Andrew Dickens: Pay back - we're middle class and we're not happy

COMMENT:

So the nurses have settled and the warnings have already been posted. The teachers are next, and then the cops and as we work our way through the public sector righting so-called wrongs, then the private sector will be forced to put their hands out.

It's right to have warnings because it will happen but once again it gets hard to complain that we are a low-wage economy and then complain that wages are going up.

We are here because of decisions made decades ago. Many argue the start of the wage rot was Ruth Richardson's Mother of All Budgets in 1991. She ripped the guts out of public sector pay then and it had flow-on effects to private pay. And a quarter of a century later we still haven't really recovered.

That's not an opinion, it's a fact

Simon Wilson wrote a piece four days ago that made some good points about wages.

He argued that we used to have a social contract which says if you work you will do okay. If you can't work you will be looked after – and we pay taxes for that.

If you do work, you might not get rich but you will not have to live in poverty. You will be able to base your sense of who you are on self-respect. And he says that social contract has been badly damaged, which is why we have Working for Families.

In other words, our wages are so low that workers need a benefit. You can argue it's communism by stealth but I don't think that's ever been its intent. It's simply that many people can't live on what they're paid.

So the public sector is taking a lead. The Defence Force this week have announced their civilian staff will all get a living wage by 2019. Some in the private sector are doing the same, like Bunnings. Then we had the $5 billion package announced last December for beneficiaries and a boost for Working With Families.

Now here's a thing about these moves. Data from Statistics NZ shows that minimum wage rises have helped the bottom 10 per cent of wage and salary earners.

But the figures also show that for the next 50 per cent wages have risen at only half the rate of those in the top 10 per cent. They have, in real terms, stagnated.

Council of Trade Unions (CTU) economist Bill Rosenberg calls it a "hollowing out of the wage scale". Inequality is growing and the people taking the biggest hit are those in the middle and the lower middle. Mostly, that includes self-employed people.

And no one is talking about it. The middle class are paying most the tax while bearing a growing financial stress.

So many of our conversations on wages and money and the economy centre on poverty and tax cuts. In other words the very poor and the quite rich. But the middle class are ignored. It's time to be a squeaky wheel and get some oil.

Say it proud. We're middle-aged, we're middle class ... and we're not happy.

* Andrew Dickens Afternoons on Newstalk ZB, midday to 4pm.