The Dim-Post

August 10, 2010

Chart of the day, back to the DPB edition

Filed under: economics,Politics — danylmc @ 2:52 pm

An interesting chart I stumbled across in the WWG detailed analysis:

I’m not a fancy economist with a degree from the LSE but to me it looks as if (a) Labour’s policies were proving pretty successful at reducing DPB numbers and (b) the recent rise in DPB beneficiaries is closely correlated to the recession related rise in unemployment.

I know that right-wingers like to fantasize about huge legions of swarthy teenage girls breeding for cash but I’m going to throw out a hypothesis that a great many of the new DPB recipients are not hot, slutty money-grasping harlots but rather mums who are recently unemployed and qualified for the DPB rather than the dole because they’re eligible for it and the payment is higher.

Sure, long-term beneficiaries are still a concern but to me that chart suggests that close to half (misread the base value on the vertical axis) most new DPB recipients are there because of the poor labour market, not ‘welfare dependency’ or a bad attitude, and that once the labour market improves then we need to keep doing what we were doing under the previous government, not radically reconstruct the welfare system.

About these ads

31 Comments »

  1. BUTBUTBUT the whole reason they’re on the DPB is because there’s a DPB and it’s very generous and why would they bother working? and so they’re not and because they’re not it’s driving down productivity and weakening the economy and that means there are fewer jobs and it means lots of people have to go on the DPB!

    [/berend]

    L

    Comment by Lew — August 10, 2010 @ 2:58 pm

  2. I think you may have fallen for the old Excel charting trick. The “zero” point on the verical access is not 0 but 80000. Eyeballing the chart it looks like numbers have doubled in the last couple of years (hence your “close to half”); in fact the increase is only about 15 – 20%. This doesn’t necessarily negate your conclusion but it does make it easier to argue the opposite: what the previous government did still only reduced numbers by 10% over 10 years (yes, yes, I’m generalising), a radical reconstruction is required.

    Comment by Steve — August 10, 2010 @ 3:06 pm

  3. An excellent post, made all the more so by Lew’s irony. His comment reminded me of an essential truth – Social Democrats believe that most people want to be engaged on constructive, decent work, and need safety nets only for economic emergencies or for when incapacity strikes; neo-liberals (and some others) believe that most people seek an easy way out if they can get it. Hence they must be disciplined into the “right” way of thinking and acting. I’ve always thought that such believers must lead a miserable life, fretting about bludgers and the ill-disciplined (and breeding) masses.

    Comment by Robert Winter — August 10, 2010 @ 3:17 pm

  4. Thanks Steve. I did make that mistake – edited the post slightly.

    Comment by danylmc — August 10, 2010 @ 3:17 pm

  5. Social Democrats believe that most people want to be engaged on constructive, decent work, and need safety nets only for economic emergencies or for when incapacity strikes;

    If I had to guess i’d say that ‘neo-liberals’ believe people “need safety nets for economic emergencies or for when incapacity strikes” too.

    Comment by Stephen — August 10, 2010 @ 3:28 pm

  6. Lindsay writes: according to census data, NZ has the second highest percentage of children living in sole parent households in the developed world and second, nearly half of the parents don’t work.

    A concern Danyl?

    And to Stephen: neoliberals only believe in safety net for banks…

    Comment by Berend de Boer — August 10, 2010 @ 3:30 pm

  7. To Lew, I just quote the Dominion:

    In 1960, 2 per cent of the working age population was dependent upon benefits. Today 13 per cent of the working age population is dependent on a benefit.

    Lew, please explain.

    Comment by Berend de Boer — August 10, 2010 @ 3:33 pm

  8. Actually, the graph drops when more money is paid for working, via working for families, childcare rebates and the in work tax credits. So presumably there were 15,000 DPB recipients who could work, but chose not to until the government paid them to do so.

    I conclude that, for those 15,000, the DPB was an economic choice, not a necessity. Is that the function of the welfare state now? Not to provide a safety net for the desperate, but simply to increase people’s economic choices? If so who is going to pay?

    Greece.

    Comment by Vibenna — August 10, 2010 @ 3:38 pm

  9. danyl “suggests that most new DBP (sic) recipients are there because of the poor labour market”

    You could also suggest that most of the reduction in DPB recipients over the period ’98-’08 was due to an improving labour market off the back of an ‘improving’ global economy. Now we know however that the economy wasn’t really improving it was just being spruiked by central banks, brokers and real estate agents.

    Comment by davy crockett — August 10, 2010 @ 3:41 pm

  10. In 1960, 2 per cent of the working age population was dependent upon benefits. Today 13 per cent of the working age population is dependent on a benefit.

    I’m not Lew, but I will – yet again – patiently explain. The DPB didn’t exist back then, the law expected Fathers to acknowledge and pay maintanence for their children. As you can imagine this didn’t really work out. Also, the state used NZ Rail, NZPost, the Forestry service and other such entities as job creation schemes to artifically manipulate the employment figures. Also, our population was a lot younger then, and if you had a mental illness you were locked away in an asylum for life. Now you’re put on an invalids or sickness benefit.

    Did I miss anything?

    Comment by danylmc — August 10, 2010 @ 3:41 pm

  11. In 1960 NZ had a massive export economy based on used sheep parts and a GDP per capita at the top of the world ranks. Then we had successive governments comprised of retards, mongs and knob grippers frittering our wealth away while carrying out their pet political and social experiments; the rest of the world looked on in awe of the stupidity.

    Comment by davy crockett — August 10, 2010 @ 3:51 pm

  12. to me it looks as if Labour’s policies were proving pretty successful

    You could also legitimately argue that WFF gave a minor level-shift downward of some 2-3,000 DPB recipients (which I believe would have a net-zero effect on Govt expenditure) while a tax-credit which makes work relatively more attractive than the DPB made, erm, work relatively more attractive.

    Comment by Phil — August 10, 2010 @ 4:00 pm

  13. Berend, in 1990 almost nobody in NZ had access to the internet. Now almost everyone does. Explain. What’s that you say? There was no meaningful consumer-level internet availability in 1990? Well, goodness.

    You seem to be arguing that people got along just fine until benefitscame along. Re the DPB: thousands of beaten and abused women and children would beg to differ. And what Danyl said. If you want to go back to living in a postwar boom-time in which the government kept people in work, and in which there were effectively no single mothers, because choosing to leave your (possibly abusive, violent) husband or partner got your kids sent to borstal or (if very unfortunate) into the Catholic Church — I suggest you form a political party and campaign on it. Good luck with that.

    L

    Comment by Lew — August 10, 2010 @ 4:06 pm

  14. If you want to go back to living in a postwar boom-time in which the government kept people in work, and in which there were effectively no single mothers, because choosing to leave your (possibly abusive, violent) husband or partner got your kids sent to borstal or (if very unfortunate) into the Catholic Church — I suggest you form a political party and campaign on it. Good luck with that.

    Or form a political party, don’t campaign on it, and implement it anyway.

    Comment by georgedarroch — August 10, 2010 @ 4:18 pm

  15. Vibenna,

    Your comment about 15000 people shifting back from work to the DPB by choice pretty threadbare. I’m not on the DPB, butI hear it is bloody hard – I’ve met enough young mothers who scrimp and save and grow their own veges, don’t drink or smoke, but still don’t have enough money to send the kids to school in a winter uniform, let alone pay the money so the kids can go on their school camp.

    I just can’t work out what the incentive is to be on the DPB again – can someone remind me? I just don’t see the appeal of life without disposable income, let alone the stress of having to choose between feeding the kids or keeping the power connected.

    Mind you John Key is on record as stating he believes women on the DPB are “breeding for business”. He’s a man who knows the worth of a dollar, so there must be a decent business case there somehow.

    But back to the issue – what led to fewer people on the DPB? A drum-tight labour market – employers were desperate to get skilled people on the job. Hence more likely to accomodate the least desirable employee type: the part time mother. The one who leaves the office early, arrives late, takes long lunch breaks to fit in the kid’s dental visit, and takes a minimum of 8 sick-days a year. All this despite only being employed as a 0.6 FTE. Employers put up with it because it was all they could get – but with unemployment above 6% and rocketing skywards it’s no surprise that women with kids are struggling to transition off the DPB again.

    Comment by taranaki — August 10, 2010 @ 4:29 pm

  16. “there must be a decent business case there somehow”

    yeah it’s like investing in a lottery ticket: you may give birth to a child who goes on to become an obscenely rich currency trader and prime minister of the country and then you’re sorted for life.

    Comment by nommopilot — August 10, 2010 @ 4:59 pm

  17. Here how racist Danyl actually is:

    In 1968, 72 percent of Maori babies were born to mothers who were married, while 28 percent were born to unmarried mothers. This compared with 89 percent of non-Maori babies born to married mothers and 11 percent to unmarried mothers.

    But by 2008 the figures point to the almost total collapse of the traditional Maori family: only 32 percent of Maori babies are now born into a family with a mother and father who are married. A staggering 78 percent of Maori babies are born to unmarried mothers. For non-Maori the comparative figures are 65 percent of babies are now born to married mums compared to 35 percent to single mothers.

    So basically most Maori were beating their wives in 1968 and they didn’t have nowhere to go. Now they can go somewhere, they do.

    Nice argument Danyl.

    Comment by Berend de Boer — August 10, 2010 @ 5:05 pm

  18. Fight, fight, fight.

    Comment by davy crockett — August 10, 2010 @ 5:11 pm

  19. Berend can you please show me a graph that overlays Maori Unemployment and rates of single parent households over that time scale?

    (I can’t but I bet there is a correlation).

    Also, (with my rose tinted glasses) back in the 70’s a single parent could work and have a modest mortgage on a modest house in a modest suburb. Today you need at least two average incomes to buy a modest house in the far flung suburbs

    Unless you have been in a cryogenic chamber since the 70’s you may have noticed the world has changed socially and structurally and we do things a wee bit differently than we did in the ‘glory days’ of 30 years ago.

    Annnd, weren’t we in a government controlled socialist hell holes in the centrally planned gulags of the 60’s,70’s and early 80’s until we were saved by Roger Douglas. Post market reforms, surprisingly the same time all the negative statistics went off the charts.

    Just sayin.

    Comment by andy (the other one) — August 10, 2010 @ 5:21 pm

  20. about the time the rest of world stopped lending hand over fist to Te Gummint for social spending (or so we thought).

    Comment by davy crockett — August 10, 2010 @ 5:23 pm

  21. “Unless you have been in a cryogenic chamber since the 70′s”

    I think you might have something there…

    Comment by nommopilot — August 10, 2010 @ 5:24 pm

  22. The DPB didn’t exist back then…

    One of those no-brainers that seem to pass Glibertarians by. They treat the DPB as though the people who introduced it woke up one morning and thought “Hey! Why don’t we wreck the awesomely excellent system we have now by giving people money to do nothing! It’ll be great!” The rest of us recognise the fairly obvious point that there were good reasons the DPB was introduced, and those reasons were pretty damn unpleasant themselves.

    Funniest part of this is that, as per Andy’s point above, Berend would crap himself if he bothered to study just exactly how socialist NZ was in 1960 – we’re now just about an objectivist utopia by comparison…

    Comment by Psycho Milt — August 10, 2010 @ 7:31 pm

  23. For non-Maori the comparative figures are 65 percent of babies are now born to married mums compared to 35 percent to single mothers.

    Holy shit. My family got disappeared by a NZ Centre For Political Research* in a 2009 press release, didn’t notice that happening. Does that mean I no longer have to pay any tax?

    *whoever the fuck comes up with these names anyway? Institute for Fucking Studies, Committee for Ideas and stuff, The My Gosh Aren’t we all a Bunch of Non-Partisan Intellckshools Foundation. All of it just translates to The Don’t do Peer Review Peeps, or Wingnut Welfare Associated inc.

    Comment by Pascal's bookie — August 10, 2010 @ 8:22 pm

  24. “…but rather mums who are recently unemployed and qualified for the DPB rather than the dole because they’re eligible for it and the payment is higher.”

    Actually, a sole parent with one or more children gets the same benefit rate whether they’re getting an unemployment benefit, a sickness benefit or the DPB: $272.70 pw . http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/statistics/statistical-report/stats-report-2009.html

    And regardless of which of those three benefits they receive, they all get additional income for the children. Often people compare a single person with no kids and a sole parent with kids and note that the sole parent gets more, forgetting that they also have more costs.

    One income-related difference between unemployment and DPB is in the amount of earnings allowed before the benefit is reduced dollar for dollar (it’s higher for DPB, or used to be – can’t find the information at the same source). The main difference between UB and DPB is the work test.

    Comment by Schulz — August 10, 2010 @ 9:01 pm

  25. Here an example of a person for whom it is clearly better to be on benefits then get to work:

    A sole parent with three young children paying the $332 average rent for a three-bedroom house in Papakura would get $206 in family support and $165 in accommodation supplement on top of the $278 DPB, a total of $649 a week.

    “A lot of our solo parents get well in the $700s. They are not going to go from $700 to $400,” Ms Raiwhara said.

    PS: my other reply above was to Lew and it’s beyond time Danyl gave us an edit button.

    Comment by Berend de Boer — August 11, 2010 @ 7:32 am

  26. an example of a person for whom it is clearly better to be on benefits then get to work:

    Yeah, but if she drowns those “three young children” in the bath so she can go out to work, we’ll actually put her in jail instead, which is way more expensive than the DPB. Are you advocating for taxpayer-supported childcare facilities here Berend, or for employers to pay wages high enough to make childcare affordable?

    Comment by Psycho Milt — August 11, 2010 @ 7:43 am

  27. And what do you propose to do in situations like that? Auction off the children they cannot care for with the rather pathetic amount of $400 per week?

    Comment by The PC Avenger — August 11, 2010 @ 7:47 am

  28. $649 – $332 rent = $317 a week to raise 3 kids – food, power, clothing, transport, the whole fecking lot. It might be do-able for a wee while but what happens once things start to wear out and break down? Where’s the money to replace and repair things? Need new brakes for your car? $500. Next WOF time, need a couple of new tyres? Oh, that’s right, no money but hey, just use the excellent public transport system we have and ditch the car! My WINZ case worker was sympathetic to me living 10kms from the bus station (and the WINZ office) and that there were no footpaths for much of that walk, but she assured me that I was receiving my full entitlement and that the DPB has no allowance built in for running a car. There was nothing she could do.

    I think there should be a gap between wages and benefits – but BdB makes an argument for higher wages not lower benefits. Tell me what you would cut from the $317 after rent budget Berend? How much does your 11 year old boy eat? Mine can eat endlessly, as can many boys his age.

    Comment by Me — August 11, 2010 @ 7:56 am

  29. Reminds me of Katherine O’Reagan (sp?) a National MP. After benefits cuts of 1991 she said women could manage on the new, 20% lower DPB, they just had to learn how to budget. To prove her point she drew up a weekly menu for a family of 1 adult and 2 children, and costed it. See! she said, it can be done!

    She even declared she would eat like that for a month to prove it was possible. Except… she was ill and it would have to wait until she was better. I mean, beneficiaries get extra money for good quality food when they’re unwell, don’t they?

    (Critics pointed out you can make a whole chicken last 3 meals – one of her budget tips – if your kids are young – but try that with teenagers? No way!)

    Comment by Me — August 11, 2010 @ 8:06 am

  30. The line drops when more people get work tested – and increases when enhanced case management kicks in. No surprises. So why aren’t case managers work testing beneficiaries when they dont turn up for appointments – in exactly the same way as they wont get jobs if they dont turn up for job interviews?

    Comment by dave — August 11, 2010 @ 1:08 pm

  31. All that graph proves is that if you corrupt it enough, a graph can prove whatever you like. If you put the numbers on a graph with the axis at zero and go back to 1990, its clear that both National and Labour policies failed. Given all the hype about work testing in the late 1990s, you see it made very little difference to the numbers (a few thousand). Also bear in mind that the dip between 2004 to 2008 happened when the government spent a couple of billion dollars and employers were reporting a big shortage of unskilled labour. Most of those ‘leaving DPB’ were getting the same level of subsidy, it was just called a tax credit, not a benefit.

    DPB is a life of poverty. The only people who benefit from the current system are people working for WINZ, who seem to get more and more funds to unsuccessfully correct their own lack of success. As the working group report also shows, WINZ only puts resource into people on Unemployment Benefit who are going to find jobs anyway.

    Comment by david — August 14, 2010 @ 3:49 pm


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

The Rubric Theme. Create a free website or blog at WordPress.com.

Follow

Get every new post delivered to your Inbox.

Join 413 other followers

%d bloggers like this: