Beware the average income stat

A reader e-mailed in asking:

I’d be interested to know if 70% of New Zealanders actually earn less than $43,000.

This is in relation to some claims on another blog.

The stat is correct, but it is a fairly meaningless stat. When you see stats about the average or median for all adult New Zealanders, you need to remember this is including hundreds of thousands of New Zealanders who are not actually in work! It includes the 15 year olds at school, the tertiary students in full-time study, the non-working spouses, the beneficiaries, the retired etc.

The more useful stat for me is what is the average hourly income of someone in employment. Because it is people in employment who fund the rest of society.

The latest average hourly wage is $27.55 an hour. That equates to $55,000 a year if you did a 40 hour week. The average or mean is different from the median, but I use it here as Stats NZ only provide the mean in their quarterly stats.

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