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The Cost of Living

The most basic current flaw in the New Zealand economy lies with our low wage levels.

Photo by Bermix Studio / Unsplash

I returned to New Zealand a week back after seven weeks abroad, primarily in France then Glasgow. As always, my first action was to read all the circa 100 newspapers awaiting me.

A constant gripe was the cost of living and trust me, it’s well justified, when compared with some other countries. Here’s some examples.

When in my Wellington office I don a lightweight, thin V-neck jersey for, despite our offices being warm, even in the summer months I never feel comfortable in simply a shirt and tie.

Well, the other day I found myself jersey-less, having the previous day gone home wearing my office jersey and forgotten to bring it back. So I bowled across the road to Farmers large Lambton Quay store.

Farmers is a middle-of-the-road chain store with a reputation for competitive pricing. There I found exactly what I was seeking for the bogus price of $99.99, or $100 in reality.

Farmers is not the sort of store where I would normally buy clothing and until a month back I’d have thought $100 a terrific bargain.

But only a fortnight earlier I’d dropped into a large Glaswegian department store to seek black slip-on shoes. That’s because with age I’m shrinking and have had to give away my existing footwear, now too big for me.

I duly bought four pairs at £20 each, that’s a little over NZ$40.

In Auckland for the night a few months back I found I’d inadvertently brought with me black shoes now uncomfortably large so popped into a Queen Street shoe store and paid $250 for exactly the same shoes which cost NZ $40 in Scotland.

So too in the Glasgow store with the smart V-neck jerseys, for in my shoe quest I walked past a display of these, exactly as I paid $100 for in Farmers. They were £5 each, that’s about NZ$10.50 and I bought four different shades.

More mysterious is recently buying 10 bottles of Cloudy Bay sauvignon blanc from the mini-market near our Glaswegian home for £6 a bottle, or NZ circa $12.50. In New Zealand they set you back between $40 and $50 a bottle.

Living as I do in different countries the one NZ cost advantage lies with food prices. It’s a significant differential, perhaps, around 30 per cent cheaper here, than say Britain and France.

All of this comes back to a base cost of living factor, namely wage differentials.

I could be wrong but my impression is that menial light-skilled workers in Britain are paid similarly to New Zealand.

But our skilled and management-level folk are paid significantly less than abroad.

Each year we lose 60,000 or so people moving to Australia. Most comment on the better material lifestyle the Aussies offer with higher incomes and lower house prices, whether buying or renting. If I was forced to live in only one country, I’d join them but having always been a having your cake and eating it too practitioner I can enjoy the different benefits of homes in different countries.

The irony of our wage differentials with Britain is that whereas Kiwis are by and large hard workers, one could never say that about Brits whose stand-out work characteristic is indolence.

We try and avoid employing them, reflected by my Glaswegian office being headed by a Canadian former Cambridge university economics professor. He’s backed up by two Kiwi property managers with the New Zealand work ethic. The two Scots are an accountant, she a middle-aged woman and a still active sports champion so is not workshy, plus a receptionist.

But we also employ six other men in Glasgow whose job is literally to do nothing.

It would be hard to find anyone in New Zealand to fill these roles for that reason but not so in Britain, where being paid to do nothing is coveted.

They are called concierges and sit in an open office in the ground floor foyer of each of our six office buildings, smiling at the tenants as they come and go. Just that, nothing else.

But remove them and the office tenants complain. It’s madness and greatly annoys me but reflects the fact that so much of Britain’s wealth is a legacy of its long and rich history of market economy, industrialisation pioneering, colonialism etc, etc.

With one exception to varying degrees that’s true of every nation. For example, a child born today in New Zealand inherits a massive going concern of roads, housing, hospitals, schools etc, etc, paid for by previous generations.

The standout exception is Haiti. A United Nations official I ran across there once claimed Haiti was the only country on earth that has measurably declined since it became independent following the 1804 slave revolt.

In summary, the most basic current flaw in the New Zealand economy lies with our low wage levels, low that is compared with similar nations. And until that’s addressed, our get up and go individuals will continue to leave.

 This article was originally published by No Punches Pulled.

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