Wages and inequality

Abstract

Wages and salaries are a vital part of the picture of income inequality in New Zealand because so many people depend on them as their principal or only source of income, although it is important to remember that the greatest extremes of inequality most frequently come from investment income (for very high incomes) and from social welfare benefits (for poverty). Wages and salaries are market incomes – that is, before taxes, tax credits like Working for Families, and other government assistance. ‘Market’ incomes include income from capital (real estate, investments, financial assets and other unearned income) as well as wages, but here we are looking only at wages and salaries (henceforth ‘wages’).