I've spent some time today reading the Ministry of Social Development's New Zealand Living Standards 2004 report. The results of the survey were compared to a version done in 2000, and the comparison was unfavourable, to say the least. You've probably already read the highlights in the paper, but I think they bear repeating, just so their full impact can be felt. Firstly, here's how the overview report [PDF] characterised the economic changes between the two surveys:
Between 2000 and 2004, New Zealand showed a pattern of broad-based growth. Real Gross Domestic product grew at an average 3.7% per year. Unemployment fell from 6.1% in June 2000 to 4.0% in June 2004, the lowest rate in 17 years... Overall, the number of income-tested beneficiaries fell by 44,000 (12%). The number of Unemployment Beneficiaries halved...Median incomes rose 6.6% over the period and income poverty [defined relative to 1998 median equivalent family income - I/S] fell from 22% to 19% of the population between June 2001 and June 2004...
Given all this good news, you would have expected New Zealanders' living standards to have improved, and for there to be fewer people living in poverty. However, the 2004 survey [PDF] found that the opposite had occurred. Over this period:
- the average living standard of all New Zealanders fell slightly;
- the proportion living in conditions categorised as "severe hardship" rose from 5% to 8%;
- the proportion of children in "severe hardship" rose from 7.9% to 14.1%;
- the proportion of Maori in "severe hardship" rose from 7.5% to 16.9%;
- the proportion of Pacific Peoples in "severe hardship" rose from 15.2% to 27.3%;
- the proportion of those on low incomes (in the bottom third of the income distribution) in "severe hardship" increased from 10.1% to 16.9%; and
- the proportion of those on income-tested benefits in "severe hardship" increased from 16.7% to 26.1%.
And all of this happened under a Labour government.
To head off the usual complaints about poverty statistics from the right, this is not a relative poverty measure. The Economic Living Standard Index (ELSI) used here asks people basic questions about whether they can afford food, clothing, medicine, or "social participation" - things like whether they have warm bedding or can heat their houses, whether they've put off buying food or medicine because they can't afford it, or whether they can afford to give their kids birthday presents or have their family round for a meal every so often. It is regarded as an extremely robust tool for the measurement of absolute deprivation. While there is some self-rating involved, this does not seem to have distorted the results in any way; neither was there any discernable effect from "consumerism" or changing expectations about access to consumption (though given the goods involved, this was unlikely). In short, this is a real decline in living standards, manifested as a real increase in the number of people who are cold, sick, and hungry.
The government has attempted to spin this by arguing that the survey data predates the introduction of the Working For Families package, and that this will have resulted in a measurable improvement. And they're almost certainly right about this to some extent - greater access to childcare and the accommodation supplement will make a difference. But the vast bulk of Working For Families is focused on the working poor and the middle classes, not those on benefits. Labour's "solution" to the hardship faced by beneficiaries is for them to get a job - something which, to their credit, they've made a lot more worthwhile by improving the minimum wage and enabling unions to fight for pay increases. But while this works for those on the unemployment benefit (at least if you ignore the fact that we have a monetary policy which commits us to a certain level of unemployment), it does nothing to help those on the sickness and invalids benefits, who by definition cannot work. These people - and thanks to the stresses of modern society, there are an increasing number of them - are being effectively left behind, and suffering a decline in living standards as a result.
(The same could be said of beneficiaries more generally. While Labour has shared the fruits of growth far more broadly than National did in the 90's, those on benefits have been effectively excluded, and there has been a significant erosion in benefit levels relative to minimum-wage jobs. And the difference is even worse when you consider the enormous increase in housing costs.)
The only conclusion that can be drawn from this is that Labour has failed the poor. While it has delivered a lot to a great many people, it has failed in its most basic duty to work to improve the lot of those at the bottom of our society. I have no doubt that National would have been worse (hell, National wouldn't even be collecting these statistics), but this is still an indictment of Labour's term in office, and one it will take a long time to live down.
Well, this is a good, quite comprehensive report but I hardly think it warrants your headline. Without this analysis how can policy be developed, analysed and implemented? It should also be noted that it effectively covers the Labour led government's first term (given the time needed for policy to flow through).
ReplyDeleteThe report also notes that 19% of family units were in "income poverty" in 2004 as opposed to 22% in 2000. And much more importantly in my book, the number of dependent children in family units in poverty feel from 27% to 21%...this result is stunning and if it has been maintained has some huge long term benefits for the future.
The downside has obviously been the further impoverishment of people on benefits - in particular those on DPB. It is still unacceptably politically convenient to bash the beneficiaries, solo parents and all those who tend not to have any kind of political representation. It would seem that the main reason for the increase in "severe poverty" is the fact that this (admittedly diminishing) group of people are getting worse off. And of course this affects the poorest elements of society whome we already know are disproportionately represented by Maori and PIs.
The fact that it is clearly more attractive to have a job income rather a beneficiary income should please many and debunk all those myths about an easy life on the dole but should be no cause for celebration that those on beneficiaries are getting worse off. I would hope that more recent policies such as PHOs and WFF would help but more is certainly required.
One of the things that we used to look at when I worked in the UK was the disparity between the richest and poorest people in an area. Especially enlightening in placed like Birmingham and Manchester which had experienced an urban renaissance that saw the wealthy move back to the inner cities and the poor became even less visible. This report seems to point to that inequality growing here which is a concern.
ReplyDeleteAt risk of enraging the Right, who will insist that everyone should be working for whatever they can get, would increasing benefit levels make Labour more or less electable? Difficult to say under MMP, but if it led to a National win (such is the level of my faith in NZers) wouldn't the situation be worse?
Noddy: firstly, "income poverty" - which will clearly decrease with time given the way it is defined - is clearly not the same as hardship. And given what is being measured here - lack of food, lack of clothing, lack of heating, lack of medicine - I think the results of this survey bear far more attention.
ReplyDeleteSecondly, your claim about an improvement in the living standards of children is simply false; in fact, the opposite has occurred. Check out figure 3.2 in the full report; the proportion of defendent children under 18 in significnat hardship or worse has risen from 18% to 26%, and the proportion in severe hardship from 8% to 14%. Stunning indeed, just not in the way you think it is.
I think it is a good thing that this data is being gathered; in order to develop policy, we need to know what the facts on the ground are. But attention must now turn to what the government is going to do about fixing this. It is not enough simply to say "WFF and PHOs will have solved the problem", because they still exclude an unacceptable number of the very worst off. Instead, they are going to have to pony up some cash. As Russell said this morning,
Stop wittering on about throwing-money-at-the-problem and throw some money at the problem already. Not enough to live on is not enough to live on.
PabloR: I think that given the results of this report, and the sort of harship it measures, an increase in benefit levels is exactly what the average New Zealander will demand.
ReplyDeleteThis is not, as Dave Crampton suggests over on Big News, about budgetting, or beneficiaries spending all their money on booze and cigarettes; this is about not having enough to live on. We've known that was the case with benefits for a very long time (hell, Treasury set them that way, back in 1991, remember?), and its long past time we fixed it.
Unfortunately, it seems the government would rather hand out a tax cut to rich tax-dodgers and foreign shareholders, rather than helping those in need.
I do despair that those of us who are down with redistribution of the wealth are becoming fewer and fewer in number.
ReplyDeleteI have made the point before that eliminating poverty extremes is sometimes seen as a justification for getting rid of the programmes & mechanisms that reduced poverty in the first place. Hopefully this report shows that the job isn't yet done.
I/S, I wasn't claiming anything, simply quoting from page 13 of the same report. You fail to point out that some of the "hardship" measures could quite easily be disputed. For example, given that schools do put emphasis (quite rightly) on bi and multi-cultural education - is a lack of access to dpecific cultural lessons really a severe hardship? The family I grew up in would not be considered poor but I and my less fortunate younger brothers frequently wore ill fitting hand me downs (I will admit this was a really problem for no. 3 when flared trowsers went out of fashion in such a rapid and dramatic way). As an adult I do not feel the scars of a lack of Sky TV and Mike's Nikes as much as I would have done if I had scars from malnutrition, no vaccinations or no access to education.
ReplyDeleteAccess to health, bad housing, lack of food on the other hand are critical measurements. As I said elsewhere, the weighting given to each "basic" would be interesting.
Do you know if they are all weighted equally?
I look at the example given of an EFU in "severe hardship" and not that feeding and clothing are not an issue. As for the significant hardship example, was the student thing supposed to be a parody? If not, can I claim restitution from the government for my years of hardship and suffering?
So, anyway, denying the results that I quoted does seem rather narrow minded. I certainly do not deny the results in this report and support roughly 99% of what you say on the topic of how our society treats beneficiaries. I repeat, having healthy well nourished children is key and if that were the only measure of poverty I bet we would capture most poverty issues (ok maybe not the over 65s). That is why I do think WFF and PHOs are critical to our country's future. So is affordable housing, by the way, as rampant price increases seems to have had a significant impact. I wonder if you feel the government has failed there considering the move away from market rents for state housing?
Sorry to be long winded again it just seems to me as though your analysis is a bit unbalanced.
Anyway, nice to be commenting on a site where my views may be considered "reactionary" :-)
It would be interesting to be able to tell, of the increased percentage of children in extreme hardship... how many are children in families that have fallen down the scale (definitely "Labour failing"), and how many are simply born into families already at that level (not really Labour's fault, unless you take the view that people really are pumping out kids to increase their benefits?).
ReplyDeleteI also think it would be good (and as DPF suggested), from a policy developement perspective , if you can track how many families are temporarily in extreme hardship, (ie, in this context, either the 2001 or 2004 report, but not both), or how many are permanently down there...
Also, I've read the summary report, but I cant find any reference to the complete list of questions... anyone know where they are... I'd be interested to score myself and see if my score tallies with my own perception... in order to evaluate how "fair" a measure it really is?
Fletch.
Noddy: that quote is clearly talking about the Household Economic Survey, and its "income poverty" threshold (which leaves rather a lot to be desired) - not the level of actual hardship measured here. As for the hardship measures, read the report; chapter 2 gives details on ELSI and what it means. Goods are classified as basics or luxury/comfort items, and they are weighted differently. "Severe hardship" means a household is lacking on average 39% of basics, "significant hardship" means that it is lacking 22%. And these are things like warm bedding, heating, doctors visits, glasses, food (see the list on p. 24). And contrary to your assertion, this is clear from the "living standards vignettes" on pages 30 - 32.
ReplyDeleteThis is serious hardship, and it is affecting more people than it used to. And I'm kindof appalled that a Labour cheerleader such as yourself would be seeking to spin and minimise it.
Fletch: its difficult to tell, but some conclusions could be drawn from the "age of youngest child" data on p109. Unfortunately, only the data for the increase in severe hardship of families whose youngest child is aged 5-9 years is statistically significant - but that suggests that its not just about children being born into poverty (Labour had been in power for 4 years when the survey was done).
ReplyDeleteAs for self-rating, I haven't seriously looked at it yet (too much to dig through), but the (seriously long) questionairres are available here (note that you need to look at the report to find out what the various goods are). A quicker method though is to use the information on good on p24-28, and the hardship chart on p29 to roughly work out where you stand. Count up the number of items in each category you don't have because of cost and you can get a very rough idea.
"I'm kindof appalled that a Labour cheerleader such as yourself would be seeking to spin and minimise it."
ReplyDeleteWell, ouch. I thought I had made me views on beneficiary treatment pretty clear. I am certainly not a card carrying Labour supporter, purely an interested observer.
What I am questioning is your now greater hysterical response to this report an my comments.
I agree with you that "are things like warm bedding, heating, doctors visits, glasses, food" are basic essentials. But the list of basic esentials for children in this report *also* includes the following - a lack of cultural lessons, limited space to play (hello Europe), did not have friends to stay or over for a meal, foregoing birthday parties.
Why did you ommit to mention these factors? Because of your spin?
Now if a family "fails" the six factors I mentioned then the are already well over the "39%" that places them in "severe hardship". The example given in the report of a family in "severe hardship" does tend to back my claim that it is not the basics you quote that are lacking but the ones you chose not to quote.
I don't think it s spin to point this out and I am truely sorry if it offends you.
Noddy - we're talking about indicators of hardship here. I hope you can accept that being unable to afford to have your child's friends over for a meal indicates hardship.
ReplyDeleteNot having a child's friend over for a meal is not necessarily hardship, but being unable to afford to have another kid over for a meal strongly suggests someone is in poverty. Likewise birthday party - getting ten of your childs friends over for fish and chips, lollies and a couple of videos is not horrendously expensive. Being financially unable, once a year, to shell out $80 on this says "hey, this family is in need."
There are many reasons people might not have their kids friends over, or not throw birthday parties evey year for each of their kids, or not give their children cultural lessons, but the only one that counts for this survey is inabilty through failure of finances (and that inability signifies hardships, and lots of it, signifies substantial hardship)
Graeme - I do take your point. But I think you can also concede that the list of "basics" in the report is pretty broad if you are going to describe people as being in "severe hardship" which is a *very* emotive and strong description. Particularly when those in this group still have access to enough food, health, free education and housing. I don't have a problem describing people without the sort basics I have highlighted as being poor and not able to participate in the community as the should be able to. I am not suggesting for a moment that that is a desireable position to be in.
ReplyDeleteNow I have seen people in what I consider to be "severe hardship" in NZ and all over the world but the measurements used in this report would allow people to be categorised as being in "severe hardship" when that is someway away from being the truth - in my opinion, of course.
By the way, going back to the "Labour cheerleader" comment, if that were truely the case I would be posting on many more of I/Ss entries than this. I/S is spot on with many observations, I just happen to take issue with this particular one.
Noddy: look at the list of "basics" on p. 24. There are 19 goods listed, and people classified as being in "severe hardship" are missing around 39%, or 7, of them. But for the life of me, I can't see any more than 4 of these items whose absence could be argued to not be a sign of real hardship, and then only by people who utterly neglect long-term or non-physical needs (people who, for example, think poor people just have to get by without having families or any form of social interaction beyond the WINZ office). It's a similar story with child basics (p 27 - 28); there are 12 items, and those in severe hardship are missing around 3 of them. You've identified four which you don't think are real indicators of hardship, but again it is only by pretending that only physical needs are "real", and that social needs or participation don't matter.
ReplyDeleteThis is simply indecent. There's no other word for it. People don't live by bread alone, and while I don't expect people who can't really afford it to be giving each other extravagent presents, or hosting slap-up meals for each other, the idea that a couple can't have their parents over for dinner once a month, or host even a cheap children's birthday party once a year, is a sign of real hardship (or at least it is against the sort of social backdrop and living standards expectations we have in New Zealand).
The example family for "severe hardship" is unemployed, uninsured (and so insecure), cannot afford fresh fruit or vegetables (and so has an inadequete and unhealthy diet), cannot afford proper medical care, new clothes, or basic social interaction and lives in a rundown house with wiring problems (in other words, a fire risk). While its clearly possible to be worse off (they have a roof over their heads and food to eat, even if its unhealthy), it is not at all unfair or "emotive" to describe this as "severe hardship". This is New Zealand, not Haiti, and we set our poverty bar accordingly.
(As for students, student poverty is real; when I was at uni, I wasn't able to afford clothes, had a crap diet, never went to the doctor, was uninsured, and generally could barely afford to live. And that's without spending a cent on alcohol. The reason we tolerate it is because it is largely voluntary - people choose to go to university, after all - and because everyone knows its temporary. It's a phase you go through as part of the experience of studying. But that doesn't mean its not hardship or that its not real).
But don't just take it from me. As the overview Report points out, the ELSI measurement has won several awards, has been copied internationally, and is generally regarded as an extremely robust measurement. If you have a problem with this, I suggest you debate it with the social policy community. I'm sure they'll give your attempts to discount poverty the respect they deserve.
I think there are economic cycle effects - housing price booms may well cause poverty where there are not capital gains taxes by basicaly redistributing wealth to capital owners and away from labour.
ReplyDeleteOr maybe some other similar economiccycle effect..
as a long term unemployed (5 years), i can clearly see that the report actually did go into some effort to serve the slow progress of thinking and imagining that is a feature of the the rich/middle class part of the western society (politicians for example).
ReplyDeletealthough it uses clear numbers, people still discuss about the outcome. to me it clearly shows the widening gap between rich and poor. and it is a direct result of a totally market driven society, like the new zealand society is a perfect example of.
i lived in nz for some time and can say that culture has been widely replaced by the money cult, followed by mass sports. once you get sick or old in new zealand, you will only have limited chances to survive in nz. i saw shocking poverty in nz in families, mainly in rural areas, like the east cape. and i dont speak of my own experiences with the social system in nz or that with public services, such as transport - all a sign of growing egoism among people.
the report sums up whats obvious: the strong and healthy are better off because social common sense is disappearing in nz society.
just as everywhere else where the market is seen as the absolute god.
thus i can not afford a good diet. i can not buy clothing, shoes etc. i can not invite people over for dinner, can hardly even pay to heat my house. over the years that leads ever further into the dead end of poverty. because the longer you get stuck in unemployment, the more you have to live off the substance. then there is a point of no return where you would actually need to replace almost everything but cant do so.
it is organised poverty. organised by the ignorant society. benefits only cover very basic needs. you will reach a point very fast, when you can not compete with competitors any more, because you look poor, you are sick, you suffer from depression. yet you are being blamed for this situation. especially by those who earn the most money.
labour or not, its the same all over the world. we have the same policy here, driven through by parties that call themself "The Left" or "Social Democrats" or "Greens" ... the outcome is the same as that of a conservative party, or even worse - looking especially at the organised way of creation of a large layer of poor in germany - called HartzIV in germany - invented by the Social Democrats and the Greens, applauded by the conservatives.
I think it is the poor that are the worst victims of the bad parts of capitalism.
ReplyDeleteThey feel they need various things. Whether that is cigarettes, a visit to the movies or just a slightly better brand of cereal.
The benefit appears (as much as I have used it) to be enough to live on, and save a fair amount of money and eat a little better than I do now because good food is a little cheaper generally (probably depends a bit on circumstances). But not if you let advertising tell you want you need all the time.
The other thing people do is collect excessive amounts of assets, you don’t need a washing machine or a dish washer (at least not one worth more than minimal value) and if you don’t have these sorts of things all sorts of other stuff gets much easier really at not all that much cost.
The problem is this puts a couple o things in conflict. the problem is I am a person with fewer needs and thus in a sense I need less benefit than maybe others do - some people need a huge amount of money to avoid being in poverty. So you have to encourage the problem to elevate it
Also in general (pre experience) the poorest people are the people least able to handle it.
yeah. cutting down the benefit because its more than one needs - a common pattern used by conservatives throughout the world. i doubt you can even safe up money from the pay of benefit. benefit can not be out in association with the term "huge amount of money". that´s just not serious.
ReplyDeleteyour remarks about good food costing less than bad food is bizarr because thats simply not true - looking at how the products are being produced and where they come from - what they actually contain etc. and be assured that there was no advertising in the country i grew up, so i am not listening to advertising anyway.
its not about washing machines and dish washers. its about organised poverty. a secure way into isolation because on benefit you can not socialise any more. at least not in a big city where all social life is being defined by the amount of money you are able to spend on it.
sure, you could move out to the woods and live in a wood shed, like in the 18th century. that might work with the amount of benfit that is being paid.
> Yeah. Cutting down the benefit because it’s more than one needs.
ReplyDeleteNo it is less than SOME people "need" more than others. being on drugs (like nicotine) incease your 'need' as does being a sucker for capitalism.
I would instead suggest help with spending it as has been proposed in the media lately. Those who are in poverty (in absolute terms) are probably those who have difficulty with money and probably need some help.
> I doubt you can even save up money from the pay of benefit.
Not much obviously, but a little.
There is a good argument for giving people money to have a leg up out of a benefit (eg a loan to study some useful skill or to get some good work clothes for example) of course but I believe there are special benefits for that.
> Benefit can not be out in association with the term "huge amount of money".
Ha-ha yeah not a huge amount. Of course the system would fall over if it was a huge amount since an ever increasing number of people would not want to work.
> Your remarks about good food costing less than bad food is bizarre because that’s simply not true
I ate more plain cereal (there is your fiber) and a limited amount of white meat and certain vegetables and drunk a lot more water (water on my cereal, heh, part of that was laziness). Most of us probably don’t eat enough cereal and too much meat as it is.
Maybe there is bad food that costs less than that stuff but they must be giving it away!
> A secure way into isolation because on benefit you can not socialize any more.
Well there is a problem in itself - why do you form social groups that cost you money to belong to them?
I think one of the problems here is really related to people adjusting to the new income stream a bit like if you used to make a millionaire and suddenly you have to work for a living. At first you will loose a whole lot of friends who only hung out with you as long as you could keep spending large amounts of money - then you will keep some and form others and with any luck you find equilibrium.
> At least not in a big city where all social life is being defined by the amount of money you are able to spend on it.
*cough* "worst victims of ... capitalism" *cough*
I/S - I suppose, in the end we will differ in what the words "severe hardship" mean. I would define that as a lack of the physical resources on which to live. I my opinion you insult those how actually are in this state as well as those how are not by lumping them together like this.
ReplyDeleteI have never in my comments suggested that being able to participate in society is not very very important, but I really do think we need to differentiate. I for one would very much like to know who in NZ is lacking in physical necessities, because that situation would be an utter disgrace.
You, who blog often enough about global issues should realise the difference and to pretend that a significant number of people in NZ live in the same conditions as many in the slums of Rio or Palestine is simply an insult to our intelligence.
What makes living on a very low income difficult is the unforseen costs.
ReplyDeleteSo for example, a doctor's visit is $39 for me with a Community Services Card. We have four kids, so if one of them gets sick they usually spread it to their brothers. It's the petrol to the doctors, the doctor' fee, maybe some panadol or a prescription.
You can certainly eat well on a small income, but you have to have the skills and the appliances. Eg. A crockpot, knowing how to turn whole chicken into pieces, how to cook dried beans. I also know that one way of adding to a family's foodbasket doesn't work in a modern city - chickens. Eggs and meat fed off house scraps is very cost efficient. We buy our meat from Verkerks factory shop, which btw is excellent. And I always have a cheap frozen chicken in the freezer. Vege's come from local market gardens and froz. veg specials.
But boy, milk is costly. Actually all dairy is but vital for growing children.
Clothing can be bought secondhand, but it's very hard to find warm cheap kids clothes, or good cheap shoes. Even haircuts are an expense (and yes I cut my family's hair and my own because we just can't afford to do it).
We still manage to sponsor a child in Kenya who lives in real poverty and we always remember him when we are feeling low about money.
School is a huge expense. Uniforms, shoes, stationary, trips. And what can really stuff us up is bank fees. There's just _no_ wiggle room.
If we lived in a cold house though, we wouldn't cope. Health is the major hassle on a poor income and if our house wasn't so great we'd be stuffed. Oh and smoking and drinking! Bwahahaha...
Oh I should add...
ReplyDelete- no movies
- no eating out
- no make up
- kids trips only to free places, eg. library, museum, botanical gardens, parks
- we don't buy birthday or xmas presents or toys (but boy does grandma make up for that)
- no X-box
- very little junk food
- no privacy (our house is only 3 bedrooms for 6 people)
BUT... I actually think this all okay. It's poverty only in a materialistic sense and even then not hugely. Not like say, starving children in North Korea. We can live by dint of the fact we are all alive and will be barring unforseen accidents. And thankfully our Church activities are both spiritually and socially fufilling.
Noddy: You, who blog often enough about global issues should realise the difference and to pretend that a significant number of people in NZ live in the same conditions as many in the slums of Rio or Palestine is simply an insult to our intelligence.
ReplyDeleteI'm not pretending that at all; I think the bar in a society such as New Zealand ought to be set somewhat higher than in the third world, and that those who pretend that it shouldn't be - the ones who think that its only poverty if you are literally naked and starving - are the ones insulting people's intelligence.
The poverty shown in this report is real, and it is an affront to the decent society we have struggled to build her in New Zealand. We should be deeply ashamed that we have tolerated it, let alone allowed it to grow. The next question is whether the government is going to actually do anything about it - or simply echo the National governments of the 90's and pretend that it doesn't exist.
Noddy,
ReplyDeleteIndeed, let us have both measures - the income distribution one AND an "absolute poverty" measure and use them both appropriately.
I/S,
You’re in danger of effectively evaluating first world and third world people on a different level - that is a bit dangerous I would have thought even if in a sense it recognizes the reality of our own bias.
Muerk,
Yes kids cost a lot partly because we don’t want to cut any corners on a stage of their life that is so important or allow them to be disadvantaged by our own poorness.
I look at my girl and think I would put her having a good cot well above me having a bed or new jacket…