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Thread: Average wages/salary in NZ

  1. #1
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    Manks is offline Serial procrastinator and general busybody
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    Default Average wages/salary in NZ

    Statistics NZ has just released the latest average income in NZ survey
    http://www.nzherald.co.nz/business/n...1129_825738151

    It seems you might be lucky to have a salary according to this article:

    Statistics New Zealand (SNZ) today said the median weekly income for all people from all sources fell between the June 2009 and June 2010 quarters by a "non-significant" 1.7 per cent to $529.
    ...
    Median weekly wage and salary income, for those receiving it, rose by 1.2 per cent to $769 in the June 2010 quarter.
    So still the average salary in NZ is less than $40k. Makes me feel quite humble really.

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    What really annoys me is the Gov't raised GST which means the average wage earner in $40K is more poor than the previous year.

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    I agree Manks, it's very sobering to think the average salary here is $40K.

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    Quote Originally Posted by Super_BQ View Post
    What really annoys me is the Gov't raised GST which means the average wage earner in $40K is more poor than the previous year.
    Why are you annoyed? From the tax calculator a person on $40K will be better off by $ +449.80 this year than last due to the tax cuts and GST rise combined.

    Ian

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    Why are you annoyed? From the tax calculator a person on $40K will be better off by $ +449.80 this year than last due to the tax cuts and GST rise combined.
    Because people are hurting. For a person on $40K, the 1.125% benefit is not even worth mentioning. Inflation for the year would be far higher than that. There's a lot of negative sediment for low and middle income wages earners in NZ as you can read here:

    http://www.stuff.co.nz/marlborough-e...osts-of-living

    http://www.nzherald.co.nz/economy/ne...ectid=10677867

    I'm not trying to start a major debate. What i'm getting at is in reality, any tax benefit the Gov't claims to give to tax payers will not shake a stick, the amounts are too small and it's quite clear that the top income earners will get the most benefit.

    NZ isn't the only country that is hurting for tax revenue. The USA is in it in a bad way and what they are proposing is the complete opposite of what NZ has done. Billionaire Warren Buffet claims the top income earners should be paying far more taxes and the rest should get significant cuts in tax as quoted here:

    http://finance.fortune.cnn.com/2010/...-for-the-poor/

    A tax cut for low-income people could boost consumer spending at a time of high unemployment and fading government stimulus funds.

    Regardless, Buffett says the tax numbers don't add up and will have to rise. So why not raise taxes on those who can afford to pay?


    It's very hard to find this kind of thinking among the majority NZ politicians. Even guys like that Allan Hubbard can not be compared to Buffet (despite how Timaru locals praise him as the Buffet equivalent for NZ).

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    Super BQ - tax cuts will generate more income for the government as it will, hopefully, stop higher earners from heading over the ditch / overseas. Raise income taxes and I, for one, would be really pushing the missus to head off; and I know a number of people in the same boat. All of us top rate payers. Given how skewed the tax system is towards high earners, (the top 10% of earners pay something like 75% of net income taxes) you only need to get a few people leaving and you make a big dent in the government's income. And people will leave - everyone can see how mobile the workforce is in general (second only to Ireland I think) - with about 20% of citizens living overseas.

    And any income tax cut is going to mean that the people who pay more tax will be better off than those who don't pay any or only pay a little bit.

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    In my book: when governments have a need to raise taxes to levels that negatively and disproportionally influence the well being of the citizens they are catering to (public servants), it usually means their business has grown too big, are operating off course or funds are mismanaged. At the end of the day governance should be facilitating prosperity of the community as a whole. Not specific groups.

    As to high bracket earners skipping the country when they feel the pinch, well lets say that is a luxury the other 90% or so low and medium income earners do not have. Hence they are the easy and repeat victim of our wonderful world of the free.

    I do not have any problems with wage differentiation within reason. But I have yet to meet the first person who can give merit to the extreme gaps in wages we all see. Some people rake in or are awarded disproportionate amounts of dough and we teach our children that these practices are examples of success (do I sound red yet?).

    If there is one thing that should be governed in my view it would be income. What in the heck does "John" do or what super natural powers does he possess over "Joe" to earn in excess of lets say 6 times the average annual income? What's that? Ah.. you can kick a ball, sing a song and wear a tie when you negotiate your way to the highest profit results because the "who can blame me for playing by the rules of the game"?. Thats screwed-up folks! It all leads to more greed and misery.

    Cap it and spread the love.... One person with an income of 5 million would have a high spending power, but it doesn't mean it would be spend to the best benefit of the economy and society. Likely you'll see that person have one or two expensive houses built and several up scale vehicles bought, while 50 hundred thousand dollars income earners would buy at least fifty vehicles and buy properties. Which scenario do you think benefits the economy and society the most?

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    Quote Originally Posted by 4togo View Post
    ....What in the heck does "John" do or what super natural powers does he possess over "Joe" to earn in excess of lets say 6 times the average annual income? What's that? Ah.. you can kick a ball, sing a song and wear a tie when you negotiate your way to the highest profit results because the "who can blame me for playing by the rules of the game"?.
    The extremes are indeed perhaps a bit hard to justify, but the inclusion of footballers / singers is interesting. What can they do. Well kick a ball, sing a song, paint a picture better than most other people to the point that as entertainers people are willing to pay to see them exhibit their talents, and to buy products that are associated with them. As for business people at the extreme >$1m pa for example, then over time they have demonstrated the ability to keep hundreds of people employed and grow a profitable business (big blue chip corporations), or they've had the skill to make a new business by identifying a need or approach in a way that no-one else has had the skill / courage to do.

    Now in the 'mid range', what makes someone worth $100k pa rather than $40k pa then in some cases it is simple IQ or effort. They are able to add value to someone else's business in a way that allows the owner to 'sell on' their input at $250k pa rather than $100k. Put simply that person is more productive. Could be that they put in more effort. Could be that they have skills they have learnt that make them able to do things other people can't. Sometimes that's from natural ability, sometimes that's hard work at school, from not going for the quick buck as a teenager, but staying in education, from going to night school, from not playing hooky on a sunny day. And once in work in some cases it's from not taking sick days as holidays, from staying late or coming in on a weekend and not charging overtime. There's few people that I know who make the higher salaries that do so with a strict 9-5 job and offering no flexibility to their employer. For the first few years of my career I was earning less than a temporary typist doing 35 hours a week in the company despite having a masters degree and putting in 60-70hours. My hourly wage would have ended up below the national minimum as it stands now. But it was an investment.

    In my case then I'm good with numbers. I can't sing, can't play football, have minimal artistic talent, but I seem better than most at being able to manipulate numbers (those who have read even a few of my posts know that ability doesn't transfer to letters or typing ). It's all about people being able to spot their talent early enough and focusing on developing that. If I'd decided I didn't enjoy doing things with numbers and instead focussed on singing then I'd be amazed if I was earning $20k let alone $40k.

    But if you're going to cap at the top, then what about the bottom. For all the layabout football players or musicians earning silly money, then how about the minority of those on benefits who are there by choice and don't make the effort to gain employment and be productive (note that I am not saying all, or even a majority, but the same proportion of the population as earn silly money as footballers).

    The comment about taxes paid by the big earners is valid. Remember that the proportion that you get to keep at the top is less than those below. So for all that the published salary of someone earning $120k is 3 times the national average, they not able to buy 3 times as much food, TVs, or whatevers. But they net they pay for a lot more than 3 times as much as the $40k for the services that we all share (education, health, defence).

    And remember that market forces come into play with salaries. If you are able to do things which lots of other people can do then the employer has plenty of options and so salaries will be low with lots of people fighting for the job in a dutch auction. As you get to the point where you are able to do something that fewer people do then there's more of a pressure from the employers fighting over your skills.


    If I were to go for an inflamatory comment, then perhaps I'd suggest that the answer to the question about what justifies the higher salaries between two people is that one will see the difference as unfair and demand an end to the disparity with a cap, the other will realise that there isn't a good reason that the other person is earning more and so decides to go out and get a simmilar job by working on their skills and proving they are every bit as able.

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    Duncan, as stated the view is from "my book"....

    I do not preach equalization of wages, nor do I try to suggest that talent should not be rewarded. I am not a socialist and truly enjoy all my toys, income etc, etc.... My gripe is with the "out of whack" rewards. The based on what? I just threw artists etc. in there but yeah I also mean the CEO, politician, public servant, tv personality etc. with salaries many times the income of a rehabilitation worker or teacher who also have skills that many people can appreciate. Or are those people simply not smart enough to climb up the ladder. Is the value of talents between the electrician and the IT manager really worth a gap of >$150000 pa?

    Quote Originally Posted by Duncan74 View Post
    If I were to go for an inflamatory comment, then perhaps I'd suggest that the answer to the question about what justifies the higher salaries between two people is that one will see the difference as unfair and demand an end to the disparity with a cap, the other will realise that there isn't a good reason that the other person is earning more and so decides to go out and get a simmilar job by working on their skills and proving they are every bit as able.
    From your last comment it appears you are trying to give an answer to the justification of wage gaps. However I see no answers to that but rather possible ways of how to respond to these facts. Please enlighten me if you can justify the, in my eyes, obscenity of extraordinary wage differences in our society.
    Last edited by 4togo; 8th October 2010 at 01:49 PM.

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    Quote Originally Posted by 4togo View Post
    Please enlighten me if you can justify the, in my eyes, obscenity of extraordinary wage differences in our society.
    People get paid what other people think that they are worth.

    Good footballers get paid silly amounts because their clubs believe that they will provide a good return on that cost through increased prize money, sponsorship and ticket returns.

    Good CEOs get paid silly amounts by their shareholders because their shareholders believe that the CEO will be able to get the company to outperform its competition and provide them with a better return on the investment than if a cheaper CEO were chosen (and most CEO salaries aren't that high for their skills and hours of work - it is their bonuses and share options that provide the headline figures and they only get these if they beat the performance goals set by the shareholders).

    I'm worth $120k a year as I have skills and experience that others do not have. In order to get this money I am pretty much "on call" all the time and occassionally need to put in the hours for no additional reward (a few months ago I had 6 weeks of 70/80 hours a week when my contract states 40). I hope, in time, to enhance and expand the skills and experience that I have and therefore greatly increase the amount that I earn to well over the $500k mark; but at all times I know that I am only going to be paid what my bosses believe me to be worth to them.

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