• Why it IS about poverty: the crucial numbers

    by  • June 19, 2013 • Features • 21 Comments

    One of the many things obscured in last night’s The Vote about children’s issues was the simple fact that incomes aren’t high enough at the lowest end for parents to give their children a decent start in life.

    The figure of $30,000 being ‘poverty’ for a family with four children was tossed around as if it wasn’t real poverty, but no-one broke down the figures for what it’s like to be on a minimum income.

    A two-parent family, even with just two children, living on one full-time minimum wage salary of $540 a week (2012 figures), has around $460 after tax, and maybe $790 with Working for Families and the accommodation supplement.

    Rent can easily be $250, feeding a two-child family well – by meeting nutritional guidelines in the cheapest way possible – costs about $260, running a car is around $85. Power costs can often be $50.

    So once bare survival is taken care of, just $145 a week may be left for everything else: $5 a day per person to cover clothing, a phone, replacing or repairing appliances, healthcare costs, and so on.

    Since that’s obviously not enough, something has to give. And that’s why children come to school without having had breakfast, or proper clothing; that’s why they live in houses that aren’t properly heated.

    This is why people say there are 270,000 children in poverty: they are the children living in families like the one above, families with less than 60% of the income of an average household in New Zealand.

    Not only is that – as Russell Wills pointed out – an internationally standard definition, it’s also the amount that focus groups with real New Zealanders have shown to be the minimum amount to have a vaguely decent life.

    So yes, anything under that is poverty.

    Max Rashbrooke

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    Max is an author, academic and journalist working in Wellington, New Zealand, where he writes about politics, finance and social issues. Sign up to Max's mailing list.

    21 Responses to Why it IS about poverty: the crucial numbers

    1. Andrew
      June 20, 2013 at 1:05 am

      I earn $1492.10 net each fortnight. I have a 200m2 home with a $200k mortgage, and run 2 cars.

      The big difference I see is, I don’t drink, smoke or take drugs. I sacrifice everything so my kids can attend the usual activities that their peers attend, including extra curricular activities, such as sports, music.

      I don’t consider my family as poor. I don’t consider my children know anything about poverty.

      I ensure that.

      • Max Rashbrooke
        Max Rashbrooke
        June 20, 2013 at 1:10 am

        Thanks for the comment … but I’ve interviewed people working on the minimum wage who also don’t smoke, take drugs or drink … and they still can’t make ends meet, because the money just isn’t enough. Also, I’d ask, why should you have to sacrifice everything? Isn’t it a human right to have a decent life for onesself AND give one’s children all that they want and need?

        • Andrew
          June 20, 2013 at 1:46 am

          That’s the problem here. The self, human right over-shadows the rights of the child, and completely shelves the responsibility of the parent. My point is we MAKE ends meet, by focusing on ‘needs’ not ‘wants’. Eventually, my kids will have the skills to increase their wealth, and I will be a working example of what Harawira said he did, on theVote last night.

          • millie price
            June 20, 2013 at 3:33 am

            i’m working full time, i am NOT on minimum wage, and after student loan, kiwi saver and taxes i usually have around about five hundred bucks. if i had two kids, according to these figures, i could pay rent and food and nothing else. and none of these figures take into account doctors bills, public transport costs etc.

        • Beaver
          June 20, 2013 at 3:15 am

          See there is an issue in itself. Why do people think it is their right to bring children they cant support in to the world? They are knowingly and willingly bringing children in to poverty, not a good start to parenting. I am not saying that poor do not have the right to have children, but why do they believe it is their right to have other people pay for, as you said “all that they want and need”? Even those well out of the poverty levels can not supply “all that they want and need”, need yes but wants still need to be prioritised.

          • Penehamine Netana-Patuawa
            June 27, 2013 at 11:17 pm

            That is a utterly prejudicial and ludicrous response. Have you ever stopped to think that some people may actually be financially stable, have children, then suffer a number of setbacks – Loss of work, accident, death in the family etc. So through NO fault of their own end up poor? Also, having children is part of life – People fall in love (including the poor, believ it or not…duh), so they show their love to one another and children are a response (even those on contraceptions can have children, as they are not foolproof).

      • John
        June 20, 2013 at 4:56 am

        To only have $200k mortgage I would think you either had a serious helping at some point or started off on the property ladder early on.
        Try starting out now with $1492.10 per fortnight to support partner and kids and see how long it takes to be a home owner or even just how difficult it becomes to manage expenses in rental situation. Or throw in a few unavoidable financial curve balls.
        Not to say I consider your wage in the poverty range.

        The better debate would have been comparing the impact of parenting vs societal and economic inequalities. Poverty is quite a loaded term and a label many of us rightly so do not want to accept. But inequality affects most of us directly. The challenge when talking of inequality though is that the debate at some point has to examine those at the top, not just those in ‘poverty’.

        • John
          June 20, 2013 at 4:57 am

          *helping hand. (also depends what part of country you live in)

    2. Tim Watkin
      June 20, 2013 at 1:33 am

      Hi Max, I’m the producer of The Vote and I appreciate you making this point – it’s good to break down the numbers like this, something you can do in print that you can’t on TV. But I’m afraid your numbers aren’t quite right.

      As we said last night, the $30,000 figure (which we worked out from the Children’s Commision report as roughly 60% of the median income for a family of four) was disposable income after housing costs. So after tax and after housing.

      If you put those tax and housing deductions back in, I’d be interested if that changed your view. While that income is horribly low, it’s also incredibly close to the average NZ gross wage of around $49,000 – which is the point Guyon was making. Can you really say someone living on almost the average wage is living in poverty?

      • Max Rashbrooke
        Max Rashbrooke
        June 20, 2013 at 1:47 am

        Hi Tim, thanks for that … and I should make clear that I thought the panellists should have explained the nos not the programme’s producers! The numbers I have are right, they’re just for a minimum wage family income specifically, which is not necessarily the same as a family on the edge of the 60% of median household income figure (depending on household size etc). I use that because that’s the figs I have to hand. But if you think about your $30,000, which is around $600 a week after housing costs, that could be the same as my $790 a week before housing costs, if your housing costs were $190. In fact housing costs are often far more than $190 … indicating that your $30,000 is, like my example, not enough.
        It is really, really complex with all the numbers, poverty lines, etc, but in short, no, that doesn’t change my view. As to the link between being in poverty and the gross wage … the 60% figure of typical income has been shown in focus groups to be what people need for a minimally decent life. So if that’s what it is …. that’s what it is!

    3. Beaver
      June 20, 2013 at 3:09 am

      Hmm I believe it was a family of 4 (not 4 children). The $30k was AFTER accommodation, so one would assume that it is also after tax. $260 a week for a family of 4 is quite a lot (yes we spend more than that but we buy many luxuries with our groceries, needing $260 is bad meal planning and budgeting). Yes poverty does not help the stress levels but money does not change parenting and anger management abilities.

      • Max Rashbrooke
        Max Rashbrooke
        June 20, 2013 at 4:13 am

        Hi yes it was 30k and 2 kids. But my points stands. a family on a min wage income can have MORE than 30k and still not have enough. $260 is the official figure based on an actual survey of supermarkets and us conservative. if your costs are lower it will be because of exceptional circumstances.

    4. sarah mckay
      June 26, 2013 at 12:48 pm

      I am a researcher and have interviewed young people in CYF youth justice care asking them about: why they believe that they ended up in the youth justice system and what they would need to succeed once they left care. This was done alongside the collection of comprehensive information about their health status including family circumstances from which they had come. This group of young people have a high chance of ending up perpetuating the cycle of disadvantage that have come from. If you compare their health statistics to the general population of young people in the New Zealand Youth Health Survey – I can tell you that there is absolutely not a level playing field when it comes to peoples ability to succeed in New Zealand. Yes how we end up in life depends on our choices but not everyone has the same ability to make positive choices for their lives. As research on poverty shows its hard enough for people from more ‘functional’ backgrounds to live on a low income and they have skills to help, imagine what chance these young people have when they leave CYF care with very little support at 18. In the end we have to invest in what is actually going to work to tackle problems like this. We can go on about people making bad choices til we are blue in the face but whose asking what these young people would need to help them succeed. Putting them on parenting or budgeting course is not enough – not even close. As one young person said to me “grow up in the hood nine times out of ten you end up in the hood.” I bet none of these young people thought when they were little kids – when I grow up I want to be young offender. Lastly some people ask – why is it my problem. Even if you don’t care about these issues from a moral perspective do it from a financial one – only dealing with these issues at the bottom of the cliff in the long term, is costing this country billions.

      • Max Rashbrooke
        Max Rashbrooke
        June 26, 2013 at 12:53 pm

        Hi there, completely agree… and the book I’ve edited, Inequality: A New Zealand Crisis (out tomorrow), tries to make that point, by talking about all the ways that opportunities AREN’T equal – including through real stories about people’s lives and opportunities. Question is, when you say what would help them ‘to succeed’, it’s not always simple to set that out, is it, when the causes of inequality are so complex … but thanks so much for raising those issues.

      • July 2, 2013 at 5:06 am

        Whatever the experience, insights, knowledge and opinions of the commenters on this here platform, I am pleased to see that we are opening up this discussion. I have come to the subject of social inequality from a public health perspective; I am researching and writing on obesity. I have yet to read your book (ordered) but have read The Price of Inequality (Stiglitz) and The Spirit Level (Wilkinson & Pickett). The one factor that I have noticed from these books is how much social and monetary inequality is a cultural problem in as much as that it requires the people of a country to have a consensus as to how to be a more equal society. This discussion we are having, here and in the media, in our homes and communities is a necessary one, one where we can learn from each other and that hopefully will spark social change in opinion and consequently action. Sarah is right, the consequences of poverty and inequality hinder economic development for everyone in the country. This is an opportunity to examine our social conscience and opportunity which we cannot afford to miss.

        • Max Rashbrooke
          Max Rashbrooke
          July 2, 2013 at 6:08 am

          Hi, thanks for that … look forward to your thoughts on the book.

    5. Trevor Henry
      August 2, 2013 at 4:25 am

      Just discovered your website and book, which I will read. I agree with Joanna that a social debate needs to start about this but there is a political debate which needs to happen as well, as I don’t see much poliitcal choice available on this issue.
      I am Australian and moved here in Nov 2011 for a big change. I had lived here before in the early 70s, so had good memories of life here, but had not visited at all between 1976 and 2000. I was greeted by the emigration stats – in Oct 2011 Kiwis moving to Australia broke the monthly record. The PM’s response was “We need to make NZ a place that they will want to come back to” which I thought at the time was a bit weak, he is the PM after all and should be able to do better. Since then I have concluded that NZ uses Australia as an unemployment sink and I think this is deliberate policy, as it keeps the unemployment rate high enough to induce people to stay in low-paid jobs, but not high enough to cause political difficulty. I have been driven to wonder why there is not more outcry about the way NZ has gone in the last 30 years. I am not new to this, I have been watching from Sydney over that period, taking note when the international right-wingers praised NZ for implementing Milton Friedman’s ideas most completely, but also noting that since 2008 NZ has not been mentioned as much. Why then do NZers not question the direction economic and social policy has taken them? My own assessment is that NZ has been thoroughly “rogered” by Roger and his successors and turned into a country where it is great to be rich and pretty s**t to be poor. Recently I heard that last year 42000 households had their power cutoff because they didn’t pay the bill, but there was no big outcry about this. So why are NZers so uncomplaining? Too busy working their 2 or 3 jobs to take notice? Or maybe the ones who would complain are amongst the 1/2 million (approx) who live in Australia.
      And not a lot of political choice – after all it was Labour who started it.
      Also, I see that low incomes is one side of this but high prices charged by monopolistic markets is another. I could name quite a few markets I have noticed since I have been here that are priced too high. And btw, I think Australia and NZ should have been made a single market long ago, before trade agreements came on the scene, and that it is a great failure of politicians and bureaucrats on both sides that it hasn’t happened.
      Sorry for going on about this but there are lots of facets to this problem, not just increasing the minimum wage.

      • Max Rashbrooke
        Max Rashbrooke
        August 2, 2013 at 5:33 am

        Hi Trevor, lots of good points there … just to pick up on one, you’re absolutely right that you have to look at top end, and things like monopolies, as well as the lower end. Robert Wade in his recent speaking tour made exactly those points. Search YouTube for ‘Bridget Williams Books’ and you’ll find a couple of videos (one short one long) of him making that argument. Cheers Max

    6. Raewyn Bennett
      August 26, 2013 at 1:07 pm

      You were quoted on “sunlive” thus “Last week Max said an atlas of socioeconomic deprivation produced by University of Otago researchers reveals stark divides, particularly between the Western and Eastern Bay of Plenty”. You and they need to delve deeper. The Eastern Bay is high deprivation indexed and predominately Maori. The Western Bay on average is not deprived. However, the high deprivation rating is just as applicable to Maori communities in the Western Bay as it is in the Eastern Bay. i.e. Maori communities in the Western Bay are h.d.i. too but are ignored when it comes to investing to reduce poverty. Having rich neighbours doesn’t take the pain away.

    7. Kevin Reilly
      October 15, 2013 at 2:06 am

      Keep up the good work,New Zealand is a broken society and set to get worse when Generation Rent get older and the penny drops that this is it for me and my family,poor housing,poor wages and poor health.We somehow have to reduce the inequality and reintroduce fairness into our communities,there is more that unities us than divides us we all have our part to play to make New Zealand a decent country once again.

    8. March 3, 2014 at 4:11 am

      Hello! I’ve been following your blog for some time now and finally got the courage to go ahead and give you a shout out from New Caney Tx!
      Just wanted to mention keep up the good job!

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