More good news: lower income people had highest pay rises

This news will rip the y-fronts of Labour, since they always bang in about those at the bottom not enjoying bigger payrises.

Turns out they do and have.

If you were asked to imagine the type of household that has experienced the biggest pay boost this year, you might not pick minimum wage workers.

But new data shows that it is the lowest-earning people in New Zealand who saw the biggest boost to their pay packets over the past 12 months.

Recent data from Statistics NZ showed that, nationwide, earnings across self-employed, employed and those on government benefits?increased 5 per cent year-on-year in the June quarter.

The median weekly earnings from paid employment rose $44 to reach $924 a week between June 2015 and June 2016. That is the largest percentage increase since 2007.

But looking further into the data, of those on wages and salaries, those?earning less than $500 a week had the biggest year-on-year percentage pay?rise, up 4.8 per cent between June 2015 and 2016.

The median income for that bracket increased from $271 a week to $284.

That was followed by a 2.6 per cent increase for those earning between $500 and $770. The median income in that bracket is now $670, compared to $653 a year ago.

Everyone earning more than $770 as week is now earning marginally less than they were the same time last year.

On top of that, there are fewer people the lowest income bracket. That is a good thing, and not something the opposition will be keen to focus on.

Infometrics economist Gareth Kiernan said the increase could have been driven by the minimum wage increase or the fact that people were working more hours.

The number of part-time workers decreased by 16,200, compared to an increase of 24,700 in full-time employees.

That is great news, it shows there are full time jobs being created.

Economist Shamubeel Eaqub said it was a trend that had been seen internationally – job growth had happened in unskilled and manufacturing sectors and people were transitioning from benefits to employment, which increased their income.

“The?big question is whether we are seeing?a big?shift in people whose source of income is moving from government transfers to paid employment and how much the increase is in wages and how much is an increase in employment.”

Unemployment dropped markedly to 5.1 per cent in the June quarter, but that was partly driven by a change in the way that employment was assessed.

He said there had been growth because the economy was doing well and there had been shortages in industries such as construction, which drove pay increases.

Fantastic news ahead of election year.

 

-Fairfax

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