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‘Low-wage economy’: What you need to earn to be an above-average earner in NZ

‘Low-wage economy’: What you need to earn to be an above-average earner in NZ

New Zealand workers need to earn more than $52,100 before tax each year to be considered an above-average earner.

In a relatively low-wage earning society, full-time workers earning $1000 a week can think of themselves as lucky, as about 40 per cent of our full-time workers are on the minimum wage ($34,320 annually or $660 per week) and earning significantly less.

Figures show the median annual income for a New Zealand man working full-time is $56,700 and for a woman that amount is almost $10,000 less, at $47,500, according to the latest available income statistics from Stats NZ.

Compared to Australia, New Zealand’s weekly earnings are considerably less.

Australians need to earn more than A$82,435 (NZ$87,168) a year before tax, or A$1,585 each week, to be considered an above-average earner.

Dr Ganesh Nana, chief economist and executive director of Business and Economic Research, said New Zealand was a low-wage economy.

Factors such as a much smaller population size and a lower minimum wage rate was part of the reason New Zealanders earned significantly less than Australians.

“We’ve got a business model based on low wages. We’ve had settings in place over the last two to three decades that have minimised wages, and focused on wages as a cost rather than an investment in labour,” Nana said.

“We’ve been trying to put a lid on wage costs which supposedly translate into improved profitability and productivity but that model hasn’t worked.”