We all know costs go up, including those involving people. Yes, wages increase over time, however if you are lucky enough to work in the public sector, wages are increasing faster than in the real productive sector of the economy.
If the increase in the labour cost of public sector incomes is not enough. Government employees, have always (from available data) had higher salaries than their private sector counterparts. However this ‘government wage premium’ has been increasing too, at an obscene (and unsustainable) rate, effectively doubling from 20% to 40% in a decade.
This trend can also been observed in the following chart of average hourly earnings. It is also worthy to note that although New Zealand
But wait, what about those employees the government had to let go, and the ones currently threatened with redundancy, surely there are some savings there. Well if you take a look at the growth in government jobs over the last 10 years, you’ll notice that during this current recession, the government has employed more, not less workers. In the heat of the GFC, the government shed a little excess baggage, however since then nearly all of those jobs have been replaced with new jobs.
Notice here that the growth in government employees is constant and pervasive, totally disconnected and uninfluenced by any economic forces.
If New Zealanders are serious about fixing the economy and improving their quality of life, one obvious factor that needs to be addressed is the size of government…
More to come...
themarketanarchist
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