All about the money

[marsden_online]

Read a couple of things in the Herald today which got me twitchy.
~~~
One was a reference to the high dollar 'castrating' the export sector. The sentiment I read a lot is: "we need to get out dollar down so that our exporters can make money again".

Well sorry, as a consumer I'd actually like it to keep moving in the other direction, thank you. Why aren't we saying "This could be great for our export and domestic businesses - an opportunity to take advantage of the rising dollar to import the technology and expertise to be more productive*." Why isn't it an incentive to do things better or get out, like it would be in any other market.

*But wouldn't it be great if the government and other factions would devote the same sort of resource to developing that technology and expertise here as they does to trying to manipulate the dollar and thus maintain low prices overseas for our products. And they say little free-market NZ has little in the way of agricultural protectionism.

And while they're busy keeping prices low for overseas consumers it means we're having to pay more for goods. Is that arse-backwards or what?

~~~
The other was this little gem from Kerre Woodham:

There was a time when I was in a low-wage job and not able to pay all my bills on time. Occasionally that was my fault but, really, when you're on $15 an hour, there's only so far you can make that money stretch.

WTF?! $15 a low wage job? Sure it's not high, but it's surely not something anyone I know would dismiss out of hand.

$600pw (40 hours) = $31,200 before tax = not to be sneezed at.

I've gone so far as to check the stats for the June quarter 2009 which puts the median hourly income at $19.47 ($20.53 if you're male, $18.22 if you're female). For 20-24 year olds (which is a lot of the people I associate with) it's $15.34

Bearing in mind the boosts to the minimum wage in recent years (and biased by the youth rate being something like $7.50 when I started my working life) I'd love to know -when- Kerre was earning $15 hour so that I could look up those stats.

So I have to concur that yes, technically $15/hour is a low wage. But practically? I didn't know what to do with my money when I was earning that much, as old LJ entries attest.

Comments

[niennahirilfea.livejournal.com]

*agree* The most I've ever earned an hour is $11.50, my first job was $9.50, and I was living with spending money in Wellington on $10.35 p/h (full-time) for 2 years back in '99-'00. Then again, I suppose things are more expensive now, but still, 30k a year would be exactly double what I'm getting currently.

[confusiontempst.livejournal.com]

The article makes it clear that $15 is low only when compared to formerly high wages, she's talking about taking a massive pay cut for some reason.

Say, you're paying your mortgage, and car payments, and all of a sudden you find yourself jobless. Even if you can earn a full 40 hour work week at min wage, the $600 might not cover all your outgoings.

This says more about committing to debts you can't long-term manage than anything else, particularly during a recession where people are getting pay cuts and job losses all over the place.

From the perspective of someone who spent the last 7 years living on ~10,000 a year, 600 a week is plenty. But that also assumes that you can find a full work week somewhere. If you're working service industry you may well only be able to get 2-3 shifts a week, and if you have ot pick up a second job then the tax rate is the full 33% penalty for not finding a job that pays enough/gives enough hours.

[marsden-online.livejournal.com]

>The article makes it clear that $15 is low only when compared to formerly high wages, she's talking about taking a massive pay cut for some reason.

No, I don't believe it does. In the second paragraph Kerre clearly establishes the context of unexpectedly tight finances for the rest of the article, but the first paragraph makes it equally clear that 'when [she was] on $15 an hour' she 'was in a low-wage job'.

She gives no context to the pay cut, so I'm not prepared to assume that it was during this or any other recession, or that whatever debts/cost of living she faced had been taken on unwisely.

With with equally little context to the amount of hours I've simply gone with a 40 hour week to scale up the rate to an annual income (BTW, 40 hours at current min wage is only $500 before tax), because actually the number of hours is irrelevant to the issue, which is a skewed perception of how much 'the little people' actually earn. (A problem more endemic to our governing class than our media commentators, admittedly).

I would love for $15/hour to be a genuinely low pay rate in New Zealand (preferably without cost of living increasing to the point where it's also genuinely 'how the hell does anyone live on that little money?!'

But I don't believe we're anywhere near that point.

[cthulhu-dream.livejournal.com]

Okay, $15 an hour isn't low for a person looking after themselves. If you have a family to look after though, it's really not much money. I think you have to look at context.

I get a PhD scholarship ($22,000 per year, not taxed), but it amounts to less than minimum wage. I've never run out of money to pay bills or food, but my parents have supplement my income from time to time, which means I don't have to cut out luxuries. Things feel comfortable, but I certainly can't save up for a house or anything else substantial.


As for the strong dollar thing, I think people are just being lazy. They want to keep exporting and make as much money as before. Well, sorry, but economic situations change! There is no point moaning and groaning about it. There are plenty of ways to adapt to the situation that can result in positive gains.

[marsden-online.livejournal.com]

I am looking at context, and Kerre provided nothing to indicate a context of family.

"There was a time I was in a low-wage job and not able to pay all my bills on time,..."

She considers that $15 per hour is sufficiently little as to be classed, almost dismissed, as a low-paying job. Period. I'm disagreeing.

I agree that $15/hour is not going to keep a family in an sort of luxury, which depending on how you're arguing can be either why or because 2 incomes have become the norm. But that's actually irrelevant.

BTW a quick visit to the calculator at ird.govt.nz indicates that the minimum wage is $21,420 after tax, for a 40 hour week. You're $580/year up (slightly more than the Independent earner tax credit of $520) :) .