New Zealand has recorded the worst real wage growth of any OECD country over the past five years, according to a report released this month. But the actual story is more complicated than that headline suggests.

RNZ reported the finding on 10 July. The figure comes from the OECD's labour cost index — a specific way of measuring wages that removes changes in the types of jobs and skills in the workforce to focus on pure wage movements. By that measure, New Zealand's real wages fell 6.4 percent since early 2021.

But other ways of measuring wages tell a different story. Westpac economist Michael Gordon pointed out that a different OECD measure — average annual wages per full-time employee — shows New Zealand wages actually rose 2.6 percent over the same five years. That's slightly below the OECD average of about 3 percent, putting New Zealand roughly in the middle of the pack.

Another economist, Gareth Kiernan from Infometrics, noted a third measurement. Stats NZ has an unadjusted measure that doesn't remove the impact of changing workforce composition. On that measure, New Zealand showed almost no real wage change over the past year and a 0.1 percent fall since 2021 — far smaller than the 6.4 percent headline.

Why do the numbers differ? Think of it this way: when the workforce changes — say, more high-skilled workers migrate in, or jobs shift between sectors — that changes the average wage even if individual wages don't move. One type of measurement removes that effect to see what's happening to wages themselves. The other types don't. That's why the same country can look dramatically different depending on which measure you use.

The key point for anyone following the policy debate: "New Zealand had the worst wage growth in the OECD" is accurate for one specific measurement method, but not across all the OECD's wage data.

Beyond New Zealand, the OECD found that 13 of 37 countries studied still have real wages below their 2021 levels. Six of those countries — Australia, Czechia, Denmark, Italy, New Zealand and Sweden — are more than 2 percent below where they were. So New Zealand is one of several developed countries still dealing with post-pandemic wage losses, not an outlier. The OECD also noted that most countries have recovered some of that lost ground since the inflation crisis eased, as Newsroom reported, suggesting the trend is toward gradual recovery rather than continued decline.

The full title of the report — "OECD Employment Outlook 2026: Geographic Disparities in Jobs and Incomes" — shows what it's really focused on: differences in jobs and wages between regions within and across countries. The wage comparison that made headlines is just one part of a broader analysis.

For officials and economists, the OECD has published detailed wage data going back to late 2019, giving them more information to work with than just the five-year comparison. That data lets them test the headline finding against other measures before drawing firm conclusions.

The data doesn't yet explain why New Zealand's wages have performed so differently depending on how you measure them. That gap is likely to get attention from Treasury, the Reserve Bank and opposition parties in coming weeks, particularly because any claim that New Zealand is "worst in the OECD" gets political attention no matter which measurement backs it up.