The wage gap and the productivity lie

23 comments on “The wage gap and the productivity lie ”

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1. Enough is Enough 1

   28 March 2013 at 12:02 pm

   New Zealand sucks at the moment and I hold nothing against those economic refugees who are packing their bags and few possession they have and heading to where they will be able to make a livfe for themselves and their children.

   When will New Zealand wake up and demand more from their governments. This trend has been getting worse for decades yet we continue to elect governments that have policies which force our kids overseas.
2. Draco T Bastard 2

   28 March 2013 at 12:08 pm

   This video, (yes, it’s the same one I posted in Open Mike), covers the productivity gains of the last thirty years and how almost all of it the went to the rich and that the rich then went on asset bubble crusades. This resulted in increased inequality, an unstable economy and the GFC but not the improved conditions that the business sector and the political parties said would happen (I was going to just say National but Labour said the same bloody thing).
3. Poission 3

   28 March 2013 at 1:37 pm

   Productivity always decrease following banking crises,and almost obvious problem.

   Why? it is the reallocation of financial resources from the productive sectors( read parts of the economy that add value ) to the unproductive sectors such as property ,land and duboius infrastructure that is in essence a financial sink ie they lock in finance into illiquid assets.

   In each of the 61 Banking crises since 1980 (yep) productivity has decreased in every domain it has occured.There is a good discussion of this in Broadbent 2012

   http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech599.pdf

   The underlying regurgitating of the productivity fallacy by these lobby groups suggest that they (and their echo chambers) are a bit thick!
   • muzza 3.1

     28 March 2013 at 1:55 pm

     Someone send that to spokeman Gilbert Peterson, maybe with the instruction that he reads it, and if he can’t understand it, to consult with someone who can walk him through the basics!
4. infused 4

   28 March 2013 at 6:37 pm

   Productivity != profit. Cheers.
   • Draco T Bastard 4.1

     28 March 2013 at 7:52 pm

     The owners profits have been going up in line with productivity – the wages haven’t.
     • infused 4.1.1

       29 March 2013 at 12:31 am

       Where? My wage hasn’t increase in 3 years. My staff have.
       • McFlock 4.1.1.1

         29 March 2013 at 12:41 am

         Has the Value of your business changed in that time ?
       • Draco T Bastard 4.1.1.2

         29 March 2013 at 1:15 am

         Well, you’re obviously not the people this government is governing for then even though you probably think that you are.

         BTW, a single person whinging that their profits haven’t gone up while banks and several others have doesn’t pass the evidence test.
         • infused 4.1.1.2.1

           29 March 2013 at 12:44 pm

           What’s the percentage of small business in New Zealand Draco? Banks and a few other very large businesses are the only exception.
           • Colonial Viper 4.1.1.2.1.1

             29 March 2013 at 1:17 pm

             Those large corporations are the ones making super-profits, draining your local community and your customers of cash. To the tune of several billion dollars a year. And then exporting that cash, typically to Australia.
           • Draco T Bastard 4.1.1.2.1.2

             29 March 2013 at 3:24 pm

             You’re still only one person and not all small businesses.
5. UpandComer 5

   28 March 2013 at 8:44 pm

   The meaningful measure is after tax wages, which have increased by 3% more then oz since 2009.

   The gap is being closed.

   Also I agree with Draco’s comment re wages not keeping track with productivity. I think employer’s in NZ do need to recognise productivity increases and incentivise productivity. Giving employees an option to buy shares in the company they work for at a reduced rate or the likes is a great idea.
   • Draco T Bastard 5.1

     28 March 2013 at 10:53 pm

     The meaningful measure is after tax wages, which have increased by 3% more then oz since 2009.

     Mr and Mrs Middle New Zealand: Median NZ household income falls

     I think employer’s in NZ do need to recognise productivity increases and incentivise productivity.

     There’s a couple of reasons for that:
     1.) NZ employers are stupid (there’s research around proving that but I can’t be bothered going to find it again)
     2.) Why would they pay the workers more when they can pay themselves more instead? Greed is Good don’t ya know.

     Giving employees an option to buy shares in the company they work for at a reduced rate or the likes is a great idea.

     Ah, yes, having people buy into capitalism will magically make them better off.
     • Colonial Viper 5.1.1

       28 March 2013 at 10:57 pm

       Not magically, but owner-employees are the way of the future.
       • Draco T Bastard 5.1.1.1

         28 March 2013 at 11:11 pm

         Cooperatives are but do you really think that an owner is going to sell voting shares to the workers? For some of them part of the reason for being in business is the power rush they get when they tell people what to do.
   • Puddleglum 5.2

     30 March 2013 at 7:27 pm

     “The meaningful measure is after tax wages”

     No it isn’t.

     The best measure is of pre-tax wages (gross income). Taxation legitimately takes a share of the return to labour in order to benefit the overall society (that’s the only legitimacy for taxation).

     The meaningful measure has to be the gross return to labour for a couple of reasons:

     First, closing the gap by reducing tax rates would not be possible. As Bill English pointed out, most New Zealanders are paying around 17.5% in tax. Even removing all income tax for this majority would not close the gap. Further, reducing the top tax rate alone would simply ‘duke the stats’ when it comes to ‘average take home pay’. That is, bigger paypackets would get disproportionately more dollars in their pocket, increase the average disproportionately and leave everyone else potentially just as far behind Australia as ever.

     Second, for the majority of income tax payers, the amount of income tax they pay is less than the benefit they receive from overall taxation. Hence, reducing the tax take (especially at the upper ends) would simply make their after tax wages worth less because of the services that would need to be cut to afford the tax cuts, services which they would then have to pay for one way or the other. Put simply, they would be worse off materially (isn’t this what the right so often complains about? – that the higher income people are paying most tax?). This is especially so if the kinds of cuts introduced were those favoured by right wing governments (e.g., benefits, education, health).

     I know Key and English like to run this line about after tax wages being relevant to closing the gap with Australia, but that’s meaningless given that the benefits of a progressive tax system fall disproportionately on the majority of (low and middle income) people – as is, of course, the intention of a redistributive tax system.

     In addition, cutting the top tax rate (as Treasury and IRD seem keen to do) would increase inequality within New Zealand.
6. UpandComer 6

   28 March 2013 at 8:44 pm

   “Real after tax wages
7. Colonial Viper 7

   28 March 2013 at 8:50 pm

   So Telecom has to fire 1300 workers to “remain competitive”. It’ll save them $80M in wages, annually.

   And they are forecasting a reduced profit of just over $1B for 2013, once redundancy costs are taken into account.

   Labour, please come forward and criticise the idiocy of shareholder EPS driven capitalism and the insecurity it has created for NZ workers. Any time now would be fine, when convenient, maybe when your members come back from enjoying a long weekend away.
   • fender 7.1

     28 March 2013 at 9:34 pm

     +1

     The greed is rampant, and taxpayers are paying for their future revenue stream infrastructure as well ffs.
   • infused 7.2

     29 March 2013 at 12:33 am

     Dude you have no idea. People at Gen-I are sitting around with fingers up their ass. They have lost so much work recently.

     So easy being an armchair warrior eh?
     • Tim 7.2.1

       29 March 2013 at 2:53 am

       “Dude you have no idea. People at Gen-I are sitting around with fingers up their ass. They have lost so much work recently.”

       Which is rather strange is it not considering DIA is a bugger’s muddle, the primitive ACC and EQC systems, and IRD?

       The funny thing is that things seemed to work when we had a GCS, a Vogel Computing Centre and a banking system that was more integrated.
       I suspect ‘corporate prestige’ and big egos have been part of the problem over the past 20-30 years.
       • Galeandra 7.2.1.1

         29 March 2013 at 12:59 pm

         egos like Infused’s?
         ‘Dude’ lol

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