Josie Pagani: Wage inequality reflects broken economy

Photo / Richard Robinson

If a few are doing well and the rest of us aren't, then things are out of whack.For all the attention in the election campaign to blogging, burning, swearing and smearing, not much of it affects us directly.

Our real worries are our wages, the future our families will have, our schools and hospitals, our security, our homes and our community. Nearly all of these depend on the kind of economy we have.

National's "rockstar economy" is a concert that sold out long ago. Forty-six per cent of New Zealanders didn't even get a wage increase this year.

This is as good as it gets, and the good times are over. A panel of economists this week stated that the economy has not exactly recovered, it has been in remission. The boom from high dairy prices and the Christchurch rebuild is about to bust. Neither was created by the Government.

The National Government can't point to a single economic initiative of its own that has made a difference to growth. The cycle pathway?

So claiming to have fixed the economy is a risk if the recovery feels like a good story happening to someone else. Relatively speaking, most New Zealanders aren't feeling better off.

There's a myth that only those on benefits or minimum wages are low income. It's true that thousands of people are really struggling, but even people with good jobs make little compared to similarly skilled people in other developed countries.

People don't see this as simply a gap between rich and poor (no one likes to see themselves defined as poor, even if they are). It's that there are some very wealthy people -- and the rest of us, and we all live in the same economy, connected by the same financial systems. The rich aren't living in a different economy in a gated community.

If a few are doing well and the rest of us aren't, then things are out of whack. That's not just a gap, that's a broken economy.

The really smart economic managers are the ones who invest in the stuff that affects most of us; schools and skills, help to build up your KiwiSaver, a commitment to build houses and help to buy your own.

A pear-shaped economy - a small number doing okay at the top and the vast bulk left behind doesn't win elections.

Josie Pagani is a political commentator and former Labour Party candidate.

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