Question 9: How did people cope with the loss of real wages in the 1980s and 90s?

29 Jun

Households made up for the loss in real wages by working more hours (principally by more women and young people) and going into debt.

A report by Simon Collins in the New Zealand Herald 25/11/06 found that average family income in 2001 in constant dollars was the same as in 1981 despite the fact that the proportion of women working went from 47% to 61% and the percentage of families working 50+ hours a week went from half to two thirds.

In New Zealand average household debt went from 60% of GDP 15 years ago to 150% today. This is the second most indebted in the OECD. Much of this went into housing with the banks fuelling a housing price bubble as prices doubled since 2000 – the same as they did in the UK and Australia. We were told not to worry. We were encouraged to use our houses as an ATM machine. Average household expenditure exceeded average income on average about 6% for those 15 years but increased to 15% in the mid 2000s. In the 3 decades before 1980 households saved on average about 10% of their income.

(Part of a series of extracts from “Exposing Right Wing Lies” by Mike Treen, Unite National Director)

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