Friday, August 06, 2021

Child Poverty Reduction Minister is a foolish risk-taker

 According to a report in Stuff the Prime Minister - also Child Poverty Reduction Minister - asked for advice on raising benefits by $50 weekly. That would bring more children out of poverty on paper. But she was advised that the incentives to work, which are already weak for sole parents, would be even further eroded.

The PM seems disinterested in the question of whether it is more important for children to be in working homes than on benefits.

Her overriding goal is for family incomes to rise regardless of source.

Since she became responsible for reducing child poverty Ardern has done a number of things including creating Best Start, lifting child tax credits, linking benefits to wages and increasing core payment rates (and it won't stop there based on the advice sought since.)

That has coincided with a nineteen percent increase - or 32,427 - more children in benefit households.

Currently almost two thirds of the children are in sole parent homes and the proportion of parents who have been dependent for more than a year has increased from 75 to 79 percent.

Now consider the following Treasury evidence (work done under Bill English) about the poor outcomes associated with benefit dependency:

These are the real risks the PM is prepared to take so she can talk about lifting thousands of children out of poverty.

Perhaps in a generation's time there will be damaged adults calling for an apology from her for being reckless with their lives?

Wednesday, August 04, 2021

The conundrum of low unemployment and high benefit dependence

Stats NZ reports that the June 2021 unemployment rate has fallen to just 4 percent.

MSD reports that the June 2021 working-age Jobseeker dependency rate was 6.1 percent.

The graph at StatsNZ is interactive and shows that back in September 2008 the unemployment rate was 4.1 percent.

Yet in September 2008 MSD reported only 3.6 percent of the working-age population was on a Jobseeker benefit.

Graphed, the difference between the two quarters is quite remarkable.

It is possible to work part-time and receive Jobseeker but the last time I requested relevant data  - December 2019 - only 6.8 percent of Jobseeker recipients were declaring earnings.

As mentioned previously the denominators for the unemployment rate and jobseeker dependence rate differ slightly but that isn't material to the massive difference between Sept 2008 and June 2021.

Out of interest I will chart the percentage unemployed against total benefit dependence.

This graph confirms is that the 2008 lower jobseeker % wasn't because people were 'hidden' on other benefits.

The central question is, why are 190,257 people on a Jobseeker benefit when only 117,000 are officially unemployed?

According to StatsNZ, "Additional people captured only by Jobseeker Support are benefit recipients seeking full-time or part-time work but unavailable for a short period of time, benefit recipients working part-time, and benefit recipients not working or seeking work."

That confirms people are on a Jobseeker benefit but not necessarily counted as unemployed.

That's very handy for the government.