Growing gap between income from welfare and work?

 The NZ Herald reports

"There is evidence that there is a growing gap between the incomes of those heavily reliant on the safety net provided by main working-age benefits, and the rest," the report said. 

Kiwiblog has picked up a similar line line.

However, beneficiaries slipped further behind average incomes because benefits are adjusted in line with prices, not incomes, so inequality worsened at the bottom of the income scale.

Here is the relevant section from the report:

While there is no evidence of growing inequality in the population overall or between high income households and the rest in the last two decades or so, there is evidence here that there is a growing gap between the incomes of those heavily reliant on the safety net provided by main working-age benefits, and the rest.

	% change from base year (CPI adjusted – ie ‘real’ changes)
	1983 to 2014	1994 to 2014	2007 to 2014
Median household income	+25	+45	+5
Net average ordinary time earnings	+32	+32	+12
NZS	+9	+21	+12
DPB plus family assistance (with one child)	-17	+6	-2
Invalids Benefit – single aged 25+	-8	-1	-1

Note:    The change in median household income is to calendar 2012 only (HES 2013). Assuming modest household income growth from 2012 to 2014, a further 3 to 4 percentage points needs to be added to the changes for household income for proper comparisons.

The DPB and Invalid Benefit calculations do not include accommodation supplement (which around 80% of those on DPB receive.)

Source: Working Age[Non-NZS] Welfare, Treasury, Figure 8

This shows that accommodation supplement and income related rents increased at a rate much higher than CPI or average wages.

Without those components accounted for we can't know if the statement is accurate.

Teen parents - a real difference

I wanted to get the whole picture before I wrote this post. Yesterday some detail arrived from MSD.

For years I have agitated about the long-term DPB population being derived from teenage births. The children of these parents form the most at-risk group.

But from 2008 the number of teenage births started dropping. In 2013 there were 29 percent fewer than in 2009.

But even better, at March 2009 there were 4,425 teenage parents on any main benefit. By March 2014 the number had dropped to 2,560. A 42 percent reduction.


The really important news is it's happening across all ethnicities.The proportions are reasonably stable.

In 2009, 52 percent were Maori; in 2013, 55 percent.

For Pacific Island, the proportion rose slightly from 9 to 11 percent.

NZ European dropped from 29 to 25 percent.

The percentage who are aged 16-17 dropped from slightly from 16.5 to 15%.

The percentage who are male is unchanged 4%.

This means thousands fewer children experiencing poor outcomes - ill-health, disconnect from education,  in and out of fostercare, potentially abused and neglected, having the cards stacked against them from the outset.

Thousands of would-be teen mums will keep their own lives and  potential, and hopefully have children when they are ready to.

It's a fantastic development.

National deserve at least some credit for it with their new young parent mentoring and benefit management regime.

Child poverty/hardship rates down

MSD has just released this years Household Incomes Report. There's lots to digest but for now here's the main political development, the one the Left is waiting for:
 

In HES 2013, child poverty rates were around 3 percentage points lower on all but one of the standard measures compared with what they were immediately after the GFC impact in HES 2010 and 2011...

Using MSD’s Economic Living Standards Index (ELSI), hardship rates for children rose from 15% in the 2007 HES to 21% in HES 2011, then fell to 17% in HES 2012. The trend finding is robust, though the actual levels at any time depend on a judgment call on the threshold used.

Gangs: an idea with promise

Here's an interesting idea:

The Dunedin City Council is investigating giving council contracts to Notorious Mongrel Mob and Black Power.
This comes after the once warring gangs made national headlines when they gave a joint submission at annual plan hearings in May, asking councillors to consider giving them a contract to maintain some of the council's green space.

More

I was a bit surprised there are many gang members down in Dunedin to be honest. But if the work units combined older and younger members they might provide a really valuable solution to a serious social problem. Older members burn out and want a better way of living. The difficulty is peresuading their offspring to take a new path.

Their visibility would also give the wider community the chance to acknowledge and include gangs. There's risk but probably more to each other than outsiders. And of course they would be doing another contractor out of work. But if they come in with a competitive price the ratepayers win too. If it had anything to do with me I'd keep an open mind.

Over half on waiting list for housing in Auckland

MSD has started publishing a quarterly report on housing waiting lists.


- 57% are in the Auckland Super City

- Only 10% are in Christchurch and under 3% in Wellington

- Even with Wellington, Lower and Upper Hutt and Porirua added together, the waiting list share is still only 6% (Greater Wellington population is just over a third of Auckland Super City)



Again, the bulk of the housing problem is in Auckland. I am guessing that affordability in the private sector is prompting renters to apply for cheaper social housing.

On the positive side,  in March 2008 the HNZC waiting list stood at 9,935. Now the number is 5,840 and includes those waiting for other social housing. A good news story for National.

And good on MSD for making the information routinely available.

ACT leader under-appreciated

Jamie Whyte just recieved  the Institute for Economic Affairs Seldon Award for his writing. The following statement by ACT's president made me reflect as per the post title:

“No other New Zealand political party can boast a leader whose thoughts are published regularly in the Wall Street Journal, The Financial Times and The Times. This award is a fantastic achievement, we’re proud it was won by a Kiwi – and we’re even more proud it was won by Jamie,” says Mr Thompson.

(And on the subject of awards. my entry into the inaugral Muriel Hopper Art Award received one of two  People's Choice awards voted by those who attended the exhibition. Not quite as prestigious but made me very happy nonetheless.)