Saturday, February 15, 2014

The 'silent majority' speaks

How utterly  heart-warming to see the people of Otago put up a counter protest to the oil objectors. Just watching 3 News showing boats with banners welcoming Anadarko's exploration, and even a sky banner being towed aloft saying it is 4 the drilling. The silent majority has found its voice.

Friday, February 14, 2014

Graph of the Day

The accompanying  NZ Initiative commentary:

Adding wood to the gender pay debate, this chart shows women in 2010 were a net fiscal drain on the economy while for men it was neutral. It also implies that, cumulatively, men and women received more from the government than they put in.  Source: VUW

Wednesday, February 12, 2014

Why Maori and African American families fell prey to welfare

Following on from yesterday's post in which I said that Americans may think their sole parent families are unique, but ours disprove that claim...

Why are Maori families like African American families?

That's probably worthy of a dissertation.


Around the 1930-50s both groups were predominantly poor but had citizenship entitlements, unlike other minority counterparts. At that time both US and NZ governments started to earnestly move money from the wealthier to the poorer via taxation. Mostly, the transfer was justified on the basis of  'needy' children.

Both ethnicities had large families. So payments per child could mount up. The sums may have seemed relatively small to middle class families, but for people coming from a paltry income base - Maori from subsistence and African Americans from the abiding legacy of slavery - the sums were meaningful.

From there it is all too easy to understand how the male of these two cultures became increasingly dispensable. The state would provide a steady and guaranteed income if he disappeared. His absence might sometimes be  'manufactured'  but in the final analysis, his financial utility was deeply degraded. He had a heavy weight competitor in the government.

(And still some politicians want to continue and even increase these types of 'needy' children policies ignoring the damage that visits on the family structure which best supports those kids financially and emotionally.)

Stopping the youth inflow into the benefit system is crucial

It is a relief that the current government has realised New Zealand's  heavy reliance on welfare - economy good or bad - is fed by a constant inflow of young people. Here's a patsy question to highlight this in parliament yesterday (my emphasis on one particular stat).

Unsurprisingly no other questions followed from the opposition.

Youth Employment—Youth in Employment, Education, or Training
6. MELISSA LEE (National) to the Minister for Social Development: What reports has she received about the number of young people in employment, education or training?
Hon PAULA BENNETT (Minister for Social Development): I am very pleased to report that the latest household labour force survey shows that the number of young people not in employment, education, or training—known as “neets”, of course—continues to fall. The number of “neets” has fallen to 11.3 percent of 18 to 24-year-olds—down from 13.9 percent a year ago. This is the lowest number of young people who are not in any form of education or work since the December 2008 quarter.
Melissa Lee: What support is this Government providing to ensure that young people engage in employment, education, or training?
Hon PAULA BENNETT: This Government has invested heavily in ensuring young people at risk of long-term benefit dependency engage with a Youth Service provider, who can help get them into education or work. Unprecedented in getting results, we are seeing local youth workers working with our youth—getting alongside of them. Currently, there are 38 Youth Service NGO providers who are actively working with more than 9,000 of these “neets”. As a result 63 percent are currently engaged in education or training.
Melissa Lee: Why is it important to provide support to young people to ensure they are in employment, education, or training?
Hon PAULA BENNETT: Young people who are not engaged in work or education are at a high risk of not only going on to a benefit but equally staying on for a very long time. Sixty-two percent of 30 to 39-year-olds currently receiving a benefit first went on welfare as young people. But this Government, through our education policies and through our support via Youth Service, is making a difference, getting alongside of these young people and seeing them get into work and further education.

Tuesday, February 11, 2014

Americans talking about single parenthood contribution to growing inequality

Good. The Americans are talking about growing inequality and the association with single parenthood.
Statistically single parents are the poorest group in society in NZ so this NYT article has enormous relevance.

The last few weeks have brought an unusual convergence of voices from both the center and the left about a topic that is typically part of conservative rhetorical territory: poverty and single-parent families. Just as some conservatives have started talking seriously about rising inequality and stagnant incomes, some liberals have finally begun to admit that our stubbornly high rates of poverty and social and economic immobility are closely entwined with the rise of single motherhood.

 But that’s where agreement ends. Consistent with its belief in self-sufficiency, the right wants to see more married-couple families. For the left, widespread single motherhood is a fact of modern life that has to be met with vigorously expanded government support. Liberals point out, correctly, that poverty rates for single-parent households are lower in most other advanced economies, where the welfare state is more generous.
I am immediately reminded of a substantial study of Swedish sole parents that showed despite their material standard of living being better, child outcomes were still worse.

That argument ignores a troubling truth: Single-parent families are not the same in the United States as elsewhere. Simply put, unmarried parents here are more likely to enter into parenthood in ways guaranteed to create turmoil in their children’s lives. The typical American single mother is younger than her counterpart in other developed nations. She is also more likely to live in a community where single motherhood is the norm rather than an alternative life choice.
Except single parent families in the United States are very similar to single parent families in NZ. All of the above applies here. In part because Maori families are very similar to African American.

 The sociologist Kathryn Edin has shown that unlike their more educated peers, these younger, low-income women tend to stop using contraception several weeks or months after starting a sexual relationship. The pregnancy — not lasting affection and mutual decision-making — that often follows is the impetus for announcing that they are a couple. Unsurprisingly, by the time the thrill of sleepless nights and colicky days has worn off, two relative strangers who have drifted into becoming parents together notice they’re just not that into each other. Hence, the high breakup rates among low-income couples: Only a third of unmarried parents are still together by the time their children reach age 5.
 Also complicating low-income single parenthood in America is what the experts call “multipartner fertility.” Both divorced and never-married Americans are more likely to repartner and start “second families” than Europeans, but the trend is far more common among unmarried parents. According to data from the Fragile Families and Child Wellbeing Study at Princeton and Columbia Universities, over 60 percent of low-income babies will have at least one half sibling when they are born; by the time they are 5, the proportion will have climbed to over 70 percent.
 "Multipartner fertility" here is borne out by those statistics from yesterday showing how many teenage single parents on welfare would go on to have another child.

All of this would be of merely passing interest if it weren’t for the evidence that this kind of domestic churn is really bad news for kids. The more “transitions” experienced by a child — the arrival of a stepparent, a parental boyfriend or girlfriend, or a step- or half sibling — the more children are likely to have either emotional or academic problems, or both. (My own research indicates that boys, especially, suffer from these transitions.)
Part of the problem is that a nonresident father tends to fade out of his children’s lives if there’s a new man in his ex’s house or if he has children with a new partner. For logistical, emotional and financial reasons, his loyalty to his previous children slackens once he has a child with a new girlfriend or wife. Nor is it likely, from the overlooked child’s point of view, that a mother’s new boyfriend or husband can fill the gap. There’s substantial research showing that stepfathers are sometimes worse than none at all.
These realities help explain the meager results of government marriage promotion programs. It doesn’t make much sense to encourage, much less pressure, a couple with no shared history, interests or deep affection to marry. At any rate, given the prevalence of multipartner fertility it’s not clear, as one scholar asked in a paper, “who should marry whom.”

In the past there were high numbers of  'shot gun' marriages. These may have resulted in some not very satisfying marriages but there seemed to be a sense that staying together for the sake of the children should take priority. The counter argument is that bad marriages are bad for children. I have a very unpopular view on the matter. A disastrous relationship should be abandoned but...Some people just need to try a bit harder. Marriage isn't a bed of roses.

But those same realities raise serious doubts about the accept-and-prop-up response to single-parent families. Increasing government largess could actually incentivize, or at least enable, parental choices that everyone admits are damaging to kids. The United States aside, scholars have found a connection between the size of a welfare state and rates of both nonmarital births and divorce. Even if you believe that enlarging the infrastructure of support for single-parent families shows compassion for today’s children, it’s not at all obvious that it shows much concern for tomorrow’s.
Exactly. David Cunliffe needs to read and understand this. His baby bonus has the greatest marginal attractiveness to existing or potential welfare dependent single mothers.

Most surprising, given the likely feminist sympathies of liberal advocates for single mothers, is their fatalism toward men. While it’s a safe bet that most in this camp wouldn’t hesitate to scold married “bastards on the couch” for not pulling their weight at home, they seem more than willing to write off unmarried fathers. Not only does this merely accept the personal loss suffered by millions of children living without their fathers; it also virtually guarantees a permanent gender gap — single mothers are inevitably competing in the labor market with one hand tied behind their backs — and entrenched inequality.

Not to mention, how does that "fatalism" towards men rub off on their sons?

So where does that leave us, policy-wise? Liberal critics of marriage promotion are probably correct that there are only limited steps government can take to change the way low-income couples meet and mate. But that doesn’t mean the status quo is the way things have to be. Not so long ago, the rise of teenage motherhood seemed unstoppable. Instead, over the past two decades adolescent births have declined to record lows. Researchers believe the decline was caused by a combination of better contraceptive use and delayed sexual activity. Both were grounded in a growing consensus — including by the policy makers, educators, the public and teenagers themselves — that having a baby when you are 16 is just a really bad idea.
The same is happening here though I'm not convinced it's about delayed sexual activity. Whatever the reason, the trend is positive.

It’s not impossible that Americans could reach a similarly robust consensus about having children outside of a committed relationship, which in the United States, at least, tends to mean marriage. But despite the growing list of center-left writers willing to admit that single motherhood is complicit in our high levels of poverty and inequality, that consensus still seems a long way off.
Let's hope more of the media and academia start writing about it here. It's about time.

Kay S. Hymowitz, a senior fellow at the Manhattan Institute and a contributing editor at City Journal, is the author of “Marriage and Caste in America: Separate and Unequal Families in a Post-Marital Age.”

(Hat-tip Bob McCoskrie for spotting this article and sending the link on.)

Monday, February 10, 2014

Evidence the DPB is much more than a safety net

When the Welfare Working Group was convened a number of papers were presented. One was about teen parents. Belatedly I have noticed the table below which shows the pathways onto the DPB.

At various times I have made attempts to find out what the prior relationship status was of people applying for the DPB but MSD tells me that it no longer keeps the information:
With regards to your other question on the reporting of the relationship status of single parents currently receiving the DPB, up until 2000 the Ministry included data on the relationship status of clients at the time they were granted Domestic Purposes Benefit in the Statistical Report. However since 2000 this information has not formed part of the Ministry's formal reporting and has not been reported on since 2003. As you are aware the Ministry is not required under the Official Information Act 1982 to create information in order to meet the specific requirements of an individual request. For this reason your request for this information was declined under section 18(e) of the Act.
Yet even Paula Bennett has claimed that...
 You might be interested to know that the vast majority of DPB recipients are in fact sole parents who have been married or in a relationship and who have lost the support of their husbands or partners for a variety of reasons.
What's a "vast majority"? 90+ percent? Is that fair?

Of all the women who were new entrants onto the DPB during 1999, only 35 percent were described as becoming dependent "following relationship breakup". Granted, a further 12 percent had "transferred from a couple benefit" indicating they had also experienced a breakup. But the total is under half - 47 percent.

And when you look at those women aged 16-19, the same percentage drops to 16 percent. Most transferred from a sickness benefit (for pregnancy reasons), the unemployment benefit or independent youth benefit (determined from my own OIA files). They may have been in a 'relationship' prior to receiving that benefit but given the age bracket the longevity or stability of those relationships wouldn't be up to much.

Additionally these statistics relate to a 12 month period. If you looked at point-in-time data the percentages are likely to drop further. That's because point-in-time captures more people who are long-term dependents - those whose pathway onto the DPB was from another benefit rather than from  relationship breakdown or employment. Note that those women aged 16-64 who come from a non-benefit relationship breakdown or employment rarely add another child to their benefit.

If MSD no longer keeps the data, is that because the reasons why people need the DPB are no longer important? Or perhaps if the public understood the degree to which it is used by people who have not experienced the loss of a partner, they may be less inclined to support the policy.

Sunday, February 09, 2014


Two HOS columns this morning knit beautifully together.

First Damian Grant refreshingly states the obvious:

If you are a net contributor most of your money will go to paying for the welfare of others.
Most of those who seek to reduce their tax obligations are net contributors to our society. The only complaints against them are they do not pay enough.
Beneficiary cheats, by contrast, are providing nothing to start with and seek to enrich themselves further by deception and dishonesty.
Tax avoiders or minimisers are still net contributors paying for the welfare of others.

Then I turn to Rodney Hide's column:

Labour's revenue spokesman, David Clark, has produced the best tax policy yet. It shows perfectly the modern state's rapaciousness. And it's perfectly in step with present-day tax policy. The policy, plainly put, is to ban Facebook for not paying enough tax.

Poor government. What a dilemma. How to screw the goose without killing it.

But wait, it happened again.

I then read an interview with new ACT leader Jamie Whyte:

He gave up being a professional philosopher (although he has never actually given up being a philosopher) for a couple of reasons. One was that he went to a conference where a talk was given by the author of a book called Against Animals and whose argument was that "animals can't be in pain because they can't form a concept of pain because they don't have language ... I'm sitting there thinking: 'I'm a grown man and I'm sitting around listening to this wank. Is this a worthy way of going about your life?' And it was starting to get on my nerves, I can tell you." Afterwards he went out with his philosopher mates and decided they were "slightly dorky", so he got on the first train out of there and went to visit a non-philosopher mate, and that was about it with him and academia.
The other reason was money. He was earning about 17,000 ($33,700) a year, and was married to a PhD student, with "no earning prospects" and he decided that if he was going to have kids, 17,000 a year would just about cover one kid at one private school for a year. Why could this yet-to-be-conceived child not go to a public school? "Have you seen the state schools in London?"

A man who planned for children.

Then I turned to Karl du Fresne's colmun printed earlier this week in the DomPost:

FEW New Zealanders begrudge some of their taxes being spent on welfare for people who, through no fault of their own, have fallen on hard times and need a hand to get back on the rails.
Most draw the line, however, at helping people who assume a right to be maintained by their fellow citizens in the lifestyle of their choice.

I’m not talking here about the usual sad suspects, such as the women who leave school at 15 and have a succession of children, often by multiple feckless fathers, and rely on the state to pay for their upbringing.

No, I’m talking about people like the Auckland couple interviewed recently by the New Zealand Herald on what the Labour Party’s $60-a-week baby bonus would mean for them.
The female partner lectured in art history until a couple of years ago, when she took time off to study for a doctorate (since attained).

She and her partner were on the unemployment benefit when they had a son 16 months ago, though she went back to work for two days a week when the boy was five months old and now works a three-day week.
The couple also received an accommodation supplement and family tax credits for the baby and the male partner’s 13-year-old son from a previous relationship, though we were not told what their total taxpayer support came to.

The male partner, meanwhile, was described as an actor and musician with an “unstable” income. He had a low-paid sales job but gave it up for a six-week acting engagement. He’s now studying full-time.
What’s striking about this couple is that they appear to have choices. They are educated. Unlike some beneficiaries, they have some control over their lives.

But they chose to have a baby, despite being on an unemployment benefit.
She chose to toss in a full-time job to study for a doctorate. Assuming her qualification is in art history, it’s not exactly a field rich in career opportunities – but then, who are we to question her life goals?

He had a full-time job but chose to drop it in favour of a short-term acting gig. Perhaps he felt a sales job was not worthy of his talents.
The article didn’t say whether he gets a benefit while he studies (another choice), but it’s reasonable to infer that he does. They could hardly exist on her income from three days’ work.

If these people have experienced hardship, as they claim, then it was self-inflicted.
They are not no-hopers, powerless to determine their future.  They have options. But underlying their decisions is the implicit assumption that the taxpayer will fund their chosen lifestyle.

This is a perverse outcome of a welfare system that has expanded far beyond what its original architects envisaged.
We can only be thankful that the couple’s sense of entitlement isn’t more widely shared – because if everyone felt free to do what they wanted, comfortable in the assurance that the state would support them, society would have collapsed long ago.