The wage gap
Claire Trevett reports:
A war of statistical tables in Parliament left National red-faced after even its own figures showed the gap in earnings between New Zealanders and Australians had increased since it took office in November 2008.
Economic Development Minister Gerry Brownlee had said in Parliament on Tuesday that the gap was less than it was when Labour was in power but yesterday the statistics proved him wrong no matter how they were presented.
Prime Minister John Key produced a table which he said most accurately compared average earnings because it took into account purchasing power parity.
But his own figures showed the gap had increased by $22 in the two years since National took over in 2008. Instead, he said it showed the gap was less than it was at the “maximum point” of Labour’s reign when the gap peaked at $187.60 in 2005.
But it subsequently shrank to $137.89 by Labour’s final year in 2008 and had since increased again to $160.25 under National.
Of course the wage gap has increased. We went into recession, and Australia did not. In a recession you have little wage growth.
I am surprised that a Minister would claim the gap has not increased. Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.
July 29th, 2010 at 11:12 am
“Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.”
Yup, as opposed to just trying to be Labour-lite.
July 29th, 2010 at 11:13 am
DPF: Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.
National coming up with such policies? They only claim to manage the civil servants better. All the other things they’re supposed in favor of are only to deceive their voters.
July 29th, 2010 at 11:23 am
Therein lies the problem- there are none.
July 29th, 2010 at 11:28 am
“Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.”
Ouch, a raw nerve.
The National Party government would be better advised to deliver on what it promised during the election campaign, instead of wasting its time appeasing the racists and imposing new taxes. In other words, stop being Labour-lite.
July 29th, 2010 at 11:30 am
First things first, DPF, forget the “recession” talk. OK, New Zealand’s economy was so badly managed for a decade that it led the world into recession, and will follow the world out. But please, don’t buy the BS about the Australian economy. Kevin Rudd and his fellow travellers have the headline “we avoided a recession” but they did it by blowing the $20 billion that John Howard and Peter Costello left for them, then $100 billion more. They are currently borrowing $100 million a day, every day. So please, in terms of economic mismanagement, the latest lot of clowns in Canberra are on a par with the clowns that were thrown out of the Big Top in Wellington at the end of 2008. And it would be a lot worse if they weren’t digging up large tracts of the country and selling it off to China.
I think all the talk about the wages gap with Australia is a “look at the shiny thing” diversion. I mean, what is the point of comparison? Sydney, where if you earn less than $100K p.a. you’re below the bread line? WA where growth is going gangbusters because of the mining boom (oh, if only we had some valuable minerals we could dig out of the ground, eh?) Queensland? I mean, where? I know the comparison between what I earn here in Melbourne and the half that amount I was offered to do the same job in Auckland is one point of comparison. Instead of talking about the gap with some mythical Australian figure, why is the conversation not about releasing the brakes on productivity? Why is it not about removing all of those barriers to enterprise and industry that exist in New Zealand? Why is it not about that, on pretty much any benchmark, real wages in New Zealand are embarrassingly low?
Why is it not about the clear obfuscation of the facts that John Key, Gerry Brownlee and Phil Goff are demonstrating?
And why is it not about why, with an allegedly “centre right” government, none of the real issues holding back the New Zealand economy are being addressed? And are arguably being made worse by new taxation programmes like the Emissions Trading Scam?
I mean, really. New Zealand is the most beautiful country on earth, but the addiction to welfare and sloth are killing it for future generations.
July 29th, 2010 at 11:35 am
Best way we can close the gap is to campaign for Julia Gillard.
July 29th, 2010 at 11:36 am
So any ideas to increase the standard of living Kiwi Bloggers?
July 29th, 2010 at 11:37 am
Back down on mining
Back down on the Brash task force’s advice
Back down on using Sir Roger Douglas
Nah, the wage gap is not going to close any time soon.
Closing the wage gap is as laughable as Labour’s promise to put NZ in the top half of the OECD.
July 29th, 2010 at 11:42 am
Oh and yes, the best thing the government can do to assist productivity (and thus increase real wages) is to wind back the destructive policies of the past decade, then get the hell out of the way.
July 29th, 2010 at 11:49 am
Gerry mis-spoke?
July 29th, 2010 at 12:00 pm
my hourly rate…$25.50…exact same job in Melbourne hourly rate $37.00 plus shift allowance plus 12% super. We aint EVER gona match the aussies.
July 29th, 2010 at 12:08 pm
On current policy settings there is no chance that NZ is going to move ahead in any substantial way economically. The changes in the budget were positive, but only in the way that mid-winter sunshine warms you!
The fact remains that Labour-Lite is taxing and spending at an even higher rate than Labour. Those are the facts, irrespective of the spin.
The ACT party has put forward a wide range of policy ideas, and created the 2025 Taskforce. Sadly, the population at large has been so corrupted by welfarism and vote buying, and Labour and National are so adept at avoiding any discussion of the real issues, that I cannot see much hope. It was appalling to see John Key kick the 2025 Taskforces report to touch with no debate allowed.
That Gerry Brownlee had really no idea about income gaps etc when questioned in parliament says it all. There is no commitment whatsoever and the slogan at the last election about catching up with Australia is really in the same class as Labour’s promises to close the gaps etc. The less charitable would call those election promises “lies”.
July 29th, 2010 at 12:13 pm
Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.
HAHAHAHAHAHAHAHAHAHAHA!!!!!!
Oh how I laughed…
…Then I cried.
July 29th, 2010 at 12:21 pm
Well Tauranga has just got its new eastern arterial motorway 7 years ahead of schedule. Plus 10 for Joyce.
But, what about the rest of us who are in private businesses? National Bank Seminar yesterday and the point was made that SME’s in NZ had declined markedly. Cannot remember the numbers but it is significant.
Apparently its because we are getting older. WELLLL no! Its because the socialists have built Govt. empires at the cost of capital starvation of the population and shifted too many people’s aspirations from working for themselves to working in a safe secure overpaid govt. bureaucracy.
The solution to all this has been obvious for a long time.
When will the Nats Act.
July 29th, 2010 at 12:40 pm
Didn’t NZ have the highest per capita income in the world just 30 years ago? Now we are lingering at the bottom of the OECD. I wonder why………….mmmm………Treaty gravy train, welfare bludgers, size of Government?
Quite simply we cannot afford the present level of Welfarism, the Treaty pay outs and the bureaucracy, and hope to keep up with other developed countries.
July 29th, 2010 at 12:50 pm
The National government could start by reducing government expenditure instead of increasing it. Time for the State to shrink before Australia shrinks New Zealand’s productive workforce.
July 29th, 2010 at 1:20 pm
The National government is completely deaf and refuses to hear the voices of the people who supported it at the last election.
Key, its duplicitous leader, has chosen to embark on the same failed Labour policies. For example, he admitted yesterday the students debt program is unsustainable, but must be kept not to lose votes. He shows a complete lack of vision for our country.
On the other hand, the alternatives to Labour-lite are a staunch socialist Labour Party and the demented Greens, so we risk jumping from the pan to the fire. The Maori Party does not matter: the racists are for hire.
Only when a true conservative government takes power, when Key and his coterie of minions, acolytes, and spin doctors are thrown out and unmasked for the left-wing liberals they are, only then NZ will have a change to move forward.
July 29th, 2010 at 1:28 pm
DPF: Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.
But we are getting cycle tracks! That will make everyone richer!
July 29th, 2010 at 1:34 pm
“Back down on mining
Back down on the Brash task force’s advice
Back down on using Sir Roger Douglas”
That does just about sum up the situation and shows National’s goals were false and delusional. The Brash taskforce clearly should be disbanded rather than be allowed to continue to offer false hope.
July 29th, 2010 at 1:40 pm
The ACT party is the only party in parliament with a focus on this issue, but only 2% of the population support them. Why?
July 29th, 2010 at 1:43 pm
I kinda of want to wait and see what happens after the 1st of October but I am starting to wish that something would actually start to be done about this, rather than just blaming the previous government (we know already!), and making ideas that they chicken out on following through on. In the last 4 months, I have seen 4 very qualified people (and my sister…) leave New Zealand for Australia. One of these people worked in a very specialised job in the government and is now earning more take home pay working for…a supermarket.
Now there is nothing wrong with working in a supermarket, but from leaving their position as a senior analyst and getting more money swiping groceries is a shameful reflection on what we earn.
I am sick and tired of this government blaming the previous administration, and the fact that they have no plan. I get it already. I would be absolutely fearful if labour were allowed their hands back in the countries kitty. But it would be nice if National actually started making in-roads like they promised before the election, stop this number/statistic fudging (Brownlee’s performance in the house yesterday asking which figures Labour wanted him to quote from was beyond the point!) because Australia looks mighty tempting to a lot of people about now.
July 29th, 2010 at 1:51 pm
We went into recession, and Australia did not. In a recession you have little wage growth.
Failing to catch their wages doesn’t count because the performance of their economy was better?
I’m pretty sure it would count if it was the other way round…
July 29th, 2010 at 1:51 pm
@freedom101 – Because hardly anyone trusts them. Next question?
July 29th, 2010 at 2:17 pm
National red-faced after even its own figures showed the gap in earnings between New Zealanders and Australians had increased.
Are you suggesting National doctor the figures to suit… DPF
July 29th, 2010 at 2:18 pm
@freedom101 1:40 pm
Because the vast majority of people know that the 12 long years of high unemployment and low growth between 1988 and 2000 was a period of all pain and little gain and that today’s new entrants to prisons are the Children of the Mother of All Budgets.
The vast majority of people know that the Rogernomics/Ruthenasia prescription is a large part of the cause of the wage gap we have with Australia today – not, as Brash suggests, the solution.
Been there, done that, didn’t work.
July 29th, 2010 at 2:25 pm
Actually Toad, I think you will find that there were substantial improvements in all sorts of areas post-Rogernomics until after 1996, when the spend and bust reasserted itself. We have had the best part of 10 to 12 years of socialism since then. So the “been there, done that” mantra actually refers to the socialist prescription, not Rogernomics!
July 29th, 2010 at 2:26 pm
“my hourly rate…$25.50…exact same job in Melbourne hourly rate $37.00 plus shift allowance plus 12% super. We aint EVER gona match the aussies.”
Dunno – if they get rid of their centralised collective bargaining structure like the Nats did to us in 1991, they’ll soon join us in globalisation’s “race to the bottom”. Ever since National did in collective bargaining in NZ we’ve been struggeling to keep up with Australian wage growth. All the while the unions have been negotiating wage increases for Australian workers.
oh – and i don’t buy this “incease productivity, increase wages” line that the right spin to us. Ever since profits have begun to be repatriated overseas (read 1980s-1990s relaxation of foriegn investment laws) there has been a disconnect between productivity growth and wage growth (the reasons should be obvious).
Look at the situation in the USA:
“During the five years from 2000 to 2005, the US economy grew in size from $9.8 trillion to $11.2 trillion, an increase in real terms of 14%.
Productivity – the measure of the output of the economy per worker employed – grew even more strongly, by 16.6%.
But over the same period, the median family’s income slid by 2.9%”
http://news.bbc.co.uk/2/hi/business/5303590.stm
That’s the free market in action folks!
July 29th, 2010 at 2:54 pm
Oh so “Honest” John, it’s because there’s not a strong union movement in NZ that wages are crap? Utter, utter rubbish. Union penetration (take that for what you will) is somewhere around 17% in New Zealand, and somewhere around 22% in Australia. Unionism/leftism or a lack of it is not the reason why I, as a senior in the IT world, am earning DOUBLE in Melbourne what I was offered to do the same job in Auckland. I am not (now, nor have been since I was emancipated from union shackles in the ’80s) a member of a union.
The reason for the (increasing) gap is a decade of socialist ideology and systemic wealth transfer away from productive individuals & enterprises onto bludgers (i.e. Liarbore & Greens voters).
There can be little doubt that the Key government has betrayed not only their core constituency, but also the principles on which the National party was founded. I suspect the one true statement Michael Cullen has made in his entire life was when he said a Key national government would just be “Labour-lite”. Apart from that, the man is and has always been a lying PoS.
Of course, 3 years of a Gillard Liarbore government, with a watermelon majority in the senate, and NZ may well catch Australia – because Gillard and the watermelons will undoubtedly take Australia down the same path to destruction as the corrupt Clark dictatorship took New Zealand.
July 29th, 2010 at 3:21 pm
Reading the comments I have come to the conclusion – we are Fucked. Big time. Bend over and get rooted
Problems
a. Politicians won’t debate the topic
b. Stupid and ignorant thoughts such as –
It’s lack of Unions in New Zealand, so we have low wages.
Profits being sent overseas
Lets have another day off
Its all Rogers fault
c. Seems to be a lack of recognition that we actually have to produce something that someone else wants, sell it to them hopefully for a profit, and then be able to spend what we have left
Wage growth doesn’t just come as alot of people seem to think, by demanding more from the boss. The thinking is, the boss can pay because there rich and can afford it
Greatest failing by John Key is that he should be advocating and selling to New Zealanders a better way.
If he can’t then he should piss off and let someone else have a go
July 29th, 2010 at 3:36 pm
You forgot one Lipo. A fantastic one I saw over at No Minister on Psycho Milt’s nonsensical leftard dribble:
Rob Carr said: “Perhaps if our minimum wage wasn’t woefully less than theirs in dollar terms let alone taking into account exchange rate then our wages might be higher. Seems hard to have them lower when it is illegal to do so >.>”
That’s right. All we have to do to close the gap is to legislate for a minimum wage that is equal to, or greater than, theirs. That’ll do it. Oh, hang on a minute … NO IT FUCKING WON’T YOU MORON. All that will do is encourage more SME owners to shut up shop and relocate to a more business-friendly environment, like Melbourne, Brisbane, Perth, Sydney, or Harare.
July 29th, 2010 at 3:36 pm
“today’s new entrants to prisons are the Children of the Mother of All Budgets.”
Yep – i knew lots of them growing up. Got to experience all the benefits of Ruthenasia between the ages of 7-13. When National collapsed the economy in 1990 by slashing state spending with the mother of all budgets my father lost his construction business. We went from a 6 person family on $1000 per week in 1987, to around $400 in 1991.
The stress caused dad to have a breakdown, and he started abusing everyone in the family. Think we would have all ended up on the streets if it wasn’t for the the fact that we were stuck out in the country, and neither of my parents drunk or smoked – plus we had the church community to help us get through the toughest times. Many of my school friends weren’t as lucky – and are now in jail, on the dole, or are drug dependant.
National has been, and still are indifferent to these people, even though they had a lare part in creating thier life-circumstances. That’s part of what makes them such an easy party to hate.
July 29th, 2010 at 3:40 pm
“today’s new entrants to prisons are the Children of the Mother of All Budgets.”
If that is the case then you must accept that the latest Maori child who has been bashed to death owes it’s demise to Sue Bradford.
July 29th, 2010 at 3:47 pm
DPF: “Rather than try to push dodgy comparisons, they would be better to outline policies which will help reduce the gap.”
They scarcely need to outline policies. The mere fact that we have built 10km of cycleway is the ultimate monument to National’s commitment to close the wage gap.
July 29th, 2010 at 4:01 pm
“Union penetration (take that for what you will) is somewhere around 17% in New Zealand, and somewhere around 22% in Australia.”
Firstly, it’s called Union density, not union penetration. Secondly, density is a secondary measuremeout That mean to coverage. Collective bargaining coverage in Aus is about 70%, which means that 70% of Australian workers are covered by a union-negotiated contract, then there’s the free-riding effect, which boosts the impact of union-negotiation further. Then there’s the general impact of higher union covergae on the rest of the labour market (if 70-80% of ppl are covered by a union, the remaining 20-30 percent have thier wages set to union standards, or they lose thier employees to unionised work-places). In NZ around 20% of workers are covered by a union negotiated contract which means that the impact of unions on the labour market is much smaller. Understand?
July 29th, 2010 at 4:03 pm
Can’t edit so i’ll post it again:
“Union penetration (take that for what you will) is somewhere around 17% in New Zealand, and somewhere around 22% in Australia.”
Firstly, it’s called Union density, not union penetration. Secondly, density is a secondary measurement to coverage. Collective bargaining coverage in Aus is about 70%, which means that 70% of Australian workers are covered by a union-negotiated contract, then there’s the free-riding effect, which boosts the impact of union-negotiation further. Then there’s the general impact of higher union covergae on the rest of the labour market (if 70-80% of ppl are covered by a union, the remaining 20-30 percent have thier wages set to union standards, or they lose thier employees to unionised work-places). In NZ around 20% of workers are covered by a union negotiated contract which means that the impact of unions on the labour market is much smaller. Understand?
July 29th, 2010 at 4:10 pm
Schooled much?
July 29th, 2010 at 4:16 pm
“NO IT FUCKING WON’T YOU MORON. All that will do is encourage more SME owners to shut up shop and relocate to a more business-friendly environment, like Melbourne, Brisbane, Perth, Sydney, or Harare.”
Ignorant bullshit. World bank ease of doing business survey – NZ second in the world. Say no more.
July 29th, 2010 at 4:18 pm
Yeah – because Sue Bradford caused families to fall apart by slashing state spending. oh that’s right, National did that…. ooops!
July 29th, 2010 at 4:19 pm
Where are all the bright rightists? i know they’re rare, but i also know that they exist.
July 29th, 2010 at 4:29 pm
Lipo states some of his “recieved wisdom” without any argument. Pretty much par for the course for kiwiblog.
July 29th, 2010 at 4:42 pm
“Collective bargaining coverage in Aus is about 70%, which means that 70% of Australian workers are covered by a union-negotiated contract…”
Funny, I’ve been here 7 years in various industries and only once seen any significant collective agreement. In the banking world, where I was until the end of last year, my non-scientific straw-poll indicated that while FINSEC are a noisy bunch, very few people (among my colleagues anyway) were actually members. Most preferred to negotiate their own deals.
Oh, and ease of doing business does not equal cost of doing business. And legislating a high minimum wage does not automagically lead to higher overall wages. In fact, it would likely lead to high(er) unemployment in New Zealand.
Typical progressive bullshit. Unions and high minimum wages are the answer to New Zealand’s ills. Nothing to do with an addiction to welfare and bludging.
July 29th, 2010 at 5:16 pm
You could have just googled collective bargaining coverage, but instead you’ve chosen to make yourself look ignorant.
http://www.google.co.nz/imgres?imgurl=http://lanekenworthy.wordpress.com/files/2009/04/areunionstheanswer-figure2-version1.png&imgrefurl=http://crookedtimber.org/2009/04/14/reducing-inequality-are-unions-the-answer/&usg=__f6ExC37nWAm5_EkAO5MpRUwRsFs=&h=448&w=344&sz=6&hl=en&start=0&sig2=Djn7ZQlWzSdjm7kRn0VeTg&tbnid=qFKfkFIzkoD2cM:&tbnh=169&tbnw=129&ei=EA5RTJuKNpO-sQOJ3YXuBw&prev=/images%3Fq%3Dcollective%2Bbargaining%2Bcoverage%2Baustralia%26um%3D1%26hl%3Den%26sa%3DN%26biw%3D1280%26bih%3D619%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=1042&vpy=272&dur=8981&hovh=256&hovw=197&tx=149&ty=235&page=1&ndsp=16&ved=1t:429,r:15,s:0
July 29th, 2010 at 5:17 pm
Why are all the rightists here so bloody thick and ignorant?
July 29th, 2010 at 5:38 pm
freedom101 (187) Says:The ACT party is the only party in parliament with a focus on this issue, but only 2% of the population support them. Why?
Because 98% of the population is at least border-line sane, whilst only 2% are genuinely certifiable.
July 29th, 2010 at 5:54 pm
Hmm, we could ask you the same question. pot kettle black glasshouses stones.
Why is Honest John lacking in knowledge and brain power? Why does he think the world owes others a living at the expense of others?
Why does he think that the Govt. is the font of all knowledge and the producer of all wealth.
Because that’s what we are talking about. Lack of wealth.
And that’s what the socialists (both left and right) seem not to understand despite some of them being wealthier than most.
We have a PM with a reputation for bing ruthless and carving chunks out of businesses to improve costs but he fails daily to do the same for our National economy because apparently its not popular and he might lose his job. Well he did make noises about what he would do and so far the doing has been pathetic and worse its has been overtaken by opposite effect.
Time they hardened up and removed so much privilege that exists to the detriment of NZ.
Interest free Student loans, ETS, handouts from the taxpayer for this that and every minor wart and scratch.ever expanding (still) social welfare. It just goes on and on and on.
July 29th, 2010 at 5:57 pm
RJL; Nothing of the sort.
Act are just hopeless at getting their message across but the day of reckoning is not far away.
the USA is grinding down the road to disaster.
Sun could set suddenly on superpower as debt bites
http://www.theaustralian.com.au/news/opinion/sun-could-set-suddenly-on-superpower-as-debt-bites/story-e6frg6zo-1225898187243
July 29th, 2010 at 6:05 pm
I don’t see how centralized collective bargaining will help raise the standard of living Honest John even if every single working person has a union negotiate their contract.
Company’s would just close up shop and piss off to Fiji or China if they can make more profit and we will become a debt laden consumer society (kind of like now) reliant on loans from the exporting Nations, what a shit way to live, maybe we could dress up in flax skirts and do a haka at the airport for our new overlords when they come to holiday on their newly brought beach front property.
July 30th, 2010 at 12:58 am
“Ignorant bullshit. World bank ease of doing business survey – NZ second in the world. Say no more.”
Yeah, I’ve noticed that you guys like to use this argument.
Shame that all it does is demonstrate that you clearly don’t have a clue what your talking about.
The survey measures ease of doing businesses with regard to regulation and administration – in other words, how easy it is to file your paperwork.
It has nothing to do with what taxes are like, what services, industry and infrastructure are like, what wages and cost of living/doing businesses is like, what the quality and work ethic of employees are like, or anything else for that matter.
Care to try again Honest John?
August 2nd, 2010 at 10:11 am
Offshore_Kiwi (202) Says:
July 29th, 2010 at 2:54 pm
“Oh so “Honest” John, it’s because there’s not a strong union movement in NZ that wages are crap? Utter, utter rubbish. Union penetration (take that for what you will) is somewhere around 17% in New Zealand, and somewhere around 22% in Australia. Unionism/leftism or a lack of it is not the reason why I, as a senior in the IT world, am earning DOUBLE in Melbourne what I was offered to do the same job in Auckland. I am not (now, nor have been since I was emancipated from union shackles in the ’80s) a member of a union.
The reason for the (increasing) gap is a decade of socialist ideology and systemic wealth transfer away from productive individuals & enterprises onto bludgers (i.e. Liarbore & Greens voters).
There can be little doubt that the Key government has betrayed not only their core constituency, but also the principles on which the National party was founded. I suspect the one true statement Michael Cullen has made in his entire life was when he said a Key national government would just be “Labour-lite”. Apart from that, the man is and has always been a lying PoS.
Of course, 3 years of a Gillard Liarbore government, with a watermelon majority in the senate, and NZ may well catch Australia – because Gillard and the watermelons will undoubtedly take Australia down the same path to destruction as the corrupt Clark dictatorship took New Zealand.”
What a sad, bitter contribution. Good to see an Offshore Kiwi really enjoying life.
August 2nd, 2010 at 10:26 am
The survey measures ease of doing businesses with regard to regulation and administration – in other words, how easy it is to file your paperwork.
It has nothing to do with what taxes are like, what services, industry and infrastructure are like, what wages and cost of living/doing businesses is like, what the quality and work ethic of employees are like, or anything else for that matter.
Actually the world bank survey measures almost all of those things. You can see the metrics here: http://www.doingbusiness.org/economyrankings/