The Implications of a Recession for the Māori Economy

Māori Income24

Summary: Median weekly incomes from all sources of income for employed Māori increased by $111 or 19.8% for between June 2003 and June 2007. However, wage growth for Māori has trailed the economy-wide average reflecting the continuing relatively high share of Māori in low-skilled, lesser paid occupations.

Background

  1. Wage growth for Māori was weak in the year to June 2007, increasing by 1.6% which was well below the economy-wide growth in wages (6.8%). However, it should be noted that year on year changes in average hourly earnings tend to be volatile when broken down by ethnicity. In addition, the high proportion of new entrants to the labour market in the past year (with Māori employment growing by 8.7%) may also have been a factor in limiting wage growth in the short-term.25
  2. Looking over a longer five–year period, Māori average hourly earnings have still lagged behind the economy-wide average but by a much smaller margin. Māori wages rose by an average of 4.2% per annum between June 2002 and June 2007, from $14.33 to $17.58. Over the same period, economy-wide average hourly earnings grew by 5.1% on average per annum from $16.71 to $21.41. Lower wage growth among Māori partly reflects the continuing relatively high share of Māori in low-skilled, lesser paid occupations.26
  3. Median weekly incomes from all sources of income for employed Māori increased by $111 or 19.8% for between June 2003 and June 2007. The following occupational categories had the highest increases in median weekly incomes:
    • service/sales, by $114 (31.6%);
    • professionals, by $178 (24.4%);
    • elementary occupations, by $108 (23.9%);
    • agriculture/fisheries, by $115 (23.7%); and
    • technicians and associate professionals $122 (21.2%).27

 

24 Māori in the Labour Market, Department of Labour, September 2007
25 Ibid.
26 Ibid.
27 Ibid.

Risks

  1. Māori employment and other economic activity is concentrated in sectors which are particularly exposed to international developments. Overall the Māori working population is also younger and less qualified than other groups, increasing the risks of job losses and reducing wage bargaining power. Māori would also potentially be affected both as consumers and as employees if there were reductions in public spending in specific sectors with a strong Māori presence, for example in the provision of health services.
  2. This has consequent risks for Māori incomes and living standards, including housing. Basic costs such as food and power increased in the December quarter Consumer Price Index released 20 January 2009. On-going pressure on rentals will make it even more difficult for low income Māori to achieve good quality housing. Māori are already under-represented in home ownership figures and over-represented in rental accommodation figures. The recession is likely to accentuate these trends and consolidate the inter-generational effects of low home ownership rates.

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