Friday, June 17, 2011
Median Wage Drops While Company Profits Rise
JKT links to Statistics New Zealand and reveals the 1.7 drop in the median weekly income (from all sources). The median income is now only $529 per week, $9 a week over the minimum wage (if looking at a 40 hr week). For a year's income it works out at $27,508, so almost half of all New Zealanders live on less than this. No the wonder the demand for food parcels is dramatically increasing and child poverty involves over 20% of our children.
Bill English and the National Government appear to have no intention of addressing the growing inequities and Bill has even stated that low wages will give us a competitive edge. National's enthusiasm for supporting corporates and the already wealthy as a way to stimulate the economy appears to reflect the failed "trickle down" theory of the past. This approach is fully exposed in the latest Time magazine's headlining article "The five Myths about the US economy". Myth number five is "The private sector will make it better" and it is revealed that American firms generated $1.68 trillion in profit over the last quarter of 2010 alone, with none of that profit being translated into jobs or increased wages.
I thought I would do a quick google to check how our New Zealand companies are doing and this is what I found:
Westpac: Profits up 68% ($210 million)
Infratil: up 26% ($120 million)
Air New Zealand; up 33% for half year ($115 million)
ANZ: up 19% for half year ($605 million)
McDonalds: up 5% for half year ($35 million)
Freightways: up 9% for half year ($15.8 million)
F&P: up 20% ($33.5 million)
Delgats: up 9% ($17.1 million)
Fonterra: up 21% ($293 million from a revenue of $9.4 billion)
Fairfax Media: up 15.8% for half year ($172.3 million)
(an average of 22.8% increase in profits across these randomly chosen companies)
These companies represent a good cross-section of our economy; banking, transport, farming, manufacturing, investment and fast food. The increase in profits range from 5 to 68% yet wage increases have been forcibly kept down under 4% and many on the lowest incomes struggle to get more than 1% through their wage negotiations.
I am ready to admit that I am not an economist but it certainly appears that under this government our successful businesses are laughing all the way to their banks and the banks are laughing all the way back to Australia.