New Zealand Income Survey - June 2010 Quarter
The New Zealand Income Survey (NZIS) for the June 2010 quarter was released on October 7. The NZIS is run annually during the June quarter as a supplement to the Household Labour Force Survey, which is conducted by Statistics New Zealand. It provides a snapshot of income statistics about people and households. This note uses median figures, rather than averages, because they are less influenced by extreme amounts (eg very high or low hourly rates).
Median income from all sources has fallen…
Median weekly income from all sources (i.e. self-employment, wages and salaries, government transfers, such as benefits, and investment income) was $529 in the June 2010 quarter. This is down 1.7% from $538 in the June 2009 quarter and is below the $536 figure recorded for the June 2008 quarter. This was the first fall in total income since the NZIS began in 1997 and reflects the downturn in the wider economy that has resulted in rising unemployment, and reduced self-employment and investment income.
…and young people have been the most affected…
In general, the fall in median weekly income has affected younger people most, with the largest decrease occurring for 20-24 year olds (down 12.5% to $380). This is likely to be due to younger age groups experiencing the largest falls in employment over the past year. The largest increase in median weekly income occurred for the 60-64 year old age group, up 6.1% to $566 over the year. By ethnicity, Pacific peoples (down 10.1% to $382) and Māori (down 4.6% to $458) also experienced larger than average falls in median weekly income.
…however, median hourly earnings for the employed have continued to rise…
The above section looked at income from all sources for all people. However, it is also useful to examine earnings (i.e. only wage and salary income) for people who are in paid employment. Median hourly earnings for people in paid employment rose by 2.7% to $20.00 in the year to June 2010 (see Figure 1). This highlights that the overall fall in income was driven by an increase in unemployment and a fall in non-wage income rather than by a fall in wages for employed people. While growth in hourly earnings was positive, it has slowed from 4.1% in the year to June 2009 and is the lowest annual growth rate since 2004. This indicator is consistent with other wage growth measures, such as the Labour Cost Index, which have showed a slowing in wage growth over the past year as a result of the recession.
Fig 1: Median hourly earnings growth
Source: NZIS, Statistics NZ.
…with hourly earnings up strongly for older workers…
The 50-54 and 55-59 year old age groups experienced large increases in median hourly earnings over the year to June 2010, up 5.3% to $22.22 and 6.3% to $21.40 respectively. Strong growth for the 65 years and over age group was also reported (up 8.4% to $19.01). Also of note was a 2.0% rise for 15-19 year olds, which is likely to be a result of the increase in the minimum wage from $12.50 to $12.75 in April 2010.
Median hourly earnings increased for every ethnic group over the year to June 2010. The strongest growth was for the Asian ethnic group (up 4.2% to $18.75) followed by Europeans (up 3.3% to $20.65). Growth was the weakest for Māori, up only 1.6% to $17.78, while median hourly earnings were up 2.9% to $16.98 for Pacific peoples.
Growth in median hourly earnings varied by industry, with the highest growth seen for rental, hiring & real estate services (up 9.4% to $20.98) followed by education & training (up 8.1% to $23.78) and wholesale trade (up 6.7% to $22.00).
…and female hourly earnings growth stronger than for males
Median hourly earnings increased by 4.3% to $19.00 for females, above the 3.5% rise to $21.25 recorded for males. This has resulted in an improvement in the gender pay gap. The ratio of female median hourly earnings to male earnings rose to 89.4% in the June 2010 quarter, up from 88.7% in the June 2009 quarter. This was the smallest percentage difference in earnings by gender since the survey began in 1997 (see Figure 2).
Fig 2: Gender pay gap
