AKA: inequality, equality
Key notes
- Issues polling, e.g., from Curia or Ipsos, does not distinguish between child or adult poverty so we don't know the level of concern respondents have towards these group. As such, we have shown a poverty metric for all Kiwis, not just children. We also believe this is the most responsible way to measure poverty which isn't always just a child issue, of course, despite the way it is often portrayed by politicians and media.
- There is no single measure of poverty, however, the DEP-17 index and corresponding 'material hardship' and 'severe material hardship' classifications are good indicators that cover a wide range of areas.
- We couldn't use 7 of the 9 measures of child poverty that were created by the previous Labour-led Government, or their all-ages equivalent, due to them being measures of income equity, not poverty. More detail below.
- https://kpi.nz/kpi/adults-on-a-main-benefit is also a good indicator of poverty, as it is the main measurement of the % of Kiwis requesting financial help from the state above any income earned.
- Remember that each Labour-led or National-led government has had coalition partners that share the successes, and the failures, with them. A full list of governments for this time range is at the bottom of this page.
Data sources
Data shown:
- Material hardship % for the entire population
- Severe material hardship % for the entire population
- 2013 onwards, as that is when this time series begun
Full data:
Frequency:
Updated:
Last update:
Next update:
Why this KPI?
- In 2018, the Labour-led Government created the Child Poverty Reduction Act. This included 9 child poverty metrics, and these were the most commonly referenced poverty measures by the Labour-led Government of the time, and still are by many politicians, media, and bureaucrats. However, we haven’t used these because:
- They only measure child poverty, not all poverty. Poverty also affects adults, especially the elderly or vulnerable, and an increasing % of households don’t have children.
- The 9 measures only really contain 2 poverty measures.
- The 7 metrics containing ‘X% living below Y% of the median’ for differing financial metrics are arbitrary measures of income equity, not poverty. They can't measure if all of society is struggling or thriving more, just a comparison to the median. For example:
- It’s possible, if not likely, during tougher economic times, that a growing number of individuals fall into poverty, even if the bottom incomes are growing faster than the median via minimum wage or benefits increases.
- If the cost of living decreases relative to incomes, which it did for food for 20 years when we look at the Household Incomes vs the Food Index up to March 2022, or there is state intervention like free school lunches, which is not recorded as income, then that can reduce poverty levels even if the incomes of the lowest earners aren’t growing as fast as the median.
- These same limitations apply to the all-ages data set too.
- The DEP-17 scores, shown as 'material hardship' and 'severe material hardship' are a good poverty measure for children and all other ages too; asking 17 good questions that would reflect a situation of poverty. It is important to note some weaknesses, however:
- The full data showing the % of households against each DEP-17 score from 0 to 17 is not published anywhere, only the % that scored 6+ (defined as 'material hardship') or 9+ (defined as 'severe material hardship').
- Other questions have a degree of choice and relate to values, e.g. buying gifts for others, or wanting to pay for home contents insurance versus choosing 'self-insurance.'
- Table 12 mentions 'Material wellbeing index', but this has not been well defined. We suspect it is the reverse of the Dep-17, e.g. a DEP-17 score of 0, 1, 2 = a 15+ Material Wellbeing score, but it could be a different type of measurement altogether.
- The amount of discretionary income in (inflation-adjusted) $ terms could be a great measure. Table 3 looks to have this information, but it hasn’t been inflation-adjusted despite the references to a 2017/18 base year. We have asked Stats NZ if they've done these calculations. If not, we've asked them if we can use the RBNZ inflation calculator (CPI), as a fair and accurate way to calculate this.
- Homelessness and people living in cars, might be in the Census data, although the last data set available is 2018. We have asked for more information on these measures.
- Given all of these limitations above, we turned to other leading authorities:
- Oxford definition: poverty = the state of being poor
- When experts speak about the 'poverty trap' or 'poverty cycle,' they closely correlate this to inter-generational social welfare dependence on the state (hence why the % on benefits is a useful measure).
- Poverty is predominantly a financial issue, whether that is an adult or a child reliant on an adult or adults. And the best indicator of financial stress/someone's income being insufficient to cover the cost of living life's necessities, is arguably whether you require financial assistance from the state/fellow taxpayer.
Discarded
The 7 poverty reduction metrics with ‘X% living below X% of the median’ for differing financial measures.
- For the reasons mentioned above, getting closer to the median value doesn’t mean you’re being lifted out of poverty, especially if everyone in society is struggling more under cost of living pressures.
Official unemployment rate.
- Unfortunately, we can’t use the official unemployment rate to measure poverty either, as the unemployment rate has a major flaw. If you work for just 1 hour per week, for free, mowing a friend’s lawn, you are considered 100% employed, not 2.5% employed (1/40) and 97.5% unemployed (39/40). There is no weighting, only a binary classification whereby 1 hour of work is considered employed for the week. There are several other issues with how this is calculated too, e.g. it uses 30 not 40 hours as a full working week, so it’s far from a true unemployment rate.
Related facts
Wishlist
With support, we’ll be able to add multiple KPIs for each issue:
- True unemployment rate
- Updates on many of KPIs listed above.
- DEP-17 scores for all ages
- % of people living in cars
- Homelessness
- Emergency food grants
- Child-specific:
- % of dependent children for working-age people on main benefits (we have this data)
- Hardship and severe hardship as measured by DEP-17 scores
- % of children living in cars.
Governments over the timeframe shown
- 1999 = Labour/Alliance + Green
2002 = Labour/Progressive + United
2005 = Labour/Progressive + United, NZ First
- 2008 = National + ACT, United, Māori
2011 = National + ACT, United, Māori
2014 = National + ACT, United, Māori
- 2017 = Labour/NZ First + Green
2020 = Labour+Green
- 2023 = National/ACT/NZ First
Sources:1,2 (see table)
Data published by Ministry of Social Development
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