Wednesday, April 25, 2007

Living standards and low incomes

Despite being unscientific and non-representative this Stuff Poll exactly reflects the 2004 NZ Living Standards Survey;

Do you think you have a good standard of living?

Yes (3230 votes, 79.0%)

No (857 votes, 21.0%)

The poll reminded me of this chart;

The chart comes from a paper I waded through last weekend called, The 2004 New Zealand Living Standards Survey: What Does It Signal About The Importance Of Multiple Disadvantage

The authors asked, what is it that causes some low-income economic family units to be in severe hardship while many others have comfortable and good living standards?

57 % of people living on income-tested benefits were living in hardship, of those living on market income 30% experienced hardship, and on Superannuation, only 13%.

To cut a very long story short the contributing factors identified are lack of non-income assets, high housing costs relative to income, having children, 17 different types of life-shocks eg relationship break-up, and ill-health of parent or child.

The authors then observe, Recognition of the importance of multiple disadvantage can serve as a caution against excessive optimism about the prospect of finding explanations of societal problems such as criminal offending, homelessness, educational failure, etc. in terms of very specific (single factor) causation.

Having summarised and diagramised all the factors contributing to living standards a conclusion is drawn that, "there may be an upper limit on how much can be achieved by policies that rely primarily on income measures to ensure minimum levels of material well-being..."

In other words, people's problems cannot be solved by throwing ever more money at them. Eureka!

No comments: