A retail worker in Auckland earned about $48,000 last year. That's $10,000 more than in 2020. Sounds good, until you remember your power bill didn't go up 27%. It went up 50%. Your rent didn't track wages. It outran them.

This is the story behind the story RNZ reported this week: households freezing their spending because bills are eating everything. The retail sector's wage data shows exactly why.

New Zealand's retail workers collectively earned $86.2 billion in 2024, up from $70.9 billion in 2020. That's a 27% jump in four years. (Source: Stats NZ (LEED), earnings-by-industry)

But here's what that 27% doesn't tell you: inflation over the same period ran at roughly 20-25%. Strip out the rising cost of everything, and retail workers' real pay barely moved. The increase that looks substantial on paper bought them maybe 2-3% more actual purchasing power. Maybe.

And that's the average. Plenty of retail workers saw their nominal wages grow slower than 27%, meaning they're earning less in real terms than they were four years ago. They're working the same hours, doing the same job, and taking home a pay packet that buys less than it used to.

This matters because retail employs nearly half a million Kiwis. It's one of the country's largest sectors. When retail wages can't keep up with costs, that's not a niche problem. That's hundreds of thousands of households making the same calculation: what do we cut?

The answer, increasingly, is discretionary spending. You pay the power bill. You pay the rent. Then you look at what's left and realise there's not much. The retail workers serving customers are often the same people who've stopped being customers themselves.

The sector added $5.3 billion in nominal wages between 2023 and 2024 alone. In real terms, after inflation, that's maybe $2 billion of actual new purchasing power spread across the entire workforce. It's growth, technically. It's also why households are putting spending on ice.

Before COVID, retail wages were growing steadily but slowly. Then the pandemic hit, wages jumped, and so did everything else. The problem isn't that wages didn't rise. It's that they rose just enough to make the numbers look okay while workers' actual financial position stagnated or worsened.

This is the uncomfortable reality behind those soaring household bills: wages went up. Costs went up more. The gap between the two is where the squeeze happens, and retail workers are right in the middle of it.