CTU Media Release

4 October 2013

Full-time workers’ earnings rise by only 1 percent

“Median weekly earnings for full-time workers, who make up by far the largest group of wage and salary earners in the work force, increased only 1.4% over the year, according to the New Zealand Income Survey,” says CTU economist Bill Rosenberg. The 1.46 million full timers make up over three-quarters (77%) of wage and salary earners.

Rosenberg says “though overall median weekly income for wage and salary earners on paper rose 4.8 percent according to the survey, this is not what people will be experiencing in their pockets or in their pay rates.”

“As Statistics New Zealand says, it is affected by significant changes in the workforce. Fewer young people are working. Instead they are staying in education. Because they earn considerably less than older workers that makes the median go up. Similarly there are more old people, 50 plus years, again raising the median. This change in the workforce has probably also contributed to the increase of 23 minutes worked per week on average, from 35 hours 55 minutes to 36 hours 18 minutes, which in turn increases median weekly earnings.”

“Despite this, median weekly earnings for full-time wage and salary earners increased only 1.4% over the year, while for part timers it rose 3.4%. Median hourly pay rates rose 3.1% for full timers and 4.6% for part timers but all of these are likely to be higher than what would have been experienced by most individual wage and salary earners. By comparison, the Quarterly Employment Survey’s average hourly wage rose 2.1% for the year to June.”

Rosenberg says “it is also notable that despite the increased pressure from Government on single parents to work, that the average wage and salary earnings of single parents with dependent children fell 6.0% over the year while their income from benefits rose 14.4%. In general, median weekly income from benefits (for those receiving them) increased 4.0 percent but this was also affected by an increasing proportion of those people being aged 65-plus. New Zealand Superannuation is more generous than other benefits. Statistics New Zealand says that main benefits, student allowances, and some supplementary assistance increased by only 0.61 percent – less than inflation – during the year.”

“We need to bear in mind that these results are from surveys. They are subject to margins of error and cannot be taken too literally,” says Rosenberg.

ENDS

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