PM digging herself into a horrid hole

The Prime Minister Jacinda Ardern entered parliament vowing to reduce child poverty. She even made herself Minister of Child Poverty Reduction. A popular call.

But the PM is in trouble. Her halo is slipping. The country has turned on her covid response and  increasingly mistrusts her motives.

So today she went back to basics and promised more money for the poor children: increased Family Tax Credits and Best Start payments.

This mirrors the US where Biden has increased child benefits against a great deal of evidenced opposition. A typical critic says:

While money can help in the short run, the truth is that no country ever got out of poverty because of income redistribution (a point economist Thomas Sowell took great pains to demonstrate in his work). If such ‘redistribution’ could deliver such a happy outcome, the U.S. should have no child poverty at all.  ~ Veronique de Rugy

The thrust of US opposition is that more 'free' money into poor families with children reduces work effort. That could run the gamut of none-at-all to less. Workless families and children don't mix well when risks of health, education, and safety outcomes are weighed up.

Since Labour took office the number of children dependent on a benefit has risen by 21 percent or 36,000.

It's a dereliction of duty to simply keep upping benefit incomes with no thought to how children in workless families fare. Many are at the bottom of the heap and will face lifelong struggles. How do parents with no work responsibilities integrate their children into that world?

But the PM is hostage to her promises and hellbent on delivering measurable income increases unrelated to work effort, while simultaneously and steadfastedly ignoring the unwanted side effects. 

Relationship between unemployment rate and unemployment benefits

Graphs are great tools for getting the big picture. Here I have plotted the unemployment rate against 'unemployment' benefits:

The heavy blue line is a combination of unemployment and sickness benefits. In 2013 the two benefits were combined into the single Jobseeker benefit (heavy brown line) but still with two categories - JS Work Ready and JS Health Condition and Disability.

The broken line is the official unemployment rate BUT expressed as a percentage of 18-64 year-olds, not 15+. Thats why in Sept 2021 it's 4.4% - a point higher than the rate announced yesterday of 3.4%

The vertical lines mark the changes of government.

Points of note:

1/ The bottom line shows sickness is increasing. This is being driven primarily by increasing  psychiatric and psychological conditions. When National became government they believed not enough attention was being paid to those people on a sickness benefit. So they abolished it, intending case managers would put as much employment effort into that group if they were part of the overall jobseeker group. It appears that the line was arrested for a time but after Labour came back in in 2017 the line started to trend up again.

2/ During Labour's 1999-2008 term the heavy blue line is thereabouts the unemployment rate. During National's term 2008-2017 the heavy blue/brown line is consistently under the unemployment rate. This probably reflects at tougher, more effective approach to benefits (which some would describe as 'punitive').

3/ Covid is largely responsible for the late steep upward trajectory of the heavy brown line BUT is was trending up before March 2020. My last post explained why the line has crossed the unemployment rate line and there is now a large gap between the two.

4/ The covid upturn is very similar to the GFC onset in magnitude. Lockdowns (policy within control of government) caused as much job loss as the global financial crisis (outside of government control).

5/ Another observation some would make is the gap between the unemployment rate and unemployment benefit lines during National's term is now being corrected by Labour. Labour is more generous with benefits. The gap right now is a reversal of the period 2011-17.

There's another line.

It's the very fine line between being generous with benefits and entrenching dependency and all the misery that entails.

Unemployment rate: treat with caution

The New Zealand Herald ran this chart from a private research company called Sense Partners. The chart depicts Maori numbers in the North Island and highlights that the officially unemployed and Jobseeker claimants are trending in opposite directions:

To be officially unemployed a person needs to be available for and seeking work. Just over  30,000 Maori in the North Island are officially unemployed. 

But over 70,000 are on a Jobseeker benefit.

Why?

1/ You can be on the Jobseeker benefit with no immediate work obligation, so not officially unemployed.

For instance the old Sickness Benefit was rolled into the new Jobseeker benefit. So now 38 percent of all Jobseeker claimants are classified as having a Health Condition or Disability which excuses them from immediate work requirements. Not officially unemployed.

2/ You can be on the Jobseeker benefit with part-time or seasonal work so not officially unemployed. With work becoming more tenuous and interrupted more people will be claiming a Jobseeker benefit while having some attachment to the workforce. 

In addition, under a Labour government implementing reforms recommended by the now Governor General Cindy Kiro as head of the Welfare Expert Advisory Group, the softening of WINZ approach towards requiring people to look for work (sanctions and employment focus have both reduced) releases more from the official  definition of unemployed. 

Back to the Maori stats highlighted in the chart, in Northland, a region with a high Maori population the unemployment rate is 3.9% yet the Jobseeker rate is 10.5 percent.

In the general population the figures are:

Unemployment rate     3.4% 

Jobseeker rate     6.1%

 All benefit-dependent rate   11.3% 

Important numbers to remember whenever you hear Grant Robertson, the Finance Minister, waxing lyrical about the wonderfully low unemployment rate.

Downward trajectory of prison population continues

 The latest prison stats came out yesterday. The downward trend continues:

Looking at a broader view the pink area would now be at the horizontal axis:

Out of interest I have graphed individual prison musters at Sept 2017 compared to Sept 2021 and a couple stand out as having very large reductions:

I was volunteering up at Rimutaka during 2017 and it was pretty chocker, also housing overflow from Arohata. Their roll has since dropped from 1,067 to 623 - a 42% reduction. Waikeria has reduced by 45 percent. Arohata's population has reduced by a massive 64 pecent.

On the other hand Mt Eden has only shed 4%. But Mt Eden is primarily a remand prison. Which might say something about reduced offending not being a driver of shrinking musters.

The total NZ prison population has fallen from 10,470 to 8,034 - a 23 percent reduction.

Which made me wonder if the staffing levels are still the same?

The most recent data source is the Annual Report 2019/20 which says, "Our frontline team includes 4,103 corrections officers..." In 2016/17 there were approximately 3,800 corrections officers. Not a perfect match for the graph timeline but the trend in corrections officer numbers would appear slightly upward.

The vast majority of the staff I interacted with were good people.  I hope having a better officer- to- prisoner ratio is making their job a bit easier. 

"A petition that keeps growing"

 Not normally a petition signer I have added my name to this one calling for:

"A petition that keeps growing" is how Kiwiblog describes it.

People say it will make no difference BUT if it gets to the point where  mainstream media can't ignore it, I would be satisfied.