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Ready for more of English’s dodgy numbers?

Written By: - Date published: 1:08 pm, August 25th, 2010 - 16 comments
Categories: bill english, wages - Tags:

Question number 3 today in Question Time will be:

AARON GILMORE to the Minister of Finance: Have New Zealand’s after-tax wages been rising faster than prices?

English is going to reply ‘yes’ and point to the same silly numbers that he and Key have been waving around for the last week or so.

To recap, the numbers they’re using are the average ordinary time wage for full-time workers. That number doesn’t include changes to the incomes of part-timers, it doesn’t include changes in the amount of overtime pay people are getting, and it is distorted by rising unemployment.

Think about it: there’s a recession. Who loses their jobs? Not the doctors, or the lawyers, or the accountants. No, it’s people on low incomes who make up most of the lost jobs. So, what happens to the average wage of the remaining employed people? It increases eh? A bad thing has happened that gives you a result that, at first glance, appears good.

It’s like you’ve got a bunch of differently sized bottles full of beer. You take away the smallest ones, the average amount of beer per bottle rises, but the total amount you have is actually less.

Same with wages. Yes, thanks to the fact that a whole lot of low wage employees have lost their jobs, the average full time ordinary wage has risen 3.2% faster than inflation since National came to power.

But you have to remember to ask – what about the 100,000 extra jobless since National came to power, who know have no wages?

What has actually happened to the total amount of wages that the families of this country have to spend? It’s fallen: the average weekly wage income per working age person is down 1% after inflation since National came to power.

And it’s going to get worse. Wages are ‘sticky’ – they are slow to respond to economic shocks. It’s only now that many wages are being negiotated for the first time since the recession started and many workers (like the teachers and the medicial technicians) are being offered below inflation pay rises.

Treasury knows it’s going to happen. That’s why they forecast that real wages will fall 3.8% over this year, and wages per working age person won’t get back to their peak until 2014.

Of course, it doesn’t need to be this way. Workers’ wages could be protected and rising. But for that to happen we would need a Finance Minister who does his job, rather than occupying himself with statistical chicanery.

16 comments on “Ready for more of English’s dodgy numbers? ”

  1. Bright Red 1

    just you as predicted, marty.

  2. Carol 2

    I wish my TV had a webcam piped into parliament so English could hear me calling him a Minister of mis-information & a BSer.

  3. Craig Glen Eden 3

    English is very poor with figures it seems he can say all he likes about black being white and wages going up when they have gone down, next he will argue he lives in Dipton instead of Wellington so he can claim more money from the hard working tax payer . National Ministers past and present they are worse than the bludger, nothing but thieves.

    • Lanthanide 3.1

      On the contrary, I would say he is very good with figures, in getting them to say what he wants.

  4. Draco T Bastard 4

    Of course, it doesn’t need to be this way. Workers’ wages could be protected and rising. But for that to happen we would need a Finance Minister who does his job, rather than occupying himself with statistical chicanery.

    Actually, we’d need an entire government that believed that wages should stay the same in real terms and not just a finance minister who isn’t free with the numbers. Which would mean a legislated CPI increase every quarter with productivity increases negotiated after that.

  5. Lazy Susan 5

    I’ve always thought the concept of average income is meaningless because Paul Reynolds and the other fairly small number of high paid workers skew the result upwards. Take a group of 10 workers 9 earn 40k/year and the 10th earns 400k/year – average income for this group $76k/year.

    Better is the median income – put the incomes in order highest to lowest and then pick the one in the middle – result in the above $40k which far better correlates to the wage of the majority of workers in the group.

    Does anyone know where national median income figures might be found and using the same comparion as Double Dipstick has what would be the outcome?

    • wyndham 5.1

      Try Statistics New Zealand . . . . http://www.stats.govt.nz

      – – – and good luck !

      • Herodotus 5.2.1

        Medium income also includes the likes of people on the pension or those 50 rich listers that have “managed” their incomes so as not to be on the top tax bracket, and the many others who utilsie similar mechanisms to under stating their incomes. Also those who are on overseas contracts such as in the middle east but still have some income derrived in NZ. Perhaps a better stat is what is a livable disposable income and the numbers that are living below this. Poverty by definition is based on income levels (60% of medium disposable income)

        On child poverty


        Similar example of Lazy Susan. Accepted cost of living in NZ say $50k, 9 families earn $40k and 1 earns$145k. Statistically the average family lives above the cost of living where in fact 90% live below this threashold.

  6. Locus 6

    Not much to add to your excellent analysis Marty, except to say that some companies actually give their staff annual merit based pay rises. Also, I’ve heard a rumour that English’s figures incorporate Labour’s tax cuts?

  7. Fisiani 7

    Wages rose by just a measly 3% under hard Labour. Labour never compensated the poor for its rise in GST. Puts the BS spin above in context.

    • felix 7.1

      Fisiani, you’re just repeating things John Key said in parliament today. Do you think you’re the only person who follows it?

      And haven’t you been warned before about making stupid assertions without providing any supporting evidence?

    • Draco T Bastard 7.2

      No, you’re just repeating the BS spin that’s been passed down from your overlords – C/T.

    • lprent 7.3

      Labour never compensated the poor for its rise in GST

      The last rise in GST was from the 1986 rate of 10% to 12.5% in July 1st 1989 during the post-1987 crunch. You must be totally desperate to reach back to events when you were probably still in nappies.

      Incidentally there some pretty hefty changes in the tax structure in the mid-80’s that dropped taxes across the board at the time GST was introduced. So you’re talking idiotic bullshit.

      The real problem in the 80’s and 90’s was to keep a job because with all of the restructuring and the like it was a chaotic time.

      I’d suggest that even if you want to be a complete twat, then it’d pay to actually know something about what you’re talking about.

      Now did you actually read the post. What it said was that Bill English would lie with numbers yesterday. It sounds like John Key parroted the same (he really does make a good dummy).

      So as far as I can see you’re merely saying that this post is BS because it doesn’t repeat the lie that you are repeating.

      I’ve checked the numbers. Both John Key and Bill English are the bullshitters. You therefore are also full of idiotic shit…..

  8. David Lloyd 8

    What do you expect? Double Dipton English is a jackass, the invisible finance minister. New Zealand is falling behind at an alarming rate and will continue to do so. English does not have the knowledge, foresight, endeavour or ability to do anything about it. He has achieved little during his decades in parliament except line his own pockets at our expense and that will continue. Statistics can be cherry-picked to support most arguments. National are masters are this aided by a lazy media who seldom question. A gullible public also does not help. I am sorry to say it but Australia and elsewhere is the place to be.

    David

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