Story: Income and wealth distribution

Page 2. Market and total income

All images & media in this story

Market income

All the incomes to factors of production add up to market income. This includes wages, salaries, self-employed income and returns from investments.

Total income

Total income includes, in addition to market income, the money people receive from the state in the form of social security benefits and retirement pensions. Data for total income before tax has been collected in New Zealand since 1981.

Market and total income in 1981

Looking just at market income, the 1981 census showed that 22% of adults (aged 15 and over) reported no income, and 47% reported less than $5,000 a year ($18,900 in 2008 dollars). At the time the average wage was about $11,000 a year (but many people were not in the labour force).

In terms of total income, the proportion without any income was 7% (or a third of those without any market income). These were mainly school students and mothers at home. However 42% still reported income of less than $5,000 a year.

Individuals on high incomes also got some of these social-security benefits, because in 1981 high-income recipients over 60 were entitled to national superannuation.

Changes since 1981

Entitlements, benefit levels and workforce practices have changed since 1981. But in 2009, social security continued to give people with zero market income a modest total income, and also affected some with high incomes.

The pattern is modified if market and total income includes the impact of income tax.

How to cite this page:

Brian Easton, 'Income and wealth distribution - Market and total income', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/income-and-wealth-distribution/page-2 (accessed 19 November 2017)

Story by Brian Easton, published 11 Mar 2010