- Date published:
10:57 am, May 20th, 2008 - 62 comments
Categories: workers' rights - Tags: minimum wage, pay, tax
See that line that says minimum wage? Nearly half of kiwis earn less than that.
Seven months ago, that was me. I was working removing asbestos contaminated glue from the floor of an office building along with half a dozen other guys. Now, asbestos is pretty dangerous stuff, inhaling a single thread of it can give you asbestosis, a deadly respiratory disease. So, we had some crappy old masks and some cheap overalls to wear. The areas we worked in were sealed from the outside world and had big fans in them to keep them at low air pressure, so if a leak developed air would flow in and no asbestos threads could get out. The outside temperature was 25 degrees. Inside it was 40 degrees plus and there was no oxygen, as we scraped potentially deadly forty year old glue off the floor. The sweat would pool in your mask but I was afraid to pull it back.
We were effectively day labourers, employed by a labour hire company that contracted our labour (and took $8 an hour as commission from the company); we would be out of a job on the day that the boss decided there was no more work for us (of course, this actually made us work slower because we didn’t want to work ourselves out of a job).
The men I had been working with had been doing jobs like this for years, decades. ‘At least now’, they told me, “we are getting some decent pay” – $11.25 an hour (as was the minimum wage at the time), just eight years before they would have been getting $7.50 an hour and no Working for Families to help them out.
See that $60,000 bracket? Less than 14% of kiwis have incomes higher than that. I’m now one of them. And do I work harder for this great increase in reward? Well, I have a chair, I have a computer, there’s coffee, and air conditioning, I don’t have the risk of contracting asbestosis, damaging my back, or finding my job has simply disappeared, and I get to sit in meetings for hours just letting the conversation wash over me like fresh air, remembering being hardly able to breath in that mask.
So, no, I don’t think this job is harder, and get I paid three times more. I suspect that for most of the people reading this, your working life is more akin to my nice well-paid office job, than that job sweating in a toxin-laden room. It’s very easy in our lives to forget how much better we have it than most.
Every morning, when I get up, I know that I am fortunate. I know that most kiwis have it tougher than I do, I know that my income is good, I know that I am not treated as a disposable automaton by my employer. So, no, I don’t begrudge a government that wants to take a small part of my income to help out those who, because of the nature of our economic system, have it tougher than me and help look after their families.
Ka pai. nice story. Those kind of stats put a lot of pressure on Thursday’s budget to be about something more than vote buying I reckon.
Eight years of a Labour government and “See that line that says minimum wage? Nearly half of kiwis earn less than that.”. That tends to indicate that income transfer is not working as it hasn’t improved overall productivity and therefore income.
“I get to sit in meetings for hours just letting the conversation wash over me like fresh air”, I would love to know which employer can afford to let you do this. The public service perhaps ?
I hear that brother. In the 90’s I worked for $8 and hour as a temp gutting fish on the nightshift, grinding lead paint off a brick wall, as a cleaner as a factory hand and moving furniture amongst a whole lot of other shitty jobs. Each time I didn’t know if I had a job the next day or not and each time I was surrounded by people in the same position. I was lucky I didn’t have a family to feed. Others were not. Let me tell you, when you get a whole lot of people who are working their rings out only to fall further and further into poverty and who don’t know where their next paycheck coming from it’s not pretty.
In one factory I worked in every single worker was a temp. If anyone spoke up about the shit conditions (exposed scorchingly hot surfaces, dangerous chemicals, etc) they were told not to come back. Unemployment was huge and benefits were so low you would virtually work for food. On that particular job workers would regularly end up beating the shit out of each other over trivial things. It was like being in a room with fifty beaten dogs for 12 hours a day. I came off that job with burns all the way up one arm from one of the kilns and a lucky escape from an assault charge. One of my coworkers killed himself.
Now I’m in the top tax-bracket. I’m no more qualified than I was then – the job market and our society is just that much better. I do not begrudge one cent of the tax I pay.
Cheers, Dan and stevedore.
Easy to see the fella that’s always had it sweet eh? So shocked that half of people are on $27K and less, and blames Labour, the Government that’s done more for wages than any government in 30 years.
I tell you what Byran, my workmates didn’t blame Labour, they blamed the cheap-arse bosses, they knew it was thanks to Labour their wages had gone up at all.
.. I had a few paragraphs for this kind of silly bugger who doesn’t get it but the post was already so long, so here they are now:
“People are often surprised when they see what the distribution of income actually looks like. Those commentators who have been talking of the middle-class earning the range of $60,000 might be especially interested to see that the real middle class (usually defined as having an income within 30-40% either side of the median) earns between $27,000 and $53,000.
These are people who have benefited from minimum wage rises, a full-employment policy, Working for Families, and a host of other initiatives. Incomes are up 15% above inflaiton in just eight years under Laobur, that’s after they stagnated and fell for most people in the 1990s. It is shocking for many to realise how low most people’s incomes are (bearing in mind these figures include retirees, beneficiaries, part timers, and those not in the workforce), but is more shocking how low they were before we had a government that worked for them.”
Although to be fair, that original graph is distorted by the 439,683 recipients of NZ super in the 10-20,000 column
If you are making a point about wages and employment(your post is entitled workers rights), would it not be best to use a table from the census that only includes those in full or part time work, (it is table 12 in the income quickstats publication)
No, because I’m talking about the distribution of income across society, not just one section of it.
If you only look at the 2.2 million people who are employed you forget the one million who aren’t. they don’t just disappear, they have to buy food, clothing, housing etc too, they have an income to live too… and it’s just as much a policy choice (even more so) what level of income those people have to live on – super levels directly affect nearly 500,000 people, working age benefits another 240,000.
A change to the minimum wage affects 300,000, plus mayn more on near-minimum wages who get bumped up too.
My personal story relates the fact that a great number of people on those low incomes are working, working damn hard.
And look at the median employed income, it’s still $38K, not exactly the 50-70K that many seem to think is middle class now.
“..they knew it was thanks to Labour their wages had gone up at all.”
Are you talking about the same people who are about to throw labour out of power? How inconsiderate and ungrateful!
Advancement in wages have hardly kept up with consumer index price and cost of living. Taking into account the past years of economic bonanza (booming commodity prices, trade liberalisation, tariff reductions, etc.), you have to conclude that this Labour government has not delivered.
[Man, so much wrong in so few words: Labour has more support than National among people on low incomes, read the Fairfax poll. People on low incomes have seen their incomes increase sharply under Labour thanks to the minimum wage, record low unemployment, Working for Families, and a greatly increased social wage (eg doctor visit subsidies, 20Free). Wages are up 15% above inflation on average. search wages in our archives. Start with this graph. SP]
erikter – I think you’d rightly conclude that they’ve delivered, but there’s still more to do. “About to throw…”? So you’re picking an election when?
Wages have increased beyond inflation fool. In fact they’ve increased so much the National Party seems to think people need some of their work rights removed just to slow things down a bit. Check your facts before you make a comment muppet.
“See that $60,000 bracket? Less than 14% of kiwis have incomes higher than that.”
But Mickey C said only 5% of workers would ever be taxed in that bracket?
Gee it sounds like you have a cushy number with the Union SP. I bet my employee’s paying $5 or $6 bucks a week to you are pleased.
[no you’re wrong there son. Union officials work real hard and I’m not one of them.SP]
Steve: you haven’t really answered either of my questions. Looking at the recent political polls your “ex-workmates” appear to be blaming Labour now 🙂
I wonder also how your Labour friendly “ex-workmates” would feel if they knew how much faster incomes are rising in the unproductive public service than in the productive private sector: chart labour cost public sector premium
[I take your use of ” ” to mean you’re implying I’m not telling the truth. Do it again and you won’t be welcome here, in any of your pseudonyms. And if you had looked at recent polls, or, gee, just actually knew anyone on a lower income, you would know they haven’t turned their backs on Labour. SP]
[lprent: how about learning to link properly – fixed the link so it doesn’t spread all over the screen]
“…only 5% of workers would ever be taxed in that bracket?”
Cite? I only ask ’cause it sounds like a lie.
The way I remember it he was saying that the top rate would only effect the top 5 percent when passed.
We’ve never had inflation adjustments to the brackets, IIRC, so while it is an interesting and legitimate point, the idea that it is a uniquely cullenesque failing is dishonest.
I’m glad you got a mask Steve. I didn’t when my crew spent a day clearing sacks of white asbestos out of an old building scheduled for demolition. The health risks of asbestos were well known, but the foreman just told us to shut up and get on with it. Disposable workers. I’m still angry about it.
Then you also include people like me when I was a student in a flatting situation. I had several part time and holiday jobs; some of them quite crappy (spraying gorse comes to mind, although it paid better than the bar jobs). I also had a job that left me with a cough that lingered for years.
I certainly wasn’t wealthy – but I feel I had more freedom than, say, a family of 5 with a single $60k earner and a mortgage… I was probably happier and under less financial stress than them.
Knowing that many different types of earners are bundled into the graph above reduces its impact I think. Perhaps household income would be a better choice?
Hey Bryan – I like having a functioning public sector, more police and more nurses. Why don’t you just fu*k off to Somalia if you want small government? I’ll happily put the hat around for your one-way ticket.
[now, now, let’s be civil. Bryan might think that doctors and police and roading engineers are ‘unproductive’ but that’s not a reason to play the fool too. SP]
Steve: I wasn’t implying you were lying & I have done my share of poorly paid, menial jobs including packing caustic soda & pool chlorine for $8.00/hr.
I don’t think that “doctors and police and roading engineers are ‘unproductive’ “, I do think that a lot of the 43,000 employed to generate red tape and write reports and attend meetings in the core public service would be doing this country a favor if they joined the migration flood to Australia.
migration surge to australia accelerates
[lprent: and again. It isn’t hard to put in a correct anchor, damnit]
[lprent: you’re more boorish than usual today. If fact you’re getting quite tiresome – personal problems?]
[lprent: ok – i apologize after fixing some long links. Those things look as messy as hell in firefox]
hooton wont get a bonus for not engineering a snap election before the due date…he keeps saying if JOhn Keys were in now…what does he mean by that?
” Start with this graph. SP”
Is that the one where you cocked up the Maths?
Yeah, I think it is…
[Tane: The figures in that graph originated from Treasury and have not been refuted. I’m happy to provide you with data as I did for David Farrar.]
When you talk about the public sector you are mostly talking about doctors and teachers and police. There are 250,000+ employees in the public sector. Only 36,000 of them are in the core public sector (which includes Courts, prison guards, customs officials, social workers etc) and, yes, people whose job it is to develop policy and legislation. Because policy and legislation don’t magically happen but we do need them, we need to work out how best to allocate our limited public revenues for the public good, we need to update and revise our laws as the world changes.
Come join the real world and stop making silly claims like the public service doesn’t do anything.
(and the migration figures are perfectly consistent with the more cycle – numbers, and especially numbers per capita have been higher at the other two peaks in the cycle over the last 20 years)
The $11,000 difference between median income and median employed income is an indictment of the social welfare policies pushed for both Labour and National governments.
Besides the people in real need, the elderly and the disabled, New Zealand has too many bludgers living off the back of the productive sector of the population.
Reform the welfare system and you see the overall income numbers going up. There is a price to pay though. No pain, no gain.
Which one of the main political parties will have the guts to do it? None.
Robinsod: Thanks for that suggestion, “Linkwhore” is a great pseudonym, I think I’ll get it put on a T-shirt though I prefer to comment under my real name:-)
[lprent: I wouldn’t mind if you knew how to put them in correctly. All you have to do is this:-
<a href=’http://my-bloody-long-link’>The text I want to display</a>
It isn’t hard]
Low income earners love Labour because they keep dishing out freebies. That’s all there is to it.
living off the back of the productive sector of the population.
I have a friend who does marketing for British American Tobacco. He’s top tax bracket and his job is to find ways around the legislation and continue to sell death. I have another friend who is staying at home to raise two beautiful clever kids who will one day contribute to society and gets working for families and another friend who works for DIA monitoring internet crime.
I get the feeling (and correct me if I’m wrong) you would say my first friend is productive and my others are not. Really makes me wonder what kind of a world you want to see.
Those people are essential to the running of the country. If you got rid of them less of the work thats needed to run the country would get done and our country would fall even further behind in the OECD rankings.
Oh, wait, isn’t that what National’s promising?
In my opinion, if you chose to have kids, that’s your problem. Don’t buy a house if you can’t afford to service it.
But what if you want to sell them for food?
[Tane: The figures in that graph originated from Treasury and have not been refuted. I’m happy to provide you with data as I did for David Farrar.]
That would be great if you could – better yet would be a link to the page you got them from
[Tane: I received them through the CTU, who were provided them by Mallard’s office along with a bunch of journalists. I’ll email you the data at the email address you’ve supplied.]
Eat them instead 🙂 Tastes like chicken… or so I hear…
DracoTB: “Those people are essential to the running of the country.” Yes but are they really?
The number of core public servants has increased by 16,000 since 2000 Bloody Long Link One and over the same period productivity growth has declined from 2% to 0% Bloody Long Link Two and tax burden has increased by 20 days Bloody Long Link Three . These core public service employees have been busily generating more compliance costs for those of us in the “real world”.
[lprent: better. I even finally wrote the section just for you. How to link. I really have to finish the code for the WYSIWG comment editor & intergrate it with the rest of the site]
There’s a glut on the market after the ‘quake and typhoon.
For that asset you’d be better to ‘accumulate/hold’ rather than ‘sell’ right now.
I wonder if Labour Party policies endorsing gambling and prostitution are helping the poorer sections of society? Or are they just broadening the tax base?
Robinsond, if your friend wants to raise a family and decides to stay home for that purpose that is HIS problem, not mine.
Do you expect society as a whole to have to pay for individuals’ decisions such this, regardless of the good intentions behind them?
Why should childless couples or other citizens paying taxes have to prop your friend up with money for his WFF?
It’s very easy to “sacrifice” yourself, as your friend is doing, knowing then Nanny State is behind you. Efficient is not.
[Tane: I won’t tolerate veiled threats against the livelihoods of posters. There will not be another warning.]
“Why should childless couples or other citizens paying taxes have to prop your friend up with money for his WFF?”
Because those non-childless couples children – the nation’s future – will be supporting the childless couples in their old age.
What goes around comes around.
It was never intended as a threat just a rye observation.
Fair enough then – I read it as a veiled threat but I’ll take your word for it.
Steve has taken a very big personal risk by outing himself considering some of the threats we have received from the Kiwiblog Right, so you’ll understand why I have a very low tolerance on this issue.
I hope by Kiwiblog right you don’t mean David Farrar I don’t think he’s particularly dangerous or likely to engage in fisticuffs.
In joker’s defence I read his comment as a joke and not threatening at all
a rye observation
Can I get fries with that?
Sorry – I don’t usually do picky spelling (wry), but that one was cute.
HS, no, not Farrar. The Kiwiblog Right refers to the culture in the comments section, and in particular some of the more rabid commenters.
Fair enough thought that’s what you meant – although David and SP doing fight for life would be funny as a fit
Sorry about the spelling.
I Haven’t had a chance to have lunch yet which can get your brain into a bit of a pickle (do you see what I did there)
Lots of banter, but nobody has a particularly convincing argument why the graph above is not deliberately misleading.
Steve has tried to answer:
I once worked after school in the local fish and chip joint. That would have put me on your graph. However at the time I did not have to buy food, clothing, housing etc.
Many of those that aren’t employed are dependent on others that are. You’ve rolled in together kids with paper runs or mowing jobs, retirees, students, part-time mums and dads, etc. Then you have left the only suggestion being that all low income earners have crummy dangerous jobs.
That’s misleading at best.
[it’s not misleading because it’s about the incomes of all New Zealanders. Incidentally, your Fish n Chip job would put you on this graph and the one that you want that only counts employed people. SP]
You will find the same type of administrative positions in large corporations and they do the same things. Write reports, make rules, add red tape that annoys the hell out of those people who actually have to implement it. Do you think these corporations would be paying out large sums to people if they didn’t think it necessary?
ha, the productivity chart shows a percentage change from year to year. It doesn’t show that productivity has decreased to zero. It shows that there was no change (0%) in the last period, an increase in the period before etc. It also shows that productivity increases over the long term is stable and hovers around 0% change. Exactly what you would expect.
PS. Do you think you could link the actual data that the blogger used?
If that’s the case then why not use the graph that shows employed people? The post is in the “worker’s rights” category and is framed with examples of terrible employment cases. All of the workers cases mentioned here would be on the employed graph.
Why, at a time when unemployment is historically low, would you include non-workers on a graph about wages?
Is this about workers (eg the cases you use to illustrate your point), or about the rate of national super and the DPB?
I’m all for intelligent argument, but the dots don’t join up between your graph and initial post.
jbc good point.
It would seem all 15+ year olds are on that graph.
Someone working part-time is obviously not going to make full-time annual wage.
‘Nearly half of kiwis earn less than minimum wage’ to me this comment does not really explain much. Is this a bad thing, a good thing, on par with other countries?
If this includes part time workers, 15 year olds doing paper runs, unemployed, whatever… I don’t find the graph useful… or am i missing something?
a bit of a pickle (do you see what I did there)
alex, finally some intelligent life!
You make a good point too. I can’t see what benefit there is comparing the after-school income of my 15 year old self, with my income now as a full-time professional with nearly 20 years of experience.
At 15 I probably thought 5 dollars an hour for slicing potatoes was pretty good. They gave me some free 20c pieces for the games machines! And I didn’t have a mortgage or any dependents either.
captcha: “Prentice rescued”.
just looking at incomes of employed people would ignore the fact that there are people without jobs who want to work and their incomes are lower because they can’t find work. It would also ignore the income levels of the nearly three quarters of a million people who get super, DPB, sickness, invalids, or unemployment (those benefits in order of number of popel who get them).
It’s not such a big deal when you’re looking at one snapshot in time and a very low unemployment period when benefit levels are stable but we’ve done a whole bunch of graphs on incomes and we always use medians and all incomes because otherwise you miss out major effects like changes in employment levels and benefit levels and how those impact on real people.
You can slice and dice the figures anyway to make them look how you want – like when Farrar tried to pretend incomes went up faster under National but looking solely at the average ordinary time full-time wage – that’s why it’s best to stick with the full picture when the question at hand is ‘what is the distribution of income among kiwis?’
we don’t have an infinite number of catagories (we do of tags) so I chose the catagory most aligned with the topic.
jbc. Comments like yours make me despair. 300,000 people earn on or about the minimum wage and many of them do have dependents to look after.
I tried to give you a look into what life is like for the bulk of the population who have incomes around that level and all you can do is talk about when you were a kid peeling potatoes.
Try to imagine, working for minimum wage in a soulless job for a greedy boss who regards you as disposable. Imagine trying to get by and raise your kids on $25,000 a year. And then, imagine that just 8 years ago, under National you were getting just $14,500 a year, and you know that if they come into power again, there will be no more pay-rises for you, even as inflation eats away at what you do get.
I wonder if you can.
Well I’m sorry but I think that the figures presented don’t really tell much of a story. There are too many factors included for a savvy person to be able to distill anything useful. Also, if you lump in all the different types of individual income then you can not really talk about supporting dependents – as they might be in the graph too. That’s where household income would be applicable.
I understand your dilemma of trying to show a broad picture without using too many (complicated) facts and figures – but this could have been done better.
Incidentally, since you mentioned the numbers came from Treasury I looked over there for the numbers. Didn’t find (no worry), but what I did notice was this:
Average family gross income: ($)
– couple with children 92,882
Wow! If that’s true then it is bloody fantastic. I guess WFF has boosted that number.
“I tried to give you a look into what life is like for the bulk of the population who have incomes around that level and all you can do is talk about when you were a kid peeling potatoes. ”
“tried” being the operative word, I now see where you’re coming from but this was not obvious from the original post or the graph used to back it up.
Your lumping everything into one graph, it really makes the graph meaningless.
“See that line that says minimum wage? Nearly half of kiwis earn less than that.” … again is this bad? is this good? is this on par with other countries? This statement it not useful if you lump everyone on a graph.
If a solo mum with 3 kids is earning less than minimum wage then that’s bad.
If a stay-at-home-mum who is supported by her husband earning $150k is earning less than minimum wage, big deal.
I’m not disagreeing with the spirit of your post, just the graph that doesn’t follow.
I mean no disrespect to those on low incomes with families, however if you wanted to show the picture of family despair then more carefully chosen facts might do a better job. Quite obviously family incomes are significantly higher than individual incomes.
I don’t need a lecture on poverty though. I know exactly what it is.
Interesting graph, it shows very clearly just how powerful a zero rated tax threshold of circa $20K would be in delivering more money to the pockets of the most needy.
I think I can see why Dr. Cullen isn’t a fan of a zero rated threshold, that being that if he isn’t taxing low earners he’s not able to play fairy god mother with their own money to buy their support.
Imagine what a different debate this would be if all tax payers (not just targeted groups which were shown by internal polling to be non Labour voters) below the “minimum wage” threshold were not paying tax so that it could be redistributed to people earning more than them.
When I first started working I was earning $109/week and the dole at that time was $90/week. For my extra $19/week I had to pay $9/week on public transport, $1.50 on compulsory union fees and I had to have a completely different wardrobe than if I had been on the dole. If you were thinking I wouldn’t have a lot remaining to save for house then you would be correct.
At that time people were saying that welfare compared to trainee/apprentice incomes was too high, and/or wages were too low, and that such comfortable welfare provided little incentive to work.
Would you get out of bed at 6:00am catch a train, a bus and work 8 hours then catch a bus and a train 5 days a week for such a slim margin over the dole while incurring additional costs to do so?
So how much has really changed? Here on this blog you bang on about the need to lift wages, as I did then and as I do now. It was a Labour govt then, it’s a Labour govt now and still nothing changes.
Vote for a change, stop being suckered by this “we look after the workers” bullshit from Labour, the Labour pollies look after themselves and the workers get shafted – welcome to Labour govt.
Why don’t you, Tane and a few other anon bloggers here at the Standard start a new workers party, I’d vote for it if it puts it’s own beliefs into it’s policies and stopped being apologists for a bunch of self serving poll driven redistribution junkies.
Whatever Steve, we’ve all done shit jobs while at university. More fool you for taking on an asbestos job.
I’ve paid my own way, paid my own student loan back, paid my share of tax – what do I get out of Labour? Fuck all mate, a shit health sytem, no investment in infrastructure for a decade until it starts to fall down, schools being closed, train system being fuckedup, and now a bunch of freakin right on academic socialists telling me I should be thankful for getting screwed.
I don’t know where you live matey but 60k in Auckland with a mortgage and kids is minimum wage.
Think about the guys you were labouring with who had to support a family – they dont know that x% wage increas was actually 2/5ths of fuck all real increase given the cost of housing and basic living under labour.
“So, no, I don’t begrudge a government that wants to take a small part of my income to help out those who, because of the nature of our economic system, have it tougher than me and help look after their families.”
I disagree on the fact that 39% of my income is “a small part”. I have no children, private health insurance, few if any claims on the State. My direct taxes equate to at least two people on the minimum annual income. How much more do you want? Why is it my problem that people on low incomes feel they have a right to children and a house? I don’t even have a house.
How if I leave the country? Will that make you feel better?