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Inflation outpaces incomes

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Inflation outpaces incomes

3News NZ

David Parker

David Parker

Family incomes have increased by less than the rate of inflation and Opposition parties are renewing calls for an increase in the minimum wage.

Statistics NZ's latest income survey shows median weekly incomes rose by just $6 in the year to June compared with the previous 12 months.

Labour's finance spokesman, David Parker, says it's the lowest annual increase since 1999.

"With weekly incomes rising more slowly than inflation, Kiwi families have less money at the end of the week than they did this time last year," he said on Thursday.

"At a time when jobs are hard to come by and losses are announced every week, many families are in real trouble because they can't earn enough."

The Greens say the figures mean that since 2008 household weekly incomes have risen 3.7 percent while the cost of living has increased 10.1 percent.

"Living costs continue to rise while incomes are falling behind," co-leader Metiria Turei said.

"These figures highlight the urgent need to raise the minimum wage and make sure vulnerable families can make ends meet."

Labour, the Greens and NZ First want the minimum wage raised from the current $13.50 an hour to $15 an hour.

A Labour Party bill that would have done that was defeated by a single vote in Parliament last month.

NZN

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Comments

8/10/2012 11:21:36 p.m.

Tim wrote:

Increasing minimum wage MAY help close the gap, but you have to look at it from a bigger picture. Employers would require better productivity and efficiency if their costs of production increase (Wages increasing). Some minimum wage workers may be low skilled people who can produce goods, just not at an optimal level. If min wage increases, they may be out of work since their output does not justify their wage, and the employer goes and finds more suitable people for the job. This is, as weird as it may seem, where unions should come in and use their collective bargaining power to force the employer to match the increase in the cost of living. That would potentially solve said problem of making ends meet, but at the expense of the employer, and possibly jobs. It's all a toss up really, it could benefit minimum wage workers in making ends meet, but could also harm students, low skilled workers in finding a job.

8/10/2012 10:24:57 a.m.

Greg wrote:

Mike, cheap housing is a myth in NZ while the resource management act ramps up council charges. Look at that tree one wanted to trim, 6k for resource consent, its just a tax by any other name. So low cost housing is a fantasy.

5/10/2012 4:00:58 p.m.

Economist wrote:

Glad Mike and the other National trolls are out in force. The truth is the minimum wage here is $13.50, in Australia its $15.51 ( or $20.29). Yet the Australian economy is thriving its a total myth to suggest a high minimum wage will be detrimental to the economy. Raise it now!

5/10/2012 7:48:00 a.m.

Mike wrote:

NZ min wage in 2011 was 9th in the world (of list of 197 countries). World in recession so out min wage will have moved up so its probably more like 5th currently.

Labour is calling for $15 an hour from the current $13.50 which would move us to about 2nd highest min wage in the world. In the middle of a recession?

The US min wage is $7.25 US or $9 NZ currently and they consider their min wage too high hence Obama is having the US print money to lower their dollar, and give Americains more $$ in the pocket for less value, ie a real income drop. Labour wants our Reserve Bank to remove the inflation target as they want to devalue our dollar and give us substantial inflation which would lower our current $13.50 to around $10 NZ level.

The reason why Labour wants to drop real incomes is our income levels too high to perform for exporters, hence they want to devalue and give inflation to lower real incomes and real costs to business like labour to exporters. Given that non labour costs will generally go up for exporters, it has to be done through reduced real wages.

Raising the min wage is the wrong move and will cost jobs as it already has.

Since raising the min wage should be off the options, we should look at other options. If we repealed much of the red tape in the RMA and got more lower cost housing built it would relieve our housing shortage and lower house/rental prices. It would also hit the speculators that Labour keeps talking about who have invested in the housing market. Lower house/rental prices would make the same min wage stretch much further, ie effectively more real net income.

We also need to address the attitudes of NZ as Kiwis turn up their noses at affordable lower cost housing. Eg Central Auckland 1-room appartments for $40-50,000 where the mortage would cost around $50/wk Kiwis wont use as they have shared facilities even though low cost.

4/10/2012 6:01:29 p.m.

Andrew wrote:

Absolutely stoked that my taxes go towards Statistics NZ to deliver such valuable information that can't possibly be derived from any other source, like maybe a common sense view of reality. The fact that David Parker draws a salary from the same trough to give us his fiscally brilliant comments above, allows me to sleep easy at night