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With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)
With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)

The BulletinJanuary 28, 2022

Is it time to ask your boss for a pay rise?

With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)
With high inflation expected to stick around, it’s time to ask for a raise. (Getty Images)

With inflation at a three decade high, New Zealanders face another year of shrinking paycheques as costs soar, Justin Giovannetti writes.

Inflation is soaring around the world and NZ hasn’t been spared. Domestic prices are growing at the fastest rate in a generation, with inflation hitting a 31-year high of 5.9% at the end of 2021. As Hamish Rutherford writes in the NZ Herald (paywalled), the last time inflation was this high “the Reserve Bank was given new powers to use interest rates to keep prices stable”. Much of New Zealand’s recent prosperity grew in that predictable environment. Too much inflation is bad for an economy, it often means that basics become more unaffordable and families struggle to budget when prices are rising fast. It’s hard to shop wisely when you don’t know what a good price is anymore.

This problem isn’t going away soon. Predictions set last year that this unexpected bout of inflation would be a temporary blip caused by Covid-19’s wrecking ball on supply chains have been dashed. Experts are now predicting another year of fast increasing prices, with inflation continuing at high levels into 2023. According to One News, the prime minister said after the StatsNZ figures were released that global pressures, like a 30% surge in petrol prices, were behind the inflation increase. Some of that is true and inflation is not a partisan issue, it would be happening regardless of who is in the Beehive, but there’s a local dimension to the problem.

Non-tradable inflation was way up. Economist Brad Olsen told The Bulletin that there are some troubling indicators in the data. One of them is non-tradable inflation, which is a measure that only looks at the increase in prices of things we don’t get overseas.

“Diving into the numbers deeper, you get a sense that there is some international stuff at play, but 5.3% in non-tradable inflation isn’t stuff we are importing, that’s demand exceeding supply here”, said Olsen.

That far exceeded expectations and is the highest level on record. House prices, rental hikes and the cost of some local materials are increasing prices across the economy. The increasing cost of nearly all our imports, from face masks to PlayStations, has made the problem worse.

While the roots of inflation aren’t partisan, this will quickly become a political problem for Labour, Henry Cooke writes for Stuff, because it’ll hit hardest the people the government says it wants to help.

So what does this mean for you? About half of New Zealand workers didn’t receive a pay rise last year, and for those who did, the average was around 2.5%. That still equates to a 2.4% pay cut. As RNZ explain, this won’t be a surprise for many readers who are struggling. The vast majority of workers enter 2022 worse off, with their weekly pay buying less than it did a year ago. Does that mean you should go to your boss and ask for a 5.9% raise? “In an ideal world, yes”, said Olsen.

Profits across the economy have been rising quickly over the past few years, pay packets haven’t increased much and labour shortages are being reported across the country. It’s a perfect storm for workers to flex their muscles. Profitable businesses face two options: Share the wealth or lose workers.

“Indicators of the labour market are telling us it’s difficult to find labour, there’s more poaching and turnover. What you might see is that if workers hold more power, they can go to their employers and tell them to make it worth their while to stay. If they don’t pony up the cash, they can lose their employees and it’ll be hard to fill their orders, because they can’t replace those workers,” said Olsen.

Keep going!
A three phase approach to omicron. (Griffin Wooldridge / Unsplash via RNZ)
A three phase approach to omicron. (Griffin Wooldridge / Unsplash via RNZ)

The BulletinJanuary 27, 2022

New Zealand’s omicron plan revealed

A three phase approach to omicron. (Griffin Wooldridge / Unsplash via RNZ)
A three phase approach to omicron. (Griffin Wooldridge / Unsplash via RNZ)

The isolation period for cases will be shortened and they’ll be asked to notify their own close contacts in the later stages of what could be a significant outbreak, Justin Giovannetti writes.

New Zealand’s omicron plan is now clear. Since Sunday, the government has unveiled a new piece of the country’s updated Covid-19 response nearly every day. The picture is now more-or-less complete. Ayesha Verrall, the associate health minister who was an infectious diseases doctor until the 2020 election, yesterday detailed a new three phase approach to omicron. The plan expects infections to soar into the thousands, or tens of thousands of daily cases, in the coming months. The first phase, where we currently find ourselves, is quite familiar to New Zealanders. The plan’s final phase will be unlike anything the country has seen before. Stuff has detailed the three phases.

Phase one: try to stamp it out. The current phase. Largely mirrors the approach to the delta outbreak, with the addition of booster shots. People who have symptoms or are close contacts are expected to get PCR tests. Contacts will be traced by public health experts, while push notifications and updated locations of interests will help the country keep tabs on infections. Cases will isolate for 14 days, while contacts isolate for 10.

At around 1,000 daily cases, phase one won’t be able to cope. Ashley Bloomfield told RNZ that the worst case scenario is this could happen in about two weeks.

Phase two: slow the spread. PCR tests will still be available. Most cases will be informed via text message and directed to use online tools to help contact tracing. Experts will focus on tracing high-risk events. Critical workers, those in health and maintaining supply chains, will be able to use rapid tests to return to work once their infections clear. Other cases will isolate for 10 days, while contacts isolate for 7.

Once cases are in the daily thousands, this will stop working. There aren’t firm guidelines on what will trigger any of the moves between phases.

Phase three: Self-management. PCR tests are reserved for the vulnerable, while most symptomatic people are directed to use rapid tests. Cases will need to find and notify close-contacts themselves. As a result, the ministry of health will stop publishing locations of interest and sending notifications to cases. The definition of a contact will be narrowed to someone in your home. The isolation periods remain 10 and 7, while critical workers can exit early with a rapid test.

As RNZ reports, Verrall said it’s possible phase three won’t be necessary as some countries haven’t hit the high level of cases that would bring about the need. Omicron has now only spread to a few dozen people in New Zealand.

The Spinoff’s Covid data tracker has the latest figures.

Isolation periods will be a critical factor in the coming weeks. With estimates that up to half the population will become infected with omicron, many New Zealanders could soon be looking at their calendars to figure out how long they and their families need to self-isolate. Until the country enters the second phase, that could mean up to 24 days of self-isolation for people who live with Covid-19 cases. Businesses have said they’ll struggle to cover a 24-day leave for isolation and it isn’t clear how sick leave will work for people who can’t work from home. Al Jazeera has looked at how self-isolation rules are changing around the world and New Zealand seems to be hitting the middle of the target, with some countries cutting isolation time to as few as five days while others are sticking with the WHO’s recommended 14.