Wellington takes a hammering (though it's not evident from MSD's calculations)

My blog posts often result from a question popping into my head.

In this case, given all the gloom and doom around public servant lay-offs in the capital, I wondered, "How big is the growth in Jobseeker benefit receipt in the Wellington region and how does it compare to other regions?"

To answer this I accessed the latest Jobseeker Support data at MSD. Their chart calculates the percentage of the working-age population (aged 18-64) receiving Jobseeker Support in each region and compares Sept 1,2023 to Aug 30, 2024:

 

(Left click on image to enlarge)

That's interesting, I thought. The year-on-year growth (final column) is highest in Auckland, Central and Waikato. Comparatively, Wellington isn't faring that badly.

But hang on. To get a reliable percentage, a reliable fraction is required. The denominator (middle  column) is the 'Estimated 18-64 resident NZ population'.

Note that the chart purportedly uses June 2023 for both calculations - 'Reported week' and 'Same week last year.'

Yet Wellington and Central have changed population numbers - Wellington's increased while Central's decreased. So the column headings are at least partially incorrect.

The official published numbers are totally unreliable.

To answer my question, I can however set up my own graph showing absolute numbers on Jobseeker Support by region, and the percentage change from base, year-on-year. At 27 percent annual growth, much higher than any other region, Wellington does not look pretty. But neither does Auckland, in terms of absolute growth:

Still, we have been in much tougher times. In June 1993 for instance, 200,000 people were reliant on the equivalent benefit but in a population around 2 million lighter.

That isn’t much consolation to those losing their jobs today but let’s hope that the unavoidable correction to Labour’s six years of over-cooking the economy with borrowed money doesn’t come with too much more pain.

The child poverty conundrum

 The Child Poverty Report 2024 has just been published. It's an overview and selected findings, as opposed to a full report which is due in 2025.

Poverty can be measured in various ways.

Material hardship is measured by asking survey questions about deprivation. Has a child gone without fresh fruit and veges, been subject to postponed doctor visits, experienced a cold and damp house, etc. The DEP-17 scale has 17 items and experience of 6+ is considered material hardship; 9 or more, severe hardship.

The following graph shows that children in beneficiary households experience material hardship at rates that are consistently, "four to five times the rates for children in working households":

(Left click on image to enlarge.)

While the fall in the hardship rate is good news, the percentage of all children living in beneficiary families increased from 15 to 19 percent  between 2017 and 2024 (see Table 6).

So the rate of hardship has fallen but there are more children subject to it.

In my opinion, the growth in benefit-dependent children is primarily the result of increasing benefit payments and incentivising more families to opt for welfare and stay on it for longer.

The following further graph from the report illustrates the steep rise in beneficiary incomes over recent years (but does not include Best Start, Winter Energy Payment or Accommodation Supplement.) A sole parent with two children receives just under $700 weekly. Adding in the exclusions however, pushes that figure up to $1,057 weekly (April 2023). See Page 6,  https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/research/benefit-system/total-incomes-annual-report-2023.pdf

In respect of children in workless households, in 2022 (latest data) New Zealand was second only to Romania when compared to 26 European countries.

By family type the highest material hardship rate occurs in sole parent families at 32 percent (compared to 12 percent overall.)

The report notes, "New Zealand also has a relatively high proportion of sole parent households compared with European countries."

Most children on benefits are in sole parent households (70%).

In conclusion, the report shows that in general child well-being has improved and poverty has fallen.

However, the part of the equation that relates to those children living on benefits is not sustainable policy.

The numbers cannot  be encouraged to keep growing. That will only ramp-up inter-generational dependency and further deplete potential productivity.

The feasible approach is that which Clark and Cullen adopted during the 2000s (but Ardern and Robertson shunned more latterly). 

That was, work is the best way out of poverty. Always has been and always will be.

Simply shoveling ever more money into perpetually unemployed households is just another moribund idea from the Ardern era.