Wages in the private sector could rise, as workers in the public sector prepare to strike. BNZ's head of research Stephen Toplis says the private sector is taking heed of the industrial action in the public sector, which is driving up widespread wage growth - mostly to avoid anything similar.

Bagrie Economics economist Cameron Bagrie says told Mike Hosking it's a bit of a perfect storm for businesses with the demands in the labour market.

"You've got the ripple effects from lifting the minimum wage, you've got the public sector who's getting a lot more active..the nurses, the teachers will be next."

However, Bagrie says the real issue is that New Zealand is a low wage economy because of weak productivity growth.

LISTEN ABOVE AS CAMERON BAGRIE SPEAKS TO MIKE HOSKING