CTU Media Release

4 October 2012

Income survey shows stagnant incomes for most New Zealand families

Most household incomes did not rise during the year to June 2012, according Statistics New Zealand’s Income Survey released today. “This is further confirmation of the hardship that many New Zealand families are facing”, says CTU Economist Bill Rosenberg. “On top of stagnant incomes, continued high unemployment levels, with continuing news of layoffs, are making it difficult for many people to make ends meet.”

Statistics New Zealand points out that the values it reports come from a survey and changes in incomes and pay rates can only be regarded as “significant” if they exceed the error in the survey. If they are not statistically significant we cannot be sure they are different from no increase.

While many small increases are reported, few are significant. “Essentially, most incomes have been stagnant over the year to June 2012. Neither median weekly incomes from all sources ($560), nor from those receiving wages and salaries ($806) showed an increase that is statistically significant. Median hourly earnings at $20.86 were stagnant too. The change in median weekly incomes from wages and salaries is the smallest since June 1999,” says Rosenberg. “Similarly, average hourly earnings at $25.07 per hour showed the smallest percentage increase since the survey began in 1997, with a non-significant increase of 30 cents.”

“Understandably in this climate, the survey shows increasing dependency on benefits and Working for Families, with a significant increase of 3.0 percent in the number of people receiving such income, with the biggest increase being in the 65+ age group,” says Rosenberg. “Similarly, one of the few groups experiencing a significant increase in hourly earnings was the part-time 15-19 year old age group whose median hourly earnings is exactly the minimum wage, which rose from $13.00 to $13.50 over the year. Many income increases have been dependent on government action during the year,” Rosenberg says. The 20-24 year old age group and those in part time employment saw statistically significant increases in their median weekly incomes. Rosenberg says that it is very likely that these increases are also influenced by the increase in the minimum wage.

“In addition we see another indication of growing income inequality: while median weekly income from wages and salaries rose insignificantly (to $806), one of the few reported significant increases was the average weekly income from wages and salaries which rose 2.7 percent to $922. This indicates that those on higher incomes are receiving larger income increases than people on lower incomes. The Ministry of Social Development’s Household Incomes Report released in August showed an increase in inequality in 2011. It looks like we had another increase in the income gap in 2012.”

The median hourly earnings for females remains at 90.7 percent of median hourly earnings for males, the same as 2011. The ratio is 93.8 percent for full timers.

ENDS

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