The Labour Cost Index rose a record 3.4% for the March year. That means wages and salaries for doing the same job rose an average of 3.4% over the year. Public sector wages were up 3.3% and private sector wages up 3.5%. Retail and other low-paid workers did especially well, with their pay up 5.1%, thanks in part to the rising minimum wage and successful union campaigns.
This is just the increase for doing the same amount of work in the same job and it matches inflation. Increases in employment, work hours, paid overtime, as well as improving average skill level (and with it pay) of jobs are specifically not included in this measure. Because people are working more and there are more high skill/high pay jobs than a year ago, the ordinary Kiwi’s pay-packet has actually increased more than 3.4%. The data only comes out once a year but the average total income was up 9.4% in the year to June 2007. Ordinary Kiwis are better-off this year than they were last year, despite some prices increasing rapidly, because their incomes have gone up even faster.
It is incredible that wages going up is portrayed as a bad thing in most of the media. People are better off than last year because of these higher wages but all we hear is â€˜oh no, inflation’. This â€˜money first, people second’ thinking has got to go (Stats should start by a renaming of the Labour Cost Index to the Wages and Salaries Index).
Let’s remember, people are not cogs in the economy. The point of the economy is to make our lives better. The economy exists for society, not the other way around. And that’s why more of the economy’s wealth being shared by the people, through higher wages, is something to be celebrated.