CTU media release

9 October 2009

Wage income and rates still rising despite total incomes stagnating

Wage and salaries still show positive increases in the latest annual New Zealand Income Survey for the three months to June 2009, says CTU Economist Bill Rosenberg.

The survey shows that the median hourly rate for wage and salary earners was $19.47, a rise of 3.8 percent over the June 2008 quarter. The median rate shows the wage which half earn below and half earn above, and is more representative of what people earn than the average which is pulled higher by a relatively small number of high earners.

The average hourly rate reported was $22.96, an increase of 2.7 percent over the year, but it shows up significantly lower than the quarterly employment survey’s $25.09 which is probably more accurate. The New Zealand Income Survey differs from the Quarterly Employment Survey in that it asks householders directly about their incomes rather than using employers’ data.

Māori workers show a notably lower hourly rate than all wage and salary earners, with a median of $18.31, and they recorded a lower increase than other earners from last year at 1.7 percent. Pacific peoples’ hourly rate is even lower, with a $16.96 median but a much higher increase at 6.0 percent.

However, when looking at weekly earnings for all people over 15 years old (including those not earning), there is a different picture. The total median weekly income has barely changed – from $536 to $538. Wage and salary weekly income has risen faster, from $447 to $455, but only by 1.8 percent – just below inflation of 1.9 percent in the period. Total weekly incomes have been dragged down by falling income from self-employment and investments. Government transfers have increased.

But against the general trend, both Māori and Pacific peoples’ weekly wage and salary earnings for over 15 year olds have fallen – from $398 in 2008 to $392 in 2009 for Māori (a fall of 1.5 percent), and from $375 to $359 for Pacific peoples: a large 4.3 percent fall.

This appears to show a picture of increasing incomes for wage and salary earners who are in work, but increasing stress on incomes from lower hours of work and unemployment. It is harder to get income from self employment and for those receiving it, investment income has fallen as a result of the recession.

Finally, the survey shows a stark picture for people who are unemployed. Their median income is zero. That means that over half of people who are looking for work have no income. The average income is $123 per week, but only a minority receive anything.

ENDS

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