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.

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

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.

Simply...

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.

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.)

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.

Synchronicity

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.

New approach to gangs

There's an article (not on-line) in today's DomPost about the government's intended new approach to gangs. Apparently Anne Tolley and the Deputy police commissioner went to LA to see what successful strategies look like. One of them is a "charter school open 365 days a year".

It's quite a long read with input from gang members and their families, some support and some cynicism. The Police commissioner however makes the point that he has a "secret weapon". That's the older generation of gang members who want a better life for their children.

"We are not going to back off...that's our job. But if people want to try something different, establish a better way for the young generation and they are sincere...then we need to show we are sincere about that too."

There are apparently 3,500 gang members in NZ (a good many of them will be incarcerated surely?) and police research estimates that one gang family can cover

"$5 million (cost includes crime and welfare); 423 victims; 14 members; 3 generations and 93 years spent in jail."

I'm ambivalent about the subject having spent a bit of time with a gang member who wanted me to paint him and his kids. Which I did and thoroughly enjoyed. He wanted out but it's hellish hard. It's personally very dangerous for someone to turn their back. Last I knew he was getting there with support from non-gang extended family. Another friend described how she'd visited prison to pay a 'gang boss' to release her partner. Could be true. Unbelievably, the partner went back to the gang later and wanted their son to join as well.

Only the communities from which gangs come can make an end to the violence and victimisation. Perhaps if police and other government agencies want to work with them, matters will improve. I don't know. Gangs just seem to provide an outlet for something dark and desperate in some people's psyches. As Jarrod Gilbert  points out, they often bite the hand that feeds. There must be some stronger instinct not to be tamed.

Debate descends into silliness

Mike Treen would like me to print his "devastating response to rightwing , self-professed “expert”, Lindsay Mitchell and her nonsensical “graphs” " as described by Frank Macskasy.

devastating response to rightwing , self-professed “expert”, Lindsay Mitchell and her nonsensical “graphs”. - See more at: http://thedailyblog.co.nz/2014/02/07/right-wing-blogger-makes-fool-of-herself/#comment-186703

Right wing blogger makes fool of herself

A right wing blogger has made a fool of themselves trying to dispute figures first revealed by me in the Dailyblog about how a huge gap had grown up between the number on benefits and the number being recorded as unemployed or jobless in the household labour force survey. She was replying to a column by my colleague Matt McCarten in the Herald on Sunday.

More

I better oblige.

My response has been left as a comment. The number of working-age people on benefits is actually higher than the number of unemployed or jobless.

The debate has just become very silly.

(Thanks by the way for the comments regarding whether there is any point in getting involved in this manner.
Weighing up the pros and cons, the answer is probably 'no'.)

And just for Mr Treen, here is the final chart rather than a "crude drawing". He still maintains,

"But, even when we combine the benefit numbers, the huge gap between the number on benefits and numbers measured as jobless remains."

A right wing blogger has made a fool of themselves trying to dispute figures first revealed by me in the Dailyblog about how a huge gap had grown up between the number on benefits and the number being recorded as unemployed or jobless in the household labour force survey. She was replying to a column by my colleague Matt McCarten in the Herald on Sunday.

She did a crudely hand-drawn graph allegedly showing that if you combined the numbers on the unemployment benefit with the number on the sickness and invalid benefit you get a completely different picture. Well that is true with a hand drawn picture. However, if you actually use the official numbers from the Department of Statistics website and use an excel spreadsheet to draw the graph the picture is a little different (actually a lot different!).

- See more at: http://thedailyblog.co.nz/2014/02/07/right-wing-blogger-makes-fool-of-herself/#comment-186703

Should I abandon this?

The debate with Daily Blog writers continues.

I always link to their assertions; explore and attempt to rebut or explain  them. They never link to mine and simply discredit them.

Today, from Frank Macskasy:

(Note the pathetic and largely ineffectual attempts by right wing blogger; self-proclaimed “social welfare expert”; and ex-Act candidate, Lindsay Mitchell, and one or two other National Party supporters to undermine Mike’s analysis. They are unable to address or answer even the most simple points Mike and others have raised.)

I have responded, in part to ask why he hasn't linked to my "attempts" and am currently in moderation.

The last thing I want is to sound like Metiria Turei whimpering about National's so-called  "racist" attacks on her attire when she can give as good as she gets. The insults don't particularly worry me.

The poser for me is whether to bother debating with the left? Does any good come from it?

(Note the pathetic and largely ineffectual attempts by right wing blogger; self-proclaimed “social welfare expert”; and ex-Act candidate, Lindsay Mitchell, and one or two other National Party supporters to undermine Mike’s analysis. They are unable to address or answer even the most simple points Mike and others have raised.) - See more at: http://thedailyblog.co.nz/2014/02/06/un-employment-under-employment-and-the-plain-unvarnished-truth/#comment-186348

Deregistration of Libz has silver lining

I've only just caught up with this news so you may have also missed it:

Libz Announce Deregistration

Tuesday, 4 February 2014, 9:34 am
Press Release: Libertarianz Party PRESS RELEASE
For immediate release
Libertarianz Party
Libz Announce Deregistration
Libertarianz leader Richard McGrath today [3 Feb] confirmed that the Electoral Commission had last week deregistered the party at its own request.
"Senior party members had been discussing for several months how we might get more bang for our buck, and it was decided to continue as a ginger group and/or think tank rather than as a registered political party."

more

It's sad yet good news.

The libertarian vote is too splintered. If ACT is now uncompromised in espousing libertarian ideas there will be energy freed up from the deregistration of Libz. And Libz activists are very committed. It's well known in politics that a few very motivated individuals can make a noise and impact which far outweighs their actual numbers.

The 'deny or discredit' approach - two examples

I've been debating with a couple of people via blogs/newspapers about welfare matters.

Here's a response to an earlier letter published in the Dominion Post.

My reply:

Correspondent Teresa Homan doubts the veracity of my statistics and wants to know where they come from. The answer is, this newspaper, which reported in November last year, "More than 5000 people are collecting benefits because drug and alcohol addiction is preventing them from working". I am assuming the information was released under the Official Information Act. It is, in any case, consistent with my own earlier requests.

And over on Breaking Views Mike Treen has presented me with a bigger better graph which introduces a different  measure but is entirely consistent with what I've been saying about recessions and the nature of the unemployed during them. He writes:

Hi Lindsay,

Thanks for trying to rebut my graph. I have redone it for the combined benefit numbers (Unemployed, sickness and invalid together). It shows a somewhat less dramatic but still dramatic gap opening up between numbers on benefits and the broader Jobless number. The Jobless number goes from being regularly 20-50,000 above the combined benefit number to being 50,000 below the number. Here is your graph when done properly.

https://dl.dropboxusercontent.com/u/18076151/Combined%20benefit%20grap.png

 My response:

Hi Mike

Your HLFS graph line has now switched to "jobless" rather than "unemployed" producing a higher number.

The last time the "jobless" were above the number on benefits was the period during 1989 - 1993, also a substantial recession which featured higher unemployment than the latest.

Which bears out the points I've raised about the nature of the unemployed during recessions. They have more assets; they are more likely to have a partner; they are more likely to be short-term unemployed - all of which, rightly or wrongly, prevent them from accessing a benefit.

Anyway, had you included your original graph line of officially "unemployed" it would fall well below the number supported on the combined SIU. Why did you drop it?

I think I know the answer to that. It would have contradicted the original claim which was:

The combined efforts of both National and Labour governments’ punitive policies towards the unemployed seems to have removed over 100,000 people from rightful access to an unemployment benefit.

The combined efforts of both National and Labour governments’ punitive policies towards the unemployed seems to have removed over 100,000 people from rightful access to an unemployment benefit. - See more at: http://thedailyblog.co.nz/2014/01/30/billions-of-dollars-stolen-from-the-unemployed/#sthash.mBmmhTuO.dpuf

Facts about the minimum wage

I notice this morning already much of the advocacy for increasing the minimum wage focusses on  being able to feed children. Yet most minimum wage earners are single and childless. When they do have children they are often part of a couple with the other earning considerably more.

Assuming Treasury deals in accurate statistics here are some about the minimum wage:

 "The minimum wage has grown much faster than average wages over the last decade...

 In 2011 our minimum wage was 60% of the median earnings for full-time workers. This was amongst the highest ratios in the OECD, and well above the level found in most countries which is typically around 45%.   For instance, the ratio was 45% in Australia, 38% in the United Kingdom, 40% in Canada, and 28% in the United States.[1] Increasing the rate still higher to 88% of the median wage would take the minimum wage well outside the normal range. This is likely to make employment for people with low skills difficult in an internationally focused economy.

---

[1]           2011 was the most recent date on which comparisons were available from the OECD.

... the minimum wage applies to a smaller proportion of the workforce (less than 4%) ...

63 percent of households earning below $18.40 are single adults without dependants.

The current objective of the minimum wage is to protect the real incomes of low wage earners, while minimising job losses. It is not an effective mechanism for reducing poverty on its own, nor is it intended to be. Instead, there are other measures, like income transfers, subsidised access to health and education services, and childcare assistance, to improve the wellbeing of families with low incomes.

 Raising the floor on wages will... always provide greatest benefit to younger people, and especially to those in the teens and early 20s."