Poverty Watch 26

In the current series of posts we’re looking at the Office of the Children’s Commissioner (OCCC) 2012 report “Child Poverty in New Zealand evidence for action“. Continuing from last week…

1.6 The impact of poverty on children

The reports we’ve been covering recently are all about the impact of poverty on children in the statistical abstract – greater health risks, poorer educational outcomes, and so on. This brief section of this report, however, reports children’s impressions of poverty in their own words:

Poor health…Sick easily…High risk of getting sick or disease…Can’t afford doctors fees… Can’t afford to go to the doctor or dentist…Unpaid doctors fees.

Teachers causing shame to students in front of their peers because they have no stationery, uniform etc. Schools should deal with parents and not punish the kids for not having shoes, books.

The children and young people spoke of having to move a lot because the rent was unpaid:
Poverty is…moving houses, always moving – stressful. Having to move in the middle of the night – unable to pay rent, scary.

The report also summarises:

Participants spoke of having to look after siblings while their parents worked, often meaning they missed school. Some of the young people said that ‘financial difficulties, a lack of education, qualifications and work experience along with responsibilities to provide for their families had led them, or their mothers into [prostitution]’. Many children and young people associated poverty with abuse, neglect and family violence. They talked about the stress of growing up in poverty and how this could ‘cause them to get involved in risky and health-compromising behaviours such as drinking, smoking and taking drugs’. Many of the participants in the project who were living in poverty did not have much hope for their future prospects.

1.7 Some common misconceptions

Another brief section looking at misconceptions about inter-generational poverty (social mobility), “relative” poverty, and the argument / myth that poverty is a result of poor spending decisions. Each of the topics is worth reading, but I’ll quote only one of them (the most abstract perhaps, but it’s topic least often discussed and least well understood in general):

Another misconception is that if poverty is measured on the basis of relative income it will be impossible to reduce poverty very much. This is because, it is argued, no matter how quickly incomes rise there will always be a significant proportion of people who fall below the relevant poverty threshold. Such a conclusion, however, is misplaced. Poverty thresholds are based on (equivalised) median incomes, and there is a fundamental difference between median and average incomes. The median is simply the mid-point in a particular distribution; that is, the point in the middle when a set of things has been arranged from the lowest value to the highest value. Accordingly, the distribution of income (and other things) can be changed without necessarily changing the median. In theory, it would be possible to eliminate child poverty completely if the incomes of those below the poverty threshold (e.g. 60 percent of the median income) were raised above the threshold (as this would have no effect on the median income). Relative poverty rates are thus responsive to government policies which alter the distribution of income. New Zealand demonstrated this during 2005 to 2007 when the Working for Families package raised the incomes of many families, especially those earning less than the (equivalised) median. This reduced child poverty rates.

For other takes on misconceptions within NZ, see the excellent Gordon Campbell’s “Ten Myths About Welfare”, the Child Poverty Action Group’s “Myths and Facts: Sole Parents and the DPB”, and internationally a recent report from British churches “The lies we tell ourselves: ending comfortable myths about poverty”. Mmmm – lots of persistent myths – why so many? – because it suits the narrative of the right-wing of politics to keep perpetuating them. Subject for a future Poverty Watch I think.

1.8 Conclusion

This first Chapter was broad, interesting, and set the tone for a much more “opinionated” and contentious report than usual. I’ll quote the brief conclusion in full:

Child poverty afflicts a significant number of young New Zealanders. This matters for many reasons. The costs of poverty, both to children and the wider society, are high. These costs are all the greater when poverty occurs in early childhood and when it is severe or persistent. Failure to address child poverty now will thus detrimentally affect our future prosperity as a nation.

In New Zealand, current child poverty rates exceed those of the 1980s. Moreover, during recent decades child poverty rates have been substantially higher than those of most other age groups. It is particularly significant that the rate of child deprivation, at least on one measure, is six times that of people aged 65 and over (which is a very large difference by OECD standards). Nobody wants the elderly to be deprived. But why should such high rates of childhood deprivation be tolerated?

The relevant New Zealand data show that child poverty is especially high amongst sole-parent families and those where no adult is in full-time employment, families with young children or more than two children, Mäori and Pasifika families, households with disabled people, and families who do not own their own home. While child poverty is more heavily concentrated in such families, there are also large numbers of poor children living in other kinds of families (e.g. those where at least one parent is in full-time employment and where there are two parents). This evidence is highly relevant when considering how best to reduce child poverty and mitigate its effects.

Finally, child poverty can be alleviated. Prudent policy interventions can make a difference. We know this from our own recent history. There is also good international evidence about what works. For instance, the child poverty-reduction strategies employed in other countries, such as Australia, Ireland, Sweden and the United Kingdom, highlight which policy levers have the greatest impact. There are many lessons from these countries for New Zealand. We have drawn on their experience in formulating our recommendations.

On to further chapters next week…

In current news:

Extreme poverty could be wiped out by 2030, World Bank estimates show

World Bank head speaks of ‘auspicious moment in history’ amid criticism rhetoric is not being matched with detailed policies

Extreme global poverty could be eradicated by the end of the next decade under optimistic new targets unveiled by the World Bank that have divided development experts.

The bank’s president, Jim Yong Kim, claimed signs of recovery in the global economy meant there was now an “opportunity to create a world free from the stain of poverty” by 2030. “We are at an auspicious moment in history, when the successes of past decades and an increasingly favourable economic outlook combine to give developing countries a chance – for the first time ever – to end extreme poverty within a generation,” he said in a speech in Washington.

The World Bank‘s upbeat projections, defining extreme poverty as the 1.3 billion people living on less than $1.25 per day, come as governments and international institutions prepare to set new targets toupdate the 15-year Millennium Development Goals set by the United Nations in 2000. …

Critics accused the World Bank of being “very unambitious” and obsessed with economic growth rather tackling inequality after the leak of planning documents in March that were heavily focused on free market orthodoxy as the primary solution to global poverty.

The recent criticism appears to have to stung Kim into stressing a greater need for poorer people to take their share of economic growth too.

“We have to break the taboo of silence on this difficult but critically important issue,” said Kim in his speech delivered to students at Washington’s Georgetown University on Tuesday. “Even if rapid economic expansion in the developing world continues, this doesn’t mean that everyone will automatically benefit from the development process. Assuming that growth is inclusive is both a moral imperative and a crucial condition for sustained economic development.”

But those who monitor the activities of the World Bank said the new rhetoric was not matched by detailed policies to tackle inequality.

As usual, words are easier than actions. Report after report after report, and nationally and internationally, poverty is still with us…

Here’s the standard footnote. Poverty (and inequality) were falling (albeit too slowly) under the last Labour government.   Now they are on the rise again, in fact a Waikato University professor says that poverty is our biggest growth industry.

Before the last election Labour called for a cross party working group on poverty. Key turned the offer down.  Report after report after report has condemned the rate of poverty in this country, and called on the government to act. Meanwhile 40,000 kids are fed by charities and up to 80,000 are going to school hungry. National has responded with complete denial of the issues, saying that the government is already doing enough to help families feed their kids. Organisations working with the poor say that Key is in poverty ‘la la land’.

The Nats refuse to even measure the problem (though they certainly believe in measurement and goals when it suits them to bash beneficiaries). In a 2012 summary of the government’s targets and goals John Armstrong wrote: “Glaringly absent is a target for reducing child poverty”…

The costs of child poverty are in the range of $6-8 Billion per year, but the Nats refuse to spend the $2 Billion that would be needed to really make a difference. Even in purely economic terms National’s attitude makes no sense.