Tuesday, December 10, 2013

Jacinda Ardern and red herrings

Labour's Jacinda Ardern to Paula Bennett in parliament today:

Jacinda Ardern: What will her Government do to address low wage rates in New Zealand, given that 40 percent of the children living in poverty are being cared for by adults in paid work but who are still not earning enough to survive?

1/ Clearly they are surviving.

2/ Being pedantic, around 6 percent of children  'living in poverty' have parents who receive income from benefits and work.  34 percent receive incomes from work alone. But even they are getting more in tax credits etc than they are paying in tax. The government is already addressing low wage rates.

3/ This is the important point.

The 265,000 children (living in households receiving less than 60 percent of the equivalised  median household income after housing costs) are not all experiencing hardship (as measured by the Living Standards survey.)

That's because the income data is derived from a sample survey of 3,500 declaring their annual income.

Some families experience a year of low income for a variety of reasons. Unemployment, fewer contracts, a new business start-up, illness, accident, relationship break-up etc. BUT they do have savings and assets to draw on. That is partly why less than half of the 265,000 children 'living in poverty' are actually experiencing hardship.

Ardern's question is designed to shift attention from beneficiary families to working families. But children in working families will (generally) only experience transitory or temporary 'poverty'. They are not affected in the lifelong way that children who spend most of their childhoods in beneficiary families are.

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