Five pathways to poverty

In the annual Sir John Graham lecture in 2011, Iain Duncan-Smith identified five pathways to poverty: family breakdown; poor education; debt; addiction, and welfare dependency and worklessness.

These pathways to poverty feed on each other in powerful ways, and can push families into damaging, downward spirals from which it is almost impossible to retrieve themselves.

Let’s have a look at a few of these. Take family breakdown—evidence is that those growing up in a broken home are:
– 75 percent more likely to fail at school;
– 70 percent more likely to become addicted to drugs; and
– 50 percent more likely to have an alcohol problem.

When it came to addiction we found that almost one third of young people who have been excluded from school have been involved with substance abuse. And so often these pathways had a knock-on effect on further destructive behaviour, particularly criminal activity. We found that 70 percent of young offenders were from lone parent families, and we estimated that something like half of the UK’s prison population were
problem drug users.

And, even more interesting, we found that as many as half of all young people going through the youth justice system had been in government care or had substantial involvement with social services.

When the government looked after them, the government failed them.
Even more, in some senses, than their own families had failed them. . .

The radical overhaul of child protection and care announced by Social Development Minister Anne Tolley aims to make sure that children whose families fail them will not be failed by those charged to look after them.

But what about the parents who should be looking after them?

Lance O”Sullivan, Northland GP and New Zealander of the Year, says this in his autobiography. He argues that if children are fed and their health problems addressed they will be more likely to do better at school and there’s a greater chance of them being able to break out of the cycle of poverty.

He says we cannot hold children responsible for their parents’ failings, and he’s right.

But that begs the question of what is done for the adults?

If they are on benefits or low wages they will be getting money for their children.

It’s not fair on the children not to help them, but is it fair on the taxpayer to pay twice – first to the parents and then when they fail, whether or not that failure is through circumstances beyond their control, to pay again to ensure they are well fed and healthy?

That is a difficult question to which there are no simple answers and the simplest of all – more money to perpetuate what hasn’t worked in the past and isn’t working now,  – won’t work in the future.

That is merely treating the symptoms, not addressing the causes.

As we looked at these issues more carefully we unearthed the immense costs of this breakdown. We put the costs of educational underachievement at £18 billion per annum;27 the costs of family breakdown at over £20 billion per annum and rising,28 and the cost of crime—so often a product of these pathways to poverty—at some £60 billion per annum.29 Almost £100 billion, every year, spent on simply treating the symptoms of social breakdown because we never got to the causes.

These eye-watering figures were a result, at least in part, of the damaging culture I spoke about before. A culture of short-termism had set in which was more focussed on chasing headlines than on changing lives. So, instead of investing in fundamental changes to the system—changes which may have taken a number of years to bear fruit—governments resorted to reactive but eye-catching tweaks around the edges.

These tweaks were expensive and often ineffective, but because they were funded by debt it was possible to push the burden of the cost of them further down the line, onto the next generation.

Tax credits

A prime example of this is the system of tax credits introduced by the previous Government, ostensibly with the goal of making work pay. More often than not these tax credits made things more confusing for claimants, and they created perverse incentives which encouraged work at just sixteen hours—no more and no less.30 But they played another role as well. Because there was a child element, paid in and out of work, tax credits became a useful tool for tweaking child poverty rates. Add a few more pounds to tax credits at the annual budget and you could triumphantly announce that you had pulled thousands of children out of poverty, as incomes would suddenly jump just above the poverty line. But had this changed anyone’s life? Had it made it any more likely that these children would go on to succeed in school, hold down a job, or form a stable and loving relationship?

In the case of a family troubled by addiction you may only have made things worse, with more money simply fuelling the family’s addiction problems. I know of too many households with addiction that get enough money, but the money only makes the situation worse because it drives them deeper into their problem and the children have to make do with even less. Because you haven’t made a permanent change in those parents’ lives, you’ll find that before long they will have cycled back below the poverty line, and you will be back where you started. Even more subtly, this policy had a longer-term effect, creating what a friend of mine, Frank Field, from the Labour Party, referred to as the “couple penalty.”31 This is where you earn more through benefits if you live apart than if you live together as a family. In essence, government money, far from being ambivalent, has actually ended up incentivising families to break up, with all the attendant consequences for children that I have already mentioned.

Perhaps worse, it has also created an intention to criminal behaviour. Families who— realising they would be better off apart—declare themselves as apart, even if they are together. This is a criminal act and they do that for a while until they realise just how serious that is and they either change their declaration, or they do actually break apart. It can’t be right that a system like ours drives people to that kind of behaviour. . . 

Welfare that was designed with the good intention of helping people, usually but not always women, out of abusive relationships, can have the perverse result of incentivising solo parenting.

This isn’t an argument for no welfare.

But the right to receive help must come with the responsibility for people, if necessary with support and time, to do what they can for themselves and their children.

 

52 Responses to Five pathways to poverty

  1. Andrei says:

    The radical overhaul of child protection and care announced by Social Development Minister Anne Tolley aims to make sure that children whose families fail them will not be failed by those charged to look after them.

    This is still “closing the barn door after the horse has bolted“.

    Since we know that children raised in intact families by their biological parents are far more likely by many orders of magnitude to thrive isn’t it contingent upon us to implement policies that make this the cultural norm instead of focusing endlessly on “ambulance at the bottom of the cliff solutions”?

    We have a significant cultural problem and we need to address this and it is no good looking down our noses at the dysfunctional underclass – we need to uphold our values and propagate them to our children so our values predominate in the future and not those of the underclass

  2. Dave Kennedy says:

    It is easy to track when we have had spikes in family dysfunction and child poverty. The biggest jump occurred immediately after 1991 when Ruth Richardson and the National Government worked hard to reduce labour costs in this country. It was achieved by cutting benefits and reducing the power of unions. Child poverty almost doubled in two years (from 8% to 15%). The other spike is now under the current National Government, where child poverty has now reached almost 30% and 40,000 are homeless.

    Most of those requiring a benefit either have a genuine disability or illness that prohibits them from working full time or it is used to get them through a rough patch. The vast majority of sole parents do not remain on welfare and the myths around welfare bludgers is not supported by the data.

    Cutting benefits is designed to force beneficiaries into work and to make low wages more attractive. However all it succeeded in doing was to increase suffering for the lowest quintile. Most of those who are on benefits have genuine reasons and no other choice and their living standards and that of their children immediately nose dived. Those in low income jobs then struggled to meet basic living expenses (hence the need for the wage subsidy Working for Families).

    New Zealanders are not lazy people, we have an amazing reputation around the world for being hard workers and we work some of the longest hours in the world (we have one of the highest percentages of those working over 50 hours a week). We also have around 11% who desperately want more work and are underemployed. 95% of us are employed and more mothers of young children work in NZ than most other OECD countries.

    What are the causes of poverty in NZ?… a low wage economy; welfare payments not covering living costs; expensive housing (amongst the most expensive in the world); poor quality homes (we are apparently well behind Europe for the minimum standards of our houses); expensive heating costs; expensive food (milk is double the price here than it is in the US, Britain and Australia) and a growing groups of dysfunctional families that are part of an ongoing cycle where there are no effective interventions.

    I currently employ a young woman who worked briefly for CYFs. She left because as a barely qualified novice she was thrown cases that only very experienced people should have been managing.

    Education helps but when the level of attainment is actually dictated by the family circumstances (as supported by the National Standards data), rather than changing our education system, what we really need to deal with is family poverty.

    We also have generations of children who have been badly supported by both their families and the state in a never ending cycle of dysfunction. 80% of young people in our prison system had been on CYFs books.

    Welfare is important to maintain because it protects children and ensures a minimum quality of life. Where we have failed is in our low wage economy (work no longer lifts families out of the poverty trap) and not providing the support for struggling families that allows them to be independent of the state.Those with addictions do not have enough support to move them out of their addiction trap.
    http://www.stuff.co.nz/national/health/74230251/Blenheim-rehab-told-to-cut-waiting-list
    http://www.radionz.co.nz/news/national/305802/mental-health-workers-struggling-to-cope

  3. Mr E says:

    “It is easy to track when we have had spikes in family dysfunction and child poverty. The biggest jump occurred immediately after 1991 when Ruth ”

    I prefer the margarine theory.

  4. Dave Kennedy says:

    So Mr E, that is the same as the relationship between increased ice cream sales and burglaries that I have used to criticise data streams that have no correlation.

    But is this case you have no argument. Poverty is directly related to income and unless you can prove that thousands of families suddenly became hopeless at managing their finances, it is logical that the drastic cuts in benefits and stifling wage increases was the real cause. There is also lots of academic support for this.

    “One of the most far-reaching policy initiatives of the 1991 Budget was the welfare benefit-cuts that widened income differentials and effectively redefined poverty in absolute terms.”

    http://briefingpapers.co.nz/2015/05/children-the-nations-greatest-asset/

    There is no obvious relationship between divorce and margarine but surprisingly there is a relationship between money and poverty. I’m surprised you weren’t aware of this😉

  5. Mr E says:

    “Poverty is directly related to income ”

    Haha. All those thosaunds of dairy farmers suffering in poverty. Imagine what they would be like with the Greens carbon tax.

    Green’s want to tax those in poverty. Haha.

  6. Dave Kennedy says:

    Oh dear, Mr E, another desperate distraction accompanied by manic laughter.

  7. JC says:

    Mr E, won’t somebody think of us poor superannuates? There are 600,000 of us poor people.. twice as many as other beneficiaries and only DK recognises the link between our pitiful benefits and poverty.. we are easily the poorest group in the land and should receive the living wage at least!

    JC

  8. Mr E says:

    Dave,
    Dealing with your errors is more than a distraction. It is near on a full time job, of which I am not paid for.

    Perhaps we need a new beneficiary category to support those that work to keep politicians honest?

    JC- this new category could supplement your existing benefits.

  9. Dave Kennedy says:

    JC, you are talking total nonsense again. Government Superannuation costs us over $12 billion a year (and rapidly increasing). It is one of the most generous retirement packages in the world and goes to those over 65 despite their income or whether they are employed or not. While 5% of those over 65 are considered to be living in poverty 30% of children live in families suffering from poverty. Those over 65 are more likely to own their own home.

    This is from an article on superannuation:

    “In 2015, a single person aged over 65 and living alone will receive $374.53 per week ($19,475.56 per annum).

    A couple living together, where both receive the pension, will receive $576.20 jointly ($29,962.40 per annum).

    These rates are after tax has been deducted.

    In contrast, a single person seeking work aged over 25 years of age will receive Jobseeker Support of $210.13 after tax.

    A jobseeker aged 20-24 years will receive $175.10 after tax – less than half of their retired counterparts.

    It is unclear why a single retired person needs $165 per week more than a single younger person seeking work.”

    http://www.stuff.co.nz/business/money/69348442/new-zealand-superannuation-the-facts-and-the-fiction

    We are also one of the most attractive places in the world for people to retire:
    http://www.investopedia.com/articles/personal-finance/062315/top-countries-where-wealthy-retire.asp

    I don’t begrudge the wealth of our elderly, but I would like to see similar support provided to our young families.

    ..and you claim to be in the poorest group in the land…you have no idea!

  10. Dave Kennedy says:

    Mr E, you mean defending and justifying yourself is a full-time job and you spend far more doing that in any thread than actually contributing rationally to the discussion.

    To try and claim that the level of wages and benefits have no influence on poverty was one of the most ridiculous things I have ever read. It is like claiming that a lack of food doesn’t lead to starvation.

    Good grief!

  11. JC says:

    “To try and claim that the level of wages and benefits have no influence on poverty was one of the most ridiculous things I have ever read.”

    He didn’t claim that.. he (and I ) gave two situations where low incomes are practically meaningless in terms of poverty.

    And even in the groups you probably mean about 70% of them personally claim they have “enough” and about 30% of those who are more deprived are in a transitory situation which means those who are chronically deprived are a quite small (6%) percentage and are characterised by the old goblins of prison, smoking, addiction, solo parentage, Maori, mental health etc.

    http://www.dpmc.govt.nz/sites/all/files/publications/555108-cab-paper-six-monthly-report-mcop-april2013.pdf

    The OECD likewise disputes your glum (read political) take on things..

    http://www.oecdbetterlifeindex.org/countries/new-zealand/

    And as the migration figures show so starkly so too returning expats and foreigners flocking in here these last few years give the lie to the manufactured figures and laments on poverty, housing crisis etc.

    The housing “crisis” is particularly a joke.. the only times in the last 100 years we haven’t had a crisis is when people are fleeing the country in large numbers and even then in around the 2000s we had 28,000-34,000 homeless under the so called caring and efficient Labour/Green govt.

    Same with poverty.. CPAG was bitterly castigating Labour /Green right through to 2008 using the same dodgy figures as now. Same with inequality.. the economists show that has stayed at about the same level these last 25 years.. rarely have figures been so extensively and intensively water boarded to produce dire conclusions.

    Basically the only metric that has truly worsened is the increasing desperation of the political opposition to avoid another record National tenure and a particularly contented electorate.

    JC

  12. Dave Kennedy says:

    JC in the report you linked to it contained this:
    “In December 2012, the Children’s Commissioner released a report on child poverty prepared for him by a group of independent experts. The report contains 78 detailed recommendations, covering tax credits, benefits and income support; child support; employment, skills and training; housing; particular issues for Maori and Pacific children; problem debt; health and disability issues; education; local communities and family; the justice system; accountability arrangements; and research and evaluation.”
    The Children’s Commissioner is retiring with very few of his recommendations implemented and he has voiced his concern that a target driven Government like this one has strangely avoided targets for child poverty and housing.

    Your comment is riddled with government spin, so it is easy to see how wide-ranging your information is.

    The Government generally talks about average incomes when it should be talking about median incomes. 43% of households in 2013 said they had just enough or not enough to meet basic needs. It doesn’t take much to push a “just enough” household into a “not enough” when housing costs rocket as they currently do. I’m sure now this category will be over 50%. Shocking stuff.

    Watch this video from Question time today and note how weak the PM’s responses are to James Shaw’s shaming questions. National is on a hiding to nothing regarding their inadequate response to an issue that has existed since 2008 and they are only starting to take it seriously since it has developed into an obvious crisis:
    http://www.inthehouse.co.nz/video/43895

    This Government is finding that the proverbial has hit the fan and they are now covered in their own mess. If you want to see desperation watch poor Paula try to find some immediate solutions. It would be funny if it wasn’t for the fact that real people are suffering.

  13. Dave Kennedy says:

    Also, JC, it depends what you consider a small percentage. 1% homeless is 45,000 people. I don’t believe that 43-50% of families should have to constantly worry if they have enough to pay basic bills. To suggest that 6% being in chronic poverty is tolerable is condemning over 1/4 of a million (270,000) to those conditions. Appalling!

  14. JC says:

    DK, there could have been not 78 but 780 recommendations to fix or ameliorate child poverty and all of them could have some point but all of them fail if they don’t address the handful of issues that really cause poverty. The critical issues start with solo parenthood, poor uptake of education and stuff on addiction etc. Whether you like it or not the answers lie in traditional morality, often religion, innovative education, discipline, less reliance on the state and all the things that make you and your family happy, well adjusted and successful and which you deny to others because you wont set them the same standards, love, expectations, censure and support you apply personally to you and yours.. very rarely does this involve you guaranteeing all the money for one of your own to live the 100% negative lifestyle of his or her choice.

    “The Government generally talks about average incomes when it should be talking about median incomes.”

    Do a word check.. the govt uses only median income and all words on “average” are not related to any income except to describe an average of a median of low income.

    “43% of households in 2013 said they had just enough or not enough to meet basic needs.”

    Erm.. and 70% said they had “just enough, enough or more than enough”. you wouldn’t be trying to prove the public’s belief that politicians are the least trustworthy people in the country alongside the media, would you?

    “To suggest that 6% being in chronic poverty is tolerable is condemning over 1/4 of a million (270,000) to those conditions. Appalling!”

    Well, its a vast improvement to saying that 250,000 adults and children are living in appalling poverty compared to 300,000 kids live in appalling poverty.. you are agreeing that the actual number of kids in poverty is maybe 50,000 to 100,000.. a massive improvement and likely closer to reality.

    All we need now is an admission that a vast number of people in the poverty industry have a financial, personal and/or political power interest in maintaining and perpetuating poverty.

    JC

  15. Dave Kennedy says:

    JC, you are actually just supporting my arguments, the fact that 30% of households don’t have enough to meet their needs is still a shocking admission. This is New Zealand, the 2nd wealthiest country per capita in the world and yet 30% of our population (around 1.3 million) don’t have enough to live on.
    http://www.radionz.co.nz/news/national/287940/nz-second-richest-country-global-report

    We have the fastest growing inequality in the OECD and through largely untaxed capital gain (and rampant property investment) a small proportion of our population have captured the majority of the country’s wealth.

    The people involved in the poverty industry are those who cause it by not sharing increased productivity with their workers and refusing to pay a living wage.

    Try telling teacher aids, supermarket tellers, fast food workers, those working in elderly care or early childhood education that their low income is because of addictions and lack of education. Our levels of education are still amongst the highest in the world (although dropping under this Govt) and we don’t have over a million addicts. My son is hard working and has a degree (in industrial design) and yet he is still earning just above a minimum wage.
    http://localbodies-bsprout.blogspot.co.nz/2015/05/housing-sustaining-today-by-denying.html

    Of course there are different degrees of poverty but 150,000 food parcels are given out annually in NZ. Even a family that just lives in a poorly insulated house and struggles to afford good food shouldn’t happen in our country but probably describes at least 30% of our households.

    There are heaps of stories like these:
    http://www.stuff.co.nz/business/money/70301032/middleclass-poor-struggling-with-financial-stresses-report.html

    What perpetuates poverty? You do AC by supporting this Government and by writing the nonsense above.

  16. Name Withheld says:

    JC, you are actually just supporting my arguments,
    You do AC by supporting this Government and by writing the nonsense above.

    Comprehension….Comprehension..
    You can’t have it both ways.
    Do try and get to bed earlier..You are just rambling now.

    AC (sic), on the other hand presents a rational and sensible view on poverty and its enablers.

    My son is hard working and has a degree (in industrial design) and yet he is still earning just above a minimum wage.
    Perhaps then, he should reflect on the career advice he was given.

    My sons are drain layers assistants and earn “heaps”(TM)

  17. Dave Kennedy says:

    NW, we just have different value systems, you tolerate a high level of poverty and exploitation and, where possible, blame the poor for their situation.

    I believe that all children in this country deserve a fair go at life and that good housing should be a basic human right. I also believe that workers should be paid living wages and that the Government shouldn’t be paying $6 billion a year in wage and accommodation subsidies.

    Commenters here are loyally repeat government spin and I will continue to provide a more informed view😉

  18. Dave Kennedy says:

    oops “loyally repeating”😛

  19. Mr E says:

    Entertaining to watch.

    What Dave’s commentary does is remind me how poorly informed Green policies are.

    According to the Greens poverty is directly related to Income. Of course this is a stupid assertion. There are many people out there with low income not in poverty. More importantly it ignores the opening statement of this thread, which lists all the major causes of poverty.

    Moving forward the Greens take a statement that says :
    “We see that around 70% of households with the lowest incomes report that they have just enough, enough, or more
    than enough income.”

    and they turn it into this:

    “30% of our population (around 1.3 million) don’t have enough to live on.”

    IMO this is beyond stupid.

    And finally then we get to the solution… A living wage. A concept that ignores successive reports during successive Governments that repeatedly say, large changes to the minimum wage causes increases to unemployment. To consider it as a solution is in my view – stupid.

    I think the ‘living wage’ should be called the ‘soon to be on the dole wage’. Because that is what report after report after report infer.

    Then we have the Greens accusing others of perpuating poverty.

    Stupiness followed by stupidness, followed by stupidness followed by irony.

    But there you have it. The Greens. In all their glory.

  20. Paranormal says:

    DK you are right about differing value systems. I’m sure NW would never misrepresent what someone had said in such an overtly emotional and political manner for trivial point scoring.

  21. Dave Kennedy says:

    Mr E, you confused and writing nonsense again. Of course there are multiple contributors to poverty, some are constant and to do with the people themselves (education, addictions etc) and others are policy related. After 1991 the sudden increase in poverty wasn’t due to a huge drop in education attainment and an explosion of addicts, it was directly related to benefit cuts and wages not keeping up with inflationary pressures. I would be really interested to see any data that supports your assertion that the people themselves created the 7% increase in child poverty at that time.

    It is also apparent, both anecdotally and in data, that the real incomes of those in the lower two quintiles of earners, has dropped over the past 7 years. You could say that the 45% of New Zealanders in 2013 who claimed that they had just enough or not enough to cover essential needs could improve their circumstances with good budgeting and improving themselves, but it doesn’t change the fact that it is actually harder for them to rent and buy houses, buy good food and pay their electricity bill.

    Just talk to Captain Perry Bray of Invercargill’s Salvation Army and he will tell you about those who will always struggle to look after themselves (the size of this group is fairly constant) and the increasing number of ordinary families that just struggle to make ends meet despite doing most things right (no one is perfect and we always need some margin of error for financial management) .

    The real value of ordinary wages has eroded over time. One income used to be enough for a family and now it is two. Sole parents especially suffer because few of the jobs available will ever be enough to support a family. You could say that two parents are what is needed (but this is largely around economics), The reality is that 25% of families have a single parent and that can’t be changed overnight.

    No one is advocating for a sudden increase to a living wage but a transition to that is entirely possible and there is heaps of evidence that raising wages boosts the economy. It is not sustainable for the Government to subsidise wages to the level it currently does ($4 billion annually), this seems more like Communism to me than anything the Greens would support. If businesses can’t afford to pay a decent wage then why should they be subsided to do so, it just doesn’t make economic sense.

    The US Dept of Labour busts the myths:
    https://www.dol.gov/featured/minimum-wage/mythbuster

    Here is some balanced research on increasing minimum wages:
    http://journalistsresource.org/studies/economics/inequality/the-effects-of-raising-the-minimum-wage

    Growth in poverty is largely about changes in policy and can’t possibly be blamed on the people themselves. The % of people who really struggle to live independently actually doesn’t change that much and yet examples from that small subgroup are being constantly used here to stigmatise them all.

    Paranormal, NW’s advice to anyone struggling on a low wage is to just get another job that pasy more. To put that in perspective, if that was told to 100,000 low income earners, what would be the result? People will always be needed to clean toilets and look after our elderly or infants. All jobs should be paid enough. Go back and read Adam Smith, there is no way he expected market forces to deliver an economy where one group grew exceedingly rich at the expense of the rest, while the Government subsidises the wages and housing of at least 25% of the work force.

    How can anyone support this?

  22. Mr E says:

    Dave

    “it was directly related to benefit cuts ”

    You know as well as I know, you can’t claim that. There are multiple factors affecting poverty. To claim only one is having an impact at any one time is stupid.

    “You could say that the 45% of New Zealanders in 2013 who claimed that they had just enough or not enough to cover essential needs could improve their circumstances with good budgeting and improving themselves”

    You want the Government to interfere with people who have ‘just enough”. Forcing them to budget and ‘improve themselves’. I will never get socialist types for that reason.
    Approximately 20% of those earning over $155,200 claim to earn ‘just enough’. And you want them budgeting and ‘improving themselves.

    That is stupid.

    “No one is advocating for a sudden increase to a living wage”

    But you have – every time the Government

    “Just talk to Captain Perry Bray of Invercargill’s Salvation Army and he will tell you”…..

    You speak on behalf of the Captain. Oh my.

    “You could say that two parents are what is needed (but this is largely around economics)”

    “No one is advocating for a sudden increase to a living wage but a transition to that is entirely possible”

    How long will you take to transition to get there Dave?

    ” If businesses can’t afford to pay a decent wage then why should they be subsided to do so, it just doesn’t make economic sense.”

    Interesting you say that. The South Coast Environment Society and it’s store in Riverton receives are grant of $74,600 (2015) when it only has an income of $54,395 (2015). An income that is less than the staff payments.

    No ‘economic sense’ you say….?

    “Growth in poverty is largely about changes in policy ”

    Whaaat???? It is about changes in society Dave. Not changes to Govt Policy.

    Crickey.

  23. Dave Kennedy says:

    “It is about changes in society Dave. Not changes to Govt Policy.”
    That is the crux of the situation. You will wring your hands and claim that the Government is doing all it can and the problem with poverty is the fault of those who are poor.

    My belief is that the Government represents us all and the taxes we pay should provide the safety net and the hands up that struggling families need.

    Housing NZ once provided housing for families who struggled so that all children could be guaranteed of a good home. It can no longer cope with this role as it has not kept up with supply and ensuring the quality of housing to support the 0.5% of our families that need support. The fact that we haven’t kept up the building with population growth since 1991 means that we are now at least 20,000 short of the numbers we need (the evidence is all around us).

    CYFs is supposed to support struggling families and support kids on our behalf. Reports show that children are no better of if they are on CYFs books and we abandon kids at 17 years and wonder why they turn to crime and end up in prison. Yet you have the gall to blame these young people and their families for the fact they can’t cope, why kick them when they’re down?

    Your nasty little digs at wwoofer hosts and the environment centre are not worthy of commenting, (find a victim). No comment about the $4 billion the Government pays in wage subsidies.

    The erosion in the value of wages is also within the Government’s control. Almost 50% of workers got no pay increase last year and yet housing costs alone increased dramatically for many. There are families homeless simply because their wages cannot cover the costs of rents.

    Have a chat to our local Salvation Army, I am not speaking for them, I am only repeating what I have been told.

    I guess until we have a change of Government we will just have to watch the massive increase in homelessness and poverty while you Mr E wring you hands and blame the poor and society for the lack of progress.

  24. Dave Kennedy says:

    I should have also said that the environment centre and Wwoofing is all about sharing skills and knowledge about self sufficiency and a week wwoofing for a struggling family may very well set them up with the skills to survive long term on a reduced income.

  25. JC says:

    “JC, you are actually just supporting my arguments, the fact that 30% of households don’t have enough to meet their needs is still a shocking admission.”

    Oh dear, that 30% was of the bottom two deciles of which approx. 30% were in a transitory situation, ie, moving from “not enough” to something being between “enough” to “more than enough”.

    So, using 100 as the starting point the bottom two deciles represent 20 of whom 30% say they don’t have enough.. thats 6 and of those 6 30% are transitory.. so thats about 4 people or 4% in the country who say they are chronically deprived.. thats just a tad different to saying there are 30% of the country in that situation.

    “We have the fastest growing inequality in the OECD”

    Er.. that conclusion came from a *working paper* using an unconventional method, so not an official OECD paper and it was immediately panned by economists on the left and right.
    Inequality is officially measured by the gini coefficient and that shows that inequality in NZ has stayed constant for the last 20 years.

    http://offsettingbehaviour.blogspot.com/2014/12/oecd-on-inequality.html

    http://www.stuff.co.nz/national/politics/69733931/inequality-in-nz-hasnt-risen-in-20-years-treasury-paper-says

    You’ve had this pointed out to you several times, but it doesn’t fit your narrative.

    JC

  26. Dave Kennedy says:

    JC, it just depends on what level of deprivation you are prepared to tolerate at the the lower levels of income earners. At the very bottom we now have families living in cars and garages etc and for 25-30% of our families they probably live in substandard housing (either crowded, uninsulated or poorly maintained) and struggle to pay for the basics (food, housing, transport, electricity). Many of the children live transitory lives where they are constantly shifting to cheaper housing and new schools. In South Auckland 25%-50% of children shift away from their school during the year.

    You appear to be saying that this can be tolerated and that the Government has no responsibility to change policies to improve their lot.

    You will have seen from an earlier link, that per head of capita New Zealand is one of the wealthiest countries in the world and the difference between the top 10% and those on the bottom is increasing more rapidly than most other countries. Our richest have seen their wealth increase by 10-15% a year over recent years while those at the bottom are lucky to get 1-2% increases (despite the fact that housing costs are going up much faster). the increases in productivity are no longer being shared with the workforce as they once were.

    Your links claim that inequality hasn’t really increased since the 90s is hard to understand when all the practical indicators say the opposite. Many more families have the declining disposable incomes after paying rent, growing numbers are needing food parcels, food in schools is becoming a necessity and around 40,000 kids are being admitted to hospitals each year because of poverty related illnesses.

    The Children’s Commissioner, the Salvation Army, Housing NZ and WINZ have indicated growing demands and problems. Treasury may have indeed managed to show that poverty inequality is an issue but it sure as hell isn’t reflected by the numbers of homeless that have doubled in Auckland over the last year alone or the drop in home ownership.

    You obviously dispute all of what I am saying but it really worries me what we are now being expected to tolerate because it is no longer the Governments role to provide a safety net for those at the bottom. I really worry for the children in the bottom 30% because it is unlikely that they can have the opportunities that I had to get a head.

  27. Name Withheld says:

    I really worry for the children in the bottom 30% because it is unlikely that they can have the opportunities that I had to get a head.

    My son is hard working and has a degree (in industrial design) and yet he is still earning just above a minimum wage.

    These two things seem to be related.

  28. Dave Kennedy says:

    NW, you will need to explain your comment. How are they related?

  29. Dave Kennedy says:

    oops, above should read “Treasury may have indeed managed to show that poverty inequality isn’t an issue”

  30. TraceyS says:

    “The real value of ordinary wages has eroded over time. One income used to be enough for a family and now it is two.”

    “Housing NZ once provided housing for families who struggled so that all children could be guaranteed of a good home.”

    Two interesting statements.

    The Labour Government’s first state house tenants were David and Mary McGregor of Wellington. He was a tram driver for the council and in 1937 his weekly wage was said to be a little over £4. The RBNZ inflation calculator computes this to be $399.50 in today’s terms. I don’t know if Mrs McGregor worked or not.

    However, attitudes were very different back in those days regarding women and work. Many, many families would have needed the money from a second income but men’s pride may not have allowed it. This was a huge issue even for my parents. We were poor, but when my mother finally did get a part time job, my father talked her into giving it up within the first week – this despite desperately needing the money. I guess it made him feel less than adequate. Lack of money could be hidden at home (sort of) but not when the wifey goes out to work as a cleaner! No, that was advertising to all and sundry that hubby’s wage wasn’t good enough.

    It is, I think, quite ignorant to suggest that many women didn’t work in the past for the primary reason that one income (usually that of the husband) was adequate. This glosses, obscenely, over the hard graft that women (including my mother) have undergone in order to achieve independence; and it also belittles the suffering they unduly experienced at the mercy of men’s egos.

    DaveK says that wages haven’t kept up, but in this example; public transport drivers, his claim is not supported by the facts. The usual pay for bus drivers today is between $33,000 and $48,000 per year. That equates to between $635 and $923 per week – significantly above Mr McGregor’s equivalent of $399.50.

    Today’s numbers come from the following site; which I note also rates the chance of getting one of these jobs as “good” due to “increasing demand” and “relatively high worker turnover”. If anything, the wife of today’s public transport driver is less likely to work because she has to (for income) than Mr McGregor’s wife back in 1937.

    http://www.careers.govt.nz/jobs-database/transport-and-logistics/transport-logistics/bus-driver/about-the-job

    I wonder what Mr McGregor would have to say about all of this if he could? For me, “his” voice may be echoed by the slightly elder commentators among us because they are closer to the past. I listen to their message because despite having all five of the “pathways to poverty” present in my own childhood I happened to be taught a few good things and one of them was to listen to, and to give particular regard to, those older than me.

    Following is one example of how our younger generation respect their elders:

    http://www.odt.co.nz/news/dunedin/383067/anger-over-protesters-blockade-banks-video

    We certainly do have a problem and it is definitely not all about money.

  31. Will says:

    All true, but there are other factors too. Women had to work very hard (unpaid) just to maintain the household, now we have an impressive army of machines to do that work for us. I doubt many would choose to go back to those days, wretched though our current existence may be.

  32. JC says:

    My parents were relatively wealthy compared to me but I’ve just taken a turn around our kitchen, dining and living areas and here’s what was on display..

    Microwave, electric jug,electric wok,electric toaster,slow cooker combo,Kenwood, Sodastream, two fridges, computer and two printers, portable photo developer,sound system,large tv with Sky, sewing machine and three libraries.

    My parents had the Kenwood, a fridge, part time electric jug, sound system, eventually a small tv and a library. They *could* have had a toaster and full time electric jug but didn’t see the need in part because they had a large wood burner stove that always had a water jug on it and a wire rack for toasting.

    Thats why the modern family might need a second earner.. to pay for all the extras that either weren’t available or not considered necessary 50 years ago and they didn’t like buying on the never never. Its why the Treasury, U of Otago survey found significant percentages of people on $80-150,000 who claimed they “didn’t have enough”.

    Another thing.. about a decade ago I started to keep a record of how long we had kept some of our appliances and nic knacks for.. it turned out they had an average age of 18 years.. we’ve done quite a bit of renewal since then but the average age is still closer to 20 than 10 years. But if you are buying the latest and greatest then there’s another hit to net income.

    A final point.. several months ago we were in Godfreys looking for a vacuum cleaner for our son in his new flat. We had $150 in mind and while we were there an old Maori lady and her niece came in.. before we left the shop had signed her up to a time payment for a $700+ machine.. thats another cause of poverty.

    JC

  33. Dave Kennedy says:

    Tracey, i think there is some merit in some of your arguments especially regarding the patriarchal family structure. However, I remember the 60s and 70s well and many labouring and factory jobs were paid relatively well and most families could afford their own home. The relative wealth of a working class family in the 60s and 70s was much better than now and much of it is related to the cost of housing and possibly electricity. Both have increased well above inflation.

    Our increasing inequality is about the lack of checks and balances to control greed and rampant speculation. A huge proportion of wealth is now generated through capital gain that is largely untaxed and does not involve investment in productive industries and employment.

    “Women had to work very hard (unpaid) just to maintain the household, now we have an impressive army of machines to do that work for us.”

    However we have had widely used labour saving devices since the 60s in homes but have degraded the value of parenting. I am disappointed that the Government vetoed the parental leave bill as all research supports the value of parenting and close family bonds in the early years. Ireland and Norway support over 40 weeks of paid parental leave.

    JC thanks to to China all the mod cons are relatively cheap and very cheap if you get 2nd hand. Both couples are generally forced to work just to pay for accommodation and food. It is easy to understand when you realise that $400-$500 a week is at the low end of accommodation in Auckland (even some garages cost similar to rent) and if your income is only $600 a week it doesn’t leave much for other necessities. The median income from all sources in NZ is currently $621, 50% of the population earn that or less.

    http://www.stats.govt.nz/browse_for_stats/income-and-work/Income/NZIncomeSurvey_HOTPJun15qtr.aspx

    For a single income household it is near impossible to survive independently.You cannot tar a whole demographic because anecdotal evidence. I too know of families that are shocking money managers but they occur across all incomes.

  34. Dave Kennedy says:

    I agree with all on this panel and they are all operating on the ground with one of the key areas causing poverty, housing.
    http://www.newshub.co.nz/politics/marae-head-paula-bennett-broke-confidentiality-2016061814#axzz4BuAQTc81

  35. TraceyS says:

    “However we have had widely used labour saving devices since the 60s in homes but have degraded the value of parenting.”

    I was born post 1970 and my mother still had a wringer washing machine until I was maybe nine or ten.

    Who are the “we” who have degraded the value of parenting? I have not. Have you? These questions are important because there are clues in the answers.

    “I remember the 60s and 70s well and many labouring and factory jobs were paid relatively well…”

    I am not comforted by that. You see, my family couldn’t afford to buy those goods, Dave. There were plenty of families who couldn’t.

    Someone will always be at the bottom and I am not ashamed to have been. It is motility which matters the most.

  36. Dave Kennedy says:

    Tracey your experience of life can’t be the sole determiner of your world view. I still used a wringer washing machine into the eighties too but for most households looking after a house has become much easier as JC said, however the cost of a TV in those days was much greater than it is now so his suggestion that people need more income to buy stuff (relatively) is not true.

    Parenting has been degrades because when my mother stayed at home right through our primary and secondary schooling was considered acceptable and normal. Now when children are three mothers on a benefit are expected to be working and have their children in care.

  37. TraceyS says:

    “I still used a wringer washing machine into the eighties too…”

    Did you also have four kids, little money, and a partner who didn’t help very much?

    I am betting that your decision to continue using a wringer washing machine into the 1980s when you knew there were modern alternatives available was an ideological one. The alternative hypothesis is that you could not afford an automatic one – just like many others.

    “Parenting has been degrades (sic) because when my mother stayed at home right through our primary and secondary schooling was considered acceptable and normal.

    Twenty six weeks paid parental leave just a start then Dave? That would be the only way to “guarantee” women would stay home from work for that amount of time.

    But even then they wouldn’t and you know it. Because most women want to work.

  38. TraceyS says:

    “Tracey your experience of life can’t be the sole determiner of your world view.”

    Just as your lack of experience can’t be the sole determiner of yours, Dave.

    It’s obvious that your experience of poverty is largely as a third-party, book-learned, and politically motivated.

  39. TraceyS says:

    “…his [JC’s] suggestion that people need more income to buy stuff (relatively) is not true.”

    JC’s point, I believe, is that there is a hell of a lot more stuff to want and that people can’t stick to just the basics anymore – they want all the stuff even if they can’t afford it.

  40. Dave Kennedy says:

    Tracey, blaming the poor for their poverty won’t solve the problem, it won’t build the necessary houses and it isn’t good for the children.

    I fully admit not being poor myself but my knowledge isn’t just academic, I actually know people who are struggling and talk to the agencies and people at the frontline o supporting them. My wife works in a high needs community and I have taught in low decile schools. Everything you say has just been based on your own personal experience.

    “most women want to work.”

    I assume you mean in paid employment? You believe that most woman put paid work as a priority before looking after their children if they had a choice? Based on what? Is this a financial choice or an emotional one?

    Even from my own experience in education, many new mothers intended to come back to work as soon as possible but changed their minds after becoming a parent.

  41. Andrei says:

    JC’s point, I believe, is that there is a hell of a lot more stuff to want and that people can’t stick to just the basics anymore – they want all the stuff even if they can’t afford it

    Indeed Tracey

  42. JC says:

    Andre,

    And don’t forget the other great driver of poverty.. debt by time payment and fines.

    JC

  43. Dave Kennedy says:

    JC, yep, loan sharks are a huge issue and I am lucky that i can afford to pay my fines. The $120 I got fined recently for driving through an amber light and the $60 I was fined for doing 55 km an hour by a speed camera would break someone on a low income.

  44. TraceyS says:

    “…blaming the poor for their poverty won’t solve the problem…”

    Dave, blame is a crude method for making anyone take responsibility. Although it sometimes works I am definitely not in favour of it.

    My interest is in how to help people without subtracting from the vital senses of self efficacy and pride. These senses are often strongest in those who have the least – and that is gold. I know this because I never lost mine. It is more valuable to me than any of the financial resources which I have access to.

    “Everything you say has just been based on your own personal experience.”

    That is true but among my experiences is four years of being connected to a “low decile” community. So too is involvement with members of my family who either are, or have been, considered to be poor.

    The other day I was conversing with a family member, a young man in his twenties, who has transcended his early years. He was determined enough to go out and find himself the role models, and put in the hard work needed, starting from a very young age. He created his own opportunities – no Government did it for him. I can’t claim to have helped him either because he did it all himself. His CV is amazing and he’s got a bright future ahead. Although I have no right, I’m still proud.

    This gives me hope that the potential is still alive and no matter what anyone says I will never let go of that. To do so is condemnation of our young.

    I’d be perfectly happy to hear from you or anyone else how I, as an individual, could help further.

    Ideas, Dave, not politically motivated criticism. Because politics is as crude sometimes as the blame game.

  45. TraceyS says:

    “You believe that most woman (sic) put paid work as a priority before looking after their children if they had a choice?”

    No of course I don’t. But that’s just a worn-out old beat up.

    Women CAN work and look after their children without having to “put paid work as a priority before looking after their children”.

    You underestimate women.

  46. Dave Kennedy says:

    Tracey, I’m afraid you don’t understand the fact that budget advisors, the Salvation Army, Public Health Nurses, teachers, food bank managers and the Auckland Mission are all saying that working families are struggling at a level that is much worse than before. No end of positive thinking will make more houses available and lower the costs of electricity and healthy food.

    You actually have no idea what many good families and good parents are dealing with.

  47. TraceyS says:

    I’m so sorry that my positive thinking makes you afraid, Dave.

    Positive thinking actually does contribute to houses getting built. You may have heard of a thing called confidence? (in the economic sense).

    Negative thinking is poison to confidence.

  48. TraceyS says:

    “The $120 I got fined recently for driving through an amber light and the $60 I was fined for doing 55 km an hour by a speed camera would break someone on a low income.”

    The really hard up can’t afford cars and their concomitant expenses, Dave. Thought you would know that with all your experience.

  49. Will says:

    Really hard up just don’t pay the fines anyway.

  50. Dave Kennedy says:

    Tracey, I hope that your positive energy results in 30,000 houses suddenly appearing, somehow I think it will actually take a pragmatic and realistic Government leadership and strategy to achieve it.

    Will, that’s partly true, and the same with the motel bills too I guess. Sadly I do know of people with little money who don’t like debt and their families suffer through trying to honour them. You seem to think all poor operate in the same way.

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