An example of why NZ will never catch Australia

Yesterday I saw a friend link to an advertisement for a full time graduate programming job on Student Job Search. The employer is seeking someone who is competent in C#, ASP.NET, HTML, CSS and Silverlight.

None of these skills in particular are very difficult or uncommon but what got me was the pay rate. $20/hour at 35 hours/week. On the surface that doesn’t look that bad and probably a lot better than the $12.75/hour most people are getting working in retail, but lets do some maths.

$20/hour * 35 hours/week * 48 working weeks/year = $33,600 NZD per annum.

Now lets convert that to AUD (using xe.com) we get just under $26,000 AUD per annum.

Now the minimum full time wage in Australia is $27,355 per annum (based on 38 hour week).

So a full time graduate job in a growth sector in New Zealand pays lower than the minimum full-time wage in Australia.

So this got me thinking, what is the minimum full-time wage in NZ, converted into Australian dollars?

The minimum is $24,480 NZD (based on 40 hour week), which converts to just under $19,000 AUD per annum.

To put it simply at the minimum wage level in Australia you earn 44% more for two hours less work per week.

Now of course none of this takes into account tax differences, superannuation, living cost differences etc. But it is still a remarkable gap.

Prime Minister John Key may talk about a goal of catching Australia but I don’t believe it is possible. Politics can’t fix the problem, only business paying their employees more can, and of course this idea flies straight in the face of capitalism.

In the meantime it is little wonder why so many young people are leaving when a graduate job is paying less than the equivalent minimum wage of the next door neighbour.