New Zealand recorded the worst real wage growth of any OECD country over the past five years, according to the OECD Employment Outlook 2026, released this month. RNZ reported the finding on 10 July, drawing on the OECD's labour cost index (LCI) measure, which put New Zealand's real wages 6.4 percent below their Q1 2021 level.

The headline number needs unpacking, because economists contacted by RNZ point to at least two other OECD measures that tell a materially different story.

Westpac senior economist Michael Gordon told RNZ that a separate OECD dataset — the average annual wages series — shows New Zealand real wages rose 2.6 percent over the same five-year window, against an OECD average of roughly 3 percent. On that measure New Zealand sits close to, not far below, the middle of the pack. The average annual wages indicator is defined by the OECD as the average yearly wage paid per dependent employee across the total economy, adjusted to a full-time equivalent basis, and is published through the OECD Data Explorer under the dataset identifier DSD_EARNINGS@AV_AN_WAGE, maintained by the OECD Directorate for Employment, Labour and Social Affairs.

Gareth Kiernan, Infometrics' chief forecaster, added a third data point. Stats NZ also publishes an unadjusted labour cost index that does not correct for changes in the skill composition of the workforce. On that unadjusted measure, Kiernan told RNZ, New Zealand recorded no real wage increase over the past year and a 0.1 percent fall since 2021 — a much smaller decline than the OECD's headline 6.4 percent figure, and one that sits closer to flat than to worst-in-the-OECD.

The gap between these series comes down to methodology. The LCI used for the OECD's headline comparison is quality-adjusted, meaning it strips out compositional shifts in the workforce — changes in the mix of occupations, skill levels and hours worked — to isolate pure price-of-labour movements. That adjustment can push the LCI in a different direction to average earnings measures when a workforce's composition is itself shifting, for instance through migration flows or sectoral employment changes. The unadjusted LCI, by contrast, captures raw wage bill movements without that correction, which is why Kiernan's figure diverges sharply from both the OECD's adjusted LCI and the annual wages series Gordon cited.

For readers working across labour market policy, the practical takeaway is that "New Zealand had the worst wage growth in the OECD" is true of one specific, methodologically particular index — not an uncontested cross-check across all the OECD's wage series.

Beyond New Zealand's own number, the OECD report found real wages remained below their Q1 2021 level in 13 of the 37 countries analysed. Six of those — Australia, Czechia, Denmark, Italy, New Zealand and Sweden — were more than 2 percent below that baseline, placing New Zealand in company with several other advanced economies still working through post-pandemic real wage losses rather than as an isolated outlier. The OECD noted that real wages have regained some of the lost ground in virtually all member countries since the worst of the inflation shock, as reported by Newsroom, suggesting the trend line even for the worst-affected economies is one of partial recovery rather than continued deterioration.

The report's full title, "OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes," points to where its analytical weight actually sits. The 2026 edition carries a special focus on geographic disparities in employment and income outcomes within and between countries, a theme that runs through the report's structure well beyond the cross-country wage comparison that generated the RNZ headline. Canada, cited as a comparator case in the OECD's country-level material, recorded real wage growth of 1.5 percent year-on-year in the first quarter of 2026 — a reminder that the headline five-year comparison and current-quarter trends can move in different directions even within the same dataset.

The OECD's statistical annex provides a nominal and real wage index for each member country stretching back to Q4 2019, giving analysts a longer run of data than the five-year headline comparison alone. That annex, together with the OECD Data Explorer's average annual wages series, gives officials and economists the tools to check the LCI-based headline against other measures before drawing conclusions about where New Zealand's wage performance actually sits relative to its OECD peers.

None of this settles the underlying question of why New Zealand's quality-adjusted labour costs diverge from its average earnings trend to the degree the OECD's headline figure implies. That is likely to be the subject of further scrutiny from Treasury, the Reserve Bank and opposition parties in the weeks ahead, particularly given the political salience any "worst in the OECD" framing carries regardless of which underlying index produced it.