by Metiria Turei
A major report was released today. Household Incomes in New Zealand: Trends in Indicators of Inequality and Hardship 1982-2009 uses data from the Household Economic Survey to update a wide range of poverty and inequality measures and analyses the findings thoroughly in a 150 page report.
Missed it? You could be forgiven for doing so since it was unceremoniously dumped on the MSD website without so much as a press release announcing its arrival.
I’ve been looking out for it for a few months now because, among other things, it updates various measures of income inequality, including the GINI co-efficient. This update uses data collected during 2008-9, so it’s the first time the report has included information about John Key’s term of office.
Taking the GINI co-efficient alone, the gap between rich and poor has widened slightly since 2007; taking other measures into account it has been at best static. From 2004-2007 the gap narrowed steadily (thanks in large part to Working for Families), but under National it has plateaued.
And this report doesn’t take into account any of the changes from this year’s Budget, which, as you’ll recall, was questioned for the impact it would have on the gap between rich and poor. Tax cuts for the rich and a GST increase hitting the poorest hardest? I think we can expect to see the gap getting wider in future updates.
This is bad news for all of us, since the narrower the gap, the better off we’d all be on almost every social and economic measure of wellbeing. We were making progress, but under John Key’s Government that progress has ground to a screaming halt.
Published in Economy, Work, & Welfare | Health & Wellbeing by Metiria Turei on Mon, August 16th, 2010
Tags: 15% GST, Budget 2010, gini coefficient, Household Incomes in New Zealand, Inequality in Aotearoa, tax cuts
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on the trolls and those who are unable to keep on topic
I can imagine it won’t be news to anyone who’s been running foodbanks, charity shops or other emergency support services in the past couple of years – most of us have been aware of greater need for families to cut costs on basics.
Bit annoyed that the reports are all only available in Word format – Microsoft has no place on my computer! – they could at least have put up PDF format’s, as they have done with other doc’s I’ve sourced from their website in the past.
OSS future still to be achieved, grumble, grump…
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There’s a lot to digest there, and a lot to get angry about.
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Hey, I realise you have a song to sing here, but when I read figures of speech like “plateaued” I’d sure hope that different economic contexts and their consequences are in play.. for honest relevant discussion..
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Raj Patel, the author of Stuffed and Starved http://rajpatel.org/ , also describes the commercialization of poverty. In lower socio-economic communities you will generally find larger numbers of fast food and liquor outlets, pokie machines are in high concentration and loan sharks thrive.
Poverty limits choice but choice is also limited through unregulated commercial greed.
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Inequality will increase hugely because of the current benefit system.
We have a system thst encourages those who can least afford children to have the most.
Recently there was a stat where nearly half the new babies born in Hawkes Bay came from the poorest 20% of families.
Rates for children in poverty will only skyrocket while we have a system that encourages those least able to cope financially (and in other ways) to have the most children.
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sprout – I think people who have lots of children when they can’t afford them create poverty.
We have the rediculous situation where people who work often can’t afford to have more than two children, but people who don’t work can afford many more than that.
The situation is exactly the opposite of what it should be.
Our system encourages people who can least afford children to have the most.
Do you really think encouraging MORE children to be born into poverty will improve the situation?
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Photonz1-Please explain how our system encourages poor people to have children? And what would be your solution?
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Sprout,
For a handy example; my unemployed friend. She is unemployed, has been for years. Flitters between boyfriends, also unemployed. Was an illicit prostitute a while back, wanted some extra cash. Several months back she decided to try and have a baby. She is now very large and still unemployed. She decided to have a baby because she was not doing anything and figured she might as well since the state will pay for it. Not fully relevant, but telling.
More relevant, a friend of mine whom always has a low paying job available to her was with some unemployed douche. Decided she was not too concerned if she got knocked up accidentally because the state would top her up. Got knocked up. Kept it. It is now about three.
Just to provide examples from my personal experience with it all.
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sprout,
Does that mean the poor have a lack of self control and are drawn to these outlets to spend what little money they have?
I’m relatively poor (being self employed and struggling a bit) but while there are plenty of those outlets you mention here in the depths of Manurewa, I dont visit them.
Why do poor people fritter their money away? For the price of a packet of smokes you can buy a trolley load of fruit and vegetables from the many, many fruit and vege shops here. The choise is there even for poor people.
I guess some have different priorities.
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Metiria Turei
You failed to get the message in on how decolonisation will equal the gap between rich and poor.
Have you given up on the message or can decolonisation not help in the issue?
It is important becasue here in South Auckland there is one group of people who dont seem to be able to get on as well as the rest of us.
Decolonisation might help them?
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If I was stuck in a rut like that with no conceivable way out I would drink or get drugged too so I could ignore my shitty life. Both rational choices in that context.
If you want to change things give them something real to aspire to.
Get in there and encourage youths into sports teams not gangs.
Teach them that education can be a path to a better future.
Show them how to form co-ops and local initiatives to make life better.
Offer to help at your local school with enterprise or trade training.
Take on kids for a day or to at your work from the school for work experience. You may find some keen future employees.
Stop trying to think about how much money they are or are not “worth” and help them become part of society.
Be part of the solution. Not the problem.
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sprout says “Please explain how our system encourages poor people to have children? And what would be your solution?”
Pretty obvious. The more children you have, the more money you get paid.
If you have five or six kids you can get more than a full time wage in ADDITION to your all your other benefits.
My wife sees these families all the time and very little of the extra money is spent on the children.
There needs to be a system so you can’t choose a benefit as a lifestyle. So if you’re on a benefit with two kids, don’t expect breed your way to a higher benefit.
If you want to have children, you have to be able to support them.
Currently we’re breeding our way to higher levels of children in poverty.
And the inequality that is often blamed on the rich, has a lot to do with stupid decisions by the poor.
Paying higher benefits to those who can’t afford to support children will make the problem worse – not better.
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Most poor families I know are fully employed but struggling on low wages and I know of many sole parents who are actively upskilling themselves through study or are working. For many, financial support allowed them to bridge a gap between the need to provide ongoing childcare to being self sufficient financially.
While there will always be those who are trapped in a cycle of dependency the percentage is never as huge as it is painted and it is telling to note that in times of economic prosperity the levels of welfare dependency drops considerably.
Photonz1- I would have thought that the solution to stupidity, that you suggest is a core reason for poverty, would be education – however if “stupid” people do have children and you cut support, what happens to the children?
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sprout,
Perhaps this might be of interest and explains photonz position.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10664247
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sprout says “As a teacher who has taught in low decile schools, I haven’t found much evidence of people using children as a source of income.”
My wife, and about a dozen colleagues, work full time just on the health of the children of these disfunctional families, and that’s just on one small city.
The houses they visit typically have a number of young children who are dirty and sick, often 2-4 adults on benefits, filthy house, lots of animals, lots of booze, NO food.
With a typical household income of $1000-$2000 dollars per week courtesy of taxpayers, they are living in abject poverty.
Once you are on the DPB, our system rewards you greatly for breeding as many kids as possible.
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“If you have five or six kids you can get more than a full time wage in ADDITION to your all your other benefits.”
that’s not actually true Photonz, but thanks. You might not have noticed but having five or six kids costs considerably more even if you are providing the bare minimum for them (which in most cases is all a benefit will cover).
Aside from Sapient’s two “friends” it seems there is no real evidence of people breeding for money except in the dreamworlds of righty minds. You’d really have to be crazy to think that parenting is easy money.
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“With a typical household income of $1000-$2000 dollars per week courtesy of taxpayers, they are living in abject poverty. ”
How many people are in this household and what benefit are the people on? Looking at WINZ’s site you’d have to be talking about at least two families with 3+ kids?
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“Once you are on the DPB, our system rewards you greatly for breeding as many kids as possible.”
really? how much extra do you get per kid? is it enough to cover the costs of feeding and clothing them? There is no evidence that this is happening to any great degree.
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Nommopilot,
Indeed, but a large portion of the issue here is that there is not that much parenting being done. Not-parenting is easy.
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nomopilot asks ” really? how much extra do you get per kid? ”
Five or Six kids, accom supplement and a dpb will get you $900-$1000 per week.
“is it enough to cover the costs of feeding and clothing them?”
Yes – plenty. But there’s the problem. The money is not spent on the kids.
“There is no evidence that this is happening to any great degree.”
Tell that to the teams of overloaded public health nurses all over the country who work full time every day trying to give these kids some of the care that their parent(s) neglect to give them.
I think they would totally disagree with you.
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[Frog: nznative, there was nothing in your post that wasn't an ad hominem attack. Please don't bother if that's all you have to say.]
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Phutunz’s maths re a family with 5-6 children is intersting. let’s assume DPB-Sole Parent. Main benfit is $278. If in Aucklandf, the place with highest maximum Accommodation Supplement of 225 the parent would be paying a landlord $420. Then we have FTC, which goes to parent9s) rgardless of employment status. If five of the six are under 13, thats $59.98 each, plus either 86.29 or 99.96 for the oldest child. This is less than $400. So, yes, just on $900 – not 1000 – for this parent of six, paying just under half to the landlord.
Phutunz has already identified the two or three hundred families where the kids have died from starvtaion or where in fact the landlord’s rent is myth thus receipt of the $225 is not used to pay the rent of 420…
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