Written By: - Date published: 8:29 am, August 17th, 2017 - 15 comments
Categories: capitalism, class war, economy, national, wages - Tags: #ChangeTheGovt, economic genius, economic growth, economy, growth, wages
Expect plenty of Nat boasting on “the economy” in the election campaign. They’ll be desperate to hide the inconvenient fact that ordinary workers are going backwards. There’s a lot of detail in this excellent piece:
Brian Fallow: Something is missing in Govt success story
The most recent labour market data, released last week, do not make for cheerful reading on the wages front.
The average wage (average ordinary-time hourly earnings from Statistics New Zealand’s quarterly employment survey) rose 1.6 per cent in the year to June. But that was boosted by some pay increases in the public sector that had been a long time coming.
In the private sector, the average wage rose 1.2 per cent, in a year when consumer prices rose 1.7 per cent. In other words, it fell 0.5 per cent in real terms. That was still better than the March report, when annual wage growth was 1.1 per cent and inflation 2.2 per cent.
When Perry analyses the trend in incomes after housing costs across the whole range, a clear picture of rising inequality emerges.
In 2009, the income of a household at the 90th per centile (that is, 10 per cent down the list of households ranked by income) was 5.5 times that of one at the 10th per centile (10 per cent up from the bottom). By 2016, the gap had widened to 5.9 times.
Between 2009 and 2016, household incomes at the 90th per centile rose 14.7 per cent. This is after inflation, tax, transfers and housing costs. At the 10th per centile, the increase was 9.4 per cent over the same seven years.
The increasing dispersion of incomes after housing costs has not all occurred under the National-led Government, however. It has been going on for 20 years. But the top decile has been pulling away from the rest particularly swiftly on National’s watch.
…Treasury concludes that average labour productivity over the past four years has been flat.
Zero growth over four years in what has to be foundation of any sustainable gains in living standards is not encouraging.
Nor is it a record the Government can boast about.
And for a take home message:
If you’re hoping for a pay rise sometime in the next four years, you might be out luck.
It’s unlikely because the economy won’t provide any growth to drive wages up.
The official forecast predicts wages will not keep pace with inflation, and immigration may be to blame.
Treasury forecasts show wages are expected to go up like this at over 2 percent, but inflation is also going up, meaning prices are going up at the same rate.
That means what’s called “real wage growth” is actually flat.
Financial commentator Bernard Hickey says that means more Kiwis will be stuck treading water.
This is the truth of National’s so-called economic expertise. The richest of the rich are doing very nicely thank you, but the Nats are “delivering” nothing for ordinary workers. It’s an economy where “growth” is just a reflection of population growth. Vote them out.