Profits up as wages stand still

Company profits jumped 8.6 per cent last year, while the real average hourly-wage stood still.

Statistics New Zealand said the combined operating profits of New Zealand businesses climbed by $5.2 billion to more than $65b.

That was helped by a 17 per cent jump in the operating profits of larger businesses that employ more than 20 staff, which rose to more than $29b.

Meanwhile, the mean-average hourly wage rose just 1.3 per cent, with the increase only matching the rate of inflation.

Council of Trade Unions economist Bill Rosenberg said the statistics were more evidence that the share of income going to wages and salaries was falling.

‘‘That indicates wages are not keeping up with what the economy’s income could actually afford … It is an indication we are a lowwage economy.’’

But BusinessNZ Kirk Hope chief executive said the increase in company profits meant jobs were more secure. It was also positive for ‘‘many thousands of New Zealanders’’, including KiwiSavers, who who would be receiving increased dividends, he said.

‘‘A proportion of company profits must be reinvested to safeguard the future existence of the company; without that investment there will be no ability to maintain or grow jobs.’’

Business profits can jump around significantly from year to year, but even taking a longerterm view, Statistics NZ figures show they appear to be greatly outstripping pay rises.

Total business operating profits jumped from $47b in 2009, a rise of 38 per cent.

Over the same period, the median-average hourly wage rose just under 20 per cent.