Written By: - Date published: 7:11 am, June 17th, 2015 - 138 comments
Categories: capitalism, class war, economy, housing, poverty - Tags: housing, IMF, inequality, oecd, poverty, trickle down, working poor
As National’s Auckland housing omnishambles spirals out of control it is of course the poor that suffer the most. There was a good summary in The Herald yesterday:
Vulnerable worse off in frantic housing market
Record numbers of people are sleeping rough or in cars this winter as Auckland’s desperate housing shortage makes life harder than ever for those at the bottom of the city’s frantic housing market.
The Auckland City Mission and Lifewise, which work with the homeless, say people are sleeping in cars and outside heating vents at all-night supermarkets and anywhere else they can get some shelter from the cold.
“There are more and more people who are not only rough sleeping but who sleep in their cars and who sleep in accommodation that is inappropriate,” said the City Missioner of the past 17 years, Dame Diane Robertson. “The incidence is higher than it has ever been, and it is much more visible than it has ever been.
Welcome to the “brighter future”, I think we’re “on the cusp of something special”, don’t you?.
National’s standard response to poverty is that the poor just need to get motivated and get a job. There are many (many) problems with that glib simplification, these days the biggest one is that many working people are in poverty too. Welcome to the NZ of the working poor – I’ve written about it before (here, here). In England, for example, “Over half of all families in poverty are also in work”. Another study on Child poverty and social exclusion has just reached the same conclusion: “Analysing the characteristics of poor children it confirms that now a majority of poor children are living in households with someone in employment”.
Policies that weaken the rights of workers and keep wages low are not only keeping people in poverty, they are bad for the economy too. The OECD reckons that growing inequality in NZ since 1985 has held growth back by a third. The IMF reaches similar conclusions. Just yesterday in fact, the latest from the IMF:
Pay low-income families more to boost economic growth, says IMF
Study indicates stagnating incomes of the poor and middle classes could have been instrumental in the financial crisis
The idea that increased income inequality makes economies more dynamic has been rejected by an International Monetary Fund study, which shows the widening income gap between rich and poor is bad for growth.
A report by five IMF economists dismissed “trickle-down” economics, and said that if governments wanted to increase the pace of growth they should concentrate on helping the poorest 20% of citizens.
The study – covering advanced, emerging and developing countries – said technological progress, weaker trade unions, globalisation and tax policies that favoured the wealthy had all played their part in making widening inequality “the defining challenge of our time”.
Read on for plenty more. Raising the income of the poorest 20% is good for us all, but here in NZ we’re working on the opposite.
It’s all connected. Low wages that lead to increasing poverty that leads to low growth that contributes to property speculation that drives up property prices and rents that consume a larger proportion of income that combines with low wages to increase poverty… and so on. The policy settings are wrong everywhere. What a mess.