Despite the fact that many of you disagree with me, you have to admit I do make an effort to uncover relevant and interesting data. For example, much of what the Auditor General reported this week about NB reliance on federal transfers and on income tax growth – I covered on this blog weeks/months ago.
In fact, I was the only source when the budget came out that specifically pointed out that the NB balanced budget strategy by 2014 was based on a completlely unrealistic assumption about a) cost control and b) economic growth.
I have also blogged about the increase in income taxes paid and that it has been outpacing wage growth. While an exact explanation for this would require a deep analysis, I posited then and now that more people are being pushed into higher tax brackets, hence the relatively higher tax rates.
For example, look at the following chart, selected health care sectors have had average weekly wages rise by double and triple the overall average (Industrial Aggregate). Please note this is average weekly wage growth so if more people are moving from part time to full time it would push up the averages. The point is that people in these categories are being elevated into higher tax brackets. Think about business support services and administrative support services. The overall wage levels have been pushed up significantly by the arrival of all the call centres in New Brunswick. The weekly wage is still not that high (average for biz support services of $542/week but it has almost doubled in a decade). To relate back to the income tax discussion, in 1999 workers in this sector earned $282/week on average – or barely enough to pay any income tax at all. By 2008, they were earning over $28,000 per year – still not a high salary by any measure but well into the income tax paying range. We are talking about thousands of workers in that group alone.
Just food for thought.
Average Weekly Earnings Wage Growth (1999-2008)
Ambulatory health care services  60%
Offices of physicians  97%
Business support services  92%
Administrative and support, waste management and remediation services  43%
Public administration  41%
Industrial aggregate excluding unclassified businesses [11-91N](5,6) 30%
Manufacturing [31-33] 21%
Retail trade [44-45] 20%
Credit intermediation and related activities  10%
Computer systems design and related services  4%
Source: Table 281-0027 – Average weekly earnings (SEPH), unadjusted for seasonal variation, by type of employee for selected industries classified using the North American Industry Classification System (NAICS).