The release on Wednesday of a Treasury department discussion paper on how to tax those who work in the share economy of Uber and Aribnb and the like puts a focus on how those who often earn below award rates gain little benefit from the flexibility of being treated as individual contractors, compared to the companies that reap profits from such earnings. The discussion comes as new figures from the bureau of statistics highlight how little the earnings of middle income Australia has risen over the past two years – the same group who will benefit least from the government income tax cuts.

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The latest release of the biennial survey of employee earnings and hours by the bureau of statistics gives us greater detail of how much people earn and how large (or small) their rise in earning has been over the past two years.

Whenever politicians talk about income tax we know that they like to confuse average (mean) and median to suit their purposes. The data from the ABS released on Tuesday found that the average weekly earnings of all employees in May 2018 was $1,288.70 – translating to $67,012 a year. This was a 4.7% increase from May 2016 when the average earnings for all workers was $63,996 a year:

That increase of 4.7% is just above the 4.1% growth of inflation from June 2016 to June 2018. And the good news is that the median annual earnings (ie the amount which at least 50% of all employees earn) was $57,720, which was a 5.1% increase from 2016.

This would suggest that while average earnings are struggling to increase in line with inflation, the lower end of the income scale has been doing OK.

And while this is true, there is more to the story, which has something in common with concerns of Uber drivers and others working to get by in the gig economy.

There is no real issue with Uber drivers having to pay tax – all workers should do that – but the treatment of them as independent contractors despite some working effectively a full-time level of hours highlights the lack of security such workers have.

All flexibility, no security is great for companies, not so great for workers – despite what conservative thinktanks might want you to believe.

The treasury’s discussion paper outlined “a day in the life of a ‘gigger’” from the Black Economy Taskforce as “spend the morning dog sitting through ‘mad paws’ app. Spend afternoon putting together furniture together from Airtasker apps. Deliver food in the evening with 2 or 3 food delivery apps.(Uber eats, Menulog, Deliveroo) Drive for Uber on Friday night when demand is high.”

The reality, as analysis by the Centre for Future Work at the Australia Institute found, is that “Australians earn $14.62 per hour on average driving for the ridesharing company’s most popular and low-cost service, UberX”. This is well below the award rate for the sector, which is around $30 an hour when including penalties.

It’s part of the reason why the ACTU is making a big push to have casuals and workers in the gig economy have the same conditions as other employees, especially given it also argues that casual workers are often underpaid.

Workers in the gig economy are not treated as causal workers, but the differentiation between casuals and permanent employees has a big impact on how we look at the growth in employee earnings.

Over the past two years the big increase in earnings has not actually been for permanent workers, but for casuals. While the 4.7% growth covers all workers, for casuals the average increase is 11% while permanent or fixed term employees saw their earnings rise on average by just 3.5%:

The growth in earnings for the median permanent employee was just 4.2% – a mere 0.1%pt above inflation, and for those in the 60th percentile it was just 3.4%.

This group of employees is also the same group who the government’s own figures show will benefit least from the income tax cuts that see the end of the 37% marginal tax rate from $87,000 to $200,000:

Now while the huge increases in average earnings for casual workers might seem a boon, the reality is that such workers earn comparatively very little.

The average amount earned by casual workers in 2018 was just $33,758, and the median amount was barely over the tax-free threshold at $24,960:

Even splitting employees into these groups does little to help the government’s claim that removing the marginal income tax rate for those earning over $90,000 helps average workers.

The median earnings of all workers (both full-time and part-time) rises from $57,720 to $65,998 when only counting permanent employees – meaning such employees would need to see their incomes rise by more than a third before they would get to $90,000 .

It certainly is good that casuals are getting pay rises given they invariably are those earning low amounts, but those big pay rises do serve to inflate the overall employee earnings growth, which for workers on middle income was less from 2016 to 2018 than it had been from 2014 to 2016:

But while looking at types of employment gives us more insight than the usual average earnings figures, we always need to be mindful that talking of total employees – whether full-time, permanent or casual – means hiding the level of earnings of women.

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While in 2018 the median annual earnings of men was $68,848, for women it was just $48,776:

The past two years has also seen the average earnings of all women in permanent employment rise by just 3.0% – well below inflation:

The data suggests that workers have had to trade off wage growth and security over the past two years. It highlights that not all workers have seen low wages growth, but those with the most secure work have one average barely had real wages increase.

It also shows that those in the middle incomes ranges from $57,000 to $75,000 have seen a drop in their wages growth over the past two years – the group that was most ignored in the government’s income tax cut policy.

• Greg Jericho is a Guardian Australia columnist