It has been a tumultuous start to the political year. Massive TPP protests, Key fleeing Waitangi, flying dildos, Iowa caucuses, leagalised rape bastards, and more.
So let’s talk about jobs and wages. Two good pieces in The Herald recently. From Brian Fallow:
Wages going nowhere fast
Unemployment rate is down, but economic growth is not boosting incomes as it once did
So, the unemployment rate has plunged to 5.3 per cent from 6 per cent three months ago. … But much of the drop in unemployment is explained by declines over the past three quarters in the participation rate – the labour force as a share of the working age population (everyone over 15).
…
Even so, taken at face value, the December quarter numbers are evidence that the labour market has tightened, in defiance of the forecasters.But that has yet to show up in the wages data.
The Labour Cost Index, which reflects pay rates for the same quantity and quality of work, continued to drift lower, to an annual increase of 1.5 per cent in the December quarter.
For the private sector alone it was only slightly higher at 1.6 per cent, the lowest since September 2010.
Some 46 per cent of pay rates did not increase in the latest year. Among the 54 per cent that did, the average increase was the lowest for 16 years, at 3 per cent, and the median rise 2.4 per cent.
…
This week’s data are prima facie evidence of a weakening of the relationship between economic growth on the one hand and employment and wage growth on the other.
The quotes focus on jobs and wages, but here’s heaps of detailed stuff in that article (go read the whole thing in The Herald). As to the conclusion, “a weakening of the relationship between economic growth on the one hand and employment and wage growth on the other”, wages have never kept up with growth / productivity, especially since the neoliberal reforms of the 80s. (We are continually told Productivity crucial for higher wages, but wages never keep up, see here, here, here, and graph at the end of this post.)
Second Herald piece by Sophie Ryan:
Interactive: New Zealand’s big jobs divide (and how it’s crashing the recovery)
Maori and Pacific unemployment has dropped to the lowest level since the 2008 recession, but still haven’t recovered to pre-crash levels.
The divide between employment rates in New Zealand European and Asian population, and Maori and Pacific population remains large, with Asian and European workers closer to returning to pre-recession unemployment rates. …
It is always those at the bottom that suffer the most from recession.
Nick Tuffley. chief economist as ASB, said the fall in labour participation rate by 0.3 percentage points to 68.4 per cent was a surprise, and could be overstated. “It is unusual to have the participation rate fall when employment growth itself has been so strong.
“We suspect there still exists a degree of slack in the labour market and that wage inflation will remain slow for some time yet.”
“Wage inflation” is economist speak for wage growth. Predicted to remain low sounds about right, that’s what National’s employment legislation has been all about after all. How long will voters keep putting up with it?
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