Real incomes falling

Median weekly incomes have stagnated in dollar terms since 2008, which means they have fallen over 4 percent in real terms (that is, after price rises have been taken into account), said the CTU today.

The median weekly income was $536 in June 2008, $538 in 2009, and $529 this year, according to the annual New Zealand Income Survey released today, which shows weekly income for the year to June. Half of people receive more and half receive less than the median. Household incomes showed a similar pattern.

“The survey shows that people’s living standards have fallen over the last two years,” said Bill Rosenberg, CTU Policy Director and Economist. “Those relying on wages and salaries have done least badly, but households still have lower incomes than both last year and 2008 when taking price rises into account. The self-employed have done worst of all, with a sizeable fall in income of 6.3 percent for the year. This shows the importance of wages and salaries not only to provide relatively secure incomes for people, but as a stabiliser in the economy in times of recession. It shows why workers have reason to resist actions like Telecom’s to push them out of regular employment into insecure self-employed contractor positions.”

The total median weekly income includes wage, investment and other income. However median weekly wage and salary income for those receiving it increased by 1.2 percent from the June 2009 quarter. This was the lowest recorded rise since the June 1999 quarter. Median hourly earnings rose $0.53 to $20.00, at 2.7 percent, the smallest increase since 2003.

“When looking at men and women separately, however, there are larger movements: for those receiving it, wage and salary income increased 4.0 percent for men and 4.3 percent for women. What appears to have happened is that households and the workforce have become more dependent on lower paid women’s work during the recession, so that both household income and the overall median wage and salary increase have not risen nearly as fast.”

As would be expected during the recession, people are more reliant on income from benefits from the Government. During the year the number of people receiving income from government transfers increased by 54,400 (4.9 percent), though income from that source (for those receiving it) fell slightly – by $4 to $269.

However, median weekly income from self-employment (for those receiving it) has fallen significantly since 2009 – it is down 6.3 percent or $38 to $575.

“We are also reminded of how few people receive significant income from investment: the median is only $12 per week for those who do receive it – down from $15 in 2009,” Rosenberg said.

ENDS

© Scoop Media