sure as the increase in unemployment might be due to people coming into the labour force and not being able to find a job (for example, a married woman re-entering the workforce or school leavers). For more on the HLFS, see the Household Labour Force Survey learning resource.

In the same way, when filled jobs increase it is not correct to say that more people are working – it may be that people have taken on extra jobs, or the self-employed may have taken on paid employment as well.

There is a difference between filled jobs and full-time equivalents. A filled job in the QES is the total of all the employees at each business location, plus the number of working proprietors (see Statistical calculations – definitions below) counted by the survey. If an individual is employed at more than one location, then that person will be counted at each location. Filled jobs are a count of jobs not people. This measure excludes positions held by those in ‘working proprietor’ only businesses.

Full-time equivalents (FTEs) are calculated by adding the total number of full-time employees in the survey and half the number of part-time employees.

Operation of the survey

QES statistics are derived quarterly from approximately 18,000 surveyed business locations in a range of industries and regions throughout New Zealand. Information relates to the payweek ending on, or immediately before, the 20th of the middle month of the quarter. Therefore, the reference months are February, May, August and November.

The QES is a panel survey. This means that all businesses in the sample are surveyed in each quarter until the sample is reselected or redesigned. Some businesses are rotated out when the sample is reselected or redesigned. The need to maintain a sample that provides good coverage of economic activity means that smaller businesses have a higher chance of being rotated out of the sample than larger ones. Between a sample reselection or redesign, businesses are removed if they cease or stop employing staff. A sample of new businesses and businesses that come into the scope of the survey is also introduced each quarter.

Results from the quarterly (monitoring) samples are available approximately three months after the survey reference month.

Coverage

The survey population comprises all business locations owned by economically significant enterprises in surveyed industries that employ staff.

An economically significant enterprise is one that meets at least one of the following criteria:

• has greater than $30,000 annual GST expenses or sales
• has at least three for its rolling mean employment (the average employee count over the previous 12 months)
• is in a GST-exempt industry (except residential property leasing and rental)
• is part of a group of enterprises
• is a new GST registration that is compulsory, special or forced
• is registered for GST and involved in agriculture or forestry.

The following Australian and New Zealand Standard Industrial Classification (ANZSIC) industries are excluded from coverage:

• A01 = Agriculture
• A02 = Services to agriculture
• A04 = Commercial fishing
• I6301 = International sea transport
• L7711 = Residential property operators
• M813 = Foreign government representation
• Q97 = Private households employing staff

Non-civilian staff in ANZSIC classification M82 Defence are also excluded.

Addition of businesses to the QES sample

In each quarter, businesses enter or leave the sample in order to make it as representative as possible of the surveyed industries.

There are three types of businesses that enter the sample (known as sample births):

• A new enterprise with paid employees. These are new GST registrations within the scope of the QES. A sample of these is selected for each quarter.
• A business location that was not surveyed in the previous quarter and has transferred to a surveyed enterprise in the recent quarter. Examples are takeovers and mergers. The QES tracks enterprises. Therefore, all in-scope business locations belonging to a sampled enterprise are surveyed.
• An existing enterprise that has started to employ paid labour. These are businesses that have come within the scope of the QES and are usually small enterprises. A typical example is a business with two working proprietors that has started employing staff.

Filled jobs

It should be noted that the QES measures the number of filled jobs, not the number of people employed. Individuals with more than one job are counted at each workplace. Filled-job figures comprise QES estimates of full-time and part-time paid employees at surveyed business locations in surveyed industries, plus working proprietors in those locations and industries. This measure excludes jobs held by those in working proprietor-only businesses

Limitations

The QES average earnings statistic does not provide a reliable measure of wage inflation. The QES movements shown by average earnings statistics are influenced not only by changes in employees' remuneration (resulting from changes in wage rates), salaries and paid hours but also by changes in the composition of the paid workforce from survey to survey.

Movements in average earnings statistics are influenced not only by changes in employees' remuneration resulting from changes in wage rates, salaries and hours worked but also by changes in the composition of the paid workforce from survey to survey. A measure that separates out the effects of employee remuneration and compositional changes in the workforce on these movements is not available.

Compositional changes that may affect movements in average earnings statistics and changes in weighted contributions include changes in the relative numbers of employees and their paid hours. These changes occur between males and females, full-timers and part-timers, different industries or within industries, and between different sectors or within sectors. (See the following section, Changes in weighted contribution, for more information.)

This means that the QES does not provide a good measure of pure wage inflation, as it is not possible to isolate shifts in numbers of employees and paid hours from pure wage increases. The QES collects total payout information for each business in the survey. An increase (or decrease) in total payout does not necessarily indicate that there has been an increase (or decrease) in wages. Total payout for a firm could have increased because more people were employed, more hours were worked, more qualified people were employed, or more full-time workers were employed. Survey respondents are not asked to explain changes in total payout from period to period; therefore, there is no way to isolate a pure wage increase.

Key points to note

Average ordinary time earnings include all shift, penal and other allowances: bonuses; paid leave; and commissions earned in the survey payweek. Payments not earned in the week (such as back pay, redundancy and severance pay) and non-taxable payments (such as tool money) are excluded. In contrast, the Labour Cost Index (LCI) excludes irregular payments such as bonuses and commissions, and also excludes increases in salary and wage rates due to service increments and merit promotions. Casual employees and those employees temporarily absent from work due to sickness, leave, industrial disputes and being temporarily laid off are included only if they are paid in the survey reference week.

Definitions

Business Frame (BF)

A listing of all economically significant businesses in New Zealand. The BF is maintained by Statistics New Zealand. The survey population for the QES is a subset of the BF.

Employee count (EC)

An attribute associated with each business in the population. It comes from the BF and is obtained from taxation data. EC is used only for sample design purposes.

Enterprise

A business or service entity operating in New Zealand.

Employees

Survey estimate of all full-time and part-time paid employees.

Filled jobs

Old design: Sum of three items: full-time paid employees, part-time paid employees, working proprietors in businesses that have paid employees. New design (2021): Sum of two items: full-time paid employees, part-time paid employees.

Full-time equivalent employees (FTEs)

Defined as: full-time paid employees, plus half the part-time paid employees. The count is significantly smaller than that of filled jobs, since about one-third of filled jobs are part-time.

Status in employment: Full-time paid employee

An employee who regularly works more than 30 hours per week.

Status in employment: Part-time paid employee

An employee who regularly works less than 30 hours per week.

Working proprietor

Someone who is self-employed in an economically significant business.

Total weekly gross earnings

The total of all wages paid (both ordinary and overtime) in the reference payweek.

Total weekly paid hours

The total of all the paid hours (both ordinary and overtime) in the reference payweek.

Average weekly paid hours

Defined as: Total hours / FTEs

Total pay

Defined as: Ordinary pay + overtime pay

Average hourly earnings

Defined as: (Total pay / total hours), in the reference week

Average weekly earnings

Defined as: Total pay / FTEs

Weighted averages

Weighted averages are used to adjust numbers according to the different degrees of importance of the items these numbers represent. Examples of weighted averages are the average hourly earnings and average weekly earnings in the QES.

The total estimates for average hourly earnings and average weekly earnings are basically the sum of the weighted contributions from each industry group. The weighted contribution of each industry group is measured by multiplying the industry's average earnings by its share of paid hours (for average hourly earnings) or by paid employees (for average weekly earnings). This way, the total estimate includes the effects of both the average hourly earnings in an industry, and the industry's share of total hours. Using the retail trade industry as an example, the average hourly earnings are lower than the average for all industry groups combined. If this industry had a significant increase in total ordinary time paid hours, and all other industries showed no change, then the weighted contribution of all the other industries would decrease relative to the contribution of the retail trade industry. The contribution of the retail trade industry would increase, and therefore, more weight would be given to its ordinary time hourly earnings. This could cause the average for all industries combined to decrease, even though the contribution from the retail trade industry was positive. This average can decrease because there has been a relative decrease in the contribution from higher paid industries.

This is why it is useful to look at the drivers behind the changes in the average hourly earnings and average weekly earnings in the QES. These drivers are mentioned in the media releases that accompany the publication of survey results.

Possible but rare.

Identities

• Total time = Ordinary time + Overtime
  LWLWGSTTUQ.INZL = LWLWGSTOUQ.INZL + LWLWGSTSUQ.INZL
• Filled jobs = Full-time + Part-time
  LWQEMTTUQ.INZL = LWQEMFTUQ.INZL + LWQEMPTUQ.INZL
• Filled jobs = Females + Males
  LWQEMTTUQ.INZL, LWQEMTTFUQ.INZL + LWQEMTTMUQ.INZL
• Full-time equivalent jobs (FTE) = Full-time filled jobs + (Part-time filled jobs/2)
  LWQEMFTUQ.INZL + (LWQEMPTUQ.INZL/2)
• Average weekly earnings = Gross weekly earnings / FTE
  LWLWGSTTUQ.INZL ~ LWLWGTTUQ.INZL / (LWQEMFTUQ.INZL + (LWQEMPTUQ.INZL/2))

Further reading

At the source:

• Labor market statistics (theme)
• User guide for Stats NZ’s employment measures (25 Mar 2021)
• Series description: Quarterly Employment Survey
• Redesign of the quarterly employment survey (8 Mar 2021)
• Effects of the QES redesign on the March 2021 quarter statistics (4 May 2021)
• Labour market statistics: March 2021 quarter » New QES design (4 May 2021)
• COVID-19 and labour market statistics in the September 2021 quarter (19 Oct 2021)

At IMF:

• New Zealand does not adhere to SDDS